**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-QSB**

**x      **
**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the quarterly period ended March 31, 2007**

**OR**

**o      **
**TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**Commission      File Number**

**000-51119**

**SKINS      INC.**

| **Nevada**(State                or other jurisdiction of incorporationor                organization)                                   |   | **20-4711789** (I.R.S.                Employer IdentificationNo.) |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|
|                                                                                                                                    |   |                                                                   |
| **45                West 21st Street, 2nd Floor****New                York, NY**(Address                of principal executive offices) |   |  **10010** (Zip                Code)                         |

**(212)      561-5111**

----

**SKINS      INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**FORM      10-QSB QUARTERLY REPORT**

**TABLE      OF CONTENTS**

|                                          |                                                                                                                                                                                                                             | **Page** |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| PART                I - FINANCIAL INFORMATION |                                                                                                                                                                                                                             |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                1.                        | FINANCIAL                STATEMENTS                                                                                                                                                                                              | 1        |
|                                          |                                                                                                                                                                                                                             |     |
|                                          | Consolidated                Balance Sheet as of March 31, 2007 (unaudited)                                                                                                                                                       | 2        |
|                                          |                                                                                                                                                                                                                             |     |
|                                          | Consolidated                Statements of Operations for the Three Months ended March 31, 2007                and                2006 and the period from Inception (May 18, 2004) to March 31, 2007                (unaudited)  | 3        |
|                                          |                                                                                                                                                                                                                             |     |
|                                          | Consolidated                Statements of Stockholders' Equity the period from Inception (May                18,                2004) to March 31, 2007 (unaudited)                                                              | 4        |
|                                          |                                                                                                                                                                                                                             |     |
|                                          | Consolidated                Statements of Cash Flows for the Three Months ended March 31, 2007                and                2006, and the period from Inception (May 18, 2004) to March 31, 2007                (unaudited) | 5        |
|                                          |                                                                                                                                                                                                                             |     |
|                                          | Notes                to Consolidated Financial Statements                                                                                                                                                                        | 6        |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                2.                        | MANAGEMENT’S                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                                                                                                                   | 15       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                3.                        | CONTROLS                AND PROCEDURES                                                                                                                                                                                           | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| PART                II - OTHER INFORMATION    | 18                                                                                                                                                                                                                               |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                1.                        | LEGAL                PROCEEDINGS                                                                                                                                                                                                 | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                2.                        | UNREGISTERED                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                                                                                                                       | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                3.                        | DEFAULTS                UPON SENIOR SECURITIES                                                                                                                                                                                   | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                4.                        | SUBMISSION                OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                               | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                5.                        | OTHER                INFORMATION                                                                                                                                                                                                 | 18       |
|                                          |                                                                                                                                                                                                                             |     |
| ITEM                6.                        | EXHIBITS                                                                                                                                                                                                                         | 19       |
|                                          |                                                                                                                                                                                                                             |     |
| SIGNATURES                                    |                                                                                                                                                                                                                             | 20       |

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS**

----

**SKINS      INC. AND SUBSIDIARY**

**(A      Development Stage Company)**

**CONSOLIDATED      BALANCE SHEET**

**(Unaudited)**

|                                                                                                                                                                 |   | **March                31,****2007** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
| **ASSETS**                                                                                                                                                           |   |                                 |       |
| Current                assets                                                                                                                                        |   |                                 |       |
| Cash                and cash equivalents                                                                                                                             |   | $                                    | 973,175    |   |
| Inventory                (Note 3)                                                                                                                                    |   |                                 | 68,521     |   |
| Advance                to vendor                                                                                                                                     |   |                                 | 161,090    |   |
| Prepaid                expenses                                                                                                                                      |   |                                 | 164,464    |   |
| Total                current assets                                                                                                                                  |   |                                 | 1,367,250  |   |
|                                                                                                                                                                 |   |                                 |       |   |
| Property                and equipment, net (Note 5)                                                                                                                  |   |                                 | 5,456      |   |
| Capitalized              production molds (Note 6)                                                                                                                   |   |                                 | 112,234    |   |
| Patent                costs (Note 7)                                                                                                                                 |   |                                 | 111,443    |   |
| Total                Assets                                                                                                                                          |   | $                                    | 1,596,383  |   |
|                                                                                                                                                                 |   |                                 |       |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                              |   |                                 |       |   |
| Current                liabilities                                                                                                                                   |   |                                 |       |   |
| Accounts                payable and accrued liabilities (Note 8)                                                                                                     |   | $                                    | 531,442    |   |
| Liquidated                damages                                                                                                                                    |   |                                 | 27,278     |   |
| Total                current liabilities                                                                                                                             |   |                                 | 558,720    |   |
|                                                                                                                                                                 |   |                                 |       |   |
| Commitment                And Contingencies (Note 9)                                                                                                                 |   |                                 |       |   |
|                                                                                                                                                                 |   |                                 |       |   |
| Stockholders'                Equity                                                                                                                                  |   |                                 |       |   |
| Common                Stock, $.001 par value; 436,373,650 shares authorized;                36,816,267shares                issued and outstanding at March 31, 2007 |   |                                 | 36,816     |   |
| Additional                paid in capital                                                                                                                            |   |                                 | 6,877,439  |   |
| Deficit                accumulated in the development stage                                                                                                          |   |                                 | (5,876,592 | ) |
| Total                Stockholders’ Equity                                                                                                                      |   |                                 | 1,037,663  |   |
| Total                Liabilities & Stockholders' Equity                                                                                                          |   | $                                    | 1,596,383  |   |

