International Test Systems Inc · SB-1/A · On 4/7/03

Filed On 4/7/03 1:45pm ET   ·   SEC File 333-88179   ·   Accession Number 1214782-3-93

Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer   ·   Form SB-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-1/A      Pre-Effective Amendment to Registration of            71    364K 
                          Securities by a Small-Business Issuer                  
 2: EX-4.5      Escrow Agreement                                       6     36K 
 3: EX-5.1      Legal Opinion                                          2±     9K 
 4: EX-23.1     Auditors Consent                                       1      6K 

SB-1/A   ·   Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer
Document Table of Contents

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 As  filed  with  the  Securities  and  Exchange  Commission  on  April  7, 2003
Registration  No.  333-88179                                                    

Securities and Exchange Commission
Washington, DC 20549
 -------------------------------------------
 Amendment No. 6
to
 FORM SB-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

International Test Systems, Inc.
--------------------------------
(Name of small business issuer in its charter)
Delaware                             4214                   74-29581956 
--------                             ----                   ----------- 
(State or other jurisdiction of   Primary North American     (IRS Employer      
incorporation or organization)    Industry  Classification   Identification No.)
         System  Code  Number)

16161 College Oak, Suite 101, San Antonio, Texas 78249; (210) 408-6019
----------------------------------------------------------------------
 (Address and telephone number of principal executive offices)

Carey Birmingham, President               With Copies to:                       
16161 College Oak, Suite 101              David M. Loev, Attorney at Law        
San Antonio, TX 78249                     2777 Allen Parkway, Suite 1000        
(210) 408-6019                            Houston, TX 77019; (713) 524-4110     
(Name, address and telephone number                                             
of agent for service)                                                           

     Approximate  date  of  commencement  of proposed sale to public: As soon as
practicable  after  the  effective  date  of  this  registration  statement.    

     If  this  form  is  filed to register additional securities for an offering
pursuant  to  Rule  462(b) under the Securities Act, check the following box and
list  the  Securities  Act  Registration  statement  of  the  earlier  effective
registration  statement  for  the  same  offering.  | |                         

     If any of the securities being registered on this Form are to be offered on
a  delayed  or continuous basis pursuant to Rule 415 under the Securities Act of
1933,  check  the  following  box.  |X|                                         

If  this  form is a post-effective amendment filed pursuant to Rule 462(c) under
the  Securities  Act,  check  the  following  box  and  list  the Securities Act
registration  statement  number  of the earlier effective registration statement
for  the  same  offering.  | |                                                  

     If  delivery of the prospectus is expected to be made pursuant to Rule 434,
please  check  the  following  box.  | |                                        

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                                                        [Enlarge/Download Table]


                                CALCULATION OF REGISTRATION FEE                                        

Title of Each Class                        Amount to be            Proposed     Proposed    Amount of  
        of                                 Registered              Maximum      Maximum    Registration
Shares to be Registered                                         Offering Price  Aggregate      Fee     
                                                                   Per Share    Offering               
                                                                                 Price                 
                                                                                                       
Common Shares                                  1,250,000             .40(1)     500,000         46.00  
Class A Warrants                               1,250,000               .10      125,000         11.50  
Class B Warrants                               1,250,000               .10      125,000         11.50  
Common Stock underlying Class A warrants                                                               
Common Stock underlying                        1,250,000              2.50    3,125,000        287.50  
Class B warrants                                                                                       
                                               1,250,000              4.50    5,625,000        517.50  
                                          --------------         -----------  ----------  ------------ 
Total                                          6,250,000                     $9,500,000    $   874.00  
<FN>                                                                                                   

     (1)     There  is  no  current  market  value  for  the  securities.                              
     (2)     Estimated  solely  for  purposes of calculating the registration fee based on Rule        
             457(f)(2).                                                                                

The  Registrant  hereby amends this registration statement on such date or dates
as  may be necessary to delay its effective date until the Registrant shall file
a  further  amendment which specifically states that this Registration Statement
shall  become effective in accordance with Section 8(a) of the Securities Act of
1933,  as amended, or until the Registration Statement shall become effective on
such  date as the Securities and Exchange Commission, acting pursuant to Section
8(a),  may  determine.                                                          

Disclosure  alternate  used (check one): Alternate 1 [X]     Alternate 2 [ ]    

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Prospectus                                                                      
Initial Public Offering 

International Test Systems, Inc.

This registration statement relates to the offer and sale of up to 1,250,000    
shares of common stock @ $.40 per share, 1,250,000 class A warrants @ $.10 per  
warrant with an exercise price of $2.50 per share and 1,250,000 class B warrants
@ $.10 per warrant with an exercise price of $4.50 per share of International   
Test Systems, Inc.   The registration statement also relates to the resale of up
to 2,500,000 shares of common stock issuable upon exercise of the class A       
warrants and the class B warrants.                                              

This  is  a  "best  efforts,  no  minimum  offering."  There  is a maximum gross
offering  of  $750,000  prior to warrant exercises.  There is a minimum purchase
requirement  of  1,000  shares  or  4,000  warrants,  but the company may in its
discretion  accept  subscriptions  for  less  shares  or  warrants.             

We are offering these shares through Public Securities, Inc. on a "best efforts"
basis.  We  will  pay  Public Securities, Inc.  10% commissions on all stock and
warrant  sales  that they make.  In addition, we have an arrangement with Public
Securities, Inc. providing them the option to purchase an amount equal to 10% of
the  shares of our common stock sold in this offering.  Prior to the offering of
the shares and warrants as described herein, there has been no public market for
the  common stock of International Test Systems and there are no assurances that
a  public  market will develop following completion of this offering or that, if
any  such  market  does  develop,  it  will  be  sustained.                     

                                                                [Download Table]


                                          Underwriting                          
                                          Discounts  and      Proceeds  to      
   Price to Public (1)   Commissions (2)   Issuer (3)                           
  --------------------  ----------------  -----------                           
                                                                                

Per Share                      $  .40         $  .04             $  .36         
Per Class A Warrant            $  .10         $  .01             $  .09         
Per Class B Warrant            $  .10         $  .01             $  .09         
Total Maximum            $  750,000(4)     $  75,000         $  675,000         
<FN>                                                                            

(1)  Maximum  of  250,000  shares  may  be  sold  on  a  best  efforts  basis.  
(2)  Public  Securities,  Inc.  serves  as  the  underwriter  in  this offering.
(3)  The  net  proceeds  to  International Test Systems is before the payment of
     certain  expenses  in connection with this offering estimated at $12,500 in
     the  event  we  sell  312,500  shares  and  a  maximum  of  $75,000.       
(4)  Does  not  reflect  the  exercise  of  any  warrants.                      

An  investor  may purchase either shares of our common stock, class A redeemable
warrants,  or  class  B redeemable warrants. This is a "best efforts, no minimum
offering."  Amounts  received will be distributed to the company.  This offering
will  extend  for  a  period  of  one  year  from  the  date of this prospectus.

Information  contained  herein  is  subject  to  completion  or  amendment.  The
registration  statement  relating  to  the  securities  has  been filed with the
Securities  and  Exchange  Commission.  The  securities  may not be sold nor may
offers  to  buy be accepted prior to the time the registration statement becomes
effective.  This  prospectus  shall  not  constitute  an  offer  to  sell or the
solicitation  of an offer to buy nor shall there be any sale of these securities
in  any  State in which such offer, solicitation or sale would be unlawful prior
to  registration  or  qualification under the securities laws of any such state.

THIS  OFFERING  INVOLVES  A SIGNIFICANT DEGREE OF RISK AND PROSPECTIVE INVESTORS
NEED TO READ THE SECTION  CALLED "RISK  FACTORS" IN THIS PROSPECTUS WHICH BEGINS
ON  PAGE  9.                                                                    

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION,  NOR  ANY  STATE SECURITIES
COMMISSION,  HAS APPROVED OR  DISAPPROVED  THESE  SECURITIES  OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL  OFFENSE.                                                              

International Test Systems, Inc.
 Table Of Contents
Prospectus  Summary                                            6                
Risk  Factors                                                  9                
Plan  Of  Distribution                                        10                
Use  Of  Proceeds                                             15                
Dilution                                                      18                
Capitalization                                                20                
Business  Of  The  Company                                    21                
Management's  Discussion  And  Analysis  Of  Financial                          
Condition  And  Results  Of  Operations  For  The  Period     34                
Directors,  Officers  And  Key  Personnel  Of  The  Company   38                
Security  Ownership  Of  Certain  Beneficial  Owners  And                       
Management                                              40          
Selling  Shareholders                                         42                
Certain  Transactions                                         42                
Description  Of  The  Securities                        44          
Interests  Of  Named  Experts  And  Counsel             48          
Legal  Proceedings                                            48                
Federal  Tax  Aspects                                   48          
Certain  Provisions  Of  Our  Articles  And  By  Laws   49          

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Prospectus Summary

The  Company                                                                    

International  Test  Systems,  Inc.  was  originally  incorporated  in  Texas in
September  1996.  This  Texas  corporation  was  dissolved in September 1999 and
reincorporated in Delaware on September 20, 1999 with all of the same assets and
liabilities and substantially identical ownership.  Pensar Technologies, LLC was
formed  as  a  Texas  Limited Liability Company on May 5, 1995.  On May 7, 2002,
International  Test  Systems, Inc. entered into an asset purchase agreement with
Pensar whereby International Test Systems acquired all of the assets and certain
of  the  liabilities  of Pensar.  Both International Test Systems and Pensar are
entities under partial common control and the financial statements are presented
separately  until  International  Test  Systems and Pensar entered into an asset
purchase  agreement  in May 2002.  References in this document to "International
Test Systems", "Pensar Technologies, LLC", "company", "we", "our" and "us" refer
to  International  Test  Systems,  Inc.,  a  Delaware  corporation.             

Our  operations  have  been  restricted to only a few sales to date.  We market,
sell  and distribute a family of hardware and software products used to test and
troubleshoot  components  on  printed  circuit  boards.  Our telephone number is
(210)  408-6019  and  our  e-mail  address  is  its@itestsystems.com.           

The  Offering                                                                   
-------------                                                                   

Securities  offered     1,250,000,000  shares  of  common  stock,               
    1,250,000  Class  A  Warrants,  and  1,250,000
                                Class  B  Warrants
Shares  of  common  stock                                                       
Outstanding  Before  Offering                           2,116,000               

Shares  of  common  stock                                                       
Outstanding  after  offering  (assuming  sale                                   
Of  all  shares  offered)                               3,366,000               

 Summary Financial Information

The  summary  financial  information presented below is derived from our audited
financial  statements  for  the  year  ended December 31, 2002  and December 31,
2001.                                                                           

Statement  of  Operation  Data:                                                 
Years  Ended                                                          
                              December  31,  2002          December  31,  2001
Revenues                                  $  9,534                        5,675 
Cost  of  Sales                                236                            - 
General  and  Administrative  Expenses                                          
Paid  in  Cash                              52,023                       15,507 
Paid  in  Stock                            108,800                      139,400 

Net  Loss                                $(291,905)                    (149,232)

BALANCE  SHEET  DATA:          December  31,  2002          December  31,  2001 
Working  Capital                         $(101,720)                       $(667)
Long-Term  Debt                               $868                            - 
Additional  Paid  in  Capital            1,539,441                    1,263,866 
Accumulated  Deficit                    (1,457,092)                  (1,165,187)
Total  Stockholders'  Equity  (deficit)     84,499                     $100,704 

RISK FACTORS

You  should  carefully consider the following risk factors and other information
in  this  prospectus  before deciding to become a holder of our common stock. If
any  of  the following risks actually occurs, our business and financial results
could  be  negatively  affected  to  a  significant  extent.                    

RISK THAT CAPITAL WILL NOT BE RAISED TO FINANCE OUR OPERATIONS.                 

We  anticipate  that proceeds from this offering, assuming we raise a minimum of
$125,000,  will  satisfy  our working capital requirements for at least the next
twelve months. In the event we do not raise at least the minimum offering, it is
unlikely that we will continue our business plan and we may be forced to curtail
or  cease  our  operations.                                                     

Risk  that  additional  capital  will  not  be  raised  to  finance  our ongoing
operations  as  current  funds  are  insufficient  and  we expect future losses.

Even  if  we  are successful in raising capital in this offering, we will likely
need to raise additional capital to continue and/or expand our operations. If we
do not raise the additional capital, the value of your investment in our company
may  become  worthless.                                                         

AS  OF  DECEMBER  31,  2001  AND  DECEMBER  31,  2002, OUR COMPANY HAD LOSSES OF
$149,232  AND $291,905, RESPECTIVELY.  As of December 31, 2001, and December 31,
2002,  our  company  had  negative  working  capital  of  $667  and $101,720,   
respectively.  We expect negative cash flow and operating losses to continue for
the foreseeable future until we can successfully market and distribute products,
develop  new  technologies  and  produce  commercially  viable  future  products
and/or  enter  into  successful  strategic  ventures  with  other  entities.  We
expect  our operating costs to increase.  Furthermore, we cannot assure you that
we will ever achieve or sustain profitability.  Therefore, we may not be able to
continue  our business in the future.  In this event, it can be anticipated that
investors  will  lose  all  or  part  of  their  investment.                    

WE  HAVE  NOT  BEEN  ABLE  TO  GENERATE  A  PROFIT SINCE OUR INCEPTION AND IT IS
UNLIKELY  THAT  WE  WILL  GENERATE  A  PROFIT  IN  THE  NEAR  FUTURE,IF  AT ALL.

As  we  have  been  unable to generate sufficient revenues to cover our overhead
since  we  were incorporated, and it is not likely that we will be profitable in
the  near  future,  our  future  success  will  be materially dependent upon our
raising capital to fund our ongoing operations. In the event we are unsuccessful
raising additional capital, it is likely that we will curtail our operations and
investors  will  lose all or part of their investment. Even if we are successful
in  raising  additional  capital,  if we are unable to generate profits from our
business,  it  is  likely that we will run out of capital and that you will lose
all  or  part  of  your  investment.                                            

RISK  THAT  OUR  TECHNOLOGY  IS  NOT  ACCEPTED  IN  THE  MARKETPLACE            

Our  success  depends  on  continued  growth  in  the  need  for  testing  and  
troubleshooting  components  on  printed  circuit  boards.  The  success  of our
business  will ultimately depend on acceptance of hardware and software products
to test and troubleshoot components on printed circuit boards. Our technology is
substantially  untested  in the marketplace; which could result in unanticipated
capital  expenditures  and  delays  in  achieving marketing success in the event
product  improvements  or  upgrades  are  required.  Even  if  our  product  is 
successful,  if  we  do  not  market  our technology effectively, it will not be
accepted  in  the  marketplace.                                                 

WE DEPEND ON CAREY BIRMINGHAM TO EXECUTE OUR BUSINESS PLAN.                     

Our  potential for success depends significantly on our Chief Executive Officer,
Carey  Birmingham. We are heavily dependent upon Mr. Birmingham to implement our
business  plan. We have entered into an employment agreement with Mr. Birmingham
which  provides  for  compensation to Mr. Birmingham contingent upon our raising
funds in this offering. In the event we are unsuccessful raising capital in this
offering  sufficient  to compensate Mr. Birmingham there is no assurance that he
will continue to manage our affairs in the future. Further, we have not obtained
a "key person" life insurance policy on Mr. Birmingham. The loss of his services
could  have  a  significant  adverse  effect  on  our  business.                

BEST EFFORTS, NO MINIMUM OFFERING; YOU MAY LOSE YOUR ENTIRE INVESTMENT.         

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The  shares  offered  hereby  will  be sold on a "best efforts" basis. We cannot
assure  that  all  or any of the shares or warrants offered will be sold. We are
not  required  to  receive  any minimum amount of subscriptions before accepting
such  subscriptions  for  investment  in  International  Test  Systems,  Inc.   
Accordingly, investors whose subscriptions are accepted first run the additional
risk  that  we  may  not  raise all of the funds we are seeking in this offering
which  could materially and adversely affect our ability to finance our business
plan.                                                                           

THERE  IS  CURRENTLY  NO  MARKET  FOR  OUR  COMMON  STOCK.                      

We  intend  to  apply  to  have  our  common  stock quoted on the OTC Electronic
Bulletin  Board,  a  NASD  sponsored  and  operated  quotation system for equity
securities as soon as practicable upon our registration statement being declared
effective  by  the  SEC.  It  is  a  more limited trading market than the NASDAQ
SmallCap  Market,  and  timely,  accurate  quotations of the price of our common
stock  may  not  always be available. You may expect trading volume to be low in
such  a  market.  Consequently, the activity of only a few shares may affect the
market  and  may result in wide swings in price and in volume. It is likely that
trading  in  our  stock,  if  any,  will  be  limited  and  sporadic.           

INVESTORS  MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF INTERNATIONAL TEST
SYSTEMS,  INC.  STOCK  DUE  TO  FEDERAL  REGULATIONS  OF  PENNY  STOCK.         

Once our common stock is listed on the OTC Bulletin Board, it will be subject to
the  requirements  of Rule 15(g)9, promulgated under the Securities Exchange Act
as  long  as  the price of our common stock is below $5.00 per share. Under such
rule,  broker-dealers  who recommend low-priced securities to persons other than
established  customers  and  accredited  investors  must  satisfy  special sales
practice  requirements, including a requirement that they make an individualized
written  suitability determination for the purchaser and receive the purchaser's
consent  prior to the transaction. The Securities Enforcement Remedies and Penny
Stock  Reform Act of 1990 also requires additional disclosure in connection with
any trades involving a stock defined as a penny stock. Generally, the Commission
defines a penny stock as any equity security not traded on an exchange or quoted
on  NASDAQ  that  has  a market price of less than $5.00 per share. The required
penny  stock  disclosures  include  the delivery, prior to any transaction, of a
disclosure  schedule  explaining the penny stock market and the risks associated
with  it.  Such  requirements  could  severely limit the market liquidity of the
securities  and  the  ability  of  purchasers  to  sell  their securities in the
secondary  market.                                                              

     Note: In addition to the above risks, businesses are often subject to risks
not  foreseen or fully  appreciated by management.  In reviewing this prospectus
potential  investors  should  keep in mind  other  possible  risks that could be
important.  This  prospectus  contains all of the representations by our company
concerning  this  offering,  and  no  person  shall  make  different  or broader
statements than those contained herein, investors are cautioned not to rely upon
any  information  not  expressly  set  forth  in  this  offering.               

Plan  Of  Distribution                                                          

We  are  seeking  to  raise  a  maximum offering amount of $750,000, without the
exercise  of  any warrants, through the sale of up to 1,250,000 shares of common
stock  @  $.40  per share, 1,250,000 class A warrants @ $.10 per warrant with an
exercise  price  of  $2.50  per  share and 1,250,000 class B warrants @ $.10 per
warrant  with an exercise price of $4.00 per share. The public offering price of
our  securities  will  not  change  until  completion  of  the  public  offering
distribution.  No  public  market  currently exists for shares for International
Test  Systems  common stock. We intend to apply to have our shares traded on the
OTC  Bulletin  Board  as soon as practicable and upon our registration statement
becoming  effective.                                                            

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Our  offering  will  be  sold  on  a  first  come,  first served basis by Public
Securities,  Inc.,  as  well as through our officers and directors. Our officers
and  directors may participate in the distribution of the offering and will meet
the  safe  harbor  provisions  of  SEC Rule 3a4-1 with respect to exemption from
registration  as a broker/dealer. We have entered into an underwriting agreement
with  Public  Securities  setting  forth  the  terms of our agreement with them.
Pursuant  to  this  agreement, we will pay them commissions of 10% of shares and
warrants  sold  for a total of $75,000 for the maximum offering. In addition, we
will  pay Public Securities, Inc. an unaccountable expense not to exceed $5,000.
We  have  agreed  to  sell  Public  Securities  an  option  to purchase up to an
aggregate  of  125,000 shares and up to 125,000 warrants at 140% of the offering
price  of  the  share  or warrant or $.56 per share and $.14 per warrant, as the
case  may  be, commencing one year from the date of this prospectus and expiring
five  years from the date of this prospectus. The options will be issued for the
shares  and  warrants at the rate of one underwriter's purchase option for every
ten  of the respective securities sold in this offering. The securities issuable
upon  exercise  of  the  purchase  option are identical to those offered by this
prospectus  except  that  the  securities issued pursuant to the purchase option
expire  five  years  from  the  date of this prospectus. The securities purchase
option  may  not  be  transferred,  sold,  assigned  or  hypothecated during the
one-year  period  following  the date of this prospectus, except to underwriters
and  selected  dealers  and  to officers and partners of the underwriters or the
selected  dealers.  The  securities purchase option grants to holders demand and
"piggy back" registration rights for periods of five years from the date of this
prospectus  with  respect  to  the  registration under the Securities Act of the
securities  directly  and  indirectly  issuable  upon  exercise  of the purchase
option.  The exercise price and amounts issuable upon exercise of the securities
purchase  option may be adjusted in certain circumstances including in the event
of  a  stock  dividend,  or  our  recapitalization,  reorganization,  merger  or
consolidation.  However,  the purchase option will not be adjusted for issuances
of  common  stock at a price below its exercise price. Our company has agreed to
indemnify  Public  Securities  against  liabilities  under  the securities laws.
Insofar  as  indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the  company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and  is,  therefore, unenforceable. No commissions or other compensation will be
paid  to  our  officers  and  directors  in  connection  with  this  offering.  

Public  Securities, Inc., located at 300 North Argonne Road, Suite 202, Spokane,
Washington 99212, (509) 892-5590, was established in 1986. It operates as a full
service  broker-dealer  and  is a member of the NASD and SIPC. Public Securities
specializes  in  market  making and initiating quotations on untraded companies.
There is no assurance that Public Securities will make a market in the Company's
securities.  There is no material relationship between Public Securities and the
company or its management. If additional information is desired regarding Public
Securities,  Inc.,  please  feel  free  to  inquire  through the NASD Regulation
website,  www.nasdr.com.  Information  regarding  the  disciplinary  history  of
securities  firms and their registered representatives is available through this
site.                                                                           

This  registration  statement  relates  to the offer and sale of up to 1,250,000
shares  of  common stock @ $.40 per share, 1,250,000 class A warrants @ $.10 per
warrant with an exercise price of $2.50 per share and 1,250,000 class B warrants
@  $.10  per  warrant with an exercise price of $4.50 per share of International
Test  Systems,  Inc. The registration statement also relates to the resale of up
to  2,500,000  shares  of  common  stock  issuable  upon exercise of the class A
warrants  and  the  class B warrants. This is a "best efforts" offering. We will
promptly  deposit  all  investor  money  into  an escrow account with our escrow
agent,  David  M.  Loev,  Esq.,  2777  Allen Parkway, Suite 1000, Houston, Texas
77019, (713) 524-4110. We may reject a subscriber's subscription for any reason.
If  a  subscription is rejected, in whole or in part, the subscription funds, or
portion  thereof,  will be promptly returned to the prospective investor without
interest  by depositing a check (payable to said investor) in the amount of said
funds  in  the  United  States  mail,  certified  returned-receipt  requested.  
Subscriptions  may  not  be revoked, cancelled, or terminated by the subscriber,
except  as  provided  herein.  Each subscription for securities in this offering
that  is  accepted  by  us  will  be  credited  immediately  to our company cash
accounts,  and  such  funds  may  be  spent by us at our discretion, without any
waiting  period  or  other  contingency.                                        

We  intend  to  sell  our  securities  in  the  following  states:              

Arizona                                                       
Arkansas                                                      
California                                                    
Colorado                                                      
Connecticut                                                   
Florida                                                       
Illinois                                                      
Maine                                                         
Maryland                                                      
Michigan                                                      
Minnesota                                                     
New  Jersey                                                   
New  Mexico                                                   
New  York                                                     
Ohio                                                          
Oklahoma                                                      
Pennsylvania                                                  
South  Carolina                                               
Tennessee                                                     
Texas                                                         
Virginia                                                      
Washington  D.C.                                              
Wisconsin                                                     
Wyoming                                                       

No  person  or  group  has  made  any  commitment  to purchase any or all of the
securities.  We  cannot  state  at this point how many of the securities will be
sold. Insiders and affiliates will not purchase securities in order to reach the
minimum  but  anticipate  purchasing  our  securities after we raise the minimum
offering  amount.                                                               

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We  reserve  the  right  to  reject  any subscription in full or in part, and to
terminate  the  offering  at  any  time.                                        

No person, individual or group has been authorized to give any information or to
make  any  representations  in  connection  with  this offering other than those
contained  in  this  prospectus  and,  if  given  or  made,  such information or
representation  must  not  be  relied  on as having been authorized by us or our
officers. This prospectus is not an offer to sell, or a solicitation of an offer
to  buy,  any  of  the securities it offers to any person in any jurisdiction in
which  that  offer  or  solicitation  is  unlawful. Neither the delivery of this
prospectus  nor  any  sale  hereunder shall, under any circumstances, create any
implication  that  the  information in this prospectus is correct as of any date
later  than  the  date  of  this  prospectus.                                   

