---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM
10-QSB

(Mark One)

|[X] | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30,
2007

|[   ] | TRANSITION REPORT UNDER SECTION 13
      OR 15(d) OF THE EXCHANGE ACT
|----- | ---------------------------------------------------------------------

For the transition period from ________________to
_______________

|000-30919                                                              
|-----------------------------------------------------------------------
|(Commission file number)                                               
|                                                                       
|SK3 GROUP, INC.                                                        
|(Exact name of small business issuer as
      specified in its charter)

|Delaware                          | 98-6218467         
|--------------------------------- | -------------------
|(State or other jurisdiction      | (IRS Employer      
|of incorporation or organization) | Identification No.)

500 Mamaroneck AvenueHarrison, New York 10528(Address of principal
executive offices)(914)
777-2090(Issuer's telephone
number)N/A(Former
name, former address and former fiscal year, if changed since last
report)

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

State the number of shares outstanding of each of
the issuer's classes of common equity, as of the latest practicable date: As of
September 30, 2007  28,191,303shares
of common stock

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

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

---

SK3 GROUP, INC.Index

|                           |                                                                                                                                                                                                                                                     | Page      
|-------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------
|                           |                                                                                                                                                                                                                                                     | Number    
|PART I.                    | FINANCIAL INFORMATION                                                                                                                                                                                                                               |           
|                           |                                                                                                                                                                                                                                                     |           
|Item 1.                    | Financial Statements                                                                                                                                                                                                                                |           
|                           |                                                                                                                                                                                                                                                     |           
|                           | Consolidated Balance Sheets as of
      September 30, 2007 (unaudited) and December 31, 2006
      (audited)                                                                                                                                        | F-1       
|                           |                                                                                                                                                                                                                                                     |           
|                           | Consolidated Statements of
      Operations for the three months ended September 30, 2007
      and 2006, the nine months ended September 30, 2007 and 2006
      and from May 17, 2004 (date of inception) to September 30, 2007
      (unaudited) | F-2       
|                           |                                                                                                                                                                                                                                                     |           
|                           | Consolidated Statements of Cash
      Flows for the nine months ended September 30, 2007 and 2006
      (unaudited)                                                                                                                                 | F-3       
|                           |                                                                                                                                                                                                                                                     |           
|                           | Notes to Consolidated Financial
      Statements (unaudited)                                                                                                                                                                                        | F-4  F-10
|                           |                                                                                                                                                                                                                                                     |           
|Item 2.                    | Management's Discussion and
      Analysis or Plan of Operations                                                                                                                                                                                    | 2         
|                           |                                                                                                                                                                                                                                                     |           
|Item 3.                    | Controls and Procedures                                                                                                                                                                                                                             | 12        
|                           |                                                                                                                                                                                                                                                     |           
|PART II. OTHER INFORMATION |                                                                                                                                                                                                                                                    
|                           |                                                                                                                                                                                                                                                    
|Item 1.                    | Legal Proceedings                                                                                                                                                                                                                                   | 12        
|                           |                                                                                                                                                                                                                                                     |           
|Item 2.                    | Unregistered Sales of Equity
      Securities and Use of Proceeds                                                                                                                                                                                   | 12        
|                           |                                                                                                                                                                                                                                                     |           
|Item 3.                    | Defaults Upon Senior
      Securities                                                                                                                                                                                                               | 12        
|                           |                                                                                                                                                                                                                                                     |           
|Item 4.                    | Submission of Matters to a Vote of
      Security Holders                                                                                                                                                                                           | 12        
|                           |                                                                                                                                                                                                                                                     |           
|Item 5.                    | Other Information                                                                                                                                                                                                                                   | 12        
|                           |                                                                                                                                                                                                                                                     |           
|Item 6.                    | Exhibits                                                                                                                                                                                                                                            | 12        
|                           |                                                                                                                                                                                                                                                     |           
|SIGNATURES                 |                                                                                                                                                                                                                                                    

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Consolidated Balance Sheets(Expressed in US dollars)

|                                                                            |  | September 30, |   |  | December 31, |  
|--------------------------------------------------------------------------- |  | ------------- | - |  | ------------ | -
|                                                                            |  | 2007          |   |  | 2006         |  
|                                                                            |  | $             |   |  | $            |  
|                                                                            |  | (Unaudited)   |   |  |              |  
|ASSETS                                                                      |  |               |   |  |              |  
|Current Assets                                                              |  |               |   |  |              |  
|Cash                                                                        |  | 289           |   |  | 16,928       |  
|Accounts receivable                                                         |  |              |   |  | 936          |  
|Prepaid expenses                                                            |  |              |   |  | 429          |  
|Total Current Assets                                                        |  | 289           |   |  | 18,293       |  
|Intangible Assets (Note 3)                                                  |  |              |   |  | 937          |  
|Total
      Assets                                                          |  | 289           |   |  | 19,230       |  
|                                                                            |  |               |   |  |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                       |  |               |   |  |              |  
|Current Liabilities                                                         |  |               |   |  |              |  
|Accounts payable                                                            |  | 38,017        |   |  | 37,793       |  
|Accrued liabilities                                                         |  | 290           |   |  | 290          |  
|Due to related party (Note
      4)                                         |  | 35,016        |   |  | 1,794        |  
|Notes payable (Note 4)                                                      |  | 69,636        |   |  | 69,636       |  
|Total
      Liabilities                                                     |  | 142,959       |   |  | 109,513      |  
|Contingencies and Commitments (Notes 1 and
      6)                         |  |               |   |  |              |  
|Stockholders Deficit                                                       |  |               |   |  |              |  
|Preferred Stock                                                             |  |               |   |  |              |  
|Authorized: 5,000,000 preferred
      shares with a par value of $0.0001    |  |               |   |  |              |  
|Issued and outstanding:
      none                                          |  |              |   |  |             |  
|Common Stock                                                                |  |               |   |  |              |  
|Authorized: 90,000,000 common shares
      with a par value of $0.0001      |  |               |   |  |              |  
|Issued and outstanding: 28,191,303 and
      34,191,303 shares respectively |  | 2,820         |   |  | 3,420        |  
|Additional Paid in Capital                                                  |  | 120,355       |   |  | 119,755      |  
|Donated Capital                                                             |  | 21,547        |   |  | 16,747       |  
|Deficit Accumulated During the Development Stage                            |  | (287,392      | ) |  | (230,205     | )
|Total
      Stockholders Deficit                                           |  | (142,670      | ) |  | (90,283      | )
|Total
      Liabilities and Stockholders Deficit                           |  | 289           |   |  | 19,230       |  

(The Accompanying Notes are an Integral Part of
These Financial Statements.)

F1

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Consolidated Statements of
Operations(Expressed in US dollars)(Unaudited)

|                                              | Accumulated   |               |               |               |              
|--------------------------------------------- | ------------- | ------------- | ------------- | ------------- | -------------
|                                              | from May 17,  |               |               |               |              
|                                              | 2004 (Date of | For the Three | For the Three | For the Nine  | For the Nine 
|                                              | Inception) to | Months Ended  | Months Ended  | months Ended  | months Ended 
|                                              | September 30, | September 30, | September 30, | September 30, | September 30,
|                                              | 2007          | 2007          | 2006          | 2007          | 2006         
|                                              | $             | $             | $             | $             | $            
|                                              |               |               |               |               |              
|                                              |               |               |               |               |              
|Revenue                                       | 62,367        |              |              |              | 5,090        
|                                              |               |               |               |               |              
|Cost
      of Sales                           | (48,103)      |              |              |              | (2,934)      
|                                              |               |               |               |               |              
|Gross
      Profit                            | 14,264        |              |              |              | 2,156        
|                                              |               |               |               |               |              
|                                              |               |               |               |               |              
|Expenses                                      |               |               |               |               |              
|                                              |               |               |               |               |              
|Advertising &
      marketing                 | 5,820         |              |              |              |             
|Amortization                                  | 1,718         |              | 156           | 156           | 469          
|Consulting                                    | 33,285        |              | 4,273         | 12,019        | 7,629        
|Donated services                              | 21,547        | 1,800         | 1,500         | 4,800         | 4,500        
|General and administrative                    | 32,367        | 2,858         | 3,259         | 8,139         | 8,806        
|Impairment of website development
      costs | 781           |              |              | 781           |             
|Professional fees                             | 154,115       | 4,514         | 29,865        | 31,292        | 55,456       
|                                              |               |               |               |               |              
|Total
      Expenses                          | 249,633       | 9,172         | 39,053        | 57,187        | 76,860       
|                                              |               |               |               |               |              
|Loss from Operations                          | (235,369)     | (9,172)       | (39,053)      | (57,187)      | (74,704)     
|                                              |               |               |               |               |              
|Loss
      on disposal of subsidiary          | (17,741)      |              |              |              |             
|                                              |               |               |               |               |              
|Net
      Loss                                | (253,110)     | (9,172)       | (39,053)      | (57,187)      | (74,704)     
|                                              |               |               |               |               |              
|                                              |               |               |               |               |              
|Loss
      Per Share  Basic and Diluted      |               |              |              |              |             
|                                              |               |               |               |               |              
|                                              |               |               |               |               |              
|Weighted Average Shares Outstanding           |               | 28,191,000    | 33,051,000    | 19,743,000    | 33,051,000   