----

**SKINS      INC. AND SUBSIDIARY**

**(A      Development Stage Company)**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(Unaudited)**

|                                                                                                 |   | **Three                Months Ended****March                31,** |       | **Period                from****Inception****(May                18, 2004)****to****March                31,** |   |
|------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   | **2007**                                                          |       | **2006**                                                                                                       |   | **2007** |   |
| Operating                expenses:                                                                   |   |                                                              |       |                                                                                                           |   |   |   |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |
| Design                and development                                                                |   | $                                                                 | 334,636    |                                                                                                           | $      | 34,289 |   | $ | 810,242 |   |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |   |   |
| Selling,                general and administrative                                                   |   |                                                              | 1,142,518  |                                                                                                           |   | 443,696 |   |   | 4,140,782 |   |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |   |   |
| Total                operating expenses                                                              |   |                                                              | 1,477,154  |                                                                                                           |   | 477,985 |   |   | 4,951,024 |   |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |   |   |
| Operating                Loss                                                                        |   |                                                              | (1,477,154 | )                                                                                                              |   | (477,985 | ) |   | (4,951,024 | ) |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |   |   |
| Unrealized                (loss) on derivative instruments                                           |   |                                                              | —    |                                                                                                           |   | 19,237 |   |   | (1,306,754 | ) |
| Liquidated                Damages                                                                    |   |                                                              | —    |                                                                                                           |   | — |   |   | (27,278 | ) |
| Interest                Income                                                                       |   |                                                              | 10,002     |                                                                                                           |   | 1,268 |   |   | 37,872 |   |
| Interest                Expense                                                                      |   |                                                              | —    |                                                                                                           |   | (931 | ) |   | (5,266 | ) |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |   |   |
| Net                loss                                                                              |   | $                                                                 | (1,467,152 | )                                                                                                              | $      | (458,411 | ) | $ | (6,252,450 | ) |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |  |   |
| Basic                and diluted loss per share                                                      |   | $                                                                 | (0.04      | )                                                                                                              | $      | (0.02 | ) |  |  |   |
|                                                                                                 |   |                                                              |       |                                                                                                           |   |   |   |   |  |   |
| Weighted                average number ofcommon                shares outstanding, basic and diluted |   |                                                              | 35,220,736 |                                                                                                           |   | 19,853,933 |   |  |  |   |