The  securities  may  only  be offered, sold or traded in those states where the
offering  and/or securities have been registered, or where there is an exemption
from  registration.                                                             

Purchasers  of  securities, either in this offering or in any subsequent trading
market  which  may  develop, must be residents of states in which the securities
are  registered  or  exempt  from  registration.  Some  of  the  exemptions  are
self-executing,  that is to say that there are no notice or filing requirements,
and  compliance  with  the  conditions  of  the  exemption  render the exemption
applicable.                                                                     

If  all  of  the  securities  we are offering are sold, we will have outstanding
3,366,000 shares of common stock prior to exercise of any of the warrants we are
offering.  The  shares  of  common  stock  sold  in this offering will be freely
tradable  without  restriction or further registration under the Securities Act,
except  for  any  shares purchased by one of our "affiliates", which may be sold
only  while  this  registration  statement  or  another  registration  statement
covering  resales  by  those affiliates is effective, or in accordance with Rule
144  or  private  sales  exemptions.  An  affiliate  is  a  person  controlling,
controlled  by  or  under  common  control with our company. There are no lockup
agreements  or  resale restrictions on any of our outstanding shares, other than
those  governed  by  Rule  144.                                                 

Note:  After  reviewing  the  amount  of  compensation  to the selling agents or
finders  for  selling the securities, and the nature of any relationship between
the  selling  agents  or  finders  and  the company, a potential investor should
assess  the  extent  to  which  it  may  be  inappropriate  to  rely  upon  any 
recommendation  by  the  selling  agents  or  finders  to  buy  the  securities.

Note:  Equity  investors  should  be  aware  that  unless the company is able to
complete a further public offering or the company is able to be sold for cash or
merged  with  a  public  company  that  their  investment  in the company may be
illiquid  indefinitely.                                                         

Determination  Of  The  Offering  Price                                         

Prior  to  this  offering,  there has been no market for the common stock and/or
warrants  of  the  company,  and we have essentially had no substantial business
operations  to  date.  The offering price has been determined arbitrarily by our
board  of  directors.                                                           

For  the  year ended December 31, 2001 and for the year ended December 31, 2002,
losses were ($149,232) and ($291,905), respectively with a net loss per share of
$(0.08)  and  $(0.14),  respectively.                                           

Our  proforma  net  tangible  book value as of December 31, 2001 was $100,704 or
$.05 per share. Our proforma net tangible book value as of December 31, 2002 was
$84,499  or  $.04  per  share.                                                  

Our  proforma  net  tangible  book  value as of December 31, 2002 based upon the
number  of  shares outstanding after this maximum offering if all securities are
sold  will  be  $687,374  or  $.20  per  share.                                 

The  percentage of outstanding shares the investors in the offering will have if
the  maximum  is  sold and if 312,500 shares are sold as well as if the warrants
are  exercised  is  set  forth  as  follows:                                    

%  if  312,500  Shares      if  Maximum  Offering     % if Maximum Offering     
 are                        Sold  and  No         Amount  Sold  and  all
Sold                    Warrants  Exercised        Warrants  Exercised

13%                              37%                      64%       

Management  is  implicitly attributing a value of $124,874 to our company in the
event  312,500  shares  are  sold  and  $687,374  if  the  maximum  is  sold.   

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After  reviewing  the  above, potential investors should consider whether or not
the  offering  price  or exercise price for the securities is appropriate at the
present  stage  of  the  company's  development.                                

Use  Of  Proceeds                                                               

The  gross  proceeds  of the offering, excluding warrant exercises, assuming the
sale  of  $125,000, $500,000 and $750,000 of securities in the event the maximum
offering is sold is provided below. We expect all of our organizational expenses
will  be  paid  prior  to  the effective date of this prospectus, as well as the
majority  of  offering  expenses,  including  legal,  accounting  and  other    
professional  fees.  We  are  offering the securities through Public Securities,
Inc., as well as our officers and directors. We will pay Public Securities, Inc.
a  commission  of 10% on all stock and warrant sales made via Public Securities.
No  commissions or other compensation will be paid to our officers and directors
in  connection with this offering. We will receive proceeds from the exercise of
the warrants, if any warrants are exercised. We intend to use the gross proceeds
as  follows:                                                                    

                                                        [Enlarge/Download Table]


                                                                                                      Maximum Offering     
                                                           $125,000 (1) Percent  $500,000  Percent    $750,000 (2)  Percent
                                                                                                                           

Gross Aggregate  Proceeds                               $   125,000       100%   $500,000    100%  $   750,000       100%  
Less Offering Expenses and Commissions:                                                                                    
    Offering Costs(3)                                        72,125        58%     72,125     14%       72,125        10%  
    Commissions                                              12,500        10%     50,000     10%       75,000        10%  
Net offering expenses                                        84,625        68%    122,125     24%      147,125        20%  
Net Offering Proceeds                                        40,375        32%    377,875     76%      602,875        80%  
Advertising and Direct Marketing:                                                                                          
Corporate                                                         -         -      25,000      5%       46,500         6%  
     Product                                                  5,000         4%     80,125     16%      167,250        22%  

Consulting and Outsourcing Fees, Wages and Salaries:                                                                       
     Portion of President's salary                           25,000        20%     45,000      9%       45,000         6%  
     Marketing Executive                                          -         -      48,000     10%       60,000         8%  
     Marketing  and Sales Support                                 -         -      37,500      8%       60,000         8%  
Administrative Support                                            -         -      21,500      4%       24,000         3%  
Benefits and Insurance                                            -         -      20,250      4%       33,000         4%  

General Corporate & Working Capital:                                                                                       
    Secondary Market Program                                  1,125         1%     26,000      5%       39,075         5%  
     Investor  Relations                                      2,000         2%     24,000      5%       25,000         3%  
     New Product R&D                                              -         -       5,000      1%       16,000         2%  
     Inventory Purchases                                          -         -       3,000      1%        8,000         1%  
     Office Expenses & Rental                                 2,750         2%     12,500      3%       22,500         3%  
     Personnel Retention and Training                                                                                      
                                                                  -         -      10,000      2%       32,250         4%  
Debt Reduction(4)                                             5,000         4%     20,000      4%       25,000         3%  
                                                            125,000       100%    500,000    100%      750,000       100%  
Total Gross Offering Proceeds                                                                                              
<FN>                                                                                                                       

(1)  Assumes  sale  of  312,500  shares, but may result from sale of less shares                                           
     with  the  sale  of  warrants.                                                                                        
(2)  Assumes  the  sale  of  1,250,000  shares,  1,250,000 Class A warrants, and                                           
     1,250,000  Class  B  warrants.                                                                                        
(3)  Incurred  by  BFP  Texas on behalf of the company and will be reimbursed to                                           
     BFP  Texas,  Ltd., a limited partnership controlled by our president, Carey                                           
     Birmingham,  upon  raising  a  minimum  of  $125,000.                                                                 
(4)  The indebtedness which will be discharged includes accounts payable. During                                           
     the last fiscal year, approximately $6,000 was incurred for various general                                           
     business  purposes, including travel, office supplies and general expenses.                                           
     Interest rates on theses credit cards ranges from 10.99% to 20.99%. Certain                                           
     indebtedness  was  incurred  in  fiscal  year  2002  in  the  amount  of                                              
     approximately  $2,500.                                                                                                

In  the event we raise a minimum of $125,000 from this offering, we expect these
proceeds  to satisfy our cash  requirements for the next 12 months.  However, if
only  the  minimum  is  raised,  this  will  result  in  slower  development and
introduction  of  new products,  as well as a more limited sales plan. We cannot
assure you that we will be able to raise additional  funds on  favorable  terms,
if  at all.  Some expenses, such as marketing expenses and salaries, contemplate
spending  with  and  without  a  third  party  distributor.                     

We  are not in default on, nor in breach of, any loan, note,  lease or any other
obligation  or  indebtedness.  We  are  not  subject  to  any  unsatisfied      
judgments,  liens or settlement  obligations.  We have no significant  amount of
trade payables that have not been paid within the stated trade term. While we do
anticipate  cash flow  problems in the event this offering is  unsuccessful,  we
have scaled back  operations and have deferred growth until we receive a capital
infusion.                                                                       

The  foregoing  represents  our  present  intentions  and  best  estimate of the
allocation  of  the net proceeds of the sale of the  securities  offered in this
offering  based  on our contemplated operations,  our business plan, and current
industry  conditions.                                                           

Until  we  use the net proceeds for a particular purpose, we will invest them in
short-term  interest  bearing  securities,  which  may  be  investment  grade   
securities, money market funds, certificates of deposit, or direct or guaranteed
obligations  of  the  United  States  government.                               

Note:  After  reviewing  the portion of the offering allocated to the payment of
offering  expenses,  and to the immediate payment to management and promoters of
any  fees,  reimbursements,  past  salaries  or  similar  payments,  a potential
investor  should consider whether the remaining portion of his investment, which
would  be  that  part available for future development of the company's business
and  operations,  would  be  adequate.                                          

Dilution                                                                        

The  following table shows, on a pro forma basis determined as of April 1, 2003,
the  difference  between  existing  stockholders  and  new  investors purchasing
securities  in  this  offering.                                                 

Raise  of  $125,000  Assuming  312,500  Shares  Purchased                       

                                                                [Download Table]


                                     Percent  of    Percent                
                          Number     Total Amount   Amount Raised    Total 
                      ------------  --------------  -------------    ----- 
                                                                           
Present stockholders     2,116,000         87.1%       $206,469       62.3%
New stockholders           312,500         12.9%        125,000       37.7%
                      ------------  --------------  -------------    ----- 
Total                    2,428,500        100.0%       $331,469      100.0%
                      ============  ==============  ==============   ======

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                                                                [Download Table]


Raise of Maximum Offering Amount of $750,000 Assuming 1,250,000 Shares Purchased

                                     Percent  of    Percent                     
                          Number     Total Amount   Amount Raised    Total      
                      ------------  --------------  -------------    -----      
                                                                                
Present stockholders     2,116,000           62.9%     $206,469       21.6%     
New stockholders         1,250,000           37.1%      750,000       78.4%     
                      ------------  --------------  -------------    -----      
Total                    3,366,000          100.0%     $923,469      100.0%     
                      ============  ==============  ==============   ======     

                                                                [Download Table]


Raise of Maximum Offering Amount and Exercise of All Warrants $9,500,000 raised
and 3,750,000 purchased and converted                                          

                                     Percent  of    Percent                    
                          Number     Total Amount   Amount Raised    Total     
                      ------------  --------------  -------------    -----     
                                                                               
Present stockholders     2,116,000           36.1%     $206,469       2.1%     
New stockholders         3,750,000           63.9%    9,500,000      97.9%     
                      ------------  --------------  -------------    -----     
Total                    5,866,000          100.0%    9,706,469     100.0%     
                      ============  ==============  ==============   ======    

On  December  31,  2002,  we had net tangible book value of $84,499, OR $.04 per
share,  based  on  the  proforma 2,150,000 shares outstanding stock owned by our
shareholders.  The  net  tangible book value per share is equal to the company's
total  tangible  assets,  less  our  total liabilities, and divided by our total
number of shares of common stock outstanding. After giving effect to the maximum
sale of the common stock and associated warrants at the public offering price of
$0.40  per  share  and $0.10 per warrant less the associated offering costs, the
application  of  the  estimated net offering proceeds including commissions, our
pro  forma  net  tangible  book  value, as of December 31, 2002, would have been
$687,374  or  $.20  per  share.  This  represents  an  immediate increase in net
tangible book value of $.16 per share to existing stockholders, and an immediate
dilution  of $.24 per share to new investors purchasing shares in this offering.
Without  the purchase of the warrants and assuming the sale of 312,500 shares of
common  stock  in  this  offering,  our pro forma net tangible book value, as of
December  31,  2002, would have been $124,874 or $.05 per share. This represents
an  immediate  increase in net tangible book value of $.01 per share to existing
stockholders  and  an  immediate  dilution  of  $.35  per share to new investors
purchasing  shares  in  this  offering. Without the purchase of the warrants and
assuming  completion  of  the  maximum offering, our pro forma net tangible book
value, as of December 31, 2002, would have been $462,374 or $.14 per share. This
represents an immediate increase in net tangible book value of $.10 per share to
existing  stockholders  and  an  immediate  dilution  of  $.26  per share to new
investors  purchasing shares in this offering. Based on the above, the following
table illustrates the per share dilution in net tangible book value per share to
new  investors:                                                                 

                                                   Minimum           Maximum
                                                   ------------      -----------
Public  offering  price  per  share                   $0.40             $0.40   
of  common  stock                                                             

Net  tangible  book  value  per  share                        

      as  of  December  31,  2002                   $.04              $.04

Increase  per  share  attributed  to                          

      investors  in  this offering                  $.01              $.10

Pro  forma  Net  tangible  book  value                                          
per  share  after  the offering                        $.05              $.14   

Net  tangible  book  value  dilution  per                                       
share  to  new  investors                              $.35              $.26   

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Capitalization                                                                  

We  amended our articles of incorporation in July 2002 to authorize the issuance
of  fifty  million  shares  of  common  stock,  par  value  $0.001  per  share. 

                                                        [Enlarge/Download Table]


Capitalization  Table  December  31,  2002                                                               

                                                        Actual     As Adjusted for Sale of 312,500 Shares
                                                                                                         
Debt:                                                                                                    
    Short term debt                                    $105,567                      $105,567            
    Long term debt                                     $868                          $868                
    Total debt                                         $106,435                      $106,435            
Stockholders equity (deficit):                                                                           
Preferred stock  authorized  10,000,000                                                                  
Shares, $.001 par value each.  At December 31, 2002                                                      
there are 0 shares outstanding                                0                             0            

Common stock authorized 50,000,000 shares, $.001 par                                                     
value each.  At December 31, 2002, there were                                                            
2,150,000 shares outstanding                               2,150                        2,463            

Additional paid in capital:                            1,539,441                    1,664,128            
Deficit accumulated during development stage          (1,457,092)                  (1,457,092)           
Total Stockholders' Equity                                84,499                      209,499            
                                                      -----------                   ----------           
Total capitalization                                    $190,934                     $315,934            

Forward  Looking  Statements                                                    

Some  of  the  information  in  this  prospectus  may  contain  forward-looking 
statements.  Such  statements  can  be  identified by the use of forward-looking
terminology  such as "may", "expect", "anticipate", "continue", or other similar
words.  These  statements  discuss  future  expectations, contain projections of
results of operations or of financial condition or state other "Forward-Looking"
information.  When  considering such forward-looking statements, you should keep
in  mind  the  risk  factors  and  other  cautionary statements included in this
prospectus.  The  risk factors noted in the "Risk Factors" section and the other
factors  noted  throughout  this  prospectus,  including  certain  risks  and   
uncertainties,  could  cause  the  actual  results  of  the  company  to  differ
materially  from  those  contained  in  any  forward-looking  statement.        

Business  Of  The  Company                                                      

Our  Business.                                                                  

       We  manufacture,  market,  sell  and  distribute a family of hardware and
software  products used to test and  troubleshoot  components on printed circuit
boards.                                                                         

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We  have  designed and sold printed circuit board test products since Pensar was
formed  on  April  20,  1995.  Our company had a ten-year exclusive distribution
agreement  with  Pensar Technologies, dated June 19, 1999 amended April 15, 2000
and June 1, 2001, granting us the exclusive, worldwide right to market, sell and
distribute  these  test  products.  We  had  the right to purchase products from
Pensar  at a 40% discount off the price to the consumer. We had no obligation to
prepurchase  any  products  or parts for our inventory. In consideration for our
distributorship,  we  were  required  to  pay  Pensar  a  one-time  $5,000      
distributorship  fee  upon  execution  of  the  agreement  and  a monthly $1,500
distributorship  fee until July 31, 2000. In addition, the agreement contained a
right of first refusal to purchase the existing technology. We had the option to
renew  the  distribution  agreement  for  an  additional  five  (5) year term by
delivering  written  notice  to  Pensar  90  days prior to the expiration of the
initial  term.                                                                  

By  amendments  executed  in  April  2000  and June 2001 by both our company and
Pensar, we were granted both a first right of refusal to purchase the CircuiTest
Technology  from  Pensar as well as an option to purchase the  technology at any
time  during the term of the  distribution  agreement  and any  extensions.  The
option  to  purchase  allowed  us to  purchase  the  technology  for the  lesser
of  $375,000  or  75% of  the fair market value as determined by an  independent
third  party  appraiser.                                                        

On  May  1,  2002,  International  Test  Systems,  Inc.  entered  into  an asset
purchase  agreement  with Pensar whereby International Test Systems acquired all
of  the  assets  and  certain  of the liabilities of Pensar in consideration for
300,000  shares  of  International Test Systems' common stock, and the          
assumption by International  Test  Systems of Pensar liabilities in the amount  
of $30,835.                                                                     

The  Products  we  own  and  market.                                            

The  products  we  own  and  market  are  known  collectively  at the CircuiTest
In-Circuit  Component  Test  System  and include the 2000S  In-Circuit Component
Test System,  the CircuiTest  2100 Scanner  Expansion and the recently developed
2100  S/OAI  (Shorts/Opens  Adapter  Interface)  Shorts  and  Opens  Tester.    

The  CircuiTest  2000S  In-Circuit Component System is a personal computer-based
product  which will troubleshoot, test and allow for the repair of components on
assembled  printed  circuit  boards.  This  system  connects  with  any standard
personal computer via a serial communications port and contains its own external
power  supply.  The  CircuiTest  2000S  tests  both analog and digital circuits.
Electronic  printed  circuit  boards  are  now  used  throughout the electronics
industry  and  will  continue  to be used in the foreseeable future. Despite the
growth  of digital technology, we believe the real world to be analog in nature.
Digital  circuits  can only operate on very specialized or "restricted" kinds of
electrical  signals.  All other types of signals are, and must be, translated by
analog  circuits  if  digital circuits are to process them. Furthermore, digital
circuits  require  highly  stable  power  sources,  and  these  power  supplies 
themselves  must  be  created  from  analog  components.                        

The  CircuiTest  2100  Scanner  Expansion,  when  connected  to  the  CircuiTest
2000S, increases the number of tests the software can automatically perform from
64  to  a  range  of  between  256  and  1024.                                  

The  newly  developed  2100  S/OAI  can  be  used  by  printed  circuit  board  
manufacturers  and  assemblers  for located shorts and opens between points on a
component, a common problem in the manufacturing  process.  Attached to the 2100
Scanner  Expansion,  the  S/OAI  also has  test-point  capability  of up to 1024
points.                                                                         

Specific  electronics  components  that  might  use  our  printed  circuit board
testing  equipment  for  manufacturing,  repair  and  maintenance  include:     

o    Network  switching  cards;                                       

     o    Computer and peripheral  circuit boards in such products as computers,
          mother boards,  monitors, laser printers,  matrix printers,  scanners,
modems,  optical  disk  drives;                             

     o    Avionics circuit boards, found, for example, in aircraft, navigational
and  communications  electronics;                           

     o    Medical   circuit   boards;   military  and  government   electronics;
          telecommunication  circuit  boards;  telephone  equipment,   answering
          machines  and fax  machines;  cash  registers,  scanners,  credit card
          verification  equipment;  electronic equipment power supplies;  and TV
and  monitor  circuit  boards.                              

We  believe  these  systems  are  low-cost,  easy-to-use  and  have  numerous   
attributes  that we believe  separate them from the  competition.  Some of these
attributes  include:                                                            

     o    Knowledge-Based  Data: A database  feature within the product software
allows  it  to  locate  failed  components  faster.         

     o    Power-Off Testing: Testing of components is performed without applying
          electrical power to the board.  Power-off testing eliminates the risks
     of  damaging  the  components  of  the  printed  circuit  boards.

     o    Family of Adaptive Products:  Our core testing product, the CircuiTest
          2000S  System, is designed to facilitate  rapid adaptation to meet the
          unique,  complex testing requirements that our customers identify.  We
          believe  the  CircuiTest  2000S  System  and its  family of  flexible,
          adaptive  products can test and  troubleshoot the majority of problems
          that exist in a variety of  products  or can be readily  adapted to do
so.                                                         

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AMT,  Inc.,  Southwest  Test,  Inc.,  and Camtech Electronics each accounted for
1/3  of  2001  sales.  Two different customers accounted for 42% and 18% of 2000
sales.  No  other  customer and no vendors accounted for as much as 10% of sales
or  purchases.  We  are  seeking  a  capital  infusion  from  this  offering:   

(i)  to  further  develop  a  market  and  support  our  products,    
(ii)  to  develop  and/or  acquire  new  technologies,  and           
     (iii)to  seek and form  strategic  alliances  in  order  to strengthen  our
company  and  maximize  our  future  value.                 

Production  of  Products  We  Market.                                           

Since  our  inception  in  1995,  we  have  continually  outsourced  all  the   
manufacturing  and  production of products to various companies around Texas and
the Southwest.  We intend to continue to subcontract the production and assembly
of  products  to  local  and  regional  sheet  metal  fabricators, manufacturers
and  assemblers.                                                                

Numerous  back-up  outsourcing  firms  exist  in  the  area, and we believe that
we  will  not  be  reliant  on  any  single  provider.  We  expect that we would
experience  a  maximum  two-week  delay  if  we  had  to  change  suppliers  or 
manufacturers. This delay should not have a material effect on sales. Most parts
and  components  are readily available off-the-shelf through  wholesalers.  Less
than  5% of the final product is composed of long-lead-delivery-time components,
and  we  normally  carry  these  in  inventory.  In addition, to achieve certain
discounts,  we  may,  from  time  to  time,  warehouse  bulk  quantities  of    
off-the-shelf  components.                                                      

As  of  April  1,  2003,  the  company  does not have any backlog of firm orders
for  products.                                                                  

Future  Products                                                                

We  believe  that  as  more  and  more  products  are  manufactured with printed
circuit boards, the demand for manufacturer's defect-testing and troubleshooting
systems, such as ours, increases. We anticipate the introduction of new variants
to  the  existing  core  product  line.                                         

We  believe  that  there  will  be  a  market  for enhancements to our core test
products.  An example of such an enhancement is the autoprober.  At present, our
testing  systems are attached to the circuit  board by hand.  An autoprober is a
robotic chassis into which the circuit board is inserted for hands-free testing.
We  are  very  satisfied  with  our  product  without  the  enhancement  of  the
autoprober,  as it is less  expensive  than products with this feature,  thereby
providing us a price  advantage over our  competitors.  However,  providing this
enhancement  as an alternative for our customers could enlarge our market share.

While  we  do  not  presently  manufacture  autoprobers,  other  companies, such
as  Probotech,  Inc.  and Teradyne,  Inc., do. We intend to seek the addition of
new  products  to  our  product  line,  as  well  as new  ways to  maximize  the
relationships  we  build  with  our  customers.  As  recent evidence of this, we
provided  Probotech  a  copy of our software in August,  2001 to  determine  the
best  way  to  interface  their autoprober technology with our hardware/software
CircuiTest  technology.   Probotech  is  continuing to examine the likelihood of
merging  the  2000S  technology  with  their  autoprober.                       

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We  further  intend  to  accomplish  these  goals by seeking distributorships or
other  strategic  relationships,  such  as  joint  ventures,  mergers,  or      
acquisitions,  with  companies in our related sphere of influence and industry .
We  believe  that  by  establishing  a  superior  marketing  network and staying
abreast  of  the  needs  of  our  customers,  as  well  as current technological
advances,  we should be able to continually expand our product line and maximize
the  value  of  our  company.                                                   

Our  Market  Strategy                                                           

1.  Sales                                                                       

Our  sales  approach  will  be  based  on  maximizing  contact  with  potential 
customers by demonstrating  that our products have a wider range of capabilities
and  a  lower  price  point  than  our  competitors'  products.                 

Our  current  internal  sales  force  consists  of  our  president,  Carey      
Birmingham.   Our  approach  includes   establishing  new  additional  worldwide
distributor   relationships  and  implementing  direct  marketing  campaigns  to
specific segments of the market.  Our direct marketing and sales efforts include
increasing  our  internal  direct sales force,  trade  publication  advertising,
Internet web site  promotion,  public  relations,  trade  shows/conferences  and
database  marketing  culminating  in  demonstrations.                           

This  method  is  based  upon  our  own  internal  experience of selling to this
market  and  does  not  rely  on  any  specific  outside  sales  study or model.

2.  Distribution                                                                

Our  research  indicates  that,  increasingly,  companies  are  creating  sales 
distribution channels composed of non-company employees,  and that companies are
reducing their dependence on their own direct field sales force. We are building
our  distribution  channels  to  reflect  this  industry  trend.                

We  may  engage  additional  regional  and international distributors as well as
value-added   resellers   ("VAR")  and  we  may   engage   independent  sales   
representatives,  licensing  partners and joint  venture  partners to market and
sell  products  to  prospective  customers.                                     

3.  Direct  Mail                                                                

We  are  considering  the  use  of  direct  mail  as  the  first  phase  of  our
database  marketing  campaign to generate more leads and inquiries  that lead to
sales.  In addition, we expect to continue  generating prospect lists from trade
shows,  trade  publications,  associations,  and  other  sources.               

We  have  produced  marketing  materials  describing  our  products  that we can
mail to potential  customers  who respond to our print ads, who attend the trade
shows and  conferences  and who are trade magazine  subscribers.  We can receive
these  mailing  lists  as  an  advertiser.                                      

In  order  to  enhance  the  success  of  the direct mail campaign, a portion of
the marketing  budget may be designated  for follow-up  phone calls to potential
customers  and  lead  management.                                               

4.  Advertising  and  Trade  Shows                                              

We  plan  to allocate a portion of our marketing budget to print advertisements.
In  conjunction  with  paid  advertisements,  most  trade  publications  offer  
complimentary  editorials  and  feature  stories on new product releases. We are
developing  an editorial calendar and will increase our public relations efforts
to  write  articles  about  the  technology.                                    