(The Accompanying Notes are an Integral Part of
These Financial Statements.)F2

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Consolidated Statements of Cash
Flows(Expressed in US dollars)(Unaudited)

|                                                                                 |  | For the Nine  |   |  | For the Nine  |  
|-------------------------------------------------------------------------------- |  | ------------- | - |  | ------------- | -
|                                                                                 |  | Months Ended  |   |  | months Ended  |  
|                                                                                 |  | September 30, |   |  | September 30, |  
|                                                                                 |  | 2007          |   |  | 2006          |  
|                                                                                 |  | $             |   |  | $             |  
|                                                                                 |  |               |   |  |               |  
|                                                                                 |  |               |   |  |               |  
|Operating Activities                                                             |  |               |   |  |               |  
|                                                                                 |  |               |   |  |               |  
|Net loss for thep eriod                                                          |  | (57,187       | ) |  | (74,704       | )
|                                                                                 |  |               |   |  |               |  
|Adjustments to reconcile net loss to net
      cash used in operating activities |  |               |   |  |               |  
|Amortization                                                                     |  | 156           |   |  | 469           |  
|Impairment of
      website development costs                                    |  | 781           |   |  |              |  
|Donated
      services                                                           |  | 4,800         |   |  | 4,500         |  
|                                                                                 |  |               |   |  |               |  
|Changes in operating assets and
      liabilities:                               |  |               |   |  |               |  
|Accounts
      receivable                                                        |  | 936           |   |  | 2,123         |  
|Inventory                                                                        |  |              |   |  | 2,387         |  
|Prepaid
      expenses                                                           |  | 429           |   |  |              |  
|Accounts payable
      and accrued liabilities                                   |  | 224           |   |  | 11,192        |  
|Due to related parties                                                           |  | 32,150        |   |  | 10,000        |  
|                                                                                 |  |               |   |  |               |  
|Net
      Cash Used in Operating Activities                                      |  | (17,711       | ) |  | (44,033       | )
|                                                                                 |  |               |   |  |               |  
|Cash Flows Provided by Financing
      Activities                                |  |               |   |  |               |  
|Proceeds from advances
      from related party                                  |  | (587          | ) |  |              |  
|Repayment of amounts owed related parties                                        |  | 1,659         |   |  | 41,000        |  
|                                                                                 |  |               |   |  |               |  
|Net
      Cash Provided by Financing Activities                                  |  | 1,072         |   |  | 41,000        |  
|                                                                                 |  |               |   |  |               |  
|Decrease in Cash                                                                 |  | (16,639       | ) |  | (3,033        | )
|                                                                                 |  |               |   |  |               |  
|Cash
       Beginning of Period                                                 |  | 16,928        |   |  | 14,061        |  
|                                                                                 |  |               |   |  |               |  
|Cash
       End of Period                                                       |  | 289           |   |  | 11,028        |  
|                                                                                 |  |               |   |  |               |  
|Supplemental Disclosures                                                         |  |               |   |  |               |  
|                                                                                 |  |               |   |  |               |  
|Interest paid                                                                    |  |              |   |  |              |  
|Income taxes paid                                                                |  |              |   |  |              |  

(The Accompanying Notes are an Integral Part of
These Financial Statements.)F3

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|1. | Development Stage Company
|-- | -------------------------

SK3 Group, Inc. (formerly
CTT International Distributors Inc.) (the Company) was incorporated in the
State of Delaware on January 14, 2000. Pursuant to an Agreement dated December
29, 2004 (the Agreement), the Company issued 1,365,003 shares of common stock
in exchange for all of the issued and outstanding shares of common stock of CTT
Distributors Ltd. (Distributors). Distributors was incorporated in the
Province of British Columbia, Canada, on May 17, 2004. The acquisition was
considered a reverse acquisition for accounting and financial reporting
purposes. The consolidated financial statements include the accounts of the
Company since the reverse merger (December 29, 2004) and the historical accounts
of Distributors since the date of its inception, May 17, 2004. All significant
intercompany balances and transfers have been eliminated on consolidation. Prior
to the acquisition of Distributors, the Companys sole asset consisted of
ownership of a 100% interest in Slabsdirect.com Online (BC) Ltd.
(SlabsOnline), a company incorporated in the Province of British Columbia,
Canada. SlabsOnline was unsuccessful in the business of establishing a vertical
trade portal on the Internet for the natural stone industry. The Company
disposed of its interest in SlabsOnline to the former President of the Company.
The Company incorporated a wholly-owned subsidiary, CTT International
Distributors Inc. on November 1, 2004 under the laws of the State of Delaware.
Effective January 7, 2005, CTT International Distributors Inc. merged with and
into the Company, and the Company was the surviving corporation. Concurrent with
the merger, the Company changed its name from Slabsdirect.com, Inc. to CTT
International Distributors Inc.

These consolidated
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated significant revenue
and has never paid any dividends. The Company is unlikely to pay dividends or
generate significant earnings in the immediate or foreseeable future. The
continuation of the Company as a going concern and the ability of the Company to
emerge from the development stage are dependent upon the continued financial
support from its shareholders, the ability of the Company to obtain necessary
equity financing to continue operations and to generate sustainable significant
revenue. There is no guarantee that the Company will be able to raise any equity
financing or generate profitable operations. As at September 30, 2007, the
Company has a working capital deficiency of $142,670 and has accumulated losses
of $287,392 since inception. These consolidated financial statements do not
include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. These factors raise
substantial doubt regarding the Companys ability to continue as a going
concern.

On May 14, 2007, the
Company completed a merger with its wholly-owned subsidiary, SK3 Group, Inc.,
which was incorporated in 2007 solely to effect a name change. As a result, the
Company changed its name from CTT International Distributors Inc. to SK3 Group,
Inc. The Company is in the process of changing its business to the
telecommunications industry and during the nine months ended September 30, 2007,
the Company entered into the Stock Purchase Exchange and Plan of Merger
Agreements described in Note 6.

|2. | Summary of Significant Accounting Principles
|-- | --------------------------------------------

| | a) | Basis of Presentation
| | -- | ---------------------

These consolidated
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company has not produced significant revenues from its
principal business and is a development stage company as defined by Statement of
Financial Accounting Standard (SFAS) No. 7 Accounting
and Reporting by Development Stage Enterprises. These
financial statements include accounts of the Company and its wholly-owned
subsidiary, CTT Distributors Ltd. All intercompany transactions and balances
have been eliminated. The Companys fiscal year end is December 31.

| | b) | Interim Financial Statements
| | -- | ----------------------------

The interim unaudited
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with the instructions to Securities and Exchange
Commission (SEC) Form 10-QSB. They do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Therefore, these financial statements should be read in
conjunction with the Companys audited consolidated financial statements and
notes thereto for the year ended December 31, 2006, included in the Companys
Annual Report on Form 10-KSB filed on May 15, 2007 with the SEC.

F  4

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------

The consolidated financial
statements included herein are unaudited; however, they contain all normal
recurring accruals and adjustments that, in the opinion of management, are
necessary to present fairly the Companys consolidated financial position at
September 30, 2007 and December 31, 2006, and the consolidated results of its
operations and consolidated cash flows for the three and nine months ended
September 30, 2007 and 2006. The results of operations for the nine months ended
September 30, 2007 are not necessarily indicative of the results to be expected
for future quarters or the full year.

| | c) | Use of Estimates
| | -- | ----------------

The preparation of
financial statements in conformity with US generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. The Company regularly evaluates estimates and
assumptions related to donated expenses, revenue recognition and deferred income
tax valuations. The Company bases its estimates and assumptions on current
facts, historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Companys estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.

| | d) | Cash and Cash Equivalents
| | -- | -------------------------

The Company considers all
highly liquid instruments with a maturity of three months or less at the time of
issuance to be cash equivalents.

| | e) | Inventory
| | -- | ---------

Inventory is recorded at
the lower of cost and net realizable value on a first-in, first-out basis. At
September 30, 2007, the Company did not hold any inventory.

| | f) | Comprehensive Loss
| | -- | ------------------

SFAS No. 130,
Reporting Comprehensive Income,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at September 30, 2007 and 2006,
the Company has no items that represent a comprehensive loss and, therefore, has
not included a schedule of comprehensive loss in the consolidated financial
statements.

| | g) | Financial Instruments and Concentration Risk
| | -- | --------------------------------------------

The fair value of
financial instruments which include cash, accounts receivable, accounts payable,
accrued liabilities, note payable and amounts due to a related party were
estimated to approximate their carrying value due to the immediate or relatively
short maturity of these instruments. Financial instruments which potentially
subject the Company to a concentration of credit risk consist primarily of cash
and accounts receivable. The Company deposits cash with a high quality financial
institution. For the nine months ended September 30, 2007, the Company did not
recognize all sales revenue. For the nine months ended September 30, 2006,
revenue from one customer represented 57% of total revenue and from a second
customer represented 40% of total revenue. For the nine months ended September
30, 2007, the Company did not purchase any inventory. For the nine months ended
September 30, 2006, the Company purchased 100% of its inventory from one
vendor.

| | h) | Basic and Diluted Net Income (Loss) Per Share
| | -- | ---------------------------------------------

The Company computes net
income (loss) per share in accordance with SFAS No. 128, "Earnings per Share", which requires presentation
of both basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted
method. In computing Diluted EPS, the average stock price for the period is used
in determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive.

F  5

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------

| | i) | Website Development Costs
| | -- | -------------------------

The Company recognizes
the costs associated with developing a website in accordance with the American
Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) No. 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use.
Relating to website development costs the Company follows the guidance pursuant
to the Emerging Issues Task Force (EITF) No. 00-2, Accounting for Website Development Costs.

| | j) | Long-Lived Assets
| | -- | -----------------

In accordance with SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets,the Company tests long-lived assets
or asset groups for recoverability when events or changes in circumstances
indicate that their carrying amount may not be recoverable. Circumstances which
could trigger a review include, but are not limited to: significant decreases in
the market price of the asset; significant adverse changes in the business
climate or legal factors; accumulation of costs significantly in excess of the
amount originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of losses
or a forecast of continuing losses associated with the use of the asset; and
current expectation that the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful life.