----

**SKINS      INC. AND SUBSIDIARY**

**(A      Development Stage Company)**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)**

|                                                                                                                                                                                         |   | **Common                  Stock**  |       | **Additional****Paid-in****(deficit                  in)** |   | **Deficit****Accumulated****Total                  Development** |   | **Total****Stockholders'                  Equity/** |      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|------------------------------------------------------------|--------|------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|
|                                                                                                                                                                                         |   | **Shares**                         |       | **Amounts**                                                |   | **Capital**                                                      |   | **Stage**                                           |      | **(Deficiency)**  |   |
| Transfer                  of net liabilities from a predecessor entity - May 18,                  2004                                                                                       |   |                                    |            |                                                       | $      | -                                                                |   | $                                                   | (32,312   | ) | $ | - |   | $ | (32,312 | ) |
| Shares                  issued on June 1, 2004                                                                                                                                               |   |                                    | 954,513    |                                                       |   | 955                                                              |   |                                                | 9,045     |   |   |  |   |   | 10,000 |   |
| Shares                  issued on July 2, 2004                                                                                                                                               |   |                                    | 954,513    |                                                       |   | 955                                                              |   |                                                | 9,045     |   |   |  |   |   | 10,000 |   |
| Shares                  issued on August 4, 2004                                                                                                                                             |   |                                    | 1,909,026  |                                                       |   | 1,909                                                            |   |                                                | 18,091    |   |   |  |   |   | 20,000 |   |
| Shares                  issued on August 10, 2004                                                                                                                                            |   |                                    | 1,909,026  |                                                       |   | 1,909                                                            |   |                                                | 18,091    |   |   |  |   |   | 20,000 |   |
| Shares                  issued on December 1, 2004                                                                                                                                           |   |                                    | 8,338,484  |                                                       |   | 8,338                                                            |   |                                                | 79,162    |   |   |  |   |   | 87,500 |   |
| Shares                  issued on December 30, 2004                                                                                                                                          |   |                                    | 144,077    |                                                       |   | 144                                                              |   |                                                | 1,356     |   |   |  |   |   | 1,500 |   |
| Shares                  issued on December 31, 2004                                                                                                                                          |   |                                    | 3,818,053  |                                                       |   | 3,818                                                            |   |                                                | 36,182    |   |   |  |   |   | 40,000 |   |
| Net                  Loss                                                                                                                                                                    |   |                                    | -          |                                                       |   | -                                                                |   |                                                | -         |   |   | (152,706 | ) |   | (152,706 | ) |
| Balances                  at December 31, 2004                                                                                                                                               |   |                                    | 18,027,692 |                                                       |   | 18,028                                                           |   |                                                | 138,660   |   |   | (152,706 | ) |   | 3,982 |   |
|                                                                                                                                                                                              |   |                                    |            |                                                       |   |                                                                  |   |                                                |           |   |   |  |   |   | - |   |
| Shares                  issued for services on October 20, 2005                                                                                                                              |   |                                    | 1,376,308  |                                                       |   | 1,376                                                            |   |                                                | (1,370    | ) |   | - |   |   | 6 |   |
| Net                  Loss January 1, 2005 to October 20, 2005                                                                                                                                |   |                                    |            |                                                       |   |                                                                  |   |                                                |           |   |   | (223,152 | ) |   | (223,152 | ) |
| Recapitalization                  of deficit upon merger of Skins Shoes, LLC into Skin Shoes, Inc.                  on                  October 20, 2005 (Note 1)                            |   |                                    |            |                                                       |   |                                                                  |   |                                                | (375,858  | ) |   | 375,858 |   |   | - |   |
| Net                  Loss Oct 21, 2005 to Dec 31, 2005                                                                                                                                       |   |                                    |       |                                                       |   | -                                                                |   |                                                | -         |   |   | (309,162 | ) |   | (309,162 | ) |
| Balances                  at December 31, 2005                                                                                                                                               |   |                                    | 19,404,000 |                                                       |   | 19,404                                                           |   |                                                | (238,568  | ) |   | (309,162 | ) |   | (528,326 | ) |
|                                                                                                                                                                                         |   |                                    |            |                                                       |   |                                                                  |   |                                                |           |   |   |  |   |   |  |   |
| Reclassification                  of Share based liability Awards to equity Awards upon the re-Adoption                  of                  the 2005 Incentive Stock Plan on March 16, 2006 |   |                                    | -          |                                                       |   | -                                                                |   |                                                | 241,157   |   |   | - |   |   | 241,157 |   |
| Skins                  Inc. net assets assumed - March 20, 2006                                                                                                                              |   |                                    | 14,821,434 |                                                       |   | 14,821                                                           |   |                                                | 1,693,886 |   |   |  |   |   | 1,708,707 |   |
| Conversion                  of convertible debenture - Common Stock - March 20, 2006                                                                                                         |   |                                    | 178,572    |                                                       |   | 179                                                              |   |                                                | 119,821   |   |   |  |   |   | 120,000 |   |
| Shares                  issued for consulting services on April 3, 2006 (Note 5)                                                                                                             |   |                                    | 122,000    |                                                       |   | 122                                                              |   |                                                | 145,058   |   |   |  |   |   | 145,180 |   |
| Share                  based Compensation, June 30, 2006                                                                                                                                     |   |                                    |            |                                                       |   |                                                                  |   |                                                | 86,156    |   |   |  |   |   | 86,156 |   |