In  addition,  numerous  trade  shows  exist  for  electronics manufacturing and
testing. We plan to participate at both large, national trade shows and smaller,
regional  trade  shows.                                                         

Our  Industry  and  Our  Competition                                            

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Estimates  targeted  the  2000  world-wide  annual  market  for  personal       
computer-based  testing  equipment  to be in  excess  of $400  million.  We have
obtained  this information from Frost & Sullivan, an international marketing and
consulting  firm. Further, based on management's market experience and knowledge
of  its customer base, it concurs with this estimate.  As described below, other
competitors  are  substantially  larger  in size  and  market  share  or  market
coverage.  However,  we anticipate  that the  CircuiTest  Systems will be priced
lower  than the  competition,  be  easier to use and  include  a wider  range of
features.                                                                       

Existing  Competition  For  The  CircuiTest  Systems                            

Competitive  testers  to  ours  are  marketed  by  Huntron  Instruments, Inc., a
US-based company, Polar, PLC, and DiagnoSYS,  Ltd., both UK-based companies. The
systems these companies  manufacture and sell rely on a graphic  voltage/current
plot of the  component  tested on a personal  computer,  similar to our systems.
However,  we  believe  our  systems,  the  CircuiTest  2000S  and  2100  scanner
expansion,  are less expensive,  easier to use and when compared to Huntron, can
test  a  much  wider  range  of  components.                                    

Huntron                                                                         

Our  CircuiTest  system  is  most  often  compared  to  the  Huntron  series  of
testers.  Huntron  Corporation,  a privately  held company  based in Mill Creek,
Washington,  has several  systems ranging in price from $1,995 for a rudimentary
system to  $40,000  and more for its  advanced  auto-prober  system.  Huntron is
privately  owned  and  little  detailed  financial  information  is a available.
However, Huntron is recognized in the voltage/current curve analysis market and,
based  upon most recent Dun & Bradstreet reports available, has estimated annual
sales of $4.8 million.  It is our estimation that Huntron occupies approximately
2-3%  of the total US-based Automated Test Equipment Market.  Huntron was formed
in  1976  and  sold  to  its  officers and directors in 1993 for an estimated $4
million.                                                                        

Huntron  currently  offers  a  1-year  warranty  on  its  equipment  with       
subsequent  one-year  extensions  for  $950,  as  well  as  fees  for  software 
upgrades.  Most  often,  the  CircuiTest  2000S  is  compared to Huntron's Model
5100DS,  priced  at  $7,495,  and more  recently the Huntron  ProTrack Model 20,
priced  at  $6,995,  compared  to our CircuiTest  2000S priced at $5,995.  After
using  both  the  Huntron  5100DS and our CircuiTest 2000S system, a focus group
comprised  of eight potential  customers  reported that the Company's CircuiTest
system  had  numerous  advantages  over  its  competitor.                       

Polar,  PLC                                                                     

Polar  is  another  closely  held,  private  company  based  out  of  the United
Kingdom.  According  to  recent  Dun  & Bradstreet reports, the US office of the
UK-based  company  had  estimated  sales  of  $1.5  million in fiscal 2001.  The
products  Polar  manufactures  and  markets  compete primarily with our products
overseas  and in the middle east.  It is our estimation that Polar occupies less
than 1% of the US-Based ATE market and up to 5% of the international ATE Market.

DiagnoSYS,  Ltd.                                                                

DiagnoSYS  is  also  closely  held,  with  the  parent  company based out of the
United Kingdom.  DiagnoSYS also competes significantly with our equipment in the
international  markets  overseas.  It  is  our  estimate that DiagnoSYS occupies
approximately a 5% niche in the US-ATE market and up to 10% of the international
ATE  market.                                                                    

Others                                                                          

The  balance  of  ATE  in  the  US  is spread among various large companies with
substantially  more  expensive  test  equipment,  and  therefore  overlapping   
customers,  as  our  company.  These  companies  include such household names as
Hewlett-Packard subsidiary Agilent, Teradyne and GenRad. More often, we are seen
as  adjuncts  to  these  manufacturers  rather  than  competitors.              

In  general,  the  CircuiTest  systems  compete  in  circuit  board  repair  and
troubleshooting  for companies around the world.  Although 85% of our historical
sales have been in the domestic United States, we have had sales to companies in
Brazil,  Japan,  Egypt,  Turkey,  Mexico,  Canada and  Germany,  to the US Army.
Although these sales represented a small percentage of overall sales, we believe
the  potential  for future business is strong overseas and in Mexico and Canada.

Trends  In  The  Company's  Historical  Operating  Results.                     

We  foresee two significant issues which will favorably affect our operations in
the  future:                                                                    

1.   Low  Cost/PC-Based  Automated  Test  Equipment                             

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2.   The  price point of the CircuiTest 2000S, our core product, is considerably
lower  than  our  competitors' comparable automated test equipment.  Most often,
the  CircuiTest  2000S  is compared to Huntron's Model 5100DS, priced at $7,495,
and  more  recently  the  Huntron  ProTrack  Model  20,  priced  at $6,995.  Our
CircuiTest  2000S  is  priced  at  $5,995.                                      

We  believe  that  current  economic  conditions,  including the PC market, will
have  a  significant  impact  on  the  company's business as companies will seek
products to test and troubleshoot circuit boards at the best possible price.  In
the  event  that a competitor offers a product similar to the one offered by the
company  at  a competitive or reduced price than that offered by the company, we
may  be  forced  to  reduce  our  price.                                        

Power-Off  Testing                                                              

Our  core  product,  the  CircuiTest  2000S,  tests and troubleshoots populated,
printed circuit boards without applying power to the board. Management believes,
and  has  had confirmation from the  marketplace,  that  power-off  testing will
increase  dramatically  in  the  future due to this  feature.  As components get
smaller  and  smaller,  the  trend  in  the  industry will be to test and repair
components  at  the board level with no power supplied to the populated, printed
circuit  board. When power is supplied to the board to test components, there is
a  risk  of  damaging  the  component  or  the  entire  board  if the technician
incorrectly connects the test equipment.  Our "power-free" circuit board testing
technology  uses  known  and  trusted  methods  of troubleshooting and virtually
eliminates  the  possibility  of  damaging  the  board  or  its  components.    

Sampling  of  Features  Found  in  the  CircuiTest  2000S  &  2100:             

     SymSortTM  -  A  copyrighted  database  feature which allows technicians to
automatically  accumulate  information on failed components on a printed circuit
board.  This  feature  directs  the  technician  to the most likely component to
causing  a  particular  problem.                                                

     TurboScanning  - Accelerated software feature allows up to 10 tests/second,
or  test-by-test  discharge  of  individual  points.                            

     Digital  Image Importing  - Software  feature  allowing  the user to view a
digital  image  of  the  printed  circuit  board  under  test,  making  locating
components  under  test  fast and easy. The image can be in photographic format,
schematics,  or  user-designated  format.                                       

     Warranty  & Software Upgrades - We offer, through our manufacturer, Pensar,
a  3-year  repair  or  replace  warranty  on its products as well as 3-year free
software  upgrades  for customers.  This compares to competitors that offer only
1-year  warranties  and  1-year  free  upgrades.                                

     Ease  of Use - The Windows-based software is icon-driven, and training time
averages  three  hours  per  customer.                                          

     Quick  Ramp-Up  -  One  of the product's software features is "Scope Mode."
Scope  Mode  allows  technicians  to  begin  trouble-shooting   boards          
immediately,  without  using  all  the  product  features  and with virtually no
training.                                                                       

     Low  Cost  -  Based  on  market comparisons of similar testing systems, the
Company's  products  are  inexpensive.  Payback  typically  averages four to six
months,  but  in  the  case  of  one  customer,  was  as  fast  as  one  day.   

     Family  of Adaptive Products - Our core  testing  product,  the  CircuiTest
2000S  Base  System,  is  designed  to  facilitate  rapid adaptation to meet the
unique,  complex  testing requirements that our customers identify.  As more and
more  products  are  manufactured  with  printed  circuit boards, the demand for
manufacturer's  defect-testing  and  troubleshooting  systems,  such  as  ours, 
increases. The CircuiTest 2000S Base System and its family of flexible, adaptive
products  can test and troubleshoot the majority  of  problems  that  exist in a
variety  of   products  with  PCBs.                                             

Past  foreign  sales  represented  units  sent  to  companies  in Turkey, India,
Japan,  China, Egypt, Singapore, Jamaica, Mexico and Canada. The company intends
to  increase  international   sales  by  signing   international   distribution 
agreements.  Foreign  sales  as  a  percent  of  total  sales for the year ended
December  31,  2001  were  0%.                                                  

Past  domestic  government  sales  represented  sales  to  the US Air Force, the
INS and the US Army. We intend to market aggressively to US government agencies.
We  had  no  domestic  government  sales  during  the  last  fiscal  year.      

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Government  Regulation                                                          

We  are  not  currently  subject  to direct regulation by any government agency,
other  than  regulations  applicable  by  businesses generally.  In the event we
become  subject  to  regulation,  this  may  have  an  effect  on our results of
operations.                                                                     

Our  Significant  Employee                                                      

We  have  one  employee,  Carey  Birmingham,  our  president  and a director. We
plan  to  maintain  lean  operations  in order to  minimize  operating  expenses
while  seeking  a capital infusion. Depending upon the success of this offering,
during  the  next  12  months  we  intend  to  hire between one and three  staff
members  as  well  as  enter into consulting relationships as needed in order to
market  our  products,  exploit  new  technologies  and  products,  and seek and
exploit strategic  alliances with persons and/or businesses that we believe will
strengthen  our  company  and  maximize  our  future  value.                    

Initially,  we  will  rely  on  the expertise of our president, Carey Birmingham
to  begin  marketing efforts.  In addition, we anticipate hiring a marketing and
sales  support  person  to  provide  marketing  support  as well  as to  conduct
"in-house"  marketing efforts,  such as phone solicitations and direct mailings.
We  also  anticipate  hiring  an  administrative support staff member to provide
office  support  services to the  president and the  marketing  support  person.
Depending  on the  success  of the  foreign  marketing  efforts,  we  anticipate
employing a  marketing  and sales  executive  to aid in the  overseas  marketing
effort.                                                                         

We  do  not  anticipate  that  any  of  the  employees  engaged  by  us  will be
subject  to  any  collective  bargaining  agreements  nor do we  anticipate  the
possibility  of  any  strike  or  work  stoppage.                               

Description  Of  Our  Property                                                  

We  currently  sublease  approximately  200  square  feet  of  office  and      
warehouse  space  at  16161 College Oak, Suite 101, San Antonio, Texas, which we
use  for  our  corporate offices.  We entered into a three year sublease with an
entity  controlled  by our president and largest shareholder, BFP Texas Limited,
Ltd.  and the sub lease expires on December 31, 2004.  Our lease payment is $150
per month.  In  addition  to  rent, we pay a proportionate share of normal      
office  expenses  for  the  maintenance  of  the  premises.                     

Our  president,  Carey  Birmingham,  owns  a  4.02% limited partnership interest
in  BFP  Texas,  Limited,  our  landlord.                                       

We  believe  that  the  existing  premises  will  satisfy  our  needs  in  the  
foreseeable  future with only moderate changes needed to be made to the premises
to accommodate  additional  staff.  Ample small office space is available to us,
and  we  are  not  real  estate  dependent.                                     

Intellectual  Property                                                          

On  May  1,  2002  we  acquired  all  ownership rights, including copyrights, to
the  software,  hardware  and  intellectual property associated with the product
known  as  CircuiTest  2000S  from  Pensar.  The  hardware  is  protected  from 
outside  duplication  by  a  Programmable  Array  Logic  chip,  or  "PAL" on the
main  system  motherboard.  This  chip  is installed and programmed in the final
phase  of  quality  control  at its main  office by  developers  of the  system.
Immediately  after programming,  a small fuse is "blown" in the PAL,  making the
hardware  and  its  functions  virtually  impossible  to  duplicate.  Pensar  is
considering  upgrading  its  hardware  security by including a modified Erasable
Programmable  Read-Only  Memory  chip, or EPROM, which also has a fuse "blowing"
feature.  The  inclusion  of a chip is expected to increase the cost of the base
system  by  $10-$15.                                                            

Research  and  Development                                                      

We  have  not  spent  any  funds  on research and development of products during
the  last  fiscal  year.                                                        

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The  Development  Of  Our  Company                                              

International  Test  Systems,  Inc.  ("ITS  Texas"),  a  Texas  corporation, was
formed in September 1996. In January, 1997 ITS Texas purchased all of the assets

and liabilities of Pensar  Technologies LLC ("Pensar"),  which ceased operations
in  December  1995. These assets consisted of the technology underlying a device
then know as the A-2000  Universal  Analog Tester for component level testing of
printed  circuit  boards as well as inventory and  furniture  and  fixtures.  As
consideration,  ITS Texas  issued to Pensar  730,000  shares of ITS Texas stock,
representing  45.625%  of  its  total  shares.                                  

As  a  result  of  this  transaction,  ITS  Texas  embarked on an effort to sell
its shares to the public under Rule 504, a Small Corporate Offering Registration
(SCOR) exemption. Unfortunately the efforts to sell stock in ITS during 1998 and
early  1999 were unsuccessful  and ITS Texas abandoned the effort in April 1999.
Carey  Birmingham,  our chairman of the board and chief executive  officer,  was
chairman of the board of ITS Texas and Pensar LLC at this time.  Youval  Krigel,
our director and consultant, is the co-designer of the test system and served as
vice president of Pensar and vice president of research and  development for ITS
Texas  at  this  time.                                                          

Subsequent  to  its  failed  efforts  to  raise  capital  in the SCOR, ITS Texas
experienced   continued   difficulties   in  growing  its   operations,   became
overburdened with debt and sought the assistance of outside  consultants as well
as  strategic  relationships  to  boost  the  company.                          

In  May,  1999,  ITS  Texas  and  Unifund  America,  Inc.,  a  New York merchant
banking firm  specializing  in strategic  planning  for  companies  such as ITS,
agreed to form a strategic relationship.  Unifund believed that a leaner company
devoted  to marketing and distribution  might be a more successful  venture.  It
also  believed  that it could  help  grow  such a  company  by  identifying  and
evaluating  sensible  business  solutions  as  well  as  forming   complementary
strategic relationships.  Unifund was only interested in a marketing company. On
June  16,  1999,  ITS  Texas  and  Unifund   America,   Inc.   formalized  their
relationship.  ITS Texas  would issue a marketing  agreement  to a newly  formed
entity,  which  would become our company.  In consideration of being granted the
exclusive  marketing  agreement,  the parties  agreed that the new company would
issue  210,000  of  our  shares  of  common  stock  to  ITS  Texas  as  follows:
17,000 shares of our common stock to the holders of ITS Texas and 193,000 shares
of  our  common  stock  to  Carey  Birmingham.  It  was  also  agreed that Carey
Birmingham would be our president and director.  The parties agreed that Unifund
America's  chief  executive  officer,  Scott  Barter,  would be appointed to our
board  of  directors  and  that  Unifund  would own a  controlling  block of the
shares.   As  additional  consideration  for the exclusive marketing  agreement,
Unifund  agreed  that  it  would  provide  management,  business  and  marketing
advice  to  the  newly formed entity and to fund legal, accounting and operating
expenses  in  connection  with  the establishment of our business.  Unifund paid
$25,000  to the law firm of Kaplan Gottbetter & Levenson, LLP for legal services
in  connection  with  the preparation of our registration statement and received
250,000  shares of common stock from the company.  In addition, Unifund has paid
the  company approximately $80,000 as of the date of this registration statement
which  was  utilized  for  operations.                                          

Management  of  the  to-be-formed  entity  wanted only to be a marketing company
and not a company  involved in the  development  or  manufacture  of the circuit
board products.  In light of this, ITS Texas was reorganized its operations.  On
June 16, 1999, it transferred all of its technology back to Pensar Technologies,
LLC, which had been dormant but in good standing since the transfer of assets in
1997.  In  exchange  for the  technology,  Pensar  assumed all of the assets and
liabilities  of  ITS  Texas.  Assets  of Pensar at the time of transfer included
completed  inventory,  comprised  of  un  assembled  kits  for  approximately 14
2000S,  2100  and  1000S  units  as  well  as  miscellaneous  parts.            

Simultaneously  with  the  transfer of assets and liabilities between Pensar and
ITS  Texas  in  1999,  the  two  companies  agreed  to execute a distributorship
agreement  that  allowed  ITS  Texas the exclusive worldwide right to market and
distribute  Pensar test systems for a period of 10 years, with options to renew.
On  May  1,  2002,  this  distributorship  agreement  was cancelled and an asset
purchase  agreement  was  entered into between International Tests Systems, Inc.
and  Pensar  whereby  International  Test Systems acquired all of the assets and
certain  and of the liabilities of Pensar in consideration for 300,000 shares of
International  Test  Systems'  common stock valued at $.40 per share or $120,000
And  the  assumption  by International Test Systems of Pensar liabilities in the
Amount  of  $30,835.  Therefore,  the  transaction  was  valued  at  $120,000.  

During  the  fiscal  year  ending  December 31, 2002 we sold a total of 4 Units,
consisting  of  a  blend  of  2000S  base  Systems  and 2100 Scanner Expansions.

From  the  date  the  first  test  system  was  sold  in  October  1994  through
December  31,  2002,  a  total  of  151  units  have  been sold to a total of 60
customers  in the U.S., Japan, China, Egypt, Singapore, Jamaica, Mexico, Brazil,
Turkey,  India  and  Canada.  A  partial list of end-use customer list includes:

=========================================================================       
-------------------------------------------------------------------------       
Company                              Location             No.  of Systems       
=========================================================================       
NCR  Corporation                     Bethlehem,  PA              1              
IBM  Corporation                     San  Jose,  CA              2              
Sony  Microelectronics               San  Antonio,  TX           2              
Cisco  Systems                       San  Jose,  CA              2              
Solectron  Corp.                     Austin,  TX                 4              
SMT  Centre                          Austin,  TX                 6              
Harris  corporation                  San  Antonio,  TX           6              
US  Air  Force                       San  Antonio               10              
US  Army                             Mannheim,  Germany          1              
ICL/Fujitsu                          Dallas,  TX                 3              
Immigration  Naturalization  Service                                            
Various  Location  in  Texas                                     3              
Radian  Corporation                  Austin,  TX                 2              
Paradigm  Corp.                      San  Antonio,  TX           2              
Finetest                             San  Jose,  CA              2              
Vanco  PTE                           Singapore                   1              
Fastar,  Ltd.                        Dallas,  TX                 1              
Primetech  Electronics               Quebec,  Canada             1              
Colin  Medical  Instruments          San  Antonio,  TX           1              
Matrix  Components                   Austin,  TX                 2              
Tanisys  Corporation                 Austin,  TX                 2              
EMSCO                                Cairo,  Egypt               1              
Electronic  Resources,  Int'l        Des  Moines,  IA            2              
Digital  Repair  Corp.               San  Antonio                1              

Note:  Because  this  offering  focuses on details concerning the company rather
than  the  industry  in  which  the  company operates or will operate, potential
investors  may wish to conduct their own separate investigation of the company's
industry  to  obtain  broader  insight  in  assessing  the  company's prospects.

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Recent  Events                                                                  

Messrs. Birmingham and Barter each received $7,500 in February 2003 as          
non-refundable fees for the execution of a Letter of Intent with a third party  
to purchase shares from Messrs. Birmingham and Barter for $.26 per share. The   
Letter of Intent expired by its terms and the fees were retained by both of     
Messrs. Birmingham and Barter as liquidated damages.                            

In  March  2003,  each  of  Messrs. Birmingham and Barter received approximately
$30,000  from  the  same  third  party  as  mentioned  above, via their agent in
connection  with  continued  negotiations  between  the parties.  In addition to
negotiations  to  acquire  shares  of  company common stock from each of Messrs.
Birmingham  and Barter, the third party was negotiating to acquire a controlling
interest  in  the  company.  As  of  April  4,  2003,  the  company  is still in
negotiations  to  sell  a controlling interest and Messrs. Birmingham and Barter
believe they have reached an agreement to  sell  an aggregate of 626,000 shares 
under the terms of the Letter of Intent.  In  the event that Messrs. Birmingham 
and Barter are unable to reach an agreement  to sell their shares, it is likely 
that the third party will seek the return  of  advances of approximately $30,000
made to each of Messrs. Birmingham and  Barter.                                 

Management's Discussion And Analysis Of Financial Condition And Results Of      
Operations                                                                      

The  following  discussion  should  be  read  in  conjunction with our financial
statements.                                                                     

This  prospectus  contains  forward  looking  statements  relating  to  our     
company's  future economic  performance,  plans and objectives of management for
future operations, projections of revenue mix and other financial items that are
based  on the  beliefs  of,  as well  as  assumptions  made  by and  information
currently  known  to,  our  management.  The words  "expects, intends, believes,
anticipates,  may, could, should" and similar expressions and variations thereof
are intended to identify forward-looking  statements.  The cautionary statements
set  forth  in this section are intended to  emphasize  that actual  results may
differ  materially  from  those  contained  in  any  forward  looking statement.

Development  Activities.                                                        

Our  company  has  been  an  early growth stage enterprise since 1995. We are an
early  growth  stage company that was organized to exclusively market and sell a
component-level  printed  circuit board tester whose principal customers use the
tester  to  analyze,  repair, and service printed circuit boards with components
attached.                                                                       

During  our  development,  our  management  devoted  the  majority  of  their   
efforts  to  creating and initiating the marketing program, and sourcing working
capital  to engage in any profitable business  activity and provided the initial
working capital through the sale of shares of common stock.  Our company has not
yet  generated  sufficient  revenues  during its  operating  history to fund its
ongoing  operating  expenses, or entirely fund its marketing  activities.  There
can  be  no  assurance  that the manufacturer's products will be accepted in the
marketplace  or  that our company's sales efforts will provide a profitable path
for  us.                                                                        

Results  of  Operations                                                         

Twelve  Months  Ended December 31, 2002 Compared to Twelve Months Ended December
31,  2001                                                                       

Revenue  from  equipment  sales and sales commissions increased $3,859 to $9,534
for  the  twelve  months ended December 31, 2002 compared to sales of $5,675 for
the  twelve  months ended December 31, 2001.  Management believes that the small
amount  of sales is largely attributable to management's efforts to complete the
company's  public  offering  which has resulted in less time spent by management
marketing  the company's products.  In addition, the Company's lack of funds has
contributed  to  its  inability  to  market  and  sell  the  company's products.

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General and administrative expenses increased $5,916 or 4% from $154,907 for the
twelve  months  ended  December 31, 2001 to $160,823 for the twelve months ended
December  31,  2002.  The  increase  in  general  and administrative expenses is
largely  due  to professional fees paid to accountants and lawyers in connection
with  the  company's  efforts  to  become  a  publicly-traded  entity.  Another 
significant  general  and  administrative expense  included consulting expenses.

Net  loss increased $142,673, or 96% from $(149,232) for the twelve months ended
December  31, 2001 to $(291,905)  for the twelve months ended December 31, 2002.
The  increase  in net loss was largely due to the impairment loss of $135,169 on
goodwill  recorded  in  the  purchase  of  Pensar.                              

Effects  of  Pensar  Acquisition  on  Company's  Future  Operations             

To  the  extent  that  the  company has acquired 100% of Pensar, this may have a
positive  effect through the sale of certain inventory that currently exists and
was  acquired  from  Pensar.    We do not believe that the acquisition of Pensar
will  have  a  significant  impact  on  our  future  operations,  cash flow, and
liquidity.                                                                      

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The  PC  market  and  its  related electronics are a small part of our business.
Nevertheless,  our  business  has  been  adversely  impacted  by the slowdown in
economies worldwide. We have also been adversely affected by the cyclical nature
of  the  electronics  and  semiconductor  industries, which experience recurring
periods  of  oversupply  of products and equipment of the type our equipment can
test and repair. These factors have resulted in a downturn in the demand for our
products.  During  the  first  and  second  quarters  of  2002,  orders declined
significantly.  Our  experience  in  previous  downturns  has  been  that orders
improve as our customers' capital expenditures increase. At present, however, we
cannot  say  how  long the current downturn will last or when the situation will
improve.  In  the absence of significant improvement, orders could remain low or
decline  further.                                                               

Liquidity  And  Capital  Resources.                                             

Overview                                                                        

The  Company's  cash  position  was  $0 at December 31, 2002. Working capital at
December  31, 2002 was negative at $(101,720).                                  

To  date,  we  have  not  generated  significant  revenues  as we have generated
revenues  of $5,675 for the year ended December 31, 2001 and $9,534 for the year
ended  December  31,  2002.  We have not been profitable since inception, we may
incur  additional  operating  losses  in  the future, and may require additional
financing  to  continue the development and commercialization of our technology.
While  we  expect  to  generate  revenues  from the sale of products in the near
future,  we  may  enter  into  licensing  or other agreements with marketing and
distribution  partners  that  may result in license fees, revenues from contract
research,  or  other  related  revenue.                                         

As  of  April  4,  2003  our principal commitments consist of our agreement with
Public  Securities  to  raise  funds in connection with this offering on a "best
efforts"  basis as well as a $75,000 revolving line of credit with BFP Texas, of
which  we have $8,000  available for borrowing.   However, there is no assurance
that  Public  Securities will be successful in raising us any capital.  Although
we  have  no  material  commitments  for  capital expenditures, other than those
mentioned  above,  we  expect our capital requirements to increase significantly
over  the  next  several  years as we increase advertising and direct marketing,
increase  sales  and  administration  infrastructure  and  embark  on developing
in-house business capabilities and facilities.  Our future liquidity and capital
funding  requirements  will  depend  on  numerous  factors,  including,  but not
limited  to,  the  levels  and  costs  of  our  research  and  development      
initiatives  and  the  cost  and  timing  of  the  expansion  of  our  sales and
marketing  efforts.                                                             

Our  current  cash  forecasts  indicate  that  there  will be negative cash flow
from  operations for the foreseeable future.  We believe that proceeds from this
offering,  assuming  we  raise at least $125,000, will be sufficient to meet our
anticipated  needs  for  working  capital,  capital  expenditures  and  business
development for the next twelve months.  We expect to utilize cash at an average
rate of approximately $10,000 per month, or $120,000 for the next twelve months.
Moreover, if we are successful in raising at least $125,000, Mr. Birmingham's 5-
year  employment  contract  will  become effective and he will receive an annual
salary  of  $25,000  for  the first year, $55,000 for year two, $65,000 for year
three,  $75,000  for  year  four  and  $100,000  for  year  five.               