Recoverability is
assessed based on the carrying amount of the asset and its fair value which is
generally determined based on the sum of the undiscounted cash flows expected to
result from the use and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value.

| | k) | Foreign Currency Translation
| | -- | ----------------------------

The Companys functional
and reporting currency is the United States dollar. Monetary assets and
liabilities denominated in foreign currencies are translated in accordance with
SFAS No. 52 Foreign Currency Translation, using the exchange rate prevailing at the balance sheet date. Gains
and losses arising on settlement of foreign currency denominated transactions or
balances are included in the determination of income. Foreign currency
transactions are primarily undertaken in Canadian dollars. The Company has not,
to the date of these financials statements, entered into derivative instruments
to offset the impact of foreign currency fluctuations.

| | l) | Revenue Recognition
| | -- | -------------------

The Company recognizes
revenue from the sale of electronic products, such as MP3 players, in accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 104 (SAB
104), Revenue Recognition in Financial
Statements. Revenue consists of the sale of electronic
products and is recognized only when the price is fixed or determinable,
persuasive evidence of an arrangement exists, the product is shipped, and
collectibility is reasonably assured. The Company continually monitors timely
payments and assesses any collection issues. The allowance for doubtful accounts
is based on the Companys detailed assessment of the collectibility of specific
customer accounts. Any significant customer accounts that are not expected to be
collected are excluded from revenues.

| | m) | Income Taxes
| | -- | ------------

Potential benefits of
income tax losses are not recognized in the accounts until realization is more
likely than not. The Company has adopted SFAS No. 109 Accounting for Income Taxes as of its inception.
Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits
for net operating losses carried forward. Potential benefit of net operating
losses have not been recognized in these financial statements because the
Company cannot be assured it is more likely than not it will utilize the net
operating losses carried forward in future years.

| | n) | Stock-based Compensation
| | -- | ------------------------

The Company records
stock-based compensation in accordance with SFAS No. 123R Share Based Payments, using the fair value
method. The Company has not issued any stock options since its
inception.

F  6

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------

| | o) | Recently Issued Accounting Pronouncements
| | -- | -----------------------------------------

In February 2007, the
Financial Accounting Standards Board (FASB) issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial
Liabilities  Including an Amendment of FASB Statement No. 115. This statement permits entities to choose to measure many financial
instruments and certain other items at fair value. Most of the provisions of
SFAS No. 159 apply only to entities that elect the fair value option. However,
the amendment to SFAS No. 115 Accounting for Certain
Investments in Debt and Equity Securities applies to
all entities with available-for-sale and trading securities. SFAS No. 159 is
effective as of the beginning of an entitys first fiscal year that begins after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provision of SFAS No. 157, Fair Value
Measurements.The Company is currently evaluating the
impact of this statement on the Company's future financial statements.

In September 2006, the
FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS No. 157 is to
increase consistency and comparability in fair value measurements and to expand
disclosures about fair value measurements. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
SFAS No. 157 applies under other accounting pronouncements that require or
permit fair value measurements and does not require any new fair value
measurements. The provisions of SFAS No. 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007. The Company
is currently evaluating the impact of this statement on the Company's future
financial statements.

| | p) | Recently Adopted Accounting Pronouncements
| | -- | ------------------------------------------

In September 2006, the
SEC issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements. SAB
No. 108 addresses how the effects of prior year uncorrected misstatements should
be considered when quantifying misstatements in current year financial
statements. SAB No. 108 requires companies to quantify misstatements using a
balance sheet and income statement approach and to evaluate whether either
approach results in quantifying an error that is material in light of relevant
quantitative and qualitative factors. SAB No. 108 is effective for periods
ending after November 15, 2006. The adoption of SAB No. 108 did not have a
material effect on the Companys financial statements.

In September 2006, the
FASB issued SFAS No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB
Statements No. 87, 88, 106, and 132(R). This statement
requires employers to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This statement also requires an employer to
measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The provisions of SFAS No. 158 are
effective for employers with publicly traded equity securities as of the end of
the fiscal year ending after December 15, 2006. The adoption of this statement
did not have a material effect on the Company's financial statements.

In June 2006, the
Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statements No. 109. FIN 48
clarifies the accounting for uncertainty in income taxes by prescribing a
two-step method of first evaluating whether a tax position has met a more likely
than not recognition threshold and second, measuring that tax position to
determine the amount of benefit to be recognized in the financial statements.
FIN 48 provides guidance on the presentation of such positions within a
classified statement of financial position as well as on derecognition, interest
and penalties, accounting in interim periods, disclosure, and transition. FIN 48
is effective for fiscal years beginning after December 15, 2006. The adoption of
this statement did not have a material effect on the Company's financial
statements.

| | p) | Reclassifications
| | -- | -----------------

Certain reclassifications
have been made to the prior periods financial statements to conform to the
current periods presentation.

F  7

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|3. | Intangible Assets
|-- | -----------------

| |                           |       |              |            | September 30, | December 31,
| | ------------------------- | ----- | ------------ | ---------- | ------------- | ------------
| |                           |       |              |            | 2007          | 2006        
| |                           |       | Accumulated  |            | Net Carrying  | Net Carrying
| |                           | Cost  | Amortization | Impairment | Value         | Value       
| |                           | $     | $            | $          | $             | $           
| |                           |       |              |            | (unaudited)   |             
| |                           |       |              |            |               |             
| | Website development costs | 2,500 | 1,719        | 781        |              | 937         

Costs associated with the
website consist primarily of website design costs. These capitalized costs were
being amortized based on their estimated useful life over four years. During the
nine month period ended September 30, 2007, the Company wrote off the carrying
value of $781 to operations as the carrying costs were no longer recoverable.
Internal costs related to the development of website content are charged to
operations as incurred.

|4. | Related Party Balances/Transactions
|-- | -----------------------------------

| | a) | At September 30, 2007, the Company owes $31,563 (December
      31, 2006 - $1,794) to a company related by common directors for expenses
      paid on behalf of the Company, which is unsecured, non-interest bearing
      and due on demand.                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | b) | At September 30, 2007, the Company owes $19,900 (December
      31, 2006 - $19,900) of demand notes to the former President of the
      Company. The notes are unsecured, non-interest bearing and due on demand.
      The Company owes $3,453 (December 31, 2006 - $nil) to the former President
      of the Company for advances and expenses paid on behalf of the Company,
      which are unsecured, non-interest bearing and due on demand.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c) | At September 30, 2007, the Company owes the former
      President of the Company for cash advances of $41,000 (December 31, 2006 -
      $41,000). The note is unsecured, non-interest bearing and due on
      demand.                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | d) | At September 30, 2007, the Company owes the former
      President of the Company for the acquisition of its opening inventory in
      the amount of $8,736 (December 31, 2006 - $8,736). The note is unsecured,
      non-interest bearing and due on demand.                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | e) | During the nine month period ended September 30, 2007,
      the Company recognized a total of $4,500 (September 30, 2006 - $4,500) for
      donated services provided by the former President of the Company. As at
      September 30, 2007 the Company recognized a total of $300 (September 30,
      2006  $nil) for donated rent.                                                                                                           

|5. | Common Stock
|-- | ------------

On April 16, 2007, upon
entering into the Merger Agreement described in Note 6(b), the former President
of the Company returned to the Company for cancellation 6,000,000 shares of
common stock (2,000,000 pre-dividend shares). On May 14, 2007, the Company
effected a stock split by declaring a stock dividend on the basis of two new
shares of common stock for every share of common stock outstanding. All amounts
have been retroactively adjusted to reflect the stock dividend.

|6. | Commitments
|-- | -----------

| | a) | On October 1, 2005, the Company entered into a lease
      agreement for office premises at a rate of CDN$535 per month plus overhead
      expenses, on a month-to-month basis. On June 30, 2006, the Company
      terminated the lease agreement and entered into a new lease agreement for
      office premises at a rate of CDN$50 per month. For the nine month periods
      ended September 30, 2007 and 2006, the Company incurred rent expense of
      $4,192 and $4,416, respectively, which has been recorded as general and
      administrative expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | On April 16, 2007, the Company entered into an Agreement
      and Plan of Merger (the Merger Agreement) with Reliablecom Acquisition
      Corp., a wholly-owned subsidiary of the Company incorporated on April 16,
      2007 (Acquisition), Reliablecom, Inc. (Reliablecom), and Kapadia
      Holdings, Inc., the sole shareholder of Reliablecom (Holdings). Pursuant
      to the terms of the Merger Agreement, Acquisition will merge with and into
      Reliablecom, which will become a wholly-owned subsidiary of the Company
      (the Merger). The Company will issue an aggregate of 43,875,000
      post-split adjusted shares of common stock and 292,500 shares of series A
      Preferred stock (the Preferred Stock) to Holdings at the time of the
      closing of the merger. Each share of Preferred Stock will be convertible
      into 150 shares of the Companys common stock, upon effectuation of an
      increase in the Companys authorized shares of common stock to 300,000,000
      common shares.

F  8

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|6. | Commitments (continued)
|-- | -----------------------

Upon execution of the
Merger Agreement, the Companys former President resigned as an officer and a
member of the Board of Directors of the Company. The Companys former President
also agreed to the return and cancellation of 6,000,000 post-split adjusted
shares of the Companys common stock owned by him. See Note 5.

Prior to the closing of
the Merger Agreement, the Company agreed to change its name to SK3 Group, Inc.,
declare a two-for-one dividend on outstanding shares of common stock (Refer to
Note 6(c)), and complete a private placement offering for an aggregate of
$6,500,000 of the Companys common shares at a minimum price of $2.00 per
share.