| Share                  based Compensation, September 30, 2006                                                                                                                                |   |                                    |            |                                                       |   |                                                                  |   |                                                | 130,218   |   |   |  |   |   | 130,218 |   |
| Reclassification                  of Derivative Liability as Form SB-2 became effective on October                  10,                  2006                                                |   |                                    |            |                                                       |   |                                                                  |   |                                                | 1,890,600 |   |   |  |   |   | 1,890,600 |   |
| Warrants                  Exercised December 5, 2006                                                                                                                                         |   |                                    | 30,000     |                                                       |   | 30                                                               |   |                                                | 29,970    |   |   |  |   |   | 30,000 |   |
| Warrants                  Exercised December 8, 2006                                                                                                                                         |   |                                    | 120,000    |                                                       |   | 120                                                              |   |                                                | 119,880   |   |   |  |   |   | 120,000 |   |
| Warrants                  Exercised December 11, 2006                                                                                                                                        |   |                                    | 320,000    |                                                       |   | 320                                                              |   |                                                | 319,680   |   |   |  |   |   | 320,000 |   |
| Warrants                  Exercised December 12, 2006                                                                                                                                        |   |                                    | 115,715    |                                                       |   | 116                                                              |   |                                                | 115,599   |   |   |  |   |   | 115,715 |   |
| Warrants                  Exercised December 14, 2006                                                                                                                                        |   |                                    | 119,000    |                                                       |   | 119                                                              |   |                                                | 118,881   |   |   |  |   |   | 119,000 |   |
| Warrants                  Exercised December 15, 2006                                                                                                                                        |   |                                    | 274,000    |                                                       |   | 274                                                              |   |                                                | 273,726   |   |   |  |   |   | 274,000 |   |
| Warrants                  Exercised December 19, 2006                                                                                                                                        |   |                                    | 363,476    |                                                       |   | 363                                                              |   |                                                | 363,113   |   |   |  |   |   | 363,476 |   |
| Warrants                  Exercised December 21, 2006                                                                                                                                        |   |                                    | 238,572    |                                                       |   | 238                                                              |   |                                                | 238,334   |   |   |  |   |   | 238,572 |   |
| Warrants                  Exercised December 22, 2006                                                                                                                                        |   |                                    | 100,000    |                                                       |   | 100                                                              |   |                                                | 99,900    |   |   |  |   |   | 100,000 |   |
| Share                  based Compensation, December 31, 2006                                                                                                                                 |   |                                    |            |                                                       |   |                                                                  |   |                                                | 356,240   |   |   |  |   |   | 356,240 |   |
| Net                  Loss                                                                                                                                                                    |   |                                    |       |                                                       |   |                                                             |   |                                                |      |   |   | (4,100,278 | ) |   | (4,100,278 | ) |
| Balances                  at December 31, 2006                                                                                                                                               |   |                                    | 36,206,769 |                                                       |   | 36,206                                                           |   |                                                | 6,103,651 |   |   | (4,409,440 | ) |   | 1,730,417 |   |
|                                                                                                                                                                                         |   |                                    |       |                                                       |   |                                                             |   |                                                |      |   |   |   |   |   |   |   |
| Warrants                  Exercised January 5, 2007                                                                                                                                          |   |                                    | 100,000    |                                                       |   | 100                                                              |   |                                                | 99,900    |   |   |  |   |   | 100,000 |   |
| Warrants                  Exercised January 6, 2007                                                                                                                                          |   |                                    | 11,904     |                                                       |   | 12                                                               |   |                                                | 11,882    |   |   |  |   |   | 11,894 |   |
| Warrants                  Exercised January 10, 2007                                                                                                                                         |   |                                    | 100,000    |                                                       |   | 100                                                              |   |                                                | 99,900    |   |   |  |   |   | 100,000 |   |
| Warrants                  Exercised January 25, 2007                                                                                                                                         |   |                                    | 200,000    |                                                       |   | 200                                                              |   |                                                | 199,800   |   |   |  |   |   | 200,000 |   |
| Warrants                  Exercised February 7, 2007                                                                                                                                         |   |                                    | 59,524     |                                                       |   | 60                                                               |   |                                                | 59,464    |   |   |  |   |   | 59,524 |   |
| Warrants                  Exercised February 26, 2007                                                                                                                                        |   |                                    | 138,070    |                                                       |   | 138                                                              |   |                                                | 137,906   |   |   | - |   |   | 138,044 |   |
| Repurchase                of                options (Note 9)                                                                                                                                 |   |                                    | -          |                                                       |   | -                                                                |   |                                                | (30,445   | ) |   | - |   |   | (30,445 | ) |
| Share                  based Compensation                                                                                                                                                    |   |                                    |            |                                                       |   |                                                                  |   |                                                | 195,381   |   |   |  |   |   | 195,381 |   |
| Net                  Loss                                                                                                                                                                    |   |                                    |       |                                                       |   |                                                             |   |                                                |      |   |   | (1,467,152 | ) |   | (1,467,152 | ) |
| Balances                  at March 31, 2007 (unaudited)                                                                                                                                      |   |                                    | 36,816,267 |                                                       | $      | 36,816                                                           |   | $                                                   | 6,877,439 |   | $ | (5,876,592 | ) | $ | 1,037,663 |   |