If  we  are  unable to raise a minimum of $125,000 from this offering, we may be
forced  to curtail or cease our operations.  Even if we are able to continue our
operations,  the  failure  to  obtain financing could have a substantial adverse
effect  on  our  business  and  financial results. Although we have historically
relied  upon  financing provided by our officers and directors to supplement our
operations,  they  are  not  legally obligated to provide us with any additional
funding  in  the  future.  We currently maintain a revolving line of credit with
BFP Texas which bears interest at an annual rate of 8%.  As of April 1, 2003, we
owed  BFP Texas approximately $67,000.  Other than BFP Texas, we do not have any
agreements  for  additional  sources  of  financing.                            

In  the future, we may be required to seek additional capital by selling debt or
equity  securities,  curtailing  operations,  selling  assets,  or  otherwise be
required  to  bring cash flows in balance when it approaches a condition of cash
insufficiency.  The  sale  of additional equity securities, if accomplished, may
result  in  dilution  to  our shareholders.  We cannot assure you, however, that
financing  will be available in amounts or on terms acceptable to us, or at all.

As  of  December  31,  2002,  we  had  a tax loss carry-forward of approximately
$85,000  to  off-set  future taxable income. There can be no assurance, however,
that  we  will  be  able  to  take  advantage  of  any  or  all of such tax loss
carry-forward,  if  at  all,  in  future  fiscal  years.                        

Year  Ended  December  31,  2002                                                

Net  cash used in operating activities was $(17,758) for the year ended December
31, 2002, which reflected a net loss of $(291,905), stock issued for services of
$108,800,  and  an impairment of goodwill associated with the purchase of Pensar
of  $135,169.                                                                   

Net  cash  provided  by  financing  activities  was  $61,107  for the year ended
December  31,  2002,  which  reflected  shareholder  contributions of $6,900 and
proceeds  from  a  note  payable  to  a  related  party  of  $54,750.           

Cash  used  in  investing  activities  for  the year ended December 31, 2002 was
$(43,520) from an increase in deferred offering costs of ($43,673) and $153 cash
received  in  the  purchase  of  Pensar.                                        

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Year  Ended  December  31,  2001                                                

Net  cash  used in operating activities was $(3,242) for the year ended December
31,  2001,  reflecting a net loss of $(149,232) and stock issued for services of
$139,400.                                                                       

Cash  used in investing activities was ($17,005) for the year ended December 31,
2001  due  to  an  increase  in  deferred  offering  costs.                     

Cash  provided  by  financing activities was $15,073 for the year ended December
31,  2001  reflecting  shareholder  contributions  of  15,073.                  

Events  Or  Milestones                                                        

EVENTS OR MILESTONES

Printed  circuits  boards  are  found  virtually  every  type  of  electronic   
instrument and product  manufactured today. Every new product and every existing
product that contains a printed  circuit  board  represents  an  application  or
product  opportunity  for our test systems.  While no assurance can be given, we
believe that printed  circuit  boards will remain a mainstay in the  electronics
industry. Our products test the individual components on a printed circuit board
based on voltage  and current  (V/I)  signature  analysis.  This  technology  is
time-tested  and  is a  recognized  generic  means  of  testing  throughout  the
electronics  industry.  While the CircuiTest 2000S and associated software uses 
new and innovative interpretations of the V/I, we believe that this basic method
of testing will continue to be a standard far into the foreseeable future. We do
not believe that this  industry is as time  sensitive  as other  high-technology
industries,  and,  thus, we believe we have the time to plan,  fund and scale up
our business without losing a place in the market. Of course,  the foothold that
competitors have in the industry will be a barrier that we must pass.           

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                                                        [Enlarge/Download Table]


EVENT                         METHOD OF                                     DATE OR NUMBER OF MONTHS              
                              ACHIEVEMENT                    ESTIMATED      AFTER RECEIPT OF PROCEEDS             
                                                             CASH           WHEN EVENT SHOULD BE                  
                                                             REQUIRED       ACCOMPLISHED                          
                                                             FOR SUCH                                             
                                                             EVENT                                                
                                                                                                                  
Fund minimal operations       Conduct this                                  Immediately                           
                              offering and sell              $125,0000      after escrowed funds                  
                              a minimum of 312,500                          are released.                         
                              shares                                                                              
Market products based         Conduct this offering to                      Ongoing process which should          
 upon                         obtain needed funds to pay                    commence within one month after       
existing technology.          for direct mailings and        $5,000 based   receipt of funds in excess of         
                              other marketing efforts. Hire  on sale of     125,000. Direct offering  amount is   
                              marketing support and          312,500        received.  Other forms of marketing   
                              establish relationships with   shares         and the retainment of marketing       
                              independent sales                             support staff can commence when       
                              contractors to market          $235,625 -     amounts in excess of $125,000 are     
                              products. Target               $378,750       received. In addition, the president  
                              governmental and foreign       based on       and the directors will be compensated 
                              markets.                       raising        from the offering proceeds to the     
                                                             between        extent they engage in developing our  
                                                             $500,000 and   business, which may include           
                                                             $750,000       marketing advice or activities.       

Seek product and              Conduct this offering to                      Ongoing process which can             
 technology opportunities     obtain needed funds to hire    $0 based on    commence immediately after receipt    
 which expand our             a product developer and        sale of        of $125,000.  Upon receipt of the     
business in both the area     establish relationships with   312,500        maximum offering amount, we can       
 of testing and trouble       independent technology         shares         hire a product developer. The receipt 
shooting as well as other     companies and developers.                     of amounts between these              
areas that will maximize                                     $8,000 to      breakpoints will enable us to pay our 
 our value.                                                  $24,000 based  president and                         
                                                             on raising     directors who shall engage in the     
                                                             between        development of relationships with     
                                                             $ 500,000 and  individuals and companies which can   
                                                             $750,000       provide us with improved and different
                                                                            technologies and products.            
Seek to establish strategic   Conduct this offering to                      Ongoing process which can             
alliances that will maximize  obtain needed funds to pay     $2,000 based   commence immediately after receipt    
our value.                    for the services of the        on raising     of $125,000. Upon receipt of          
                              president, the directors and   $125,000       125,000, and upon the receipt of      
                              consultants to conduct due                    amounts between $500,000 and          
                              diligence on market needs      $75,000 to     750,000, we can pay our president     
                              and opportunities for our      $110,0000      and our directors who intend to       
                              company to increase its        based on       engage in the development of our      
                              value.                         raising        business. The ability to complete     
                                                             between        strategic alliances cannot be         
                                                             $500,000 and   definitively timed and will depend on 
                                                             $750,000       opportunities which these individuals 
                                                                            will continue to explore.             
Seek liquidity and growth     Become listed on the over-     $ 3,125 based  Six months to one year initially and  
in the market place.          the-counter bulletin board     on raising     then a continuing effort thereafter.  
                              and continue marketing         $125,000                                             
                              efforts.                                                                            
                                                             $50,000 to                                           
                                                             $65,000 based                                        
                                                             on raising                                           
                                                             between                                              
                                                             $500,000 and                                         
                                                             $750,000                                             

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Note:  After  reviewing  the  nature  and  timing  of  each  event or milestone,
potential  investors should reflect upon whether  achievement of each within the
estimated time frame is realistic and should assess the  consequences  of delays
or  failure  of  achievement  in  making  an  investment  decision.             

We  cannot  assure  you  that  any,  or  all,  of the events previously outlined
can,  or  will,  occur  within  the  expected  time  frame.                     

We  have  scaled  back  operating  costs  and  will  continue  to do so until we
receive  an  infusion of cash. If this offering is successful we will be able to
market and sell our products and to develop and/or license new technology. We do
not  currently  have  any  strategic  alliances.  In  the past we were unable to
generate  enough  capital  from  revenues to fully develop and retain the proper
staff  to  market  and support our products as well as to seek and exploit other
market  opportunities.  While  no  assurances can be given, we believe that with
proper  funding, we will have the support to achieve our objectives. However, we
believe  that  the  achievement  of  these  goals  involves  a  process  cannot 
necessarily  be  defined  by  a  list  of  separately  identifiable date-certain
milestones.                                                                     

To  make  our  company  profitable,  we  estimate  we  will require a minimum of
$125,000  in  capital  to be used over a 12-18  month  period  for such costs as
marketing and sales staff salaries and support,  as well as  advertising,  trade
show participation and reimbursement of costs to subcontracted distributors,  if
any.                                                                            

In  the  event  we  encounter  delays  in  the  successful  marketing  of  our  
products,  we can expect  consequences  which include  reduction in  advertising
expenditures,  participation  in tradeshows and possibly layoff of marketing and
sales  staff  and  support,  in  that  order.                                   

Directors,  Officers  And  Key  Personnel  Of  The  Company.                    

The  following  table  sets  forth  the  name, age and position of each director
and  executive  officer  of  International  Test  Systems  as  follows:         

Name                 Age                  Title                       
----                 ---                  -----                       
Carey  Birmingham         47     President, Chief Executive Officer,            
                        Chief Financial Officer  and  Director
Henrik  Youval  Krigel    48     Director                                       
Alex  H.  Yount           49     Director                                       

The  directors  have  been  elected  by the present shareholders and shall serve
for  terms  of  one  year,  or  until  their  successors  are  elected  and have
qualified. Officers are appointed by, and serve at the pleasure of, the board of
directors,  absent  any employment agreement.  There are no family relationships
among  the  company's  officers  and  directors.                                

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Carey  Birmingham  has  served  as  our  President,  Chief  Executive  Officer, 
Chief  Financial  Officer  And  Director since the Company was reincorporated in
Delaware  in  1999.  Since  1996,  Mr.  Birmingham has  served as  chairman  and
president of ITS Texas, as well as Pensar  Technologies  LLC. Mr. Birmingham was
responsible  for the  formation and  management of ITS Texas in September  1996,
which was a development stage company.  Prior to the formation of ITS Texas, Mr.
Birmingham  was also responsible for the formation of Pensar Technologies LLC in
1995, a start-up  company  created to design and market the technology  known as
the  2000S  In-Circuit  Test System. Mr. Birmingham is responsible for long-term
strategic  planning  and  all  day-to-day  administrative activities,  including
marketing,  finance,  profit  and  loss  responsibility,  building  strategic   
alliances  and  developing  sales.                                              

During  the  past  14  years,  in  addition  to  his work in venture capital and
individual  investments,  Mr. Birmingham had served in various capacities.  From
March  1982  through  April 1984, Mr. Birmingham served as Asset Manager and Sr.
Asset  Manager  for  New  York Life  Insurance.  Mr. Birmingham served as a Vice
President  for Unicorp  American  Corporation and  Executive Vice  President for
Unicorp  Property  Management,  a  company  subsidiary,  from  May  1984 through
November  1989.  Mr.  Birmingham  served  as  a  Portfolio  Director  for United
Services  Automobile  Association  (USAA)  from  1990  through part of 1992.  In
addition,  Mr.  Birmingham  served  as  a  consultant  for Fidelity  Mutual Life
Insurance  and  Mutual  Benefit Life from 1992 through 1994.  Mr. Birmingham has
been  responsible  for  the  asset  and  property  management  of  real  estate 
portfolios  valued  in  excess  of  $250  Million  at  New York Life,  $300-$400
Million at Unicorp American,  $200-$300  Million at USAA and approximately  $300
-$400 million at Fidelity and Mutual Benefit Life.  During his tenure with these
companies,  Mr.  Birmingham  generated gross sales proceeds of over $700 million
from  the sale of properties.  Mr. Birmingham received a BA degree from New York
University  in  1980.                                                           

Henrik  Youval  Krigel  has  served  as  our  Director  since  June  1999. Since
joining  our company as a director in June 1999, Mr. Krigel has worked full time
for  Ktest International, LLC, a company unrelated to our company. Ktest designs
and  sells  test  equipment  for the avionics wire harness repair  market. Since
June  1999,  Mr.  Krigel  has  spent  less than 10 hours a month on ITS matters,
although  we  share office  space with his company  and he is  available  to our
company  at  any time for consultation or advice.  Mr. Krigel, has spent over 25
years  in  electronics  and  20  years  in automated test equipment design, most
recently  as  one  of  the  founders  of Protech, Inc., a company formed for the
design  and  manufacture  of  large-scale  functional  testers, a technology Mr.
Krigel  developed.                                                              

As  co-designer  of  the  CircuiTest  systems,  Mr.  Krigel  served  as  vice   
president  of  Pensar  Technologies  LLC from its  inception  in 1995  until the
formation  of ITS Texas in September  1996,  at which time he resigned to become
vice  president of research and  development  for ITS Texas until June 1999.  As
vice president of ITS Texas, Mr. Krigel was responsible for creation, design and
planning  of  new  products for both Pensar Inc. and International Test Systems.
In  1982,  he  attended the University of Texas at San Antonio, and from 1982 to
1983, San Antonio Community College, but has not yet received a formal degree in
the  United  States.  From  1967  to 1969, Mr. Krigel studied electronics at the
Israeli  Air Force Academy.  Mr. Krigel then served for 10 and one-half years in
the  Israeli  Air  Force,  achieving  the  rank  of  Chief  Master  Sergeant.   

Alex  H.  Yount  has  served  as  our  Director  since  2000.  Mr.  Yount spends
approximately  8  hours  per month on company business.  Since January 2002, Mr.
Yount  has  worked for Koontz McCombs Realty Services, Inc. as vice president of
commercial  real  estate.  From  May  1994  through  December  2001,  Mr.  Yount
served  as  vice  president  of  Cavender  &  Hill  Properties,  Inc.  of  San  
Antonio  Texas.  Cavender  &  Hill is a commercial real estate sales and leasing
company.  Between  May 1994 and  December  1998,  Mr.  Yount  served as Cavender
&  Hill's  vice president of property  management  where he was in charge of all
property  management  activities  for  the  company  and  headed  a staff of six
employees.  From January 1999 to the present, Mr. Yount has served as Cavender &
Hill's  vice  president  of office  buildings  division.  He has assumed a newly
created  position  with Cavender & Hill where he is in charge of office building
leasing  and  investment  sales.                                                

In  1976,  Mr.  Yount  received  his  bachelor's  degree  in  design  from  the 
University  of  Florida,  School  of  Design.  In  July 1980, Mr. Yount attended
courses  for  the Institute of Real Estate Management in attainment of Certified
Property  Manager  (CPM(C)) designation.  In July 1997, he attended courses with
the  Institute of Real Estate  Management  in  Chicago  Illinois  in  attainment
of  a  certified  commercial  investment  member  (CCIM)  designation.          

Mr.  Yount  is  a  national  and  local  member  of the Institute of Real Estate
Management,  a  national and local member of the CCIM Institute, a member of the
San Antonio  Board of Realtors  and a national  and local member of the Building
Owners  &  Managers  Association.                                               

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None  of  the  company's  officers  or  directors has ever worked for or managed
a company in the same business as the company.  None of the officers, directors,
key  personnel  or  principal  stockholders  are  related  by blood or marriage.

The  board  of  directors  has  authority  to  authorize  and  approve  company 
transactions  involving  stock  purchase agreements, stock options, and warrants
without  shareholder  approval.  Therefore, shareholders are very reliant on the
board  of  directors to make good business decisions as the shareholders have no
control  over  such  matters.                                                   

Director  compensation  will  be  allocated  in  accordance  with  a  director's
level  of  engagement  with  the  company  and at the discretion of the board of
directors.                                                                      

Note:  After  reviewing  the  information  concerning  the  background  of  the 
company's  Officers,  Directors  and  other  key  personnel, potential investors
should  consider  whether  or  not  these  persons  have adequate background and
experience  to  develop  and operate this company and to make it successful.  In
this  regard,  the experience and ability of management are often considered the
most  significant  factors  in  the  success  of  a  business.                  

Employment  Agreements                                                          

In  May  2002,  we  entered  into  a five year employment agreement with Carey  
Birmingham  to  serve as our President and Chief Executive Officer.  Pursuant to
the agreement, Mr. Birmingham receives an annual salary upon the company raising
a  minimum  of  $125,000 of $25,000 and an annual salary of $45,000 in the event
the  company  raises a minimum of $500,000.  Thereafter, Mr. Birmingham's salary
will  be  as  follows:                                                          

Year  2-$55,000,  Year  3-$65,000,  Year 4-$75,000 and Year 5-$100,000.   In the
near  future,  the company plans to maintain a $250,000 life insurance policy on
the  life  of Mr. Birmingham which is anticipated to remain in effect as long as
he  is  employed  by  the  company.  In the event Mr. Birmingham's employment is
terminated with or without cause, Mr. Birmingham shall be entitled to receive as
severance  pay,  an  amount  equal to 12 months of salary, rights to any options
received  whether  vested  or  not, and health and life insurance under the same
terms  as  if  the  agreement  had  not  been  terminated.                      

Security  Ownership  Of  Certain  Beneficial  Owners  And  Management           

The  following  tables  set  forth  certain information regarding the beneficial
ownership  of  shares  of  our common stock prior to the offering, and after the
offering  of  such  shares  assuming  the  sale  of 312,500 shares and 1,250,000
shares,  respectively  by  our  officers,  directors,  principal  owners of five
percent  (5%)  or  more of our  common  stock, and all officers and directors as
a  group.                                                                       

                                                                [Download Table]


Name and address               Beneficially Owned        Beneficially Owned         
Of Beneficial Owner(1)         Prior to Offering         After Offering             
                                                  312,500 Shares  1,250,000 Shares  
                             Shares         Percent       Percent        Percent    
                                                                                    
Unifund Financial                                                                   
Group, Inc.                 571,500           27.0%         23.5%          17.0%    
R. Scott Barter (2)         846,500           40.0%         34.9%          25.1%    

Carey Birmingham (3)(4)(5)1,074,500           50.8%         44.2%          31.9%    
Alex H. Yount (3)            70,000            3.3%          2.9%           2.1%    
H. Youval Krigel (3)         70,000            3.3%          2.9%           2.1%    
Pensar                      300,000           14.2%         12.4%           8.9%    
BFP Texas(5)                300,000           14.2%         12.4%           8.9%    
All officers and directors                                                          
as a group (3 persons)    1,214,500           57.4%         50.0%          36.1%    
 Assumes that none of the warrants are exercised.                                   

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<FN>                                                                                

(1)  Each  person or entity has sole voting and investment power with respect to    
     the  shares  shown.                                                            
(2)  Includes 571,500 shares owned of record by Unifund Financial Group which is    
     controlled  by  Mr.  Barter,  and  275,000 shares individually owned by Mr.    
     Barter  .                                                                      
(3)  The  business  address of such individual is the same as International Test    
     Systems  address.                                                              
(4)  Includes  300,000  shares held of record by Pensar, of which Mr. Birmingham    
     is an affiliate, 25,000 shares held of record by Frances M. Birmingham, Mr.    
     Birmingham's  wife,  and 5,000 shares held of record by Caitlin Birmingham,    
     Mr.  Birmingham's  daughter.                                                   
(5)  Includes  300,000  held  of  record  by  Pensar  through  BFP Texas and Mr.    
     Birmingham  which  are  affiliates  of  Pensar  and  Mr. Birmingham acts as    
     co-trustee  of  the  general  partner  of  BFP  Texas.                         

Management  Compensation                                                        

Carey  Birmingham,  our  Chief  Executive  Officer  and  President  received    
$0 during the year ended  December  31,  2001,  and  $0  during  the  year      
ended December 31, 2002.                                                        

During  the  year  ended  December  31,  2000,  Youval  Krigel  received  25,000
shares  of our common stock in consideration for services rendered as a director
which  the  company valued at $10,000.  During the year ended December 31, 2001,
Alex  Yount  received 70,000 shares of common stock which were valued at $28,000
and  Youval  Krigel  received  34,200  shares  which were valued at $13,680.  In
addition,  Carey  Birmingham  received  228,500  shares  during  the  year ended
December  31,  2001which  were  valued  at  $91,400.                            

In  May  2002,  we  entered  into  a five year employment agreement with Carey  
Birmingham  to  serve as our President and Chief Executive Officer.  Pursuant to
the agreement, Mr. Birmingham receives an annual salary upon the company raising
a  minimum  of $125,000 of $25,000 and $45,000 in the event the company raises a
minimum  of $500,000 in this offering.  Thereafter, Mr. Birmingham's salary will
be  as  follows:                                                                

Year  2-$55,000,  Year  3-$65,000,  Year  4-$75,000  and  Year  5-$100,000.     

The  company  is  highly  dependent  on  the  services of Mr. Birmingham who has
entered  into  an  employment agreement with the company which provides that Mr.
Birmingham  will not compete with the company for twelve months upon termination
of  the  agreement.                                                             

Note:  after reviewing the above, potential investors should consider whether or
not  the  compensation  to  Mr.  Birmingham  and other key personnel directly or
indirectly,  is  reasonable  in  view  of  the  present  stage  of the company's
development.                                                                    

Selling  Shareholders                                                           

Not  applicable                                                                 

Certain  Transactions                                                           

Carey  Birmingham,  Youval Krigel and Raphael Sonsino were founding shareholders
of  International  Test Systems, (Texas) prior to our reorganization in Delaware
in  September  1999.                                                            

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During  the  first quarter of 1997 in a private sale pursuant to Section 4(2) of
the  Securities  Act,  Stephen G. Birmingham, Dr. Ed Lahniers and Andree Sonsino
purchased  shares  in  ITS Texas for a capital investment of $50,000, $5,000 and
$2,000,  respectively.  Upon formation of our company, all holders exchanged all
of their shares in ITS Texas for shares in our company. Stephen G. Birmingham is
the  father  of  Carey  Birmingham,  the  president  of  our  company.          

Carey  Birmingham  is chairman and president of our company as well as President
of  Pensar LLC. On June 16, 1999, ITS Texas transferred all of its technology to
Pensar  LLC  in  exchange for which Pensar LLC assumed all of the liabilities of
ITS  Texas. On June 19, 1999, Pensar LLC and ITS Texas entered into a renewable,
ten-year  distribution  agreement  granting  ITS  Texas the exclusive, worldwide
right to market, sell and distribute products based on Pensar technology. Pensar
owned  45.625%  of  the  total  shares  of  ITS  Texas  on  June  16,  1999.    

Mr.  Carey  Birmingham was president and a director of both Pensar and ITS Texas
during  the negotiation of the distributor agreement with Pensar. He was at such
time  owner of 1,262,156 units, or 50.49% of Pensar and the majority shareholder
in  Pensar.                                                                     

Our  company  was  re-organized in Delaware in September 1999 in anticipation of
completing a public offering of our stock. On that same date, ITS Texas assigned
us  the  distribution  agreement  with  Pensar  LLC,  and  ITS  Texas ceased all
day-to-day  business.  On April 15, 2000, we amended the compensation section of
our  distribution  agreement  with  Pensar.                                     

Although  Mr.  Birmingham  was  president and a director of ITS Texas and Pensar
during  1999,  ITS  Texas,  Pensar  and  ITS Delaware, had different third party
directors  who gave final approval of the distribution agreement and our efforts
to  obtain  additional  capital  in  the  public  markets.  In  addition  to Mr.
Birmingham,  the  other  majority  shareholder approving the Pensar exchange and
distribution  agreements  was the Birmingham Family Partnership, Ltd., (re-named
BFP  Texas,  Ltd.  in  2001).  Mr. Birmingham served (and continues to serve) as
co-trustee of the General Partner of BFP, Texas, Ltd., and has general authority
over  the investment business of BFP Texas, Ltd. By virtue of a Trust Agreement,
Mr.  Birmingham  was,  at  the  time,  the beneficiary of less than a 5% Limited
Partnership  interest in BFP, Texas, Ltd. As of June 30, 2002, Mr. Birmingham is
the  beneficiary  of  a  5.2286% Limited Partnership interest in BFP Texas, Ltd.

We  entered  into  an  Asset  Purchase  Agreement with Pensar in May 2002, which
superceded the distribution agreement. Pursuant to the Asset Purchase Agreement,
we  acquired  all of the assets of Pensar in consideration for 300,000 shares of
our stock and the assumption of liabilities of Pensar in the amount of $30,835. 

At  the time of the Asset Purchase Agreement between Pensar and our company, Mr.
Birmingham  owned  1,262,156  units  in  Pensar, or 50.49% of Pensar. BFP Texas,
Ltd.,  (formerly  Birmingham  Family  Partnership, Ltd.), owned 737,844 units of
Pensar,  or  29.51%.  By  virtue  of  a  Trust  Agreement, Mr. Birmingham is the
beneficiary  of  a  5.2286% Limited Partnership interest in BFP, Texas, Ltd. Mr.
Birmingham  also serves as co-trustee of the General Partner of BFP Texas, Ltd.,
and  has  general  authority  over  the  investment  business of BFP Texas, Ltd.