The closing of the Merger
Agreement is subject to customary closing conditions. Pursuant to the terms of
the Merger Agreement, either party had the right to terminate the Merger
Agreement if a closing had not occurred by September 30, 2007. As at September
30, 2007, the Merger Agreement is terminable by either party, however, the
Company has not received notice from any party to terminate the
agreement.

| | c) | On May 9, 2007, the Company, Reliablecom and Sohel
      Distributors Inc. (SDI), and Sohel Kapadia, the sole shareholder of SDI
      (Seller), entered into a Stock Purchase Agreement (the Purchase
      Agreement). Pursuant to the terms of the Purchase Agreement, Reliablecom
      will acquire 100% of the issued and outstanding capital stock of SDI in
      exchange for (i) 85,000 shares of series A preferred stock of the Company
      (the Preferred Stock), and (ii) an earn-out of additional compensation
      for three years from the closing. The seller will receive 50% of the
      quarterly profits in excess of $37,500, together with 50% of the annual
      profits in excess of $150,000 plus the quarterly profit payments. The
      purchase price is subject to adjustment in the event the working capital
      of SDI is less than zero at closing. Each share of Preferred Stock has a
      liquidation preference of $0.01 and will be convertible into 150 shares of
      the Companys common stock, upon effectuation of an increase in the
      Companys authorized shares of common stock to 300,000,000 post-split
      adjusted shares.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Upon closing of the
Purchase Agreement, the Company, Reliablecom and the Seller will enter into an
Escrow and Lock-up Agreement, subject to various terms, and pursuant to which
the Seller will place the Preferred Stock into escrow.

Upon closing of the
Purchase Agreement, the Seller will enter into an employment agreement with SDI,
pursuant to which the Seller will serve as President of SDI. For the first three
years of the term of the employment agreement, the seller will be paid $150,000
per year. The agreement has a term of three years, and will automatically be
renewed for additional one year terms unless terminated by either party at lease
90 days prior to expiration.

The closing of the
Purchase Agreement is subject to customary closing conditions. Pursuant to the
terms of the Purchase Agreement, either party had the right to terminate the
Purchase Agreement if a closing had not occurred by September 30, 2007. As at
September 30, 2007, the Purchase Agreement is terminable by either party,
however, the Company has not received notice from any party to terminate the
agreement.

| | d) | On May 25, 2007, the Company, Reliablecom, The Phone Card
      Warehouse, Inc. (TPC), Kaushika Pael, the sole shareholder of TPC and
      Pradip Patel (Patel) entered into a Stock Purchase Agreement (the
      Purchase Agreement). Pursuant to the terms of the Purchase Agreement,
      Reliablecom will acquire 100% of the issued and outstanding capital stock
      of TPC in exchange for (i) 30,000 shares of series A preferred stock of
      the Company, which shares shall not be transferable for a period of one
      year from closing; (ii) 30,000 shares of series A preferred stock of the
      Company to be held in escrow (the "Escrow Shares") and released
      incrementally upon the achievement of certain earnings measures. Any
      Escrowed Shares which are not released to the Seller as set forth above
      will be cancelled without consideration payable to the Seller; (iii)
      $7,000,000, of which $3,000,000 will be paid upon closing and $4,000,000
      (the Post-Closing Cash) will be paid as set forth below. The
      Post-Closing Cash will be subject to adjustment equal to the amount of
      accounts receivable outstanding as of closing, collected within 45 days
      from closing, plus inventory on hand, less accounts receivable or
      inventory outstanding for more than 45 days. Such amounts shall only be
      paid to the Seller after all accounts payable outstanding as of the
      Closing have been paid; and (iv) An earn-out of additional cash
      compensation for three years from the closing date. The Seller will
      receive 50% of the quarterly profits in excess of $62,500, together with
      50% of the annual profits in excess of $250,000 plus the quarterly profit
      payments.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F  9

---

SK3 Group, Inc. (formerly CTT International
Distributors Inc.)(A Development Stage
Company)Notes to the Consolidated Financial
Statements(Expressed in US dollars)(Unaudited)

|6. | Commitments (continued)
|-- | -----------------------

Each share of series A
convertible preferred stock (the Preferred Stock), has a liquidation
preference of $0.01 per share and will be convertible into 50 shares of the
Companys common stock, upon effectuation of an increase in the Companys
authorized shares of common stock to 100,000,000. The Preferred Stock votes
together with the common stock and each share of Preferred Stock is entitled to
50 votes.

In accordance with the
terms of the Purchase Agreement, upon the closing, each of the Seller and Patel
will enter into an employment agreement with TPC. Pursuant to his agreement,
Patel will serve as chief executive officer of TPC. For the first three years of
the term of the agreement, Patel will be paid a salary of $14,583.33 per month.
Commencing on the third anniversary of the agreement, Patel will receive a
salary draw of $14,583.33 per month. For each of the first three fiscal quarters
after the third anniversary of the agreement, Patel shall be paid any additional
amount by which 25% of the net profit of TPC for such quarter exceeds $62,500.
After the end of the fiscal year, Patel shall be paid any additional amount by
which 25% of the net profit of TPC for the fiscal year exceeds $250,000. In the
event 25% of the net profit for any quarter does not exceed the salary draw for
that period, subsequent draws will be reduced proportionately. The agreement has
a term of three years and shall automatically be renewed for additional one year
terms unless terminated by either party at least 90 days prior to expiration.
The agreement also contains customary provisions for benefits, confidentiality
and non-competition.

Pursuant to the
agreement, Kaushika Patel (the Controller) will serve as controller of TPC.
For the first three years of the term of the agreement,. the Controller will be
paid a salary of $6,250 per month. Commencing on the third anniversary of the
agreement, the Controller will receive a salary draw of $6,250 per month. For
each of the first three fiscal quarters after the third anniversary of the
agreement, the Controller shall be paid any additional amount by which 25% of
the net profit of TPC for such quarter exceeds $62,500. After the end of the
fiscal year, the Controller shall be paid any additional amount by which 25% of
the net profit of TPC for the fiscal year exceeds $250,000. In the event 25% the
net profit for any quarter does not exceed the salary draw for that period,
subsequent draws will be reduced proportionately. The agreement has a term of
three years and shall automatically be renewed for additional one year terms
unless terminated by either party at least 90 days prior to expiration. The
agreement also contains customary provisions for benefits, confidentiality and
non-competition.

The closing of the
Purchase Agreement is subject to the satisfaction of customary closing
conditions, as well as the following closing conditions, among others completion
of audited financial statements of TPC. Pursuant to the terms of the Purchase
Agreement, either party had the right to terminate the Purchase Agreement if a
closing had not occurred by September 30, 2007. As at September 30, 2007, the
Purchase Agreement is terminable by either party, however, the Company has not
received notice from any party to terminate the agreement.

F  10

---

|Item 2. Management's Discussion and
      Analysis or Plan of Operations
|------------------------------------------------------------------------

The following
discussion contains forward-looking statements that are subject to significant
risks and uncertainties about us, our current and planned projects, our current
and proposed marketing and sales, and our projected results of operations. There
are several important factors that could cause actual results to differ
materially from historical results and percentages and results anticipated by
the forward-looking statements. The Company has sought to identify the most
significant risks to its business, but cannot predict whether or to what extent
any of such risks may be realized nor can there be any assurance that the
Company has identified all possible risks that might arise. Investors should
carefully consider all of such risks before making an investment decision with
respect to the Company's stock. The following discussion and analysis should be
read in conjunction with the financial statements of the Company and notes
thereto. This discussion should not be construed to imply that the results
discussed herein will necessarily continue into the future, or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future. Such discussion represents only the best present
assessment from our Management.

Overview

SK3 is a start-up, development stage company and
has not generated any significant revenues from its e-commerce business
operations.

CTT International Distributors, Inc. (CTT) was
merged under the laws of the State of Delaware on January 7, 2005. CTT was
formed by the merger of Slabsdirect.com, Inc. and CTT International Distributors
Inc. Slabsdirect.com Inc. was incorporated under the laws of the State of
Delaware on January 14, 2000. CTT International Distributors Inc. was
incorporated under the laws of the State of Delaware on November 1, 2004. As
part of the merger, the Articles of Slabsdirect.com Inc. were adopted as the
Articles of CTT. Until January 7, 2005, Slabsdirect.com, Inc. was an online
auction marketplace for natural stone products, equipment and related items with
no operations, no revenues, no financial backing and few assets. On May 23,
2007, CTT changed its name to SK3 Group, Inc.

SK3 has one subsidiary, CTT Distributors Ltd.,
which is the operating company and was incorporated under the laws of the
Province of British Columbia on May 17, 2004. CTT Distributors Ltd. is a
wholly-owned subsidiary of SK3.

On December 29, 2004, Slabsdirect.com Inc. agreed
to issue 455,001 shares of common stock in exchange for all of the issued and
outstanding shares of common stock of CTT Distributors Ltd. See Exhibit 10.1 -
Share Exchange Agreement for more details. The acquisition was considered a
reverse acquisition for accounting and financial reporting purposes. The
consolidated financial statements include the accounts of SK3 since the reverse
merger (December 29, 2004) and the historical accounts of CTT Distributors Ltd.
since the date of its inception, May 17, 2004. All significant intercompany
balances and transfers have been eliminated in consolidation.

Prior to the acquisition of CTT Distributors Ltd.,
Slabdirect.com Inc.s sole asset consisted of ownership of a 100% interest in
the issued and outstanding capital stock of Slabsdirect.com Online (BC) Ltd., a
company incorporated in the Province of British Columbia, Canada.
Slabsdirect.com Online (BC) Ltd. was been unsuccessful in the business of
establishing a vertical trade portal on the Internet for the natural stone
industry. Slabsdirect.com Inc. disposed of its interest in Slabsdirect.com
Online (BC) Ltd. to the former president of Slabsdirect.com Inc. pursuant to the
stock purchase agreement dated December 29, 2004. See Exhibit 10.2 - Stock
Purchase Agreement for more details.