----

**SKINS      INC. AND SUBSIDIARY**

**(A      Development Stage Company)**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                                                                                   |   | **Three                Months Ended****March                31,** |       | **Period                from****Inception****(May                18, 2004) to****March                31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                   |   | **2007**                                                          |       | **2006**                                                                                                    |   | **2007** |   |
|                                                                                                                                                                                   |   | (unaudited)                                                       |       | (unaudited)                                                                                                 |   | (unaudited) |   |
| Cash                flows used in operating activities:                                                                                                                                |   |                                                              |       |                                                                                                        |   |   |   |
| Net                loss from operations                                                                                                                                                |   | $                                                                 | (1,467,152 | )                                                                                                           | $      | (458,411 | ) | $ | (6,252,450 | ) |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Adjustments                to reconcile net loss from operations to net cash used in operating                activities:                                                              |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Depreciation                                                                                                                                                                           |   |                                                              | 798        |                                                                                                        |   | 371 |   |   | 5,144 |   |
| Amortization                                                                                                                                                                           |   |                                                              | 1,481      |                                                                                                        |   | 817 |   |   | 9,144 |   |
| Issuance                of common stock for services                                                                                                                                   |   |                                                              | 18,150     |                                                                                                        |   | - |   |   | 72,606 |   |
| Share                based compensation expense                                                                                                                                        |   |                                                              | 195,381    |                                                                                                        |   | 133,400 |   |   | 1,009,152 |   |
| Unrealized                loss on derivative instruments                                                                                                                               |   |                                                              | -          |                                                                                                        |   | (19,237 | ) |   | 1,306,754 |   |
| Changes                in operating assets and liabilities:                                                                                                                            |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Prepaid                expenses                                                                                                                                                        |   |                                                              | (17,355    | )                                                                                                           |   | (34,793 | ) |   | (90,792 | ) |
| Advances                to vendors                                                                                                                                                     |   |                                                              | (161,090   | )                                                                                                           |   | - |   |   | (161,090 | ) |
| Inventory                                                                                                                                                                              |   |                                                              | (68,521    | )                                                                                                           |   | - |   |   | (68,521 | ) |
| Accounts                payable and accrued expenses                                                                                                                                   |   |                                                              | 253,847    |                                                                                                        |   | 177,268 |   |   | 515,625 |   |
| Liquidated                Damages                                                                                                                                                      |   |                                                              | -          |                                                                                                        |   | - |   |   | 27,278 |   |
| Net                cash used in operating activities                                                                                                                                   |   |                                                              | (1,244,461 | )                                                                                                           |   | (200,585 | ) |   | (3,627,150 | ) |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Cash                flows used in investing activities:                                                                                                                                |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Purchases                of molds                                                                                                                                                 |   |                                                              | (112,234   | )                                                                                                           |   | - |   |   | (112,234 | ) |
| Purchase                of property and equipment                                                                                                                                      |   |                                                              |  -    |                                                                                                        |   |  - |   |   |  (8,623 | ) |
| Patent                Costs                                                                                                                                                            |   |                                                              | (4,073     | )                                                                                                           |   | - |   |   | (112,136 | ) |
| Net                cash used in investing activities                                                                                                                                   |   |                                                              | (116,307   | )                                                                                                           |   | - |   |   | (232,993 | ) |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Cash                flows provided by financing activities:                                                                                                                            |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Cash                assumed in connection with Recapitalization                                                                                                                        |   |                                                              | -          |                                                                                                        |   | 2,261,462 |   |   | 2,261,462 |   |
| Related                Party payments                                                                                                                                                  |   |                                                              | -          |                                                                                                        |   | (78,271 | ) |   | (26,924 | ) |
| Proceeds                from issuance of Common Stock                                                                                                                                  |   |                                                              | 609,462    |                                                                                                        |   | - |   |   | 2,479,225 |   |
| Proceeds                from note payable                                                                                                                                              |   |                                                              | -          |                                                                                                        |   | - |   |   | 150,000 |   |
| Repurchase              of options (Note 9)                                                                                                                                       |   |                                                              | (30,445    | )                                                                                                           |   | - |   |   | (30,445 | ) |
| Net                cash provided by financing activities:                                                                                                                              |   |                                                              | 579,017    |                                                                                                        |   | 2,183,191 |   |   | 4,833,318 |   |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Net                increase/(decrease) in cash and cash equivalents                                                                                                                    |   |                                                              | (781,751   | )                                                                                                           |   | 1,982,606 |   |   | 973,175 |   |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Cash                and cash equivalents at beginning of period                                                                                                                        |   |                                                              | 1,754,926  |                                                                                                        |   | 36,533 |   |   | - |   |
|                                                                                                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Cash                and cash equivalents at end of period                                                                                                                              |   | $                                                                 | 973,175    |                                                                                                        | $      | 2,019,139 |   | $ | 973,175 |   |
|                                                                                                                                                                                   |   |                                                              |       |                                                                                                        |   |   |   |   |   |   |
| Supplemental                Disclosure of Cash Flow                Information                                                                                                    |   |                                                              |       |                                                                                                        |   |   |   |   |   |   |
| Cash                paid during this period for:                                                                                                                                  |   |                                                              |       |                                                                                                        |   |   |   |   |   |   |
| Interest                                                                                                                                                                          |   | $                                                                 |  -    |                                                                                                        | $      |  931 |   | $ |  5,266 |   |
|                                                                                                                                                                                   |   |                                                              |       |                                                                                                        |   |   |   |   |   |   |
| Supplemental                Schedule of Non-Cash Investing and Financing Activities:                                                                                                   |   |                                                              |            |                                                                                                        |   |  |   |   |  |   |
| Net                liabilities assumed from reverse acquisition on March 20, 2006, net                of                cash of $2,261,462                                             |   |                                                              | -          |                                                                                                        |   | 552,755 |   |   | 552,755 |   |
| Conversion                of convertible debenture, assumed from reverse acquisition, to common                stock                                                                   |   |                                                              | -          |                                                                                                        |   | 120,000 |   |   | 120,000 |   |
| Conversion                of convertible debenture, assumed from reverse acquisition, to warrant                liability                                                              |   |                                                              | -          |                                                                                                        |   | 30,000 |   |   | 30,000 |   |
| On                May 18, 2004 the Company received Net Liabilities From a predecessor                entity totaling                                                                  |   |                                                              | -          |                                                                                                        |   | - |   |   | 32,312 |   |
| Transfer                of deficit due to merger of Skin Shoes, LLC into Skin Shoes, Inc.                on                October 20, 2005                                            |   |                                                              | -          |                                                                                                        |   | - |   |   | 375,568 |   |
| Issuance                of Common Stock to consultants on April 3, 2006 for services to be                provided for a two year term                                                 |   |                                                              | -          |                                                                                                        |   | - |   |   | 145,180 |   |
| Reclassification                of share based liability awards to equity awards upon the re-adoption                of                the 2005 Incentive Stock Plan on March 16, 2006 |   |                                                              | -          |                                                                                                        |   | 241,157 |   |   | 241,157 |   |
| Reclassification                of derivative liability to equity upon the declaration of the SB-2                registration statement as effective.                                 |   |                                                              | -          |                                                                                                        |   | - |   |   | 1,890,600 |   |