In  August 2002 Mr. Birmingham gifted 162,156 of his units in Pensar to his wife
for  no  consideration.  This left Mr. Birmingham with 1,100,000 units, or a 44%
interest,  in  Pensar.                                                          

Also in August 2002, Mr. Birmingham transferred a total of 127,000 shares of his
stock in our company in a series of transactions described in more detail below.
Mr. Birmingham transferred 25,000 shares to Frances M. Birmingham, his wife, and
5,000  shares  to  Caitlin  Birmingham,  his  daughter.  Mr.  Birmingham  is the
beneficial  owner  of  the  30,000  shares  discussed  in  the  sentence  above.

In  October  2002,  Mr.  Birmingham  gifted  500  shares of his stock to each of
Francis  W.  White,  Christopher  Ullman,  Hans  Hodell  and  Brian  Harris.    

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In  December  2002,  Mr.  Birmingham transferred a total of 75,000 shares of his
stock  to  R.  Scott Barter in consideration for consulting services rendered to
the  company.                                                                   

Following  the  transfers by Mr. Birmingham, his direct ownership in our company
as  of  December  31,  2002  is  419,500  shares  of  common  stock.            

As  a  result  of his ownership in Pensar as well as his status as an affiliate,
Mr.  Birmingham  is  the  beneficial  owner of all 300,000 shares of our company
owned  by  Pensar,  in  addition  to  the shares he already owns directly in our
company.                                                                        

Except  for  its  ownership  interest  in Pensar, BFP Texas, Ltd. owns no shares
directly  in  our company. By nature of its ownership in Pensar, BFP Texas, Ltd.
is  the  beneficial  owner  of  all 300,000 shares of our company. Therefore, by
virtue  of  his  role  as  co-trustee  of the General Partners of BFP Texas, Mr.
Birmingham  owns  a beneficial interest in our company of 300,000 shares through
BFP  Texas.                                                                     

Therefore,  by  virtue of his direct ownership of shares and shares held by wife
and  daughter,  his ownership in Pensar, and his Limited Partnership interest in
BFP  Texas,  Mr. Birmingham held a total beneficial interest of 1,049,500 shares
of  our  company  as  of  December  31,  2002.                                  

The  following  is a description of individual stock transactions from September
1999  through  March  2003:                                                     

Unifund Financial Group, Inc.                                                   

UNIFUND                                                                         

Unifund  Financial  Group,  Inc.  purchased  574,000  newly issued shares of our
company  from  June  through  November  1999  for  $57,400,  or  $.10 per share.
Unifund's  chief  executive officer, Scott Barter, was appointed to our board of
directors.  Mr.  Barter  resigned from our board of directors on April 30, 2001.

Unifund was awarded an additional 196,000 newly issued shares in September 1999,
valued at $78,400, or $.40 per share, in consideration for providing management,
business  and marketing advice and to fund certain legal and accounting expenses
in  connection  with  the  reorganization  of  our  business.                   

Unifund  purchased  250,000 newly issued shares on February 2, 2000 for $25,000,
or  $.10  per  share.                                                           

Unifund  transferred  70,000  of  its own shares, valued at $28,000, or $.40 per
share,  in  July  2001  to  Alex Yount in consideration for Mr. Yount becoming a
company  director of our company. Alex Yount became our director on May 1, 2001.

Unifund  transferred  228,500  of its own shares, valued at $91,400, or $.40 per
share,  in  July  2001 to Carey Birmingham in consideration for contributions to
our  company as an officer and director and to entice Mr. Birmingham to continue
as  an  officer  and  director.                                                 

Unifund  returned for cancellation 100,000 of its own shares, valued at $40,000,
or  $.40  per share, in May 2002 in connection with the Asset Purchase Agreement
between  the  company  and  Pensar.                                             

Unifund  transferred  25,000  of its own shares, valued at $10,000, or $. 40 per
share,  in  June  2002  to  Warren Kirshenbaum in consideration for future legal
services  to  be  provided  upon  our  becoming  a  publicly  traded  company.  
Subsequently,  in  March  2003,  these  shares  were  returned to Unifund by Mr.
Kirshenbaum.                                                                    

Unifund  transferred  25,000  of  its own shares, valued at $10,000, or $.40 per
share,  in  June  2002  to  Richard  Cohen  in  anticipation of providing future
management and financial consulting services upon our becoming a publicly traded
company.                                                                        

Unifund  transferred  25,000  of  its own shares, valued at $10,000, or $.40 per
share,  in  June  2002  to  Wayne  Brannan in consideration for providing future
management and financial consulting services upon our becoming a publicly traded
company.                                                                        

These  transactions  leave  Unifund  with  total shares of 571,500 shares of our
company  as  of  March  31,  2003.                                              

Carey Birmingham, Our President and Director                                    

CAREY G. BIRMINGHAM, DIRECTOR, PRESIDENT AND CEO                                

Carey  Birmingham was awarded 193,000 newly issued shares, valued at $77,200, or
$.40  per share, in December 1999 in lieu of payment for his services as a chief
executive  officer  and  director  for  the  year  ended  1999.                 

Mr.  Birmingham  purchased  an  additional  250,000  newly  issued shares of our
company  for  $25,000,  or  $.10  per  share  in  February  2000.               

Mr.  Birmingham  was  awarded  an  additional  50,000 newly issued shares of our
company valued at $20,000, or $.40 per share in December 2000 in lieu of payment
for  his  services  as a chief executive officer and director for the year ended
2000.                                                                           

Mr.  Birmingham  received 228,500 transferred shares, valued at $91,400, or $.40
per  share  from Unifund Financial Group in July 2001 in lieu of payment for his
services  as  a chief executive officer and director and to entice him to remain
as  CEO  of  our  company.                                                      

Mr.  Birmingham  returned  for cancellation 100,000 of his own shares, valued at
$40,000,  or  $.40  per share, in May 2002 in connection with the Asset Purchase
Agreement  between  the  company  and  Pensar  Technologies.                    

Mr.  Birmingham transferred 25,000 of his own shares, valued at $10,000, or $.40
per  share,  in  June  2002 to Warren Kirshenbaum in consideration for providing
future legal services upon our becoming a publicly traded company. Subsequently,
in  March 2003, these shares were returned to Mr. Birmingham by Mr. Kirshenbaum.

Mr.  Birmingham transferred 25,000 of his own shares, valued at $10,000, or $.40
per  share,  in June 2002 to Richard Cohen in consideration for providing future
management and financial consulting services upon our becoming a publicly traded
company.                                                                        

Mr.  Birmingham transferred 25,000 of his own shares, valued at $10,000, or $.40
per  share,  in June 2002 to Wayne Brannan in consideration for providing future
management and financial consulting services upon our becoming a publicly traded
company.                                                                        

In  August 2002, Mr. Birmingham gifted 50,000 of his own shares to the following
individuals:                                                                    

Frances M. Birmingham received 25,000 shares.                                   
David W. Mooney received 10,000 shares.                                         
Jay Alkire received 10,000 shares.                                              
Caitlin Birmingham received 5,000 shares.                                       

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In  October 2002, Mr. Birmingham gifted 2,000 of his own shares to the following
individuals:                                                                    

Frank W. White received 500 shares                                              
Christopher Ullman received 500 shares                                          
Hans Hodell received 500 shares                                                 
Brian Harris received 500 shares                                                

In  December  2002,  Mr.  Birmingham transferred a total of 75,000 shares of his
stock  to  R.  Scott Barter in consideration for consulting services rendered to
the  company.                                                                   

These  transactions  leave  Mr.  Birmingham  owning 444,500 shares directly, and
30,000 shares through family members as of December 31, 2002. However, by virtue
of  his  direct ownership of shares in our company, his ownership through family
members,  his  ownership in Pensar, and his Limited Partnership interest in BFP,
Texas,  Mr.  Birmingham holds a total beneficial interest of 1,049,500 shares of
our  company  as  of  March  31,  2003                                          

Directors of the Company.                                                       

H. YOUVAL KRIGEL, DIRECTOR                                                      

H.  Youval Krigel was awarded 803 shares of our common stock in exchange for his
shares  of ITS Texas and 9,997 newly issued shares, valued at $3,999 or $.40 per
share,  in  December  1999  in  lieu  of  payment for consulting and directorial
services  for  the  year  ended  1999.                                          

Mr.  Krigel  was awarded an additional 25,000 newly issued shares of our company
valued  at  $10,000,  or $.40 per share, in December 2000 in lieu of payment for
his  services  as  director  for  the  year  ended  2000.                       

Mr.  Krigel  was  awarded 34,200 newly issued shares, valued at $13,680, or $.40
per share, in July 2001 in lieu of payment for his services as a director and to
entice  him  to  remain  a  director  of  our  company.                         

These  transactions  leave  Mr. Krigel with total shares of 70,000 shares of our
company  as  of  October  1,  2002.                                             

H. ALEX YOUNT, DIRECTOR                                                         

H.  Alex  Yount  received  70,000  shares, valued at $28,000, or $.40 per share,
transferred from Unifund Financial Group in July 2001 in lieu of payment for his
services  as  a director of our company. Mr. Yount became a Director in May 2001
and remains on our board. Mr. Yount personally, therefore, owns 70,000 shares of
our  company.                                                                   

Individual Shareholders and companies other than Directors:                     

Scott  Barter  received  150,000  shares  in  remuneration  for  his directorial
function and consulting services at the end of 1999. These shares were valued at
$.40  per  share,  or  $60,000.  In July 2001, Mr. Barter received an additional
50,000  shares for directorial and consulting services valued at $20,000 or $.40
per share. In December 2002 Mr. Barter received an additional 75,000 shares from
Carey  Birmingham  in  recognition  of his consulting services during 2002 which
were valued at $30,000 or $.40 per share. Mr. Barter personally, therefore, owns
275,000  shares  of  our  company.                                              

Sheila Corvino was awarded 50,000 newly issued shares valued at $20,000, or $.40
per  share,  in  September  1999  for  legal  services  provided to our company.
Services  anticipated by the delivery of these shares were deemed never received
by  the  company  and  the  shares  were  cancelled  in  March  2003.           

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Brad  Smith  was  awarded  50,000 newly issued shares valued at $20,000, or $.40
share,  in  September  1999  for  consulting  services.                         

Elizabeth Acton was awarded 5,000 newly issued shares, valued at $2,000, or $.40
per  share,  in  September  1999  for  providing  administrative services to the
company.  Ms. Acton was also awarded an 15,800 shares, valued at $6,320, or $.40
per  share, in July 2001 for providing additional administrative services to our
company.  Ms.  Acton  therefore  owns  a  total of 20,800 shares of our company.

Harris  Schiff was awarded 10,000 newly issued shares, valued at $4,000, or $.40
per  share,  in  September  1999  for  providing  word processing and management
information  services  to  the  company.                                        

Alan  Scott  was awarded 5,000 newly issued shares, valued at $2,000 or $.40 per
share,  in  September  1999  for  providing  legal  services  to  the  company. 

Stephen  Birmingham  received 146 shares in exchange for his shares of ITS Texas
and  was  awarded 4,854 newly issued shares, valued at $1,942, in September 1999
in  consideration  for  services  rendered.  Mr.  S.  Birmingham  was awarded an
additional 7,200 newly issued shares valued at $2,880, or $.40 per share, in May
2002  in consideration for services rendered. Mr. S. Birmingham, therefore, owns
a  total  of  12,200  shares of our company. Stephen Birmingham is the father of
Carey  Birmingham,  our  President  and  CEO.                                   

Dr.  Ed  Lahniers received 15 shares in exchange for his shares of ITS Texas and
was  awarded  485  newly  issued  shares,  valued  at $194, in September 1999 in
consideration  for  services  rendered.  Dr.  Lahniers was awarded an additional
7,200  newly  issued  shares valued at $2,880, or $.40 per share, in May 2002 in
consideration  for  services  rendered. Dr. Lahniers, therefore, owns a total of
7,700  shares  of  our  company.                                                

B.  Raphael  Sonsino received 300 newly issued shares in exchange for his shares
of  ITS  Texas.  Mr. Sonsino was awarded an additional 5,300 newly issued shares
valued  at  $2,120, or $.40 per share, in May 2002 in consideration for services
rendered.  Mr.  Sonsino, therefore, owns a total of 5,600 shares of our company.

Andree  Sonsino  received  6 shares of company common stock in consideration for
his  shares  of  ITS  Texas and Mr. Sonsino was awarded 394 newly issued shares,
valued  at  $158,  in September 1999 in consideration for services rendered. Ms.
Sonsino was awarded an additional 5,300 newly issued shares valued at $2,120, or
$.40 per share, in May 2002 in consideration for services rendered. Ms. Sonsino,
therefore,  owns  a  total  of  5,700  shares  of  our  company.                

Pensar  Technologies,  LLC  received  300,000  shares  of  our company valued at
$120,000,  OR  $.40 per  share  in  May 2002 as part consideration for the Asset
Purchase  Agreement  described  above.                                          

David  M.  Loev,  Attorney  at  Law formerly of Vanderkam & Sanders, was awarded
100,000  newly  issued shares valued at $40,000, or $.40 per share, in May 2002,
in  consideration  for  legal  services  rendered.                              

Warren Kirshenbaum received 50,000 transferred shares valued at $20,000, or $.40
per  share,  equally  from  Unifund  and  Carey  Birmingham  in  June  2002  in 
anticipation  of  providing  future  legal services upon our becoming a publicly
traded  company.  These  shares  were  returned to Unifund and Mr. Birmingham in
March  2003.                                                                    

Richard  Cohen received 50,000 transferred shares valued at $20,000, or $.40 per
share, equally from Unifund and Carey Birmingham in June 2002 in anticipation of
providing  future management and financial consulting services upon our becoming
a  publicly  traded  company.                                                   

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Wayne  Brannan  received  50,000  shares  valued  at $20,000, or $.40 per share,
equally  from  Unifund  and  Carey  Birmingham  in  June 2002 in anticipation of
providing  future management and financial consulting services upon our becoming
a publicly traded company. Wayne Brannan received an additional 16,000 shares of
newly  issued  stock  in  March  2003,  valued at $6,400, or $.40 per share, for
consulting  services.  This leaves Mr. Brannan with 66,000 shares of our company
as  of  March  30,  2003.                                                       

Other Financial Relationships between parties:                                  

From  March  2002  through March 2003, BFP Texas, Ltd., (formerly the Birmingham
Family  Partnership,  Ltd.)  loaned the company $60,500 for legal and accounting
services  in  connection  with  the  preparation of this registration statement.
These  funds  were  received from BFP Texas, Ltd. under the terms of a revolving
line  of  credit  in  the amount of $25,000. The line of credit was increased to
$40,000  in  August  2002,and  again  to $75,000 in December 2002 and matures on
December  31,  2003,  unless otherwise extended, and accrues interest at 8%. Mr.
Birmingham  serves as co-trustee of the General Partner of BFP, Texas, Ltd., and
has  general  authority  over  the  investment  business  of  BFP Texas, Ltd. In
addition, by virtue of a Trust Agreement, Mr. Birmingham is the beneficiary of a
5.2286%  Limited  Partnership  interest  in  BFP,  Texas,  Ltd.                 

In  March  2003,  Carey  G.  Birmingham loaned the company $20,000 for legal and
accounting  services  in  connection  with  the preparation of this registration
statement.  These  funds  were received from Mr. Birmingham under the terms of a
revolving  line of credit in the amount of $25,000 which matures on December 31,
2003,  unless  otherwise  extended,  and  accrues  interest  at  8%.            

Stephen  Birmingham,  a  shareholder  in  both  Pensar  and  our company, is not
affiliated  with  and  holds  no  interest  in  BFP  Texas,  Ltd.               

Description of the Securities                                                 

The  securities  offered  for  sale  consist  of:                               

1,250,000  shares  of  common  stock,  par  value  $0.001  per  share, which can
be purchased for $0.40 per share,                                               

1,250,000  class  A  redeemable  warrants,  which can be purchased for $0.10 per
warrant, and which may be exercised for one share of common stock at an exercise
price  of  $2.50 per share, and 1,250,000 class B redeemable warrants, which can
be  purchased  for $0.10 per warrant and which may be exercised for one share of
common  stock  at  an  exercise  price  of  $4.50  per  share.                  

Our shares of common stock, our class A warrants and our class B warrants can be
purchased  separately  in any amounts. We have reserved (1) 1,250,000 shares for
issuance upon the exercise of our Class A redeemable warrants, and (2) 1,250,000
shares  for  issuance  upon  the  exercise  of  our Class B redeemable warrants.

Prior  to this offering, there are no shares subject to issuance under presently
outstanding  stock  purchase agreements, stock options, warrants or rights. Upon
completion of this offering, a maximum of 1,250,000 shares will be issuable upon
the  exercise  of  Class A redeemable warrants and a maximum of 1,250,000 shares
will  be issuable upon the exercise of Class B redeemable warrants. In addition,
up  to 125,000 shares of common stock will be issuable to Public Securities, our
underwriters,  at  $.56  per  share and up to 125,000 warrants will be issued to
Public  Securities  at  an  exercise price of $.14 per share, at the rate of one
share  and  warrant  for  every  10  shares  sold  by  Public Securities in this
offering. There are no shares of common stock subject to issuance under existing
stock  purchase  or  option  plans  but  not yet covered by outstanding purchase
agreements,  options  or  warrants.  Stock  purchase  agreements, stock options,
warrants,  or rights may be approved by the company's Board of Directors without
shareholder  approval.                                                          

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Common Stock                                                                    

Our certificate of incorporation authorizes the issuance of 50,000,000 shares of
common  stock,  par  value  $.001  per  share,  of  which  2,380,000  shares are
outstanding on the date hereof. Holders of common stock are entitled to one vote
for  each  share  held  of  record  on  each  matter  submitted  to  a  vote  of
stockholders.  There  is no cumulative voting for election of directors. Subject
to  the  prior rights of any series of preferred stock which may be outstanding,
if  and  when the board of directors declares dividends, holders of common stock
are  entitled  to  ratably  receive,  such  dividends.  Upon  the  liquidation, 
dissolution,  or winding up of the company, holders of common stock are entitled
to  share  ratably  in  all  assets  remaining  after payment of liabilities and
payment of accrued dividends and liquidation preferences on the preferred stock,
if any. Common stock is not convertible, nor does it have any preemptive rights.
The  outstanding  common stock is validly authorized and issued, fully paid, and
nonassessable.                                                                  

FUTURE  ISSUANCES  OF  OUR  COMMON  STOCK  COULD DILUTE CURRENT SHAREHOLDERS AND
ADVERSELY AFFECT THE MARKET IF IT DEVELOPS. We have the authority to issue up to
50,000,000  shares of common stock and to issue options and warrants to purchase
shares  of our common stock without stockholder approval. These future issuances
could  be  at  values substantially below the price paid for our common stock by
our  current  shareholders.                                                     

We  will,  at  all times, reserve a sufficient number of authorized but unissued
shares  to  accommodate the exercise of warrants. There is no assurance that any
such  exercise  will  take  place  and  therefore no assurance that we will have
available  to  us  proceeds  from  an  exercise.                                

Preferred Stock                                                                 

Our  certificate of incorporation authorizes the issuance of 5,000,000 shares of
preferred  stock  with  a par value of $.001 per share. We have no present plans
for  the  issuance of such preferred stock. The issuance of such preferred stock
could adversely affect the rights of the holders of common stock and, therefore,
reduce  the  value  of  the common stock. It is not possible to state the actual
effect of the issuance of any shares of preferred stock on the rights of holders
of  the common stock until the board of directors determines the specific rights
of  the  holders  of  the preferred stock. However, these effects might include:

-     restricting dividends on the common stock;            

-     diluting the voting power of the common stock;        

   -     impairing the liquidation rights of the common stock; and

          -     delaying or preventing a change in control of International Test
   Systems without further action by the stockholders.

Warrants                                                                        

The  company  will  offer  class  A  redeemable  warrants and class B redeemable
warrants.  The  following  discussion  of  certain  terms  and provisions of the
warrants is qualified in its entirety by reference to the detailed provisions of
each  warrant  and  its  related warrant agreement, the forms of which have been
filed as exhibits to the registration statement of which this prospectus forms a
part. Both the class A redeemable warrant and the class B redeemable warrant and
the  class  A  redeemable  warrant  agreement  and  class  B  redeemable warrant
agreement  can be inspected and copied by the public at the office of the SEC in
Washington,  D.  C.                                                             

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The Class A Redeemable Warrants                                                 

The class A redeemable warrants will be issued in registered form pursuant to an
agreement  dated  the  date  of this prospectus between the company and American
Stock Transfer and Trust Company . One class A redeemable warrant represents the
right  of  the  registered  holder  to  purchase one share of common stock at an
exercise  price  of  $2.50  per  share,  subject  to  adjustment  .  The class A
redeemable  warrants  are subject to adjustment in the purchase price and in the
number  of  shares  of common stock and/or other securities deliverable upon the
exercise  of  the  class  A  redeemable  warrants  in the event of certain stock
dividends,  stock  splits,  or  similar  transactions.                          

The  class  A  redeemable  warrants may be exercised at any time after issuance,
until  the  close  of business on the third anniversary of the effective date of
the  offering. After the expiration date, the class A redeemable warrants become
void  and  of no value. A holder of the class A redeemable warrants may exercise
them  at  the  office  of  the  class A redeemable warrant agent, American Stock
Transfer,  by surrendering his or her warrant, and paying the exercise price for
each  warrant  being  exercised.                                                

No  holder  of  the  class  A redeemable warrants will be entitled to vote or to
receive  dividends  or  be  deemed  the holder of shares of common stock for any
purpose  whatsoever  until  the  class  A  redeemable  warrants  have  been duly
exercised  and  the  exercise  price  paid  in  full.                           

The class A redeemable warrants are subject to redemption by the company anytime
on  30  days  written notice at a redemption price of $.01 per warrant, provided
that  the  trading  price of the underlying common stock is at least 150% of the
then  current  per share exercise price for 20 or more consecutive trading days.
Upon  notice  of  redemption,  holders  of  the class A redeemable warrants will
forfeit  all rights there under except the rights to receive the $0.01 per share
redemption  price and to exercise them during the relevant 30-day notice period.

If  required,  the  company  will  file  a  post-effective  amendment  to  the  
registration  statement with the Securities and Exchange Commission with respect
to  the  common  stock  underlying  the class A redeemable warrants prior to the
exercise  of  the  class  A  redeemable  warrants  and deliver a prospectus with
respect  to  such  common  stock  to  all  class A redeemable warrant holders as
required  by  Section  10(a)(3)  of  the  Securities  Act  of  1933.            

The Class B Redeemable Warrants                                                 

The class B redeemable warrants will be issued in registered form pursuant to an
agreement  dated  the  date  of this prospectus between the company and American
Stock  Transfer.  One  class  B  redeemable  warrant represents the right of the
registered  holder to purchase one share of common stock at an exercise price of
$4.50  per  share,  subject  to  adjustment. The class B redeemable warrants are
subject  to  adjustment  in  the  exercise  price and in the number of shares of
common  stock and/or other securities deliverable upon the exercise of the class
B  redeemable warrants in the event of certain stock dividends, stock splits, or
similar  transactions.                                                          

The  class  B  redeemable  warrants may be exercised at any time after issuance,
until  the  close  of business on the fifth anniversary of the effective date of
this offering. After the expiration date, the class B redeemable warrants become
void  and  of no value. A holder of the class B redeemable warrants may exercise
them  at the office of the class B redeemable warrant agent and, by surrendering
his  or  her  warrant,  and  paying  the class B exercise price for each class B
redeemable  warrant  being  exercised.                                          

No  holder  of  the  class  B redeemable warrants will be entitled to vote or to
receive  dividends  or  be  deemed  the holder of shares of common stock for any
purpose  whatsoever  until  the  class  B  redeemable  warrants  have  been duly
exercised  and  the  exercise  price  paid  in  full.                           

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The class B redeemable warrants are subject to redemption by the company anytime
on  30  days  written notice at a redemption price of $.01 per warrant, provided
that  the  trading  price of the underlying common stock is at least 150% of the
then  current  per share exercise price for 20 or more consecutive trading days.
Upon  notice  of  redemption,  holders  of  the class B redeemable warrants will
forfeit  all rights there under except the rights to receive the $0.01 per share
redemption  price and to exercise them during the relevant 30-day notice period.

If  required,  the  company  will  file  a  post-effective  amendment  to  the  
registration  statement with the Securities and Exchange Commission with respect
to  the  common  stock  underlying  the class B redeemable warrants prior to the
exercise  of  the  class  B  redeemable  warrants  and deliver a prospectus with
respect  to  such  common  stock  to  all  class B redeemable warrant holders as
required  by  Section  10(a)(3)  of  the  Securities  Act  of  1933.            

TRANSFER AGENT                                                                  

American  Stock  Transfer  serves as the transfer agent for our shares of common
stock,  class  A  warrants  and  our  class  B  warrants.                       

Dividend Policy                                                                 

We  have  not  paid any cash dividends to date, there are no assets available to
pay  dividends, and we do not expect to pay dividends in the foreseeable future.
We intend, in the short term at least, to use all available funds to develop our
business.                                                                       

Legal Proceedings                                                               

None                                                                            

EXPERTS                                                                         

The financial statements for the year ended December 31, 2002 and the year ended
December  31,  2001  included  in this registration statement have been included
herein  in  reliance  upon  the  report  of  Malone  & Bailey, PLLC, independent
certified  public  accountants  given  on  the  authority  of  said  firm  as   
experts in auditing and accounting.                                             

Legal Matters                                                                   

Certain legal matters in connection with the registration of the securities were
passed upon by David M. Loev, Attorney at Law, counsel to the Company.  David M.
Loev was awarded 100,000 shares of our common stock in consideration of services
rendered.                                                                       

Changes In And Disagreements With Accountants On Accounting And Financial       
Disclosure                                                                      

On  January  8, 2002, the client-auditor relationship between International Test
Systems,  Inc.,  (ITS)  and Thomas P. Monahan, CPA ("Monahan") ceased as Monahan
was  dismissed  as  the  Company's  auditor.                                    