In the past fiscal year, SK3 focused its efforts
on the e-commerce operations of its business, including the development of the
website and its strategic alliances for marketing. During the next 12 months,
SK3 has no current plan to (1) buy any specific additional plant or equipment,
(2) conduct any significant research or development activities, or (3) to hire
any employees, other than what will be required as part of SK3s plan of
operation. See Plan of Operation below for more information.

SK3 entered into an Agreement and Plan of Merger
(the Merger Agreement) dated April 16, 2007 with Reliablecom Acquisition
Corp., a wholly-owned subsidiary of the Company incorporated on April 16, 2007
(Acquisition), Reliablecom, Inc. (Reliablecom), and Kapadia Holdings, Inc.,
the sole shareholder of Reliablecom (Holdings). Pursuant to the terms of the
Merger Agreement, Acquisition will merge with and into Reliablecom, which will
become a wholly-owned subsidiary of the SK3 (the Merger). SK3 will issue an
aggregate of 14,625,000 post-dividend shares of common stock and 292,500 shares
of series A Preferred stock (the Preferred Stock) to Holdings at the time of
the closing of the merger. Each share of Preferred Stock will be

2

---

convertible into 50 post-dividend shares of the
Companys common stock, upon effectuation of an increase in CTTs authorized
shares of common stock to 100,000,000 shares.

Upon execution of the Merger Agreement, SK3s
former President Amit Sankhala (Sankhala) resigned as an officer of SK3. Mr.
Sankhala also agreed to the return and cancellation of 8,000,000 pre-dividend
shares of CTTs common stock owned by him. Prior to the closing of the Merger
Agreement, CTT agreed to change its name to SK3 Group, Inc., and declare a
two-for-one dividend on outstanding shares of common stock.

The closing of the Merger Agreement is subject to
customary closing conditions. In the event the Merger Agreement has not closed
by June 30, 2007, the Merger Agreement shall be terminated unless otherwise
agreed to by the respective parties. On June 26, 2007, the parties entered into
Amendment No. 1 to Merger Agreement, pursuant to which the termination date was
extended to July 31, 2007. On August 2, 2007, the parties entered into Amendment
No. 2 to Merger Agreement, pursuant to which the termination date was extended
to September 30, 2007.

On May 9, 2007, SK3, Reliablecom and Sohel
Distributors Inc. (SDI), and Sohel Kapadia, the sole shareholder of SDI
(Seller), entered into a Stock Purchase Agreement (the Purchase Agreement).
Pursuant to the terms of the Purchase Agreement, Reliablecom will acquire 100%
of the issued and outstanding capital stock of SDI in exchange for (i) 85,000
shares of series A preferred stock of CTT (the Preferred Stock), and (ii) an
earn-out of additional compensation for three years from the closing. The seller
will receive 50% of the quarterly profits in excess of $37,500, together with
50% of the annual profits in excess of $150,000 plus the quarterly profit
payments. The purchase price is subject to adjustment in the event the working
capital of SDI is less than zero at closing. Each share of Preferred Stock has a
liquidation preference of $0.01 and will be convertible into 50 post-dividend
shares of the Companys common stock, upon effectuation of an increase in CTTs
authorized shares of common stock to 100,000,000 shares.

Upon closing of the Purchase Agreement, CTT,
Reliablecom and the Seller will enter into an Escrow and Lock-up Agreement,
subject to various terms, and pursuant to which the Seller will place the
Preferred Stock into escrow.

Upon closing of the Purchase Agreement, the Seller
will enter into an employment agreement with SDI, pursuant to which the Seller
will serve as President of SDI. For the first three years of the term of the
employment agreement, the seller will be paid $150,000 per year. The agreement
has a term of three years, and will automatically be renewed for additional one
year terms unless terminated by either party at lease 90 days prior to
expiration.

The closing of the Purchase Agreement is subject
to customary closing conditions. The Purchase Agreement may be terminated prior
to closing at the election of the Seller or Reliablecom, in the event the
Purchase Agreement has not closed by June 30, 2007. On June 26, 2007, the
parties entered into Amendment No. 1 to Purchase Agreement, pursuant to which
the termination date was extended to July 31, 2007. On August 2, 2007, the
parties entered into Amendment No. 2 to Purchase Agreement, pursuant to which
the termination date was extended to September 30, 2007.

On May 25, 2007, SK3, Reliablecom Inc.
(Reliablecom), The Phone Card Warehouse, Inc. (TPC), Kaushika Patel, the
sole shareholder of TPC (the Seller) and Pradip Patel (Patel), entered into
a Stock Purchase Agreement (the TPC Purchase Agreement). Pursuant to the terms
of the TPC Purchase Agreement, Reliablecom will acquire 100% of the issued and
outstanding capital stock of TPC in exchange for:

- 30,000 shares of series A preferred stock of the SK3, which
  shares shall not be transferable for a period of one year from closing;
- 30,000 shares of series A preferred stock of the SK3 to be
  held in escrow (the "Escrow Shares"). Of the Escrowed Shares, 10,000 shall be released to the Seller if TPCs earnings before
  interest taxes, depreciation and amortization (EBITDA)
  for the first year after closing are at least $1,500,000, 10,000 shall be
  released to the Seller if TPCs EBITDA for the second year
  after closing are at least $1,600,000, and 10,000 shall be released to the
  Seller if TPCs EBITDA for the second year after closing
  are at least $2,000,000. In the event that the first and second year targets
  are not met, but the total annual EBITDA for the first
  three years exceeds $5,100,000, all of the shares remaining in escrow
  would be released to the Seller. Any Escrowed Shares which are
  not released to the Seller as set forth above will be cancelled without consideration payable to the Seller;
- $7,000,000, of which $3,000,000 will be paid upon closing and
  $4,000,000 (the Post-Closing Cash) will be paid as set forth below. The Post-Closing Cash will be subject to adjustment equal
  to the amount of accounts receivable

3

---

outstanding as of closing,
collected within 45 days from closing, plus inventory on hand, less accounts
receivable or inventory outstanding for more than 45 days. Such amounts shall
only be paid to the Seller after all accounts payable outstanding as of the
Closing have been paid; and

- An earn-out of additional cash compensation for three years
  from the closing date. The Seller will receive 50% of the quarterly profits in excess of $62,500, together with 50% of the annual
  profits in excess of $250,000 plus the quarterly profit
  payments.

Upon closing of the TPC Purchase Agreement, Mr.
Patel will enter into an employment agreement with TPC pursuant to which he will
serve as chief executive officer of TPC. For the first three years of the term
of the agreement, Mr. Patel will be paid a salary of $14,583.33 per month.
Commencing on the third anniversary of the agreement, Mr. Patel will receive a
salary draw of $14,583.33 per month. For each of the first three fiscal quarters
after the third anniversary of the agreement, Mr. Patel shall be paid any
additional amount by which 25% of the net profit of TPC for such quarter exceeds
$62,500. After the end of the fiscal year, Mr. Patel shall be paid any
additional amount by which 25% of the net profit of TPC for the fiscal year
exceeds $250,000. In the event 25% the net profit for any quarter does not
exceed the salary draw for that period, subsequent draws will be reduced
proportionately. The agreement has a term of three years and shall automatically
be renewed for additional one year terms unless terminated by either party at
least 90 days prior to expiration.

Upon closing of the TPC Purchase Agreement, the
Seller will enter into an employment agreement with TPC pursuant to which she
will serve as controller of TPC. For the first three years of the term of the
agreement, Mrs. Patel will be paid a salary of $6,250 per month. Commencing on
the third anniversary of the agreement, the Seller will receive a salary draw of
$6,250 per month. For each of the first three fiscal quarters after the third
anniversary of the agreement, the Seller shall be paid any additional amount by
which 25% of the net profit of TPC for such quarter exceeds $62,500. After the
end of the fiscal year, the Seller shall be paid any additional amount by which
25% of the net profit of TPC for the fiscal year exceeds $250,000. In the event
25% the net profit for any quarter does not exceed the salary draw for that
period, subsequent draws will be reduced proportionately. The agreement has a
term of three years and shall automatically be renewed for additional one year
terms unless terminated by either party at least 90 days prior to
expiration.

Financial Condition

SK3 is a development stage company and SK3s
ability to continue as a going concern is dependent on raising additional
capital to fund future operations and ultimately to attain profitable
operations. This means that SK3s auditors believe there is substantial doubt
that SK3 can continue as an on-going business for the next twelve months unless
SK3 obtains additional capital to pay its bills. SK3s auditors report on its
2005 financial statements contained an explanatory paragraph that states that
due to recurring losses since inception and negative cash flows substantial
doubt exists as to SK3s ability to continue as a going concern. Accordingly,
SK3s financial statements contained in this quarterly report have been prepared
on a going concern basis, which assumes that SK3 will be able to realize its
assets and discharge its obligations in the normal course of business. SK3
incurred net losses for the period from inception of May 17, 2004 to September
30, 2007 of $287,392.

SK3 incurred a net loss of $9,172 during the three
month period ended September 30, 2007. As of September 30, 2007, SK3 had a cash
balance of $289. SK3s liabilities on September 30, 2007 totaled $142,959,
consisting of $38,017 in accounts payable $290 in accrued liabilities, $69,636
in notes payable and $35,016 in amounts due to related parties. Accounts payable
of $38,017 consisted of  legal costs, and  other miscellaneous
administrative costs. Accrued liabilities of $290 consisted of $290 of accrued
legal fees. There are no material defaults or past due amounts for the accounts
payable or accrued liabilities. When these assets were offset against SK3s
liabilities, SK3 was left with a working capital deficit of $142,670 at
September 30, 2007.

SK3s financial statements included in this
quarterly report have been prepared without any adjustments that would be
necessary if SK3 becomes unable to continue as a going concern and would
therefore be required to realize upon its assets and discharge its liabilities
in other than the normal course of its business operations.