----

**Skins        Inc. and Subsidiary**

**(A        Development Stage Company)**

**Notes        to Consolidated Financial Statements**

**(Unaudited)**

**NOTE      1: DESCRIPTION OF BUSINESS**

**Overview**

**Development      Stage**

----

**Skins          Inc. and Subsidiary**

**(A          Development Stage Company)**

**Notes          to Consolidated Financial Statements**

**(Unaudited)**

**Going      Concern**

**NOTE      2: CONDENSED PRESENTATION**

**NOTE      3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Cash      Equivalents*

*Use      of Estimates*

----

**Skins          Inc. and Subsidiary**

**(A          Development Stage Company)**

**Notes          to Consolidated Financial Statements**

**(Unaudited)**

*Income      Taxes*

*Share      Based Compensation*

*Recently      Issued Accounting Pronouncements*

*Net      Loss per Common Share*

----

**Skins          Inc. and Subsidiary**

**(A          Development Stage Company)**

**Notes          to Consolidated Financial Statements**

**(Unaudited)**

|                                                           |   | Three                  Months ended |       |
|----------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                           |   | March                  31,          |       |
|                                                           |   | 2007                      |       | 2006 |   |
|                                                           |   | (Unaudited)               |       | (Unaudited) |   |
| Numerator:                                                     |   |                      |       |   |   |
| Net                  loss - basic and diluted                  |   | $                                   | (1,467,152 | ) | $ | (458,411 | ) |
|                                                           |   |                                |            |   |   |  |   |
| Denominator:                                                   |   |                                |            |   |   |  |   |
| Weighted                  average shares - basic               |   |                                | 35,220,736 |   |   | 19,853,933 |   |
|                                                           |   |                                |            |   |   |  |   |
| Effect                  of dilutive stock options and warrants |   |                                | —    |   |   | — |   |
|                                                           |   |                                |            |   |   |  |   |
| Denominator                  for diluted earnings per share    |   |                                | 35,220,736 |   |   | 19,853,933 |   |
| Loss                  per share                                |   |                                |            |   |   |  |   |
| Basic                  and Diluted                             |   | $                                   | (0.04      | ) | $ | (0.02 | ) |

**NOTE 4: INVENTORY**

**NOTE 5: PROPERTY      AND EQUIPMENT, NET**

| Sewing                equipment              |   | $      | 1,882  |   |
|----------------------------------------------|--------|--------|--------|--------|
| Office                equipment              |   |   | 1,184  |   |
| Computer                equipment            |   |   | 7,535  |   |
|                                         |   |   | 10,601 |   |
| Less                accumulated depreciation |   |   | 5,145  |   |
|                                         |   |   |        |   |
|                                         |   | $      | 5,456  |   |