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To  ITS's  current  Board of Directors, Monahan's report on his audit of ITS for
the  period from inception (May 13, 1999) through December 31, 1999 and the year
ended  December  31,  2000  did not contain any adverse opinion or disclaimer of
opinion  and  was  not  qualified  or modified as to uncertainty, audit scope or
accounting  principles.                                                         

During  the  audits  of ITS's financial statements for the period from inception
(May  13,  1999)  through December 31, 1999 and the year ended December 31, 2000
and the interim period from December 31, 2000 to the date Monahan was dismissed,
Monahan  did  not  have  any  disagreements with ITS on any matter of accounting
principles  or  practices,  financial statement disclosure, or auditing scope or
procedure  which disagreement(s) if not resolved to the satisfaction of Monahan,
would  have  caused  Monahan  to  make  reference  to  the subject matter of the
disagreement(s)  in  connection  with  its  reports.                            

The  decision  to  change  accountants  was  approved  by  ITS's  Board  of     
Directors.                                                                      

On  March  18,  2002,  ITS  engaged  Malone  &  Bailey,  PLLC as its independent
accountants  for the fiscal years ended December 31, 2000 and 2001. During 2000,
2001  and  the  subsequent  interim  period  in  2002 prior to engaging Malone &
Bailey,  ITS  did  not  consult  with  Malone  & Bailey regarding either (i) the
application  of  accounting  principals  to  a  specified  transaction,  either 
completed  or  proposed;  or the type of audit opinion that might be rendered on
ITS's  financial  statements;  or  (ii)  any  matter that was either the subject
matter  of  a  disagreement  or  a  reportable  event. Malone & Bailey, PLLC has
reviewed  the  disclosure  required  by Item 304(a) before it was filed with the
Commission  and  has  been  provided an opportunity to furnish ITS with a letter
addressed  to  the  Commission  containing any new information, clarification of
ITS's  expression  of its views, or the respects in which it does not agree with
the statements made by ITS in response to Item 304(a). Malone & Bailey, PLLC did
not  furnish  a  letter  to  the  Commission.                                   

ITS  has  requested that Monahan review the disclosure and to furnish ITS with a
letter addressed to the Commission containing any new information, clarification
of ITS's expression of its views, or the respect in which it does not agree with
the  statements  made  by  ITS  herein.  Such  letter has not been received from
Monahan  as  of  the  date  of  this  filing.                                   

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Financial Statements                                                            

 INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders                                      
International Test Systems, Inc.                                            
San Antonio, Texas                                                          

We have audited the accompanying consolidated balance sheet of International    
Test Systems, Inc., as of December 31, 2002 and the related consolidated        
statements of expenses, stockholders' equity, and cash flows for each of the two
years then ended.  These financial statements are the responsibility of ITS's   
management.  Our responsibility is to express an opinion on these consolidated  
financial statements based on our audits.                                       

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

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of International Test  
Systems, Inc. as of December 31, 2002 and the results of its operations and its 
cash flows for each of the two years then ended in conformity with accounting   
principles generally accepted in the United States of America.                  

The  accompanying financial statements have been prepared assuming that ITS will
continue as a going concern. As discussed in Note 2 to the financial statements,
ITS  has  suffered  recurring  losses  from  operations  and  has  a net capital
deficiency,  which  raises  substantial doubt about its ability to continue as a
going  concern. Management's plans regarding those matters also are described in
Note  2.  The  financial  statements  do  not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.                              

MALONE & BAILEY, PLLC                                                           
Houston, Texas                                                                  
www.malone-bailey.com                                                           

February 11, 2003                                                               

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INTERNATIONAL TEST SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
 As of December 31, 2002

ASSET                                             
Current Assets                                                                  
Accounts receivable, net of $0 allowance                              
   for doubtful accounts                               $       273
Due from related parties                                         776  
Inventory                                                      2,798  
                                                       -----------
   Total Current Assets                                      3,847

Fixed assets, net of $26,308 accumulated depreciation               3,377       
Deferred offering costs                                           183,710       
                                                       -----------
        Total Assets                                   $   190,934
                                                       ===========

LIABILITIES                                       
Current Liabilities                                                             
Accounts payable                                         $    48,422  
Accrued expenses                                               1,589  
Current portion of note payable                                  806  
Note payable to a related party                               54,750  
                                                       -----------
   Total Current Liabilities                               105,567

Long term portion of note payable                                     868       
                                                       -----------
        Total Liabilities                                  106,435
                                                       -----------

Commitments                                                                     

STOCKHOLDERS' EQUITY                              
Preferred stock, $.001 par, 10,000,000 shares                                   
authorized, none issued and outstanding                               
Common stock, $.001 par, 50,000,000 shares                                      
authorized, 2,150,000 shares outstanding                       2,150  
Additional paid in capital                                      1,539,441       
Retained deficit                                               (1,457,092)      
                                                       -----------
   Total Stockholders' Equity                               84,499
                                                       -----------
Total Liabilities and                             
        Stockholders' Equity                           $   190,934
                                                       ===========

See accompanying summary of accounting policies 
and notes to financial statements.

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                                          INTERNATIONAL TEST SYSTEMS, INC.                  
                                       CONSOLIDATED STATEMENTS OF OPERATIONS                
                                    For the Years Ended December 31, 2002 and 2001          

                                                                         2002        2001   
                                                                      ---------   --------- 
                                                                                            

Revenue from equipment sales                                                                
  and sales commissions                                                  $9,534     $5,675  

Selling expenses                                                            236             
General & administrative                                                                    
  - paid in cash                                                         52,023      15,507 
  - paid in stock                                                       108,800     139,400 
Depreciation                                                              3,576             
Impairment of goodwill                                                  135,169             
                                                                      ---------    ---------
    Loss From Operations                                               (290,270)   (149,232)

Other Expense                                                                               
    Interest expense                                                   (  1,635)            
                                                                      ---------    ---------
Net loss                                                              $(291,905)  $(149,232)
                                                                      =========    =========

Basic and diluted net loss per common share                               $(.14)      $(.08)
Weighted average common shares outstanding                            2,108,333   1,966,667 

See accompanying summary of accounting policies 
and notes to financial statements.

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                                       INTERNATIONAL TEST SYSTEMS, INC.                   
                                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY           
                                 For the Years Ended December 31, 2002 and 2001           

                                           Common Stock           Net                     
                                      Shares         Amount       Loss         Totals     
                                    ----------    ----------    ----------    ---------   
                                                                                          
Balances, December 31, 2000          1,925,000     1,091,418    (1,015,955)     75,463    

Shares returned to ITS                (298,500)                                           

Shares issued for:                                                                        
  - services                           348,500       139,400                   139,400    
  - deferred offering costs             50,000        20,000                    20,000    

Contribution to capital                                                                   
    by shareholders                                   15,073                    15,073    

Net loss                                                        (  149,232)   (149,232)   
                                    ----------    ----------    ----------    ---------   
Balances, December 31, 2001          2,025,000      1,265,891   (1,165,187)     100,704   

Shares cancelled                      (100,000)                                           

Shares returned to ITS                (447,000)                                           

Shares issued for:                                                                        
  - purchase of Pensar                 300,000        120,000                   120,000   
  - services                           272,000        108,800                   108,800   
  - deferred offering costs            100,000         40,000                    40,000   

Contribution to capital                                                                   
   by shareholder                                       6,900                     6,900   

Net loss                                                        (  291,905)    (291,905)  
                                    ----------    ----------    ----------    ---------   
Balances, December 31, 2002          2,150,000      1,541,591  $(1,457,092)     $84,499   
                                    ==========                  ==========    =========   
     less: par value                                   (2,150)                            
                                                  ------------                            
     Additional paid in capital                    $1,539,441                             
                                                  ============                            

See accompanying summary of accounting policies 
and notes to financial statements.

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                              INTERNATIONAL TEST SYSTEMS, INC.                           
                           CONSOLIDATED STATEMENTS OF CASH FLOWS                         
                       For the Years Ended December 31, 2002 and 2001                    

                                                                    2002          2001   
                                                                  ---------     ---------
                                                                                         
CASH FLOWS FROM OPERATING ACTIVITIES                                                     
  Net loss                                                        $(291,905)  $(149,232) 
  Adjustments to reconcile net loss                                                      
    to cash used in operating activities:                                                
    Stock issued for services                                       108,800     139,400  
    Depreciation                                                      3,576              
    Impairment of goodwill                                          135,169              
    Changes in:                                                                          
      Accounts receivable                                             3,333     (    30) 
      Due from related parties                                          568       7,060  
      Inventory                                                       1,308              
      Accounts payable                                               20,002     (   440) 
      Accrued expenses                                                1,391              
                                                                  ---------     ---------
NET CASH USED IN OPERATING ACTIVITIES                              ( 17,758)    ( 3,242) 
                                                                  ---------     ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES                                                 
    Cash received in purchase of Pensar                                 153              
                                                                  ---------              
NET CASH USED IN INVESTING ACTIVITIES                                   153              
                                                                  ---------              
CASH FLOWS FROM FINANCING ACTIVITIES                                                     
    Shareholder contributions                                         6,900      15,073  
    Proceeds from note payable to a related party                    54,750              
    Payments on note payable                                       (    543)             
    Increase in deferred offering costs                            ( 43,673)    (17,005) 
                                                                  ---------     ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES                            17,434      (1,932) 
                                                                  ---------     ---------
NET CHANGE IN CASH                                                 (    171)     ( 5,174)

CASH AT BEGINNING OF PERIOD                                             171        5,345 
                                                                  ---------     ---------
CASH AT END OF PERIOD                                                    $0         $171 
                                                                  =========     =========
SUPPLEMENTAL DISCLOSURES:                                                                
    Interest paid                                                       $46           $0 
    Income taxes paid                                                     0            0 

NONCASH ACTIVITIES:                                                                      
    Deferred offering costs paid with stock                         $40,000      $20,000 
    Purchase of Pensar                                                                   
      Cash received                                                     153              
      Accounts receivable                                             3,575              
      Due from related party                                            878              
      Inventory                                                       4,107              
      Fixed assets, net                                               6,953              
      Accounts payable                                               28,420              
      Accrued expenses                                                  198              
      Note payable                                                    2,217              

See accompanying summary of accounting policies 
and notes to financial statements.

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INTERNATIONAL TEST SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

Nature  of  Business.  International  Test  Systems, Inc. ("ITS") was originally
formed  in  Texas  on  September  20,  1996  to  manufacture,  market,  sell and
distribute  a  family  of  hardware  and  software  products  used  to  test and
troubleshoot  components on printed circuit boards. . This Texas corporation was
dissolved  in  Texas  in  September 1999 and separately incorporated in Delaware
with  substantially  identical  ownership  on  September  20,  1999. See Note 3.

ITS  received  commissions  from  the  sale  of  equipment assembled by a sister
company,  Pensar,  that  is  used  for  testing  printed  circuit boards used in
personal computers until May 2002. In May 2002, ITS purchased all the assets and
operations  of  Pensar.  See  Note  13.                                         

Principles  of  consolidation. The consolidated financial statements include the
accounts  of  ITS  and  its subsidiary, Pensar Technologies, LLC ("Pensar"). All
significant  intercompany  transactions  and  balances  have  been  eliminated. 

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 estimates and assumptions that affect the reported
amounts  of  assets,  liabilities,  revenues  and  expenses,  as well as certain
financial  statement  disclosures.  While management believes that the estimates
and  assumptions  used  in  the  preparation  of  the  financial  statements are
appropriate,  actual  results  could  differ  from  these  estimates.           

Cash  Equivalents.  Highly  liquid investments with original maturities of three
months  or  less  are  considered  cash  equivalents.  There was no cash or cash
equivalents  as  of  December  31,  2002.                                       

Revenue  Recognition. Revenue is recognized when the earning process is complete
and  the  risks and rewards of ownership have transferred to the customer, which
is  generally  considered to have occurred upon shipment of the finished circuit
board  testing  equipment.                                                      

Software  included  in the circuit board testing equipment is considered part of
the  equipment and the related sale. At the point of sale, the software does not
require  significant modification, customization or subsequent customer support.
Product  pricing  includes  the  relevant software. A standard 3-year commercial
warranty  applies,  and  warranty  claims  on  the  limited  sales  to  date are
non-existent. Management does not believe significant warranty claims will arise
in  the  future.  No  upgrades  or  enhancements  are  considered likely to sold
equipment.                                                                      

Inventories.  Inventories are valued at the lower of first-in, first-out (FIFO) 
cost or market.                                                                 

Long-Lived  Assets. Property and equipment are stated on the basis of historical
cost  less  accumulated  depreciation.  Depreciation  is  provided  using  the  
straight-line  method  over  the  estimated  useful  lives  of  the  assets.    

Impairment  of  Long-Lived  Assets.  ITS  reviews  the  carrying  value  of  its
long-lived  assets whenever events or changes in circumstances indicate that the
historical  cost-carrying  value of an asset may no longer be appropriate, or at
least  annually.  ITS assesses recoverability of the carrying value of the asset
by  first  estimating  the  future  net  cash  flows expected to result from the
reporting  unit  and comparing such with the asset carrying value. If the future
net  cash flows are less than the carrying value of the reporting unit, then the
implied value of the goodwill is compared with its individual carrying value. If
the  implied  value  is  less,  an  impairment  loss  is  recorded  equal to the
difference between the asset's carrying value and fair value. An impairment loss
of  $135,169  was  recognized  in  2002  on goodwill recorded in the purchase of
Pensar.  See  Note  13.                                                         

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Income  taxes.  ITS  recognizes  deferred  tax  assets  and liabilities based on
differences  between  the  financial  reporting  and  tax  bases  of  assets and
liabilities  using  the  enacted  tax  rates and laws that are expected to be in
effect  when  the  differences  are  expected  to  be  recovered. ITS provides a
valuation  allowance  for  deferred  tax  assets  for which it does not consider
realization  of  such  assets  to  be  more  likely  than  not.                 

Basic  and  diluted  earnings  per  share.  Basic  earnings per share equals net
earnings divided by weighted average shares outstanding during the year. Diluted
earnings  per  share  include  the  impact of common stock equivalents using the
treasury  stock  method  when the effect is dilutive. There were no common stock
equivalents  during  2002  or  2001.                                            

Recently  issued  accounting  pronouncements.  In  June  2001,  the  Financial  
Accounting  Standards  Board  ("FASB")  released its Statement No. 141 "Business
Combinations"  which  eliminated  the  pooling  of  interests method and further
clarified  the criteria to recognize intangible assets separately from goodwill.
This  statement is effective for any business purchased after June 30, 2001, and
these  provisions  apply  to  the  purchase of Pensar (see Note 13) in May 2002.

In  June  2001, FASB issued its Statement No. 142 "Goodwill and Other Intangible
Assets"  which  specified how identifiable intangible assets should be separated
from  goodwill,  that  goodwill  will  no  longer  be  amortized,  and how asset
impairment  should  be  accounted  for.  Following  FASB  142, ITS recognized an
impairment  loss  in  2002  of  $135,169 on goodwill recorded in the purchase of
Pensar.  See  Note  12.                                                         

ITS  does  not  expect  the  adoption  of  any  other recently issued accounting
pronouncements  to  have  a  significant  impact  on  ITS results of operations,
financial  position  or  cash  flow.                                            

NOTE 2 - GOING CONCERN                                                          

As  shown  in  the accompanying financial statements, ITS has incurred recurring
net  losses, and has a working capital deficiency of $101,720 as of December 31,
2002.  These conditions create an uncertainty as to ITS's ability to continue as
a  going concern. Management is trying to raise additional capital through sales
of  its  common  stock  as  well  as  seeking  financing from third parties. The
financial  statements  do not include any adjustments that might be necessary if
ITS  is  unable  to  continue  as  a  going  concern.                           

NOTE 3 - 1999 CORPORATE RESTRUCTURING                                           

On  June  24,  1999,  ITS  Texas  agreed  with Unifund America, Inc. and Unifund
Financial  Group,  Inc.  (both referred to as "Unifund"), and Pensar to dissolve
ITS  Texas,  create  a  new  corporation  in  Delaware,  and also simultaneously
transfer  all  of  the assets and liabilities of ITS Texas to Pensar. Pensar was
formed  as  a  Texas  LLC in 1995 and was owned by 5 entities, two of which were
Unifund and the president of ITS Texas ("Birmingham"). Immediately prior to this
restructuring, Pensar owned 45% of ITS Texas. The agreement was consummated when
ITS Delaware was created on September 20, 1999. Under this agreement, all of the
shareholders  in  ITS  Texas  except Pensar exchanged their ITS Texas shares for
shares  in  ITS  Delaware. Pensar gave up all of its shares in ITS Texas for the
assets  and  liabilities  of  ITS Texas. ITS Texas transferred its net assets of
$7,274  to  Pensar  and ITS Texas was dissolved. Because the ITS Delaware shares
were  not  issued  pro-rata with the original ownership in ITS Texas, additional
shares  have  been  recorded  as  compensation  expense  of  $6,292 based on the
offering  price  of  $.40  per  share.                                          

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This agreement also called for the issuance of 770,000 shares and 193,000 shares
of ITS stock to both Unifund and Birmingham, respectively, for compensation upon
the  formation  of ITS. On September 20, 1999, in lieu of accepting these shares
for  compensation,  Unifund purchased 574,000 shares of ITS Delaware for $31,200
cash  and  direct payment of third party vendor bills of $26,200. These payments
were  recorded as expenses. Since the price paid was below the offering price of
$.40  per  share,  the  $.30  difference has been recorded as a deemed dividend.

Additional shares were issued in September 1999, as follows:                    
- Unifund received 196,000 shares of ITS Delaware for consulting                
services valued at $.40 per share, or $78,400.                        
- Unifund's CEO received 150,000 shares of ITS Delaware for director            
services valued at $.40 per share, or $60,000.                        
- Birmingham received 193,000 shares of ITS Delaware for compensation           
valued at $.40 per share, or $77,200.                                 
- five third parties received 165,000 shares of ITS for services valued         
at $.40 per share, or $66,000.                                        
- two third parties received 55,000 shares of ITS for deferred offering         
costs valued at $.40 per share, or $22,000.                           

Stock transactions concerning and around the June 1999 agreement that was       
consummated in September 1999 are as follows:                                   

                                                                [Download Table]


                                                          Common Stock        
                                                      Shares          Amount  
                                                   ----------       ----------
                                                                              
ITS Texas pre-dissolution balances                 1,600,000         $651,400 
ITS Texas is dissolved                            (1,600,000)                 
Net assets to Pensar                                                 (  7,274)

ITS Delaware shares are issued to former ITS                                  
    Texas shareholders                                 1,270                0 
Compensation expense due to disproportionate                                  
  issue of ITS Delaware shares                        15,730            6,292 
Shares sold to Unifund for $31,200 cash and direct                            
  payment of third party expenses of $26,200         574,000          229,600 
  - less deemed dividend of $.30 per share                           (172,200)
Shares issued for services at $.40 per share:                                 
  - Unifund                                          196,000           78,400 
  - Birmingham                                       193,000           77,200 
  - Unifund's CEO                                    150,000           60,000 
  - Five third parties                               165,000           66,000 
  - Two third parties (deferred offering costs)       55,000           22,000 
                                                   ----------       ----------
ITS Delaware Balances, December 31, 1999           1,350,000       $1,011,418 
                                                   ==========       ==========

NOTE 4 - DUE FROM RELATED PARTY                                                 

ITS advanced the president $1,626 during 2002 and the president repaid $850,    
leaving a balance of $776 as of December 31, 2002.                              

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NOTE 5 - DEFERRED OFFERING COSTS                                                

Legal  costs  associated  with the public offering are being deferred until such
time  the  offering  is  effective  or  is aborted. When effective, the deferred
offering  costs  will be charged to equity against the proceeds raised. Deferred
offering  costs  as  of  December  31,  2002  totaled  $183,710.                

NOTE 6 - PROPERTY AND EQUIPMENT                                                 

         Estimated
        Useful
                        Lives           2002
                         -------        --------
Furniture and fixtures              5 years       $ 25,937            
Computers                           3 years         3,748             
                                        --------
                                      29,685
Less:  accumulated depreciation                   (26,308)            
                                        --------
                                     $ 3,377
                                        ========

NOTE 7 - NOTE PAYABLE                                                           

In the purchase of Pensar (see note 13), ITS purchased a note payable. In August
2000,  Pensar  purchased  computer  equipment  and  financed the purchase over a
48-month term bearing interest of 22.99% with monthly payments of $106. The note
is collateralized by the computer equipment. The balance as of December 31, 2002
was  $1,674,  of  which  $806  is  due  in  2003,  and  $868  in  2004.         

NOTE 8 - NOTE PAYABLE TO A RELATED PARTY                                        

In  March  2002  ITS  entered  into  a  line  of  credit  agreement with a major
shareholder.  The  agreement provide d for a $25,000 line of credit available to
ITS  as  needed. The limit was increased to $40,000 in August 2002 and increased
again  to  $75,000  in  December  2002.  Unpaid  principal  and interest bear an
interest  rate  of 8%, with interest due on the fifteenth of each month which is
being  accrued. Approximately $20,000 was available for borrowing as of December
31,  2002. The entire unpaid principal and interest is due on December 31, 2003.

NOTE 9 - EQUITY                                                                 

In  July  2002,  ITS  increased  the  authorized  common  stock outstanding from
20,000,000  to  50,000,000 and the preferred stock from 5,000,000 to 10,000,000.

2001                                                                            
----                                                                            
Birmingham contributed $73 to ITS to fund ongoing operations.                   

Unifund contributed $15,000 to ITS to fund ongoing operations.                  

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Unifund returned 298,500 shares of ITS common stock to ITS for no consideration.
These  shares  were  cancelled.  ITS  issued  348,500  shares of common stock to
several  individuals  for  services provided at $.40 per share, or $139,400. ITS
issued  50,000  shares at $.40 per share for deferred offering costs of $20,000.

2002                                                                            
----                                                                            
Birmingham  Family  Partnership  contributed  $6,900  to  ITS  to  fund  ongoing
operations.                                                                     

ITS  cancelled  100,000  shares  previously  issued in 1999 to lawyers for legal
services determined in 2002 to be unfulfilled. The cancellation has no effect on
the  current  statement  of  operations.                                        

Unifund  and  Birmingham  transferred  447,000 shares to several individuals for
services  for  ITS.  These  shares  were  deemed  (a)  returned  to  ITS  for no
consideration  and  cancelled,  and (b) issued on behalf of ITS, as follows. ITS
issued  300,000  shares  of  common stock for the purchase of Pensar at $.40 per
share. See Note 13. ITS issued another 272,000 shares of common stock to several
individuals  for  services provided at $.40 per share, or $108,800. The $108,800
has been recorded as a 2002 expense. ITS issued 100,000 shares at $.40 per share
for  deferred  offering  costs  of  $40,000.                                    

NOTE 10 - INCOME TAXES                                                          

ITS has net a operating loss carryforward of approximately $85,000, which       
expires in the years 2011 - 2022.                                               

Deferred tax assets               $ 29,000                            
Less: valuation allowance          (29,000)                           
        --------
Net deferred taxes                $      0                            
        ========

NOTE 11 - COMMITMENTS                                                           

In January 2002, ITS and Pensar both entered into a 3 year office lease with the
same  related  party  for $100 per month and $200 per month, respectively, which
both  expire  on  December  31,  2004.  After the purchase of Pensar by ITS, ITS
renegotiated  both  leases for new terms of $150 per month, expiring on December
31,  2004.  ITS  incurred  rent  expense  of $1,550 and $4,521 in 2002 and 2001,
respectively.  Future  minimum  lease  payments  are $1,800 per year in 2003 and
2004.                                                                           

In  May  2002,  ITS  entered  into  a  5-year  employment  agreement  with Carey
Birmingham, as President and CEO. The agreement is contingent upon ITS raising a
minimum  of  $125,000. When $125,000 is raised, the 5-year agreement begins. The
salary  in  year  one  will be $25,000 with a $30,000 increase in year two and a
$10,000  per year increase in years three through four and a $25,000 increase in
year  five. If $500,000 is raised, the salary in year one will be $45,000 with a
$10,000  per  year  increase in years two through four and a $25,000 increase in
year  five.                                                                     

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NOTE 12 - MAJOR CUSTOMERS                                                       

One customer accounted for 90 percent of 2002 sales.  ITS sold units for Pensar 
for a 40 percent commission until May 2002.  ITS had no other source of revenue 
for 2001.  No other customer and no vendors accounted for as much as 10 percent 
of sales or purchases in 2002 or 2001.                                          

NOTE 13 - PURCHASE OF PENSAR OPERATIONS                                         

On  May  1, 2002, ITS merged with Pensar by issuing Pensar 300,000 shares of ITS
common stock for all of Pensar's assets and liabilities. The 300,000 shares were
valued  at $.40 per share, or $120,000. The goodwill of $135,169 was recorded as
of  May  1,  2002. An impairment review of goodwill was performed as of December
31,  2002,  and  because  the estimated future net cash flows were less than the
carrying  value  of  the  goodwill, an impairment loss of $135,169 was recorded.