4

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Limited operating history; need for additional
capital

There is limited historical financial information
about SK3 upon which to base an evaluation of its performance as an e-commerce
company. SK3 is an e-commerce company but has not generated any significant
revenues from its e-commerce business. SK3 cannot guarantee it will be
successful in the e-commerce industry. SK3s business is subject to risks
inherent in the establishment of a new business enterprise, including limited
working capital, possible delays in the development of its products and
services, and possible cost overruns due to price and cost increases in products
and services.

SK3 has adopted a phased plan of operation to the
development of its website and its operations. See Plan of Operation below for
more detail. This allows SK3 to allocate the expenditures of its resources in a
very timely and measured manner. SK3 will not continue with expenditures in any
phase of the development if Amit Sankhala thinks SK3 will be unable to complete
the designated task. SK3 may require further equity financing to provide for
some of the working capital required to implement future development of its
website and operations beyond the final phase of the plan of operation or for
services and products that are currently not anticipated to be
developed.

To meet its need for cash, SK3 will rely on any
revenues generated from its business operations and on debt and equity
financings. Any revenue and financings will be applied to (1) development of
SK3s websitewww.cheaperthanthem.comand implementation of SK3s plan of operation, (2) development and
delivery of its products and services, (3) operation of its business, (4)
repayment of debt, and (5) working capital. Management does not know for certain
how long SK3 can satisfy its cash requirements. On August 9, 2006, Amit Sankhala
advanced $10,000 to the Company for working capital purposes, secured by an
unsecured, demand, non-interest bearing promissory note. Management believes
that SK3 can satisfy its cash needs until December 2006 based upon its existing
cash, receivables and inventory on hand. As well, with the payment terms that
SK3 has with its suppliers, it can purchase most inventory on 60 day terms. SK3
keeps its costs down by not paying Amit Sankhala a salary and keeping its
operating expenses low.

If SK3 requires additional proceeds, SK3 will have
to find alternative sources, like a public offering, a private placement of
securities, or additional loans from its sole officer or others. SK3 has no
assurance that future equity financing will be available to it on acceptable
terms. If financing is not available on satisfactory terms, SK3 may be unable to
continue, develop or expand its e-commerce operations. Equity financing could
result in additional dilution to existing shareholders.

At the present time, SK3 is seeking equity
financing to provide for the capital required to implement the phases of its
plan of operation. SK3 cannot guaranty that the proceeds raised from any
offering, if any, will be enough for it to stay in business.

If SK3 is unable to complete any phase of its plan
of operation because it does not have enough money, SK3 will suspend business
operations until SK3 raises additional working capital. If SK3 cannot raise the
required working capital, SK3 will either have to suspend operations until it
does raise the required working capital, or cease operations entirely. If SK3
ceases business operations, SK3 does not know what it will do and does not have
any plans to do anything else.

Comparison of the Three Month Periods Ended
September 30, 2007 and 2006

Results of Operations

While SK3 is currently generating some revenue,
SK3 does not anticipate earning significant revenues until it completes Phase 2
of its plan of operation. However, there is no assurance that SK3 will be able
to complete its plan of operation and management does not know when SK3s
business operations will generate significant revenues. There is no guaranty
that SK3 will generate revenues from the website, or that if SK3 does complete
Phase 2 of its plan of operation, that SK3s business operations will generate
significant revenues or that SK3 will be able to secure the financing necessary
to proceed with the other phases of its plan of operations.

For the three month period ended September 30,
2007, SK3 incurred a net loss of $9,172, compared to SK3s net loss of $39,053
for the three month period ended September 30, 2006. The decrease in net loss
for the three months ended September 30, 2007, as compared to the three months
ended September 30, 2006, was primarily due to SK3 generating no revenues for
the three month period, which resulted in nil profits, a decrease in general and
administrative expenses and a decrease in professional fees.

5

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Revenues

SK3 has generated revenues of $62,367 from
operations since its inception and $0 in revenues for the three month period
ended September 30, 2007. For the three month period ended September 30, 2007,
SK3 did not sell any products.

SK3 has generated revenues of $62,367 from
operations since its inception and $0 in revenues for the three month period
ended September 30, 2006. For the three month period ended September 30, 2006,
SK3 did not sell any products.

There is no real reason for the rate of decline on
sales of products other than the lack of customer demand on the
website.

The breakdown of SK3s sales between its Direct
Business and its Fulfillment Business is 100% and nil respectively. Inventory is
kept low as SK3s suppliers have inventory on hand. SK3s purchases inventory on
an as needed basis to fill orders. Management will monitor the demand and supply
for inventory to ensure that there is sufficient inventory with SK3s supply
channels to meet demands. If SK3 is unable to provide the inventory and meet
demands, it will mark the product as out of stock on the website. To date, SK3
has not made any fulfillment sales.

As a general policy, SK3 requires verification of
receipt of payment or credit card authorization before it ships products to
consumers or wholesale purchasers. SK3 has two types of customers that it deals
with, one being retail which are internet customers and one being wholesale,
which are customers that call up SK3 and SK3 has had past relationships with.
The verification process is for the retail (internet sales) with either credit
cards or certified cheques. The wholesale customers are relationships from the
past and are given extended credit. Once payment is verified for retail
customers, the shipment is shipped. There were no sales during the three month
period ended September 30, 2007 and no outstanding receivables at September 30,
2007. There is a direct correlation between the outstanding accounts and SK3s
liquidity. SK3 will be less able to turn its cash around to purchase inventory
so it potentially decreases SK3s profitability.

Operating Expenses

Total operating expenses decreased to $9,172 for
the three month period ended September 30, 2007, from $39,053 for the three
month period ended September 30, 2006, due primarily to a decrease in
professional fees of $25,351, a decrease in consulting services of $4,273, and a
decrease in general and administrative expenses of $401. Management expects
SK3s operating expenses to increase as SK3 increases its business operations
and its investing and financing activities.

For the three month period ended September 30,
2007, SK3 realized $0 in sales of its products. The related cost of sales was $0
resulting in gross profit from operations of $0. During the same period, SK3
incurred (a) general administrative expenses of $2,858; (b) professional fees of
$4,514, which included legal fees, accounting fees for
preparation of the financial statements, and auditors fees; (c)
consulting fees of $0; and (d) donated services of $1,800, representing the fair
value of services provided by Amit Sankhala, of which Mr. Sankhala does not
expect repayment. Therefore, for the three month period ending September 30,
2007, SK3 had total net loss of $9,172.

For the three month period ended September 30,
2006, SK3 realized $0 in sales of its products. The related cost of sales was
$0, resulting in gross profit from operations of $0. During the same period, SK3
incurred (a) general administrative expenses of $3,259; (b) professional fees of
$29,865, which included legal fees, accounting fees for
preparation of the financial statements, and auditors fees; (c)
consulting fees of $4,273; (d) donated services of $1,500, representing the fair
value of services provided by Amit Sankhala, of which Mr. Sankhala does not
expect repayment; and (e) amortization of $156 for the accumulated amortization
on its website. Therefore, for the three month period ending September 30, 2006,
SK3 had total net loss of $39,053.

SK3 has not attained profitable operations and is
dependent upon obtaining financing to continue and to expand its existing
business operations and to complete its plan of operation. For these reasons,
SK3s auditors stated in their report for the fiscal period ended December 31,
2006 that there is substantial doubt that SK3 will be able to continue as a
going concern.

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Comparison of the Nine Month Periods Ended
September 30, 2007 and 2006

Results of Operations

While SK3 is currently generating some revenue,
SK3 does not anticipate earning significant revenues until it completes Phase 2
of its plan of operation. However, there is no assurance that SK3 will be able
to complete its plan of operation and management does not know when SK3s
business operations will generate significant revenues. There is no guaranty
that SK3 will generate revenues from the website, or that if SK3 does complete
Phase 2 of its plan of operation, that SK3s business operations will generate
significant revenues or that SK3 will be able to secure the financing necessary
to proceed with the other phases of its plan of operations.

For the nine month period ended September 30,
2007, SK3 incurred a net loss of $57,187, compared to SK3s net loss of $74,704
for the nine month period ended September 30, 2006. The decrease in net loss for
the nine months ended September 30, 2007, as compared to the nine months ended
September 30, 2006, was primarily due to SK3 generating no revenues for the nine
month period, which resulted in nil profits, an decrease in general and
administrative expenses and a decrease in professional fees.

Revenues

SK3 has generated revenues of $62,367 from
operations since its inception and $0 in revenues for the nine month period
ended September 30, 2007. For the nine month period ended September 30, 2007,
SK3 did not sell any products.

SK3 has generated revenues of $62,367 from
operations since its inception and $5,090 in revenues for the nine month period
ended September 30, 2006 for a gross profit of $2,156.

There is no real reason for the rate of decline on
sales of products other than the lack of customer demand on the
website.

The breakdown of SK3s sales between its Direct
Business and its Fulfillment Business is 100% and nil respectively. Inventory is
kept low as SK3s suppliers have inventory on hand. SK3s purchases inventory on
an as needed basis to fill orders. Management will monitor the demand and supply
for inventory to ensure that there is sufficient inventory with SK3s supply
channels to meet demands. If SK3 is unable to provide the inventory and meet
demands, it will mark the product as out of stock on the website. To date, SK3
has not made any fulfillment sales.

As a general policy, SK3 requires verification of
receipt of payment or credit card authorization before it ships products to
consumers or wholesale purchasers. SK3 has two types of customers that it deals
with, one being retail which are internet customers and one being wholesale,
which are customers that call up SK3 and SK3 has had past relationships with.
The verification process is for the retail (internet sales) with either credit
cards or certified cheques. The wholesale customers are relationships from the
past and are given extended credit. Once payment is verified for retail
customers, the shipment is shipped. There were no sales during the three month
period ended September 30, 2007 and no outstanding receivables at September 30,
2007. There is a direct correlation between the outstanding accounts and SK3s
liquidity. SK3 will be less able to turn its cash around to purchase inventory
so it potentially decreases SK3s profitability.