**NOTE 6: CAPITALIZED        PRODUCTION MOLDS**

----

**Skins            Inc. and Subsidiary**

**(A            Development Stage Company)**

**Notes            to Consolidated Financial Statements**

**(Unaudited)**

**NOTE      7: PATENT COSTS**

| Patent                costs                  |   | $      | 120,587 |   |
|----------------------------------------------|--------|--------|---------|--------|
|                                         |   |   |         |   |
| Less                accumulated amortization |   |   | 9,144   |   |
|                                         |   |   |         |   |
|                                         |   | $      | 111,443 |   |

**NOTE 8: ACCOUNTS      PAYABLE AND ACCRUED LIABILITIES**

|                                              |   | **March                31,2007** |    |
|---------------------------------------------------|--------|----------------------------------|---------|
|                                              |   | **(unaudited)**                  |    |
| Trade                payables                     |   | $                                | 432,844 |   |
| Executive                separation agreement (a) |   |                             | 64,720  |   |
| Other                accrued liabilities          |   |                             | 33,878  |   |
|                                              |   |                             |    |   |
|                                              |   | $                                | 531,442 |   |

**NOTE      9: COMMITMENTS AND CONTINGENCIES**

----

**Skins            Inc. and Subsidiary**

**(A            Development Stage Company)**

**Notes            to Consolidated Financial Statements**

**(Unaudited)**

**NOTE      10: STOCK OPTIONS**

|   | · | Two                board members were granted 421,875 options each at an exercise price                of                $0.80 that vest ratably over a 36-month                period. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Two                consultants were granted 421,875 options each at an exercise price                of                $0.80 a share that vests ratably over a 36-month                period. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | One                consultant was granted 421,875 options at an exercise price of $0.80                that                vested immediately for finder fee services.                   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Skins            Inc. and Subsidiary**

**(A            Development Stage Company)**

**Notes            to Consolidated Financial Statements**

**(Unaudited)**

| Expected                volatility     |   |   | 17.30 | %      |
|----------------------------------------|--------|--------|-------|--------|
|                                   |   |   |       |   |
| Expected                dividends      |   |   | 0     |   |
|                                   |   |   |       |   |
| Expected                Term (Years)   |   |   | 3     |   |
|                                   |   |   |       |   |
| Risk                free interest rate |   |   | 4.70  | %      |

|   | · | The                421,875 options granted to two-consultants that vest over a 36-month                period were granted for services not yet rendered. The Company used                the                provisions of FAS 123(R) and EITF 96-18,*Accounting for Equity Instruments That Are Issued to Other Than Employees                for Acquiring, or in Conjunction with Selling, Goods or                Services*                to                account for the compensation expense associated with these grants.                The                Company measured the compensation associated with these grants based                on                the fair value of the equity instruments issued. There is no measurement                date to calculate the fair value of the options at the date of grant                because the performance commitment had not yet occurred (there are                no                sufficiently large disincentives for non-performance) and the performance                by the two consultants was not complete. The Company calculated the                expense at each reporting period based upon fair value of the options                that                vested during the reporting period using the fair value on the reporting                date. Fair value was calculated using the Black-Scholes model. The                options                were treated as liability awards upon the original grant because                the                Company did not have a sufficient number of authorized shares. The                options                became equity awards on the date they were cancelled and re-granted.                For                the three months ended March 31, 2007, the Company recorded compensation                expense of $92,377. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                remaining 421,875 options were granted to a non-employee for services                that                had already been provided. The Company used the provisions of EITF-00-19                to account for these options. At the grant date and at December 31,                2005, the Company treated the option grant as liability award because                it                did not have enough authorized shares to settle the contract in equity.                Therefore, these options were recorded at fair value as a liability                at                December 31, 2005. The fair value of the options was calculated using                the                Black-Scholes model at December 31, 2005. On March 16, 2006 the Company                increased its authorization of Common Stock therefore alleviating                the                potential liability. The Company recorded the fair value of the options                using a Black-Scholes model as of March 16, 2006 and reclassified                the                total remaining liability from these awards to additional paid in                capital. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | March                31,2007 |   |
|-----------------------------------------|--------|------------------------------|--------|
| Expected                volatility      |   |                         | 94.45  | % |
| Expected                dividends       |   |                         | None   |   |
| Expected                term (in years) |   |                         | 3.5    |   |
| Risk-free                interest rate  |   |                         | 4.51   | % |

----

**Skins            Inc. and Subsidiary**

**(A            Development Stage Company)**

**Notes            to Consolidated Financial Statements**

**(Unaudited)**

*      Accounting for Equity Instruments That Are Issued to Other Than Employees for      Acquiring, or in Conjunction with Selling, Goods or Services*