Goodwill  in  the purchase of Pensar represents the excess of the purchase price
paid  (300,000 shares valued at $.40 per share, or $120,000) over the fair value
of  the  assets acquired ($15,666) net of the liabilities assumed ($30,835). The
purchase  price  was  negotiated  as  a  private  contract between the two major
stockholders  of  both  entities,  Birmingham  and  Unifund. There were no other
bidders.                                                                        

The  two  major shareholders Birmingham and Unifund each returned 100,000 shares
of  ITS  stock  to  ITS  as  part  of  the  Pensar  purchase.  Also, certain ITS
shareholders were issued 25,000 shares for services valued at $.40 per share, or
$10,000.                                                                        

The  primary  reason  for  the  merger:  ITS was originally formed as the public
marketing  arm  of  Pensar  products.  As  planning of the public stock offering
progressed, management decided that the legal, accounting and reporting problems
created  by  maintaining two separate entities, one public and one private, were
unreasonable  and  not  needed.                                                 

A summary of the allocation of the purchase price is as follows:                
Assets acquired                                                 
Cash                                      $    153
Other current assets                         8,560
 Property and equipment                        6,953
Liabilities acquired                               (30,835)     
Goodwill recorded                                  135,169      

Pensar's  results  of operations for May 2002 through December 2002 are included
in the 2002 Consolidated Statement of Operations. A pro forma summary of results
of operations for 2002 and 2001 as if the combination had occurred on January 1,
2001  is  as  follows:                                                          

 2002               2001
---------          ---------
Sales                    $  10,691          $  14,186                           

Cost of goods sold           1,206              7,709                           
Selling expenses               236                                              
General and administrative 166,966            213,680                           
Depreciation                 4,955              3,867                           
Impairment of goodwill     135,169                                              
Interest expense             3,020              5,157                           
---------          ---------
Net loss                 $(300,861)         $(216,227)                          
=========          =========

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NOTE 14 - SUBSEQUENT EVENT                                                      

In  February  2003,  ITS  and  the  two  majority  shareholders  entered  into a
non-binding  letter  of  intent  with  a  third party to sell 626,000 ITS common
shares  from  the  shareholder's  personal  holdings for $150,000 and for ITS to
issue 14,093,000 shares of ITS common stock for $1,000,000. The third party paid
a $15,000 non-refundable deposit to the shareholders for their 626,000 shares in
February  2003.                                                                 

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 INDEPENDENT AUDITORS REPORT

To the Members                                                                  
Pensar Technologies, LLC                                                    
San Antonio, Texas                                                          

We have audited the accompanying balance sheet of Pensar Technologies, LLC, as  
of December 31, 2001 and the related statements of operations, members' deficit,
and cash flows for each of the two years then ended.  These financial statements
are the responsibility of the company's management.  Our responsibility is to   
express an opinion on these combined financial statements based on our audit.   

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

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Pensar Technologies, LLC as of 
December 31, 2001 and the results of its operations and its cash flows for each 
of the two years then ended in conformity with accounting principles generally  
accepted in the United States of America.                                       

MALONE & BAILEY, PLLC                                                           
Houston, Texas                                                                  
www.malone-bailey.com                                                           

April 2, 2002                                                                   

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PENSAR TECHNOLOGIES, LLC
 BALANCE SHEET
As of April 30, 2002
 (Unaudited)

ASSETS                                            
Current Assets                                                                  
     Cash                                                              $     153
     Accounts receivable                                                   3,575
     Due from related party                                                  878
     Inventory                                                             4,107
                                                                       ---------
          Total Current Assets                                             8,713

Property & equipment, net of $22,732 accumulated depreciation              6,953
                                                                       ---------
               Total Assets                                            $  15,666
                                                                       =========

LIABILITIES AND MEMBERS' DEFICIT                  
Current Liabilities                                                             
     Accounts payable                                                  $  28,420
     Accrued expenses                                                        198
     Due to related party                                                     46
     Current portion of note payable                                         840
                                                                       ---------
          Total Current Liabilities                                       29,504

Long term portion of note payable                                          1,377
                                                                       ---------
          Total Liabilities                                               30,881

Members' Deficit                                                        (15,215)
                                                                       ---------
     Total Liabilities and Members' Deficit                            $  15,666
                                                                       =========

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PENSAR TECHNOLOGIES, LLC
 STATEMENT OF OPERATIONS
For the Four Months Ended April 30, 2002
 (Unaudited)

                                                                      2002
                                                                       ---------
Sales                                                                  $   1,157

Cost of sales                                                              1,206
General & administrative                                                   7,528
Depreciation                                                               1,379
                                                                       ---------
Net loss                                                              $  (8,956)
                                                                       =========

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  PENSAR TECHNOLOGIES, LLC
 STATEMENT OF CASH FLOWS
For the Four Months Ended April 30, 2002
 (Unaudited)

                                                                      2002
                                                                       ---------
CASH FLOWS FROM OPERATING ACTIVITIES                                            
  Net loss                                                            $  (8,956)
Adjustments to reconcile net loss                                           
to cash used by operating activities:                             
    Depreciation                                                           1,379
Changes in:                                                             
          Accounts receivable                                            (2,755)
          Due from related party                                            (25)
          Inventory                                                        (902)
          Accounts payable                                                 (519)
         Accrued expenses                                                  198
          Due to related party                                             (420)
                                                                       ---------
NET CASH USED IN OPERATING ACTIVITIES                                   (12,000)
                                                                       ---------
CASH FLOWS FROM FINANCING ACTIVITIES                                            
     Capital contributions                                                10,500
     Payments on note payable                                              (300)
                                                                       ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                 10,200
                                                                       ---------
NET CHANGE IN CASH                                                       (1,800)

CASH AT BEGINNING OF PERIOD                                               1,953 
                                                                       ---------
CASH AT END OF PERIOD                                                 $     153 
                                                                       =========

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PENSAR TECHNOLOGIES, LLC
 NOTES TO FINANCIAL STATEMENTS
 (Unaudited)

NOTE 1 - BASIS OF PRESENTATION                                                  

The  accompanying unaudited interim financial statements of Pensar Technologies,
LLC,  a  Texas  Limited  Liability  Company  ("Pensar"),  have  been prepared in
accordance with accounting principles generally accepted in the United States of
America  and  the  rules  of the Securities and Exchange Commission ("SEC"), and
should  be  read  in conjunction with the audited financial statements and notes
thereto  contained  in  Pensar's latest Annual Report filed with the SEC on Form
SB-1.  In  the  opinion  of  management,  all  adjustments, consisting of normal
recurring  adjustments,  necessary for a fair presentation of financial position
and  the  results  of  operations  for  the  interim periods presented have been
reflected  herein.  The  results  of  operations  for  interim  periods  are not
necessarily indicative of the results to be expected for the full year. Notes to
the  financial  statements  which  would  substantially duplicate the disclosure
contained  in  the  audited financial statements for the most recent fiscal year
2001  as  reported  in  Form  SB-1,  have  been  omitted.                       

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PENSAR TECHNOLOGIES, LLC
 BALANCE SHEET
 As of December 31, 2001

ASSETS                                            
Current Assets                                                                  
     Cash                                                              $   1,953
     Accounts receivable                                                     820
     Due from related party                                                  853
     Inventory                                                             3,204
                                                                       ---------
          Total Current Assets                                             6,830

Property & equipment, net of $21,353 accumulated depreciation              8,332
                                                                       ---------
               Total Assets                                            $  15,162
                                                                       =========

LIABILITIES AND MEMBERS' DEFICIT                  
Current Liabilities                                                             
     Accounts payable                                                  $  28,937
     Due to related party                                                    466
     Current portion of note payable                                         699
                                                                       ---------
          Total Current Liabilities                                       30,102

Long term portion of note payable                                          1,818
                                                                       ---------
               Total Liabilities                                          31,920

Commitments                                                                     

Members' Deficit                                                        (16,758)
                                                                       ---------
     Total Liabilities and Members' Deficit                            $  15,162
                                                                       =========

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PENSAR TECHNOLOGIES, LLC
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2001 and 2000

                                                    2001              2000
                                                    ---------          ---------
Sales                                               $  14,186          $  41,587

Cost of sales                                           7,709             36,381
Selling expenses                                        5,675             10,494
General & administrative                               63,930             30,427
Depreciation                                            3,867              3,092
                                                    ---------          ---------
Net loss                                            $ (66,995)        $ (38,807)
                                                    =========          =========

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PENSAR TECHNOLOGIES, LLC
 STATEMENT OF MEMBERS' DEFICIT
For the Years Ended December 31, 2001 and 2000

Balance, December 31, 1999                                              $     44

Contributions to capital                                                  21,250
Net loss                                                                (38,807)
                                                                        --------
Balance, December 31, 2000                                              (17,513)

Contributions to capital                                                  67,750
Net loss                                                                (66,995)
                                                                        --------
Balance, December 31, 2001                                             $(16,758)
                                                                        ========

 See accompanying summary of accounting policies
and notes to financial statements.

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PENSAR TECHNOLOGIES, LLC
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2001 and 2000

                                                    2001              2000
                                                    ---------          ---------
CASH FLOWS FROM OPERATING ACTIVITIES                                            
  Net loss                                         $ (66,995)         $ (38,807)
Adjustments to reconcile net loss                                           
to cash used by operating activities:                             
   Depreciation                                       3,867              3,092
Changes in:                                                             
          Accounts receivable                          1,102            (   673)
         Due from related party                     (   853)               518
         Inventory                                    2,757              6,114
          Accounts payable                             1,270            ( 2,101)
         Due to related party                       ( 7,060)            10,482
                                                    ---------          ---------
NET CASH USED IN OPERATING ACTIVITIES                (65,912)           (21,375)
                                                    ---------          ---------
CASH FLOWS FROM INVESTING ACTIVITIES                                            
Purchase of property and equipment              (   649)              
                                 ---------
CASH FLOWS FROM FINANCING ACTIVITIES                                            
 Capital contributions                               67,750             21,250
     Payments on note payable                        (   659)           (   130)
                                                    ---------          ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES             67,091             21,120 
                                                    ---------          ---------
NET CHANGE IN CASH                                       530            (   255)

CASH AT BEGINNING OF PERIOD                            1,421              1,676 
                                                  ---------          ---------
CASH AT END OF PERIOD                              $   1,953          $   1,421 
                                                  =========          =========

NONCASH ACTIVITIES:                                                             
    Purchase of seller-financed property and equipment               $   3,306

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PENSAR TECHNOLOGIES, LLC
 NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

Nature  of  Business.  Pensar  Technologies,  LLC  ("Pensar") is a Texas Limited
Liability  Company  formed  on  April  20,  1995.                               

Pensar  assembles  equipment  used  for  testing  printed circuit boards used in
personal  computers.  The  equipment  is sold by a sister company, International
Test  Systems,  Inc.  These  two  companies  merged on May 5, 2002. See Note 10.

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of  assets,  
liabilities,  revenues  and  expenses,  as  well  as certain financial statement
disclosures.  While  management believes that the estimates and assumptions used
in  the  preparation of the financial statements are appropriate, actual results
could  differ  from  these  estimates.                                          

Cash  Equivalents.  Highly  liquid investments with original maturities of three
months  or  less  are  considered  cash  equivalents.                           

Revenue  Recognition. Revenue is recognized when the earning process is complete
and  the  risks and rewards of ownership have transferred to the customer, which
is  generally  considered to have occurred upon shipment of the finished circuit
board  testing  equipment.                                                      

Software  included  in the circuit board testing equipment is considered part of
the  equipment and the related sale. At the point of sale, the software does not
require  significant modification, customization or subsequent customer support.
Product  pricing  includes  the  relevant software. A standard 3-year commercial
warranty  applies,  and  warranty  claims  on  the  limited  sales  to  date are
non-existent. Management does not believe significant warranty claims will arise
in  the  future.  No  upgrades  or  enhancements  are  considered likely to sold
equipment.                                                                      

Inventories.  Inventories are valued at the lower of first-in, first-out (FIFO) 
cost or market.                                                                 

Long-Lived  Assets. Property and equipment are stated on the basis of historical
cost  less  accumulated  depreciation.  Depreciation  is  provided  using  the  
straight-line  method  over  the  estimated  useful  lives  of  the  assets.    

Impairment  losses  are  recorded  on  long-lived assets used in operations when
indicators  of  impairment are present and the undiscounted cash flows estimated
to  be generated by those assets are less than the assets' carrying value. There
were  no  impairment  losses  in  2001  or  2000.                               

Income  taxes.  ITS  recognizes  deferred  tax  assets  and liabilities based on
differences  between  the  financial  reporting  and  tax  bases  of  assets and
liabilities  using  the  enacted  tax  rates and laws that are expected to be in
effect  when  the  differences  are  expected  to  be  recovered. ITS provides a
valuation  allowance  for  deferred  tax  assets  for which it does not consider
realization  of  such  assets  to  be  more  likely  than  not.                 

Recently  issued  accounting pronouncements. ITS does not expect the adoption of
recently  issued  accounting  pronouncements to have a significant impact on ITS
results  of  operations,  financial  position  or  cash  flow.                  

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NOTE 2 - DUE FROM RELATED PARTY                                                 

In 2001, Pensar purchased two computers for one of it's members.  The total     
price was $853, which that shareholder has agreed to reimburse.                 

                                                                [Download Table]


NOTE 3 - PROPERTY AND EQUIPMENT                        

                                 Estimated             
                                   Useful              
                                   Lives       2001    
                                  -------    --------  
                                                       
Furniture and fixtures             5 years   $  25,730 
Computers                          3 years       3,995 
                                              -------- 
                                                29,685 
Less:  accumulated depreciation                (21,353)
                                              -------- 
                                             $   8,332 
                                              ======== 

NOTE 4 - DUE TO RELATED PARTY                                                   

By agreement, Pensar pays a 40 percent commission on sales of Pensar products by
International  Test  Systems,  Inc.  ("ITS").  Both  companies  have had similar
ownership  since  inception.  In  addition  to  commissions  and ownership, both
companies  share  management and expenses and at times owe one another money. As
of  December  31,  2001,  Pensar  owed  ITS  $466.                              

NOTE 5 - NOTE PAYABLE                                                           

In  August  2000,  Pensar purchased computer equipment and financed the purchase
over  a  48-month term bearing interest of 22.99% with monthly payments of $106.
The note is collateralized by the computer equipment. The balance as of December
31,  2001  was  $2,517,  of which $699 is due in 2002, $950 in 2003, and $868 in
2004.                                                                           

NOTE 6 - CAPITAL ACCOUNTS                                                       

Capital contributions of $67,750 and $21,250 have been made for the 2001 and    
2000, respectively, by a member to fund ongoing operations.                     

NOTE 7 - INCOME TAXES                                                           

Pensar is treated as a partnership for federal income tax purposes. Accordingly,
its earnings are exempt from federal income taxes. Income or loss is reported on
the  members'  federal  income  tax  returns.                                   

NOTE 8 - COMMITMENTS                                                            

Pensar's  previous office lease expired in 2001. In January 2002, Pensar entered
into a new three year office lease with a related party for $200 per month which
expires  on December 31, 2004. Pensar incurred rent expense of $3,535 and $4,325
in  2001  and  2000,  respectively. Future minimum lease payments are $2,400 per
year  in  each  of  2002,  2003,  and  2004.                                    

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NOTE 9 - MAJOR CUSTOMERS                                                        

Three  customers  each  accounted for 1/3 of 2001 sales. Two different customers
accounted  for 55 percent and 24 percent of 2000 sales. No other customer and no
vendors  accounted  for  as  much  as  10  percent  of  sales  or  purchases.   

NOTE 10 - SALE OF PENSAR                                                        

On  May  5, 2002, ITS merged with Pensar by issuing Pensar 300,000 shares of ITS
common  stock  for  all  of  Pensar's  assets  and  liabilities.                

The two major shareholders of both entities Birmingham and Unifund each returned
100,000 shares of ITS stock to ITS as part of the Pensar purchase. Also, certain
ITS  shareholders  were  issued  25,000  shares  for services valued at $.40 per
share,  or  $10,000.                                                            

The  primary  reason  for  the  merger:  ITS was originally formed as the public
marketing  arm  of  Pensar  products.  As  planning of the public stock offering
progressed, management decided that the legal, accounting and reporting problems
created  by  maintaining two separate entities, one public and one private, were
unreasonable  and  not  needed.                                                 

See the separate financial statements of ITS for additional information on the  
ITS accounting treatment.                                                       

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MAY 2002 MERGER WITH PENSAR                                                     
PRO FORMA DISCLOSURES                                                           

On  May  1, 2002, ITS merged with Pensar by issuing Pensar 300,000 shares of ITS
common stock for all of Pensar's assets and liabilities. The 300,000 shares were
valued at $.40 per share, or $120,000. The goodwill of $135,169 was recorded and
written  off  to  operations  as  of  December  31,  2002.                      

Goodwill  in  the purchase of Pensar represents the excess of the purchase price
paid  (300,000 shares valued at $.40 per share, or $120,000) over the fair value
of  the  assets acquired ($15,666) net of the liabilities assumed ($30,835). The
purchase  price  was  negotiated  as  a  private  contract between the two major
stockholders  of  both  entities,  Birmingham  and  Unifund. There were no other
bidders.  While Pensar has had gross revenues in each of the last two years, the
amounts  ($14,186  and  $41,587  in  2001 and 2000, respectively) are not large.
Because  Pensar  has  never  made  money  and significant revenue growth has not
occurred in 2002 to date, management concluded that all goodwill associated with
the  purchase  should  be  written  off  as  of  December  31,  2002.           

Had  the  merger  taken  place  on January 1, 2001, goodwill would have been the
excess  of  the purchase price paid (300,000 shares valued at $.40 per share, or
$120,000)  over  the  fair  value  as  of January 1, 2001 of the assets acquired
($20,854) net of the liabilities assumed ($30,841), which would have resulted in
goodwill  of  $129,987,  which  is  the  figure used in the following schedules.

The two major shareholders, Birmingham and Unifund, each returned 100,000 shares
of  ITS  stock  to  ITS  as  part  of  the  Pensar  purchase.  Also, certain ITS
shareholders were issued 25,000 shares for services valued at $.40 per share, or
$10,000.                                                                        

The  primary  reason  for  the  merger:  ITS  was  originally  formed  to be the
publicly-owned marketing arm of Pensar products. As planning of the public stock
offering progressed, management decided that the legal, accounting and reporting
problems  created  by  maintaining  two  separate  entities,  one public and one
private,  were  unreasonable  and  not  needed.                                 

A summary of the allocation of the $120,000 purchase price is as follows:       

Assets acquired                                   
Cash                                      $    153
Other current assets                         8,560
Property and equipment                       6,953
 Liabilities acquired                       (30,835)
Goodwill recorded                          135,169

The  following  unaudited  pro forma balance sheets and statements of operations
have been derived from the balance sheets of ITS and Pensar as of April 30, 2002
(unaudited)  and December 31, 2001 (audited) and the statements of operations of
ITS and Pensar for the four months ended April 30, 2002 (unaudited) and the year
ended  December 31, 2001 (audited) and adjust such information to give effect to
the  merger  with Pensar as if it had occurred on January 1, 2001. The pro forma
statements  of  operations  are presented for informational purposes only and do
not  purport  to  be indicative of the results of operations that actually would
have  resulted  if  the merger had been consummated on January 1, 2001 nor which
may  result  from  future  operations.  All  intercompany transactions have been
eliminated.                                                                     

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                                                        [Enlarge/Download Table]


Unaudited Pro forma results as of April 30, 2002 and for the four months then ended are as follows:                    

                                                                                                           Pro Forma   
                                            ITS                      Pensar                       Adj.      Combined   
                                        -----------                ---------                  ---------    ----------- 
                                                                                                                       
Cash                                            $22                     $153                                     $175  
Accounts receivable                              30                    3,575                                    3,605  
Due from related party                           46                      878                 $ (     46)          878  
Inventory                                                              4,107                                    4,107  
Fixed assets, net                                                      6,953                                    6,953  
Deferred offering costs                     105,037                                                           105,037  
Goodwill                                                                                        129,987       129,987  
                                        -----------                ---------                  ---------    ----------- 
                                           $105,135                  $15,666                   $129,941      $250,742  
                                        ===========                ==========                  =========    ===========

Accounts payable                               $565                   $28,420                                 $28,985  
Accrued expenses                                                          198                                     198  
Due to related party                            500                        46                     $ (46)          500  
Note payable                                                            2,217                                   2,217  
Capital                                   1,270,891                   585,881                   (395,157)   1,461,615  

Retained deficit                         (1,166,821)                 (601,096)                   525,144   (1,242,773) 
                                        -----------                ---------                  ---------    ----------- 
                                           $105,135                   $15,666                   $129,941     $250,742  
                                        ===========                ===========                 ==========   ===========

Sales                                          $700                    $1,157                                  $1,857  

Cost of goods sold                                                      1,206                                   1,206  
General and administrative                    2,334                     7,528                                   9,862  
Depreciation                                                            1,379                                   1,379  
                                        -----------                ---------                               ----------- 
Net loss                                    $(1,634)                  $(8,956)                               $(10,590) 
                                        ===========                ===========                 ==========   ===========

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                                                        [Enlarge/Download Table]


Unaudited Pro forma results as of December 31, 2001 and for the year then ended are as follows:                        

                                                                                                           Pro Forma   
                                            ITS                      Pensar                       Adj.      Combined   
                                        -----------                ---------                  ---------    ----------- 
                                                                                                                       
Cash                                           $171                   $1,953                                   $2,124  
Accounts receivable                              30                      820                                      850  
Due from related party                          466                      853                $ (    466)           853  
Inventory                                                              3,204                                    3,204  
Fixed assets, net                                                      8,332                                    8,332  
Deferred offering costs                     100,037                                                           100,037  
Goodwill                                                                                       129,987        129,987  
                                        -----------                ---------                  ---------    ----------- 
                                            100,704                  $15,162                  $129,521       $245,387  
                                        ===========                ===========                 ==========   ===========

Accounts payable                                                     $28,937                                  $28,937  
Due to related party                                                     466                                $(    466) 
Note payable                                                           2,517                                    2,517  
Capital                                  $1,265,891                  575,382                  (395,158)     1,446,115  
Retained deficit                         (1,165,187)                (592,140)                  525,145     (1,232,182) 
                                        -----------                ---------                  ---------    ----------- 
                                            100,704                  $15,162                  $129,521       $245,387  
                                        ===========                ===========                 ==========   ===========

Sales                                        $5,675                  $14,186                 $(  5,675)       $14,186  

Cost of goods sold                                                     7,709                                    7,709  
Selling expenses                                                       5,675                  (  5,675)                
General and administrative                  154,907                   63,930                                  218,837  
Depreciation                                                           3,867                                    3,867  
                                        -----------                ---------                  ---------    ----------- 
Net loss                                  $(149,232)                $(66,995)                        $0     $(216,227) 
                                        ===========                ===========                 ==========   ===========

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Certain  Provisions  Of  Our  Articles  And By-Laws And Disclosure Of Commission
Position  On  Indemnification  For  Securities  Act  Liabilities                

Our  Certificate of Incorporation and By-laws contain provisions eliminating the
personal liability of a director to the company and its stockholders for certain
breaches of his or her fiduciary duty of care as a director. This provision does
not,  however,  eliminate  or limit the personal liability of a director for any
breach  of  such  director's duty of loyalty to the company or its stockholders,
for  acts or omissions not in good faith or which involve intentional misconduct
or  a  knowing  violation  of  law,  under  Delaware statutory provisions making
directors personally liable, under a negligence standard, for unlawful dividends
or  unlawful stock repurchases or redemptions, or for any transaction from which
the  director  derived  an  improper  personal  benefit.                        

This provision offers persons who serve on the board of directors of the company
protection  against  awards of monetary damages resulting from breaches of their
duty  of  care,  except as indicated above, including grossly negligent business
decisions  made  in  connection  with  takeover  proposals for the company. As a
result of this provision, the ability of the company or a stockholder thereof to
successfully  prosecute an action against a director for a breach of his duty of
care  has  been limited. However, the provision does not affect the availability
of  equitable  remedies  such  as  an  injunction  or  rescission  based  upon a
director's  breach  of his duty of care. The SEC has taken the position that the
provision  will  have  no  effect on claims arising under the federal securities
laws.  Insofar  as  indemnification for liabilities arising under the Securities
Act  may  be  permitted  to  directors,  officers and controlling persons of our
company pursuant to the foregoing provisions, or otherwise, we have been advised
that  in  the  opinion  of  the  Securities  and  Exchange  Commission  such    
indemnification  is against public policy as expressed in the Securities Act and
is,  therefore,  unenforceable.                                                 

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In  addition,  the  amended  certificate  and  by-laws  provide  mandatory      
indemnification  rights, subject to limited exceptions, to any person who was or
is  party  or  is  threatened  to  be made a party to any threatened, pending or
completed  action,  suit or proceeding by reason of the fact that such person is
or was a director or officer of our company, or is or was serving at the request
of  our  company  as  a director or officer of another corporation, partnership,
joint  venture,  trust,  employee  benefit  plan  or  other  enterprise.  Such  
indemnification  rights  include  reimbursement  for  expenses  incurred by such
person in advance of the final disposition of such proceeding in accordance with
the  applicable  provisions  of  the  Delaware  General  Corporation  Law.      