Operating Expenses

Total operating expenses decreased to $57,187 for
the nine month period ended September 30, 2007, from $76,860 for the nine month
period ended September 30, 2006, due primarily to a decrease in professional
fees of $24,164, an increase in consulting services of $4,390, and a decrease in
general and administrative expenses of $667. Management expects SK3s operating
expenses to increase as SK3 increases its business operations and its investing
and financing activities.

For the nine month period ended September 30,
2007, SK3 realized $0 in sales of its products. The related cost of sales was $0
resulting in gross profit from operations of $0. During the same period, SK3
incurred (a) general administrative expenses of $8,139; (b) professional fees of
$31,292, which included legal fees, accounting fees for
preparation of the financial statements, and auditors fees; (c)
consulting fees of $12,019; and (d) donated services of $4,800, representing the
fair value of services provided by Amit Sankhala, of which Mr. Sankhala does not
expect repayment. Therefore, for the nine month period ending September 30,
2007, SK3 had total net loss of $57,187.

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For the nine month period ended September 30,
2006, SK3 realized $5,090 in sales of its products. The related cost of sales
was $2,934, resulting in gross profit from operations of $2,156. During the same
period, SK3 incurred (a) general administrative expenses of $8,806; (b)
professional fees of $55,456, which included legal fees, accounting
fees for preparation of the financial statements, and auditors fees; (c) consulting fees of $7,629; (d) donated services of $4,500,
representing the fair value of services provided by Amit Sankhala, of which Mr.
Sankhala does not expect repayment; and (e) amortization of $156 for the
accumulated amortization on its website. Therefore, for the nine month period
ending September 30, 2006, SK3 had total net loss of $74,704.

SK3 has not attained profitable operations and is
dependent upon obtaining financing to continue and to expand its existing
business operations and to complete its plan of operation. For these reasons,
SK3s auditors stated in their report for the fiscal period ended December 31,
2006 that there is substantial doubt that SK3 will be able to continue as a
going concern.

Liquidity and Capital Resources

SK3s capital resources have been limited. SK3
currently does not generate significant revenue from its business operations to
be profitable, and to date has primarily relied on the sale of equity for
working capital for its business operations.

SK3 had cash of $289 and a working capital deficit
of $142,670 at September 30, 2007. During the three month period ended September 30, 2007,
SK3 funded its operations through existing cash on hand. On April 9, 2006, the
Company issued a promissory note to Amit Sankhala for cash advances of $41,000
and on August 9, 2006 the Company issued a promissory note to Amit Sankhala for
cash advances of $10,000.

The notes to SK3s consolidated financial
statements as of September 30, 2007 contain footnote disclosure regarding SK3s
uncertain ability to continue as a going concern. SK3 has not generated
sufficient revenues to cover its expenses, and SK3 has an accumulated deficit of
$287,392. While management believes that SK3 will begin to generate more revenue
during the year, as of September 30, 2007, SK3 had $142,959 in current liabilities
and SK3 cannot assure that it will succeed in generating revenue sufficient to
meet its ongoing cash needs.

While SK3 has raised capital to meet its working
capital and financing needs in the past, additional financing is required in
order to fully complete its plan of operation and launch its business
operations. SK3 is seeking financing in the form of equity in order to provide
the necessary working capital. SK3 currently has no commitments for financing.
There are no assurances SK3 will be successful in raising the funds
required.

Off-Balance Sheet Arrangements

SK3 has no off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on SK3s
financial condition, changes in financial condition, revenue or expenses,
results of operations, liquidity, capital expenditures or capital resources that
are material to investors, nor does SK3 have any non-consolidated,
special-purpose entities.

Critical Accounting Policies

SK3s discussion and analysis of its financial
condition and results of operations, including the discussion on liquidity and
capital resources, are based upon its financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires management
to make estimates and judgements that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. Actual results could differ from those estimates. On an on
going basis, management re-evaluates its estimates and judgments, including but
not limited to, those related to revenue recognition and collectibility of
accounts receivable. Critical accounting policies identified are as
follows:

Revenue Recognition

SK3 recognizes revenue from the sale of electronic
products, such as MP3 players, in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 104 (SAB 104), Revenue Recognition in Financial Statements.
Revenue consists of the sale of electronic products and is recognized only when
the price is fixed or determinable, persuasive evidence of an arrangement
exists, the product is shipped, and collectibility is reasonably assured. Trade
accounts receivable relate to the sale

8

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of electronic products, such as MP3 players. Amit
Sankhala regularly reviews the collectibility of any outstanding balance,
together with his estimate of the credit worthiness of the client. SK3 sells to
customers based on standard credit policies and regularly reviews accounts
receivable for any bad debts. Allowances for doubtful accounts are based on
estimate of losses on customer receivable balances. As at September 30, 2007, there
was no allowance for doubtful accounts.

Foreign Currency Transaction /
Balances

SK3s functional and reporting currency is the
United States dollar. Monetary assets and liabilities denominated in foreign
currencies are translated to United States dollars in accordance with SFAS No.
52 Foreign Currency Translation, using the exchange rate prevailing at the balance sheet date. Gains and
losses arising on settlement of foreign currency denominated transactions or
balances are included in the determination of income. Foreign currency
transactions are primarily undertaken in Canadian dollars. SK3 has not entered
into derivative instruments to offset the impact of foreign currency
fluctuations.

Website Development Costs

SK3 recognizes the costs associated with
developing a website in accordance with the American Institute of Certified
Public Accountants (AICPA) Statement of Position (SOP) No. 98-1, Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use. Relating to website
development costs SK3 follows the guidance pursuant to the Emerging Issues Task
Force (EITF) No. 00-2, Accounting for Website
Development Costs.

Going Concern Issue

The going concern basis of presentation assumes
SK3 will continue in operation throughout the next fiscal year and into the
foreseeable future and will be able to realize its assets and discharge its
liabilities and commitments in the normal course of business. Certain
conditions, discussed below, currently exist that raise substantial doubt upon
the validity of this assumption. The financial statements do not include any
adjustments that might result from the outcome of the uncertainty.

SK3s future business activities are dependent
upon its ability to obtain third party financing in the form of debt and equity
and ultimately to generate future profitable e-commerce activity or revenue from
its product and services. As of September 30, 2007, SK3 has only generated $62,367 in
revenues since inception, and has experienced negative cash flow from its
e-commerce activities. SK3 may look to secure additional funds through future
debt or equity financings. Such financings may not be available or may not be
available on reasonable terms.

Internal and External Sources of
Liquidity

SK3 has funded its operations principally from the
issuance of common stock, borrowings in the form of advances payable, and a
short-term note payable.

Inflation

SK3 does not believe that inflation will have a
material impact on SK3s future business operations.

Plan of Operation for the Next Twelve
Months

SK3 has not had any significant revenues generated
from its business operations since inception.

SK3 anticipates that it may not be able to satisfy
its working capital requirements for the next 12 months. Accordingly, SK3 will
need to raise additional working capital to continue its operations. SK3
anticipates funding its working capital needs for the next 12 months through the
equity capital markets and private financings. Although the foregoing actions
are expected to cover SK3s anticipated cash needs for working capital and
capital expenditures for at least the next 12 months, no assurance can be given
that SK3 will be able to raise sufficient cash to meet these cash
requirements.

Also, SK3 expects revenues generated from the
website to contribute to SK3s required working capital, but expects that the
revenues generated from the website for the next 12 months will not be enough
for its required working capital. Until SK3 is able to generate any consistent
and significant revenue it may be required to raise additional funds by way of
equity.

9

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SK3 expects to improve cash flows and operating
results by raising additional capital through a registered offering, private
placements of stock, and private loans. Therefore, SK3 has not contemplated any
plan of liquidation if it does not generate revenues. SK3 cannot ensure,
however, that these plans will be successful.

At any phase, if SK3 finds that it does not have
adequate funds to complete a phase, it may have to suspend its operations and
attempt to raise more money so it can proceed with its business operations. If
SK3 cannot raise the capital to proceed it may have to suspend operations until
it has sufficient capital.

To become profitable and competitive, SK3 needs to
establish its website as a comprehensive on-line shopping mall. To achieve this
goal, Management has prepared a plan of operation for the next 12 months. Each
of the phases of the plan of operations listed below will be implemented as
resources are available.

Phase 1 - Develop and populate website (3
months)

In Phase 1, SK3 plans to (1) upgrade and update
the website so that it is more visually appealing and technologically sound and
(2) update its product line and visuals on the website. SK3 has budgeted $50,000
for this phase and expects it to take three months to complete, with completion
expected within the first three months of SK3s plan of operation. This budget
includes the cost of a fully functional, e-commerce enabled format and the costs
associated with installation and technicians. Also in this phase, SK3 will
continue to maintain and populate the website with new products and updated
visuals.

Phase 2 - Expand inventory and products (6
months)

In Phase 2, SK3 plans to expand its product line
to include inventory and products as the new products become available from
suppliers and Fulfillment Associates. SK3 will allocate 25% of this phases
budget to the purchase of new and existing merchandise.

SK3s expansion goals in this phase are to (1)
expand its inventory product line by 12 new inventory products, (2) expand its
business by offering products directly applicable to its retail model, and (3)
to expand its inventory of products to provide a 15 -100% gross margin. SK3 has
a 100% margin on some of its MP3 products. As the cost of components drops to
the manufacturer, especially flash memory, those costs are passed on to SK3.
Management believes that as SK3 sources directly from manufacturers, it will
increase its margins as the cost of components decrease.

SK3 has budgeted $75,000 for this phase and
expects it to take six months to complete, with completion expected within the
first six months of SK3s plan of operation.

Phase 3- Implement marketing strategy (6
months)

In Phase 3, SK3 plans to (1) hire personnel for
sales, marketing and customer service, (2) create a marketing strategy for the
website and its products, and (3) implement its marketing strategy on its target
market, including international customers.

SK3s marketing goals in this phase are to attract
potential and repeat customers to the website and have customers perceive the
website as a preferred source of non-branded, discount products that are
delivered in a professional, authoritative and efficient manner.

SK3 has budgeted $75,000 for this phase and
expects it to take six months to complete with completion expected within the
second six months of SK3s plan of operation.

Phase 4- Corporate Development (4
months)

In Phase 4, SK3 plans to expand its business
operations by creating products directly applicable to the non-branded,
discounted product market. SK3 intends to create products that are copies of the
products that mainstream producers like Apple, Sony and Samsung produce. Create
means to develop a product that has similar functionality and style, yet does
not and will not infringe on anyones intellectual property. SK3 currently has
no in house manufacturing. SK3 will identify a trend in electronics being sold
by companies such as the Apple iPod or Sony MP3 players and work with the
manufacturer to create similar looking and functioning products.

10

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SK3 has budgeted $50,000 for this phase and
expects it to take four months to complete, with completion expected within the
final four months of SK3s plan of operation.

During any phase of the plan of operation, if SK3
does not have adequate working capital to complete a phase of its proposed plan
of operation, SK3 may have to suspend its business operations and attempt to
raise more working capital so that SK3 can proceed. If SK3 cannot raise the
necessary working capital to proceed SK3 may have to cease business operations
until there is sufficient working capital.

SK3 anticipates continuing to rely on private
loans, equity sales of common shares, or debt financing in order to fund its
proposed plan of operation. The issuance of additional shares will result in
dilution to existing shareholders of SK3.

SK3 is not currently conducting any research and
development activities other than the development of the website. It does not
anticipate conducting such activities in the near future. As SK3 expands its
customer base and product lines, it will need to hire additional employees or
independent contractors as well as purchase or lease additional
equipment.

Uncertainties Relating To Forward-Looking
Statements

This Form 10-QSB Quarterly Report for the three
and nine month period ended September 30, 2007, including the managements discussion and
analysis of financial condition and results of operations, as well as other
sections of this Quarterly Report contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and other
United States federal securities laws. Certain information contained or
incorporated by reference in this Quarterly Report, including the information
set forth as to the future financial or operating performance of SK3,
constitutes forward-looking statements. These statements may be identified by
their use of words like plans, expect, aim, believe, projects,
anticipate, intend, estimate, will, should, could, contemplate,
target, continue, budget, may, schedule, and other similar expressions
that indicate future events and trends and identify forward-looking statements.
All statements, other than historical statements of fact, that address
expectations or projections about the future, including statements about SK3s
strategy for growth, product development, market position, expenditures and
financial results, are forward-looking statements

Forward-looking statements in this Form 10-QSB
include statements regarding (1) expectation that revenue will increase during
fiscal 2006; (2) expectation of business operations increasing as a result of
website development and an increase in marketing; (3) expectation of future
operating expenses increasing; (4) expectation that the expansion of business
operations will cause marketing and promotional costs to increase; (5)
expectation that working capital needs for fiscal 2006 will be funded through
the equity capital markets and private financings; (6) expectation that an
increase in business operations will lead to hiring of additional employees or
independent contractors; (7) expectation of future developments of content,
products, features, and services to be provided on its website; (8) uncertainty
of utilizing deferred tax assets; and (9) expectation that inflation will not
have a material impact on future operations.

These forward-looking statements involve a number
of risks and uncertainties, including, but not limited to, those discussed in
these paragraphs. Factors that could cause future results to differ from these
expectations include general economic conditions particularly related to demand
for SK3s products and services; changes in business strategy; competitive
factors (including the introduction or enhancement of competitive services);
pricing pressures; changes in operating expenses; inability to attract or retain
consulting, sales and/or development talent; changes in customer requirements;
and/or evolving industry standards; and other factors described in SK3s filings
with the Securities and Exchange Commission. The results that SK3 achieves may
differ materially from any forward-looking statements due to these risks and
uncertainties. The forward-looking statements in this Form 10-QSB for the three
and nine month period ended September 30, 2007, are subject to risks and
uncertainties that could cause actual results to differ materially from this
results expressed in or implied by the statements contained in this
report.

As a result, the identification and interpretation
of data and other information and their use in developing and selecting
assumptions from and among reasonable alternatives requires the exercise of
judgment. To the extent that the assumed events do not occur, the outcome may
vary substantially from anticipated or projected results, and accordingly, no
opinion is expressed on the achievability of those forward-looking statements.
No assurance can be given that any of the assumptions relating to the
forward-looking statements specified in the following information are accurate.
All forward-looking statements are made as of the date of filing of this Form
10-QSB and SK3 disclaims any duty to update any such forward-looking statements,
and SK3 assumes no obligation to update any such forward-looking
statements.

11

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SK3 may, from time to time, make oral
forward-looking statements. SK3 strongly advises that the above paragraph and
the risk factors described in SK3s Annual Report and in SK3s other documents
filed with the United States Securities and Exchange Commission should be read
for a description of certain factors that could cause the actual results of SK3
to materially differ from those in the oral forward-looking statements. SK3
disclaims any intention or obligation to update or revise any oral or written
forward-looking statements whether as a result of new information, future events
or otherwise.

Item 3. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of September 30, 2007, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective in ensuring that
information required to be disclosed by us in our periodic reports is recorded,
processed, summarized and reported, within the time periods specified for each
report and that such information is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.

Changes in Internal Controls.

There was no change in our internal controls over
financial reporting that has materially affected, or is reasonable likely to
materially affect, our internal control over financial reporting during the
quarter covered by this Report.

|Part II. | OTHER INFORMATION
|-------- | -----------------
|         |                  
|Item 1.  | Legal Proceedings

None.

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

None.

|Item 3. | Defaults Upon Senior
      Securities
|------- | -------------------------------------

None.

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

None.

|Item 5. | Other Information
|------- | -----------------

None.

|Item 6. | **Exhibits**
|------- | ------------
|        |             
|(a)     | Exhibits    

|Exhibit Number | Description of
      Exhibit                                                                                                                                                                    
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1           | Certification of Principal
      Executive and Financial Officer pursuant to Rule 13a-14 and Rule
        15d-14(a), promulgated under the Securities and Exchange Act
      of 1934, as amended
|               |                                                                                                                                                                                                 
|32.1           | Certification pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002 (Chief Executive and Financial
      Officer)              

12

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SIGNATURES

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

|Date: November 19, 2007 | SK3 GROUP, INC.                      
|----------------------- | -------------------------------------
|                        |                                      
|                        |                                      
|                        | By:/s/
      SAJID KAPADIA           
|                        |                                      
|                        | Sajid Kapadia,                       
|                        | Chief Executive Officer
      and    
|                        | Chief Financial
      Officer        
|                        | (Principal Executive,
      Financial
|                        | and Accounting
      Officer)        

13

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Exhibit 31.1

CERTIFICATIONS

I, Sajid Kapadia, Chief Executive and Financial
Officer of SK3 Group, Inc., certify that:

|1. | I have reviewed this Quarterly Report on Form 10-QSB of
      SK3 Group, Inc.;                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                         
|2. | Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                         
|3. | Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the small business issuer as of, and for, the periods presented
      in this report;                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                         
|4. | The small business issuers other certifying officer and
      I are responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
      internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the small business issuer and
      have:

| | a) | designed such disclosure controls and procedures, or
      caused such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the small
      business issuer, including its consolidated subsidiaries, is made known to
      us by others within those entities, particularly during the period in
      which this report is being prepared;                                                 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | evaluated the effectiveness of the small business
      issuers disclosure controls and procedures and presented in this report
      our conclusions about the effectiveness of the disclosure controls and
      procedures, as of the end of the period covered by this report based on
      such evaluation; and                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c) | disclosed in this report any changes in the small
      business issuers internal control over financial reporting that occurred
      during the small business issuers most recent fiscal quarter (the small
      business issuers fourth fiscal quarter in the case of an annual report)
      that has materially affected, or is reasonably likely to materially
      affect, the small business issuers internal control over financial
      reporting; and

|5. | The small business issuers other certifying officer and
      I have disclosed, based on our most recent evaluation of internal control
      over financial reporting, to the small business issuers auditors and the
      audit committee of small business issuers board of directors (or persons
      performing the equivalent functions):
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant deficiencies and material weaknesses in
      the design or operation of internal control over financial reporting which
      are reasonably likely to adversely affect the small business issuers
      ability to record, process, summarize and report financial information;
      and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                             
| | b) | any fraud, whether or not material, that involves
      management or other employees who have a significant role in the small
      business issuers internal control over financial reporting.                                                                                                           

|Dated: November 19, 2007 | By:/s/
      SAJID KAPADIA           
|------------------------ | -------------------------------------
|                         | Sajid Kapadia                        
|                         | Chief Executive and Financial Officer

---

Exhibit 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION
1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SK3
Group, Inc. (the Company) on Form 10-QSB for the quarter ending September 30,
2007 as filed with the Securities and Exchange Commission on the date hereof
(the Report), each of the undersigned, in the capacities and on the date
indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his
knowledge:

|(1) | The report fully complies with the requirements of
      Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                 
|(2) | The information contained in the Report fairly presents,
      in all material respects, the financial condition and results of
      operations of the Company.

|Dated: November 19, 2007 | By:/s/
      SAJID KAPADIA                 
|------------------------ | -------------------------------------------
|                         | Sajid
      Kapadia                        
|                         | Chief
      Executive and Financial Officer

---