Where Can Investors Find Additional Information                                 

A registration statement on Form SB-1, including amendments thereto, relating to
the  shares  offered  hereby  has  been  filed  with the Securities and Exchange
Commission. This prospectus does not contain all of the information set forth in
the  registration  statement  and the exhibits and schedules thereto. Statements
contained  in  this  prospectus  as  to  the  contents  of any contract or other
document referred to are not necessarily complete and in each instance reference
is  made  to  the copy of such contract or other document filed as an exhibit to
the  registration statement, each such statement being qualified in all respects
by such reference. For further information with respect to us and the securities
offered  hereby,  reference is made to such registration statement, exhibits and
schedules.  A  copy  of  the  registration  statement may be inspected by anyone
without  charge  at  the  Securities  and Exchange Commission's principal office
located  at  450  Fifth  Street,  N.W.,  Washington,  D.C.  20549,  The SEC also
maintains  a  site  on  the  World  Wide Web at http://www.sec.gov that contains
information  regarding  registrants that file electronically with the Securities
and  Exchange  Commission.                                                      

As filed with the Securities and Exchange  Commission on April 4, 2003          

Significant Parties                                                             

     The  full  names and business and residential addresses, as applicable, for
the  following  persons  are:                                                   

(1)      the  issuer's  directors;                                              

Carey  Birmingham                                             
Business  Address:                                            
International  Test  Systems,  Inc.                           
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

Residence:                                                    
21303  Encino  Commons  Blvd.  #408                           
San  Antonio,  Texas  78259                                   

Alex  H.  Yount                                               
Business  Address:                                            
Koontz  McCombs  Realty  Services                             
755  East  Mulberry  Avenue                                   
Suite  150                                                    
San  Antonio,  Texas  78212                                   

Residence:                                                    
206  East  Roosevelt  Avenue                                  
Boerne,  Texas  78006                                         

H.  Youval  Krigel                                            
Business  Address:                                            
Ktest  International,  LLC                                    
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      
Residence:                                                    
14326  Citation                                               
San  Antonio,  Texas  78248                                   

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(2)      the  issuer's  officers;                                               
       Carey  Birmingham,  President,  Chief  Executive  Officer  and  Chief
Financial  Officer                                            
Business  Address:                                            
International  Test  Systems,  Inc.                           
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

Residence:                                                    
21303  Encino  Commons  Blvd.  #408                           
San  Antonio,  Texas  78259                                   

(3)      The  issuers  general  partners;  none                                 

(4)  and  (5)  record and beneficial owners of 5 percent or more of any class of
the  issuer's  equity  securities;                                              
Carey  Birmingham                                             
Business  Address:                                            
International  Test  Systems,  Inc.                           
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

Residence:                                                    
21303  Encino  Commons  Blvd.  #408                           
San  Antonio,  Texas  78259                                   

Unifund  Financial  Group                                     
Business  Address                                             
575  Madison  Avenue,  Suite  1006                            
New  York,  NY  10022                                         

Scott  Barter                                                 
Business  Address                                             
575  Madison  Avenue,  Suite  1006                            
New  York,  NY  10022                                         

Residential  Address                                          
140  East  56th  Street                                       
Apt.  7D                                                      
New  York,  NY  10022                                         

Pensar  Technologies,  LLC                                    
Business  Address                                             
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

BFP  Texas                                                    
Business  Address                                             
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

(6) promoters  of  the  issuer;                                       
Carey  Birmingham                                             
Business  Address:                                            
International  Test  Systems,  Inc.                           
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

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Residence:                                                    
21303  Encino  Commons  Blvd.  #408                           
San  Antonio,  Texas  78259                                   

H.  Youval  Krigel                                            
Business  Address:                                            
Ktest  International,  LLC                                    
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      
Residence:                                                    
14326  Citation                                               
San  Antonio,  Texas  78248                                   

(7) affiliates  of  the  issuer;                                      
Carey  Birmingham                                             
Business  Address:                                            
International  Test  Systems,  Inc.                           
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      

Residence:                                                    
21303  Encino  Commons  Blvd.  #408                           
San  Antonio,  Texas  78259                                   

Alex  H.  Yount                                               
Business  Address:                                            
Koontz  McCombs  Realty  Services                             
755  East  Mulberry  Avenue                                   
Suite  150                                                    
San  Antonio,  Texas  78212                                   

Residence:                                                    
206  East  Roosevelt  Avenue                                  
Boerne,  Texas  78006                                         

H.  Youval  Krigel                                            
Business  Address:                                            
Ktest  International,  LLC                                    
16161  College  Oak,  Suite  101                              
San  Antonio,  TX  78249                                      
Residence:                                                    
14326  Citation                                               
San  Antonio,  Texas  78248                                   

 (8) counsel  to the issuer with respect to the proposed offering; David
M.  Loev,  Attorney  at  Law,  2777 Allen Parkway, Suite 1000, Houston, TX 77019

David  Loev                                                   
Residence                                                     
4712  Bellview                                                
Bellaire,  Texas  77401                                       

(9) each  underwriter  with  respect  to  the  proposed  offering;    
Public  Securities, Inc., 300 North Argonne Road, Suite 202, Spokane, Washington
99212.                                                                          

(10)the  underwriters  directors;                                     
William  F.  Ross                                             
10430  N.  Judkins  Lane                                      
Spokane,  WA  99217                                           

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(11)the  underwriters  officers;                                      
William  F.  Ross                                             
10430  N.  Judkins  Lane                                      
Spokane,  WA  99217                                           

(12)the  underwriters  general  partner;  and                         
None.                                                         

(13)counsel  to  the  underwriter.                                    
Business  Address                                             
Charles  A.  Cleveland,  PS                                   
1212  N.  Washington  St.                                     
Spokane,  WA  99201                                           

Residential  Address                                                  
Charles  A.  Cleveland                                        
1212  N.  Washington  St.                                     
Spokane,  WA  99201                                           

INDEMNIFICATION OF DIRECTORS AND OFFICERS                                     

Our  Certificate  of  Incorporation  contains  provisions  to  (i) eliminate the
personal liability of our directors for monetary damages resulting from breaches
of  their  fiduciary  duty  (other than breaches of the duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation  of  law,  violations  under  Section  174  of  the  Delaware  General
Corporation  Law  (the  "DGCL")  or  for any transaction from which the director
derived  an  improper  personal  benefit)  and  (ii) indemnify our directors and
officers  to  the fullest extent permitted by Section 145 of the DGCL, including
circumstances  in  which  indemnification is otherwise discretionary. We believe
that  these  provisions are necessary to attract and retain qualified persons as
directors  and  officers.  As  a  result  of  this provision, the ability of the
Company  or  a stockholder thereof to successfully prosecute an action against a
director  for  a  breach  of  his  duty  of  care has been limited. However, the
provision  does  not  affect  the  availability of equitable remedies such as an
injunction or rescission based upon a director's breach of his duty of care. The
Securities  and  Exchange  Commission  has taken the position that the provision
will  have  no  effect  on  claims  arising  under  the federal securities laws.

In  addition,  the  Certificate  of  Incorporation and By-Laws provide mandatory
indemnification  rights, subject to limited exceptions, to any person who was or
is  party  or  is  threatened  to  be made a party to any threatened, pending or
completed  action,  suit or proceeding by reason of the fact that such person is
or was a director or officer of the Company, or is or was serving at the request
of  the  Company  as  a director or officer of another corporation, partnership,
joint  venture,  trust,  employee  benefit  plan  or  other  enterprise.  Such  
indemnification  rights  include  reimbursement  for  expenses  incurred by such
person in advance of the final disposition of such proceeding in accordance with
the  applicable  provisions  of  the  DGCL.                                     

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                                     

The estimated expenses of this offering are:                        
Registration Fees          $875                                     
Blue Sky Filing Fees     $7,500                                     
Attorney's Fees         $45,000                                     
Accountant's Fees       $18,000                                     
Printing and Copying     $1,750                                     

TOTAL      $72,125                        

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UNDERTAKINGS.                                                                   

The registrant hereby undertakes that it will:                                  

     1)   File,  during  any  period in which it offers or sells  securities,  a
post-effective amendment to this registration statement                         

          a)   Include  any  prospectus  required  by  Section  10(a)(3)  of the
Securities Act;                                                                 

          b)   Reflect in the prospectus any facts or events which, individually
or  together,  represent  a  fundamental  change  in  the  information  in  the 
registration  statement.  Notwithstanding  the  foregoing,  any  increase  or   
decrease  in  volume  of  securities  offered  (if  the  total  dollar  value of
securities  offered  would  not  exceed  that  which  was  registered)  and  any
deviation from the low or high end of the estimated  maximum  offering range may
be  reflected  in  the  form  of  prospectus  filed  with  the  Securities  and 
Exchange  Commission  pursuant  to  Rule  424(b)  if,  in  the  aggregate,  the 
changes in volume and price  represent  no more than a 20 percent  change in the
maximum  aggregate  offering  price  set  forth  in  the  "Calculation  of      
Registration   Fee"  table  in  the  effective  registration  statement;  and c)
Include  any  additional  or  changed  material  information  on  the  plan  of 
distribution.                                                                   

     2)   For  determining  liability  under  the  Securities  Act,  treat  each
post-effective  amendment  as  a  new  registration  statement  of  the         
securities  offered,  and  the offering of the securities at that time to be the
initial  bona  fide  offering.                                                  

     3)   File a post-effective amendment to remove from registration any of the
securities  that  remain  unsold  at  the  end  of  the  offering.              

     4)   Insofar  as   indemnification   for  liabilities   arising  under  the
Securities  Act  may be permitted to directors, officers and controlling persons
of  the  small  business  issuer  pursuant  to  the  foregoing  provisions,  or 
otherwise,  the  small  business  issuer has been advised that in the opinion of
the  Securities  and  Exchange  Commission  such  indemnification   is  against 
public  policy  as  expressed  in  the  Securities  Act  and  is,  therefore,   
unenforceable.                                                                  

     5)   In the event that a claim for indemnification against such liabilities
(other  than the  payment  by the small  business  issuer of  expenses incurred 
or paid by a director,  officer or controlling  person of the small business    
issuer in the successful defense of any action, suit or proceeding)  is         
asserted  by such  director,  officer or  controlling person in connection with 
the securities being  registered,  the small business issuer will,  unless in   
the opinion of its  counsel the matter has  been  settled  by  controlling      
precedent,  submit  to a court of appropriate  jurisdiction the question whether
such indemnification by it is against  public  policy as expressed in the       
Securities  Act and will be governed by the final adjudication of such issue.   

UNREGISTERED SECURITIES ISSUED OR SOLD                                          

The following shares of common stock were issued to the persons identified below
by  our  company.                                                               

In  September  1999, Carey Birmingham and Youval Krigel received an aggregate of
203,800  shares  of  stock  in consideration for services rendered in connection
with  the company's formation which were valued at $81,119. The company believes
that  the  transaction  was exempt from registration pursuant to Section 4(2) of
the  Securities Act as transactions by an Issuer not involving a public offering
as  the  individuals had enough knowledge and experience in finance and business
matters  to  be able to bear an economic risk in the company and they had access
to  the  kind  of  information  normally  provided  in  a prospectus. No general
solicitation  or  advertising  was  used  to  market  the  securities.          

In  September  1999, our company issued 50,000 shares to Sheila Corvino, Esq. in
partial  remuneration  for  legal  services  rendered  in  connection  with this
offering which were valued at $20,000. The company believes that the transaction
was exempt from registration pursuant to Section 4(2) of the Securities Act as a
transaction  by  an Issuer not involving a public offering as the individual has
enough  knowledge and experience in finance and business matters to evaluate the
risks  and  merits of an investment in the company and the individual has access
to  the  type  of  information  normally  provided  in  a  prospectus.          

From  June  1999 through September 1999, Unifund Financial Group, Inc. purchased
574,000  shares  of our stock in consideration for $57,400. The company believes
that  the  transaction  was exempt from registration pursuant to Section 4(2) of
the  Securities Act as transactions by an Issuer not involving a public offering
as  the  entity  had  enough  knowledge  and  experience in finance and business
matters  to be able to bear an economic risk in the company and it had access to
the  kind  of  information  normally  provided  in a prospectus. In addition, no
general  solicitation  or general advertising was used to market the securities.

In  September  1999,  Unifund  Financial Group received 196,000 of our shares in
consideration  for  business management financial consulting services which were
valued at $78,400. We believe that this transaction was exempt from registration
pursuant  to  Section 4(2) of the Securities Act as the recipient had sufficient
knowledge  and  experience in financial and business matters that it was able to
evaluate  the  merits  and  risks of an investment in the company, and since the
transaction was non-recurring and privately negotiated. The recipient had access
to  that  kind  of  information  normally  provided  in a prospectus. No general
solicitation  or  advertising  was  used  to  market  the  securities.          

In  September  1999,  R.  Scott  Barter  received  150,000  of  our  shares  in 
consideration for directorial services which were valued at $60,000. The company
believes that the transactions were exempt from registration pursuant to Section
4(2)  of  the Securities Act as transactions by an Issuer not involving a public
offering  as  the recipient had sufficient knowledge and experience in financial
and  business  matters  that  he was able to evaluate the merits and risks of an
investment  in  the  company,  and  since  the transaction was non-recurring and
privately  negotiated.  The  recipient  had  access  to that kind of information
normally  provided  in  a prospectus. No general solicitation or advertising was
used  to  market  the  securities.                                              

In  September  1999,  Brad  Smith  received  50,000  shares  of  our  stock  in 
consideration  for  drafting and consulting services which the company valued at
$20,000.  The company believes that the transaction was exempt from registration
pursuant  to Section 4(2) of the Securities Act as transactions by an Issuer not
involving  a  public  offering  as  the  recipient  had sufficient knowledge and
experience  in  financial  and business matters that he was able to evaluate the
merits  and risks of an investment in the company, and since the transaction was
non-recurring and privately negotiated. The recipient had access to that kind of
information  normally  provided  in  a  prospectus.  No  general solicitation or
advertising  was  used  to  market  the  securities.                            

In  September 1999, Harris Schiff received 10,000 of our shares in consideration
for  word  processing  services.  The company valued these shares at $4,000. The
company  believes  that the transaction was exempt from registration pursuant to
Section  4(2) of the Securities Act as transactions by an Issuer not involving a
public  offering  as  the  recipient  had sufficient knowledge and experience in
financial and business matters that he was able to evaluate the merits and risks
of an investment in the company, and since the transaction was non-recurring and
privately  negotiated.  The  recipient  had  access  to that kind of information
normally  provided  in  a prospectus. No general solicitation or advertising was
used  to  market  the  securities.                                              

In  September 1999, Alan Scott received 5,000 of our shares in consideration for
legal services which the company valued at $2,000. The company believes that the
transaction  was  exempt  from  registration  pursuant  to  Section  4(2) of the
Securities  Act as a transaction by an Issuer not involving a public offering as
the  recipient had sufficient knowledge and experience in financial and business
matters  that  he  was able to evaluate the merits and risks of an investment in
the  company,  and  since  the  transaction  was  non-recurring  and  privately 
negotiated.  The  recipient  had  access  to  that  kind of information normally
provided  in  a  prospectus.  No general solicitation or advertising was used to
market  the  securities.                                                        

In  September  1999,  we  issued  Elizabeth  Acton,  Stephen  Birmingham, Dr. Ed
Lahniers,  B.  Raphael Sonsino, and Andree Sonsino an aggregate of 11,200 shares
in  consideration  for various consulting services valued at $4,294. The company
believes that the transactions were exempt from registration pursuant to Section
4(2)  of  the Securities Act as transactions by an Issuer not involving a public
offering  as the recipients had sufficient knowledge and experience in financial
and  business matters that they were able to evaluate the merits and risks of an
investment  in  the  company,  and  since  the transaction was non-recurring and
privately  negotiated.  The  recipients  had  access to that kind of information
normally  provided  in  a prospectus. No general solicitation or advertising was
used  to  market  the  securities.                                              

In  February  2000,  Carey  Birmingham and Unifund Financial Group each received
250,000  shares  of  our  stock  in  consideration  for  an  aggregate  capital 
contribution  of  $50,000.  The  company  believes  that these transactions were
exempt  from  registration  pursuant  to  Section  4(2) of the Securities Act as
transactions  by an Issuer not involving a public offering as the recipients had
sufficient  knowledge and experience in financial and business matters that they
were  able to evaluate the merits and risks of an investment in the company, and
since  the  transaction was non-recurring and privately negotiated. In addition,
they  had  access  to the type of information normally provided in a prospectus.

In  December  2000, Carey Birmingham received 50,000 shares of our stock in lieu
of  payment  for  his  services  as  an  officer and director for the year ended
December 31, 2000 which the company valued at $20,000. The company believes that
the  transaction  was  exempt  from registration pursuant to Section 4(2) of the
Securities  Act  as transactions by an Issuer not involving a public offering as
the  recipient had sufficient knowledge and experience in financial and business
matters  that  he  was able to evaluate the merits and risks of an investment in
the  company,  he  had  access to the type of information normally provided in a
prospectus,  and  since  the  transaction  was  non-recurring  and  privately   
negotiated.                                                                     

In  December  2000,  H.  Youval  Krigel  received  25,000  of  our  shares  in  
consideration  for  services  rendered as a director which the company valued at
$10,000.  The company believes that the transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act as a transaction by an Issuer not
involving  a  public  offering  as  the  recipient  had sufficient knowledge and
experience  in  financial  and business matters that he was able to evaluate the
merits  and  risks of an investment in the company, he had access to the type of
information  normally  provided  in  a prospectus, and since the transaction was
non-recurring  and  privately  negotiated.                                      

    In  July  2001,  H.  Youval  Krigel  received  34,200  of  our  shares  in
consideration  for  services  rendered as a director which the company valued at
$13,680.  The company believes that the transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act as a transaction by an Issuer not
involving  a  public  offering  as  the  recipient  had sufficient knowledge and
experience  in  financial  and business matters that he was able to evaluate the
merits  and  risks of an investment in the company, he had access to the type of
information  normally  provided  in  a prospectus, and since the transaction was
non-recurring  and  privately  negotiated.                                      

In  July  2001, Elizabeth Acton received 15,800 shares of common stock valued at
$6,320  for  secretarial services. The company believes that the transaction was
exempt  from  registration  pursuant  to Section 4(2) of the Securities Act as a
transaction  by  an  Issuer not involving a public offering as the recipient had
sufficient  knowledge  and experience in financial and business matters that she
was  able  to evaluate the merits and risks of an investment in the company, and
since  the  transaction  was  non-recurring  and  privately  negotiated.        

In  May  2002,  David  M.  Loev,  Attorney at Law received 100,000 shares of our
common  stock  in  consideration for legal services rendered. The company valued
these  shares  at  $40,000. The company believes that the transaction was exempt
from  registration  pursuant  to  Section  4(2)  of  the  Securities  Act  as  a
transaction  by  an  Issuer not involving a public offering as the recipient had
sufficient  knowledge  and  experience in financial and business matters that it
was  able  to  evaluate the merits and risks of an investment in the company, it
had  access  to  the  type of information normally provided in a prospectus, and
since  the  transaction  was  non-recurring  and  privately  negotiated.        

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In  May  2002,  Pensar  received  300,000  shares  in  connection with the Asset
Purchase  Agreement  with  the  company.  The  company  valued  these  shares at
$120,000. The company believes that the transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act as a transaction by an Issuer not
involving  a  public  offering  as  the  recipient  had sufficient knowledge and
experience  in  financial  and business matters that it was able to evaluate the
merits  and  risks of an investment in the company, it had access to the type of
information  normally  provided  in  a prospectus, and since the transaction was
non-recurring  and  privately  negotiated                                       

In May 2002, Stephen Birmingham, Dr. Ed Lahniers, B. Raphael Sonsino, and Andree
Sonsino  were  issued  an  aggregate of 25,000 shares of company common stock in
consideration  for various consulting services which were valued at $10,000. The
company believes that the transactions were exempt from registration pursuant to
Section  4(2) of the Securities Act as transactions by an Issuer not involving a
public  offering  as  the  recipients had sufficient knowledge and experience in
financial  and  business  matters that they were able to evaluate the merits and
risks  of  an  investment  in  the  company,  they  had  access  to  the type of
information  normally  provided in a prospectus, and since the transactions were
non-recurring  and  privately  negotiated.                                      

In  March  2003,  Wayne  Brannan  received  16,000  shares  from  the company in
consideration  for  consulting  services  rendered valued at $6,400. The company
believes  that  the transaction was exempt from registration pursuant to Section
4(2)  of the Securities Act as a transaction by an Issuer not involving a public
offering  as  the recipient had sufficient knowledge and experience in financial
and  business  matters  that  it was able to evaluate the merits and risks of an
investment  in  the  company,  it had access to the type of information normally
provided  in  a  prospectus,  and  since  the  transaction was non-recurring and
privately  negotiated                                                           

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Index to Exhibits                                                               

EXHIBIT  NO.                             DESCRIPTION                            
-----------                              -----------                            

1.1(1)     *Certificate  of  Incorporation  of  Registrant            
1.2(1)     By-laws  of  Registrant                                    
   1.3(5)     Certificate  of  Amendment  to  Certificate  of  Incorporation
4.1(3)     Form  of  Share  Certificate                               
4.2(3)     Form  of  Warrant                                          
4.3(3)     Form  of  Warrant  Agreement                               
4.4(4)     Form  of  Subscription  Agreement                          
4.5(6)     Form  of  Escrow  Agreement                                
5.1(6)     Opinion  of  David  M. Loev, Attorney at Law, counsel      
to registrant                                   
10.1(1)    Letter  of  Intent  dated  June 4, 1999 with               
Unifund America, Inc.                           
10.2(2)    Reorganization  and  Stock  Subscription  Agreement        
Dated June 16, 1999.                            
10.3(2)    Stock  Exchange  Agreement  dated September 20, 1999 among 
              certain shareholders  of  International  Test  Systems,  Inc.,
               a Texas corporation and International  Test  Systems,  Inc.,  a
Delaware  corporation.                          
10.4(1)    Distributorship Agreement dated June 19, 1999 between      
     Pensar, Inc. and  International  Test  Systems,  Inc.
   10.5(2)    Amended and Restated Distributorship Agreement dated April 15,
               2000 between  Pensar,  Inc.  and  International  Test  Systems,
Inc.                                            
10.6(3)    Second  Amendment  to  Distributorship  Agreement          
    10.7(2)    *Distributorship Agreement dated April 15, 2000 between Comware
            Technical Services  and  International  Test  Systems,  Inc.
10.8(4)    Third  Amendment  to  Distributorship  Agreement           
10.9(4)    Employment  Agreement  with  Carey  Birmingham             
 10.10(4)   Asset Purchase Agreement between International Test Systems,
Inc. and Pensar  Technologies,  LLC             
10.11(4)   Underwriting  Agreement  with  Public  Securities          
23.1(6)    Consent  of  Malone  & Bailey, PLLC, Certified Public      
Accountants.                                    
23.2(6)    Consent  of  David  M.  Loev,  Attorney  at  Law           

     (1)     Filed  as  an  exhibit  to  our  registration  statement  filed  on
September  30,  1999  (File  No.  333-88179)  herein  incorporated by reference.
     (2)     Filed as an exhibit to our registration statement filed on July 26,
2000  (File  No.  333-88179)  herein  incorporated  by  reference.              
     (3)     Filed  as an exhibit to our registration statement filed on October
30,  2001  (File  No.  333-88179)  herein  incorporated  by  reference.         
     (4)     Filed  as an exhibit to our registration statement filed on July 1,
2002  (File  No.  333-88179)  herein  incorporated  by  reference.              
     (5)     Filed  as an exhibit to our registration statement filed on January
2,  2003  2002  (File  No.  333-88179)  herein  incorporated  by  reference.    
(6)     Filed  herein.                                                

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SIGNATURES

     In  accordance with the  requirements  of the  Securities  Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements of filing and authorizes  this amendment  number two to its
registration  statement  on  Form  SB-1  to be  signed  on  its  behalf  by  the
undersigned,  on  April  7,  2003.                                              

                                International Test Systems, Inc.

                    /s/ Carey Birmingham
                                    ------------------------------------
                 Carey Birmingham,
                        Chief Executive Officer,
                                       President, Principal Financial Officer,
                        Controller, and Director

     In accordance  with the  requirements  of the Securities Act of 1933,  this
registration statement was signed by the following persons in the capacities and
on  the  dates  stated.                                                         

/s/ Carey Birmingham                                                            
------------------------------------                                            
Carey Birmingham,                                                               
Chief Executive Officer, President, Principal Financial Officer, Controller,    
And Director                                                                    
Dated: April 7, 2003                                                            
--------------------                                                            

/s/  H.  Youval  Krigel                                                         
-----------------------                                                         
H.  Youval  Krigel,  Director                                                   
Dated:  April  7,  2003                                                         

/s/  Alex  H.  Yount                                                            
----------------------------                                                    
Alex  H.  Yount,  Director                                                      
Dated:  April  7,  2003                                                         

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This SB-1/A Filing		Date		First		Last			Other Filings
		4/20/95		11		57
		5/5/95		4
		9/20/96		41
		5/13/99		35
		6/4/99		70
		6/16/99		17		70
		6/19/99		11		70
		6/24/99		42
		9/20/99		4		70
		9/30/99		70					SB-1
		12/31/99		35		55
		2/2/00		28
		4/15/00		11		70
		7/26/00		70					SB-1/A
		7/31/00		11
		12/31/00		26		68
		1/1/01		46		60
		4/30/01		28
		5/1/01		28
		6/1/01		11
		6/30/01		42
		10/30/01		70					SB-1/A
		12/31/01		4		62
		1/8/02		34
		3/18/02		35
		4/2/02		48
		4/30/02		49		61
		5/1/02		11		60
		5/5/02		57		59
		5/7/02		4
		6/30/02		27
		7/1/02		70					SB-1/A
		10/1/02		29
		12/31/02		4		60			SB-1/A
		2/11/03		36
		3/30/03		31
		3/31/03		28		29
		4/1/03		8		20
		4/4/03		18		64
Filed On / Filed As Of		4/7/03		1		71
		12/31/03		31		44
		12/31/04		16		58
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