----

**Skins            Inc. and Subsidiary**

**(A            Development Stage Company)**

**Notes            to Consolidated Financial Statements**

**(Unaudited)**

|                                    |   |  May                9, 2006Consultant                Grant |   | March                14, 2007Option                Grant |   |
|-----------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------------------------------|--------|
| Expected                volatility      |   |                                                            | 98.06  | %                                                        |   | 94.45 | % |
| Expected                dividends       |   |                                                            | None   |                                                     |   | None |   |
| Expected                term (in years) |   |                                                            | 4.25   |                                                     |   | 3.00 |   |
| Risk-free                interest rate  |   |                                                            | 1.36   | %                                                        |   | 4.51 | % |

|                                        |   | **Shares**  |      | **Weighted****Average****Exercise****Price** |   | **Weighted                -****Average****Remaining****Contractual****Term** |   | **Aggregate****Intrinsic****Value** |   |
|---------------------------------------------|--------|------------------|-----------|----------------------------------------------|--------|------------------------------------------------------------------------------|--------|-------------------------------------|--------|
| **Options**                                 |   |             |      |                                         |   |                                                                         |   |                                |   |
| Outstanding,                January 1, 2007 |   |             | 3,139,375 |                                         | $      | 0.91                                                                         |   |                                |        |   |   |  |   |
| Granted                                     |   |             | 20,000    |                                         |   | 1.63                                                                         |   |                                |   |   |   |   |   |
| Cancelled                                   |   |             | (150,000  | )                                            |   | 1.19                                                                         |   |                                |        |   |   |  |   |
| Outstanding,                March 31, 2007  |   |             | 3,009,375 |                                         | $      | 0.89                                                                         |   |                                | 3.52   |   | $ | — |   |
|                                        |   |             |           |                                         |   |                                                                              |   |                                |        |   |   |  |   |
| Exercisable,                March 31, 2007  |   |             | 1,531,251 |                                         | $      | 0.88                                                                         |   |                                | 3.62   |   | $ | — |   |

|                                       |   |  **Shares** |      |  **Weighted-****Average****Grant-Date****Fair                Value** |   |
|--------------------------------------------|--------|------------------|-----------|---------------------------------------------------------------------------|--------|
| **Non-vested                Shares**       |   |        |      |                                                                 |   |
| Non-vested,                January 1, 2007 |   |             | 1,786,248 |                                                                      | $      | 0.42 |   |
| Granted                                    |   |             | 20,000    |                                                                      |   | 1.01 |   |
| Cancelled                                  |   |             | (112,500  | )                                                                         |   | (0.73 | ) |
| Vested                                     |   |             | (215,624  | )                                                                         |   | 0.35 |   |
| Non-vested,                March 31, 2007  |   |             | 1,478,124 |                                                                      | $      | 0.43 |   |

**NOTE      11: SUBSEQUENT EVENT**

----

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF      OPERATION**

*The      following discussion of our financial condition and plan of operation should      be      read in conjunction with our financial statements and the related notes, and      the      other financial information included in this report. This Management's      Discussion and Analysis or Plan of Operation describes the matters we consider      to be important to understanding our history, technology, current position,      financial condition and future plans. Our fiscal year begins on January 1 and      ends on December 31.*

*The      following discussion includes forward looking statements and uncertainties,      including plans, objectives, goals, strategies, financial projections as well      as      known and unknown uncertainties. The actual results of our future performance      may differ materially from the results anticipated in these forward-looking      statements. Although we believe that the expectations reflected in the      forward-looking statements are reasonable, we can not guarantee future results,      levels of activity, performance or achievement.*

**OVERVIEW**

**Our      Company**

**Product      and Technology**

----

|   | · | The                same fit and feel for every Skin purchased in the same size, no matter                the                style or function of the Skin; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Interchangeable                uppers, which allow the consumer to constantly switch Skins to match                and                correspond with their apparel and activity;                and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fully                collapsible Skins, allowing for minimal room to store and pack numerous                pairs. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

**Patent      and Patent Applications**

**PLANNED      OPERATIONS**

**Product      Development**

**Planned      Distribution**

**Three      Months Ended March 31, 2007 Compared with Three Months Ended March 31,      2006**

----

**Liquidity      and Capital Resources**

**Off      Balance Sheet Arrangements**

**Critical      Accounting Policies**

----

*        Accounting for Equity Instruments That Are Issued to Other Than Employees        for        Acquiring, or in Conjunction with Selling, Goods or Services*

**Risk      Factors**

**ITEM      3. CONTROLS AND PROCEDURES**

*(a)      Evaluation of disclosure controls and procedures*

*(b)      Changes in internal control over financial reporting*

**PART      II-OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES**

**ITEM      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**ITEM      5. OTHER INFORMATION**

----

**ITEM      6. EXHIBITS**

|   | 31.1 | Certification                of Principal Executive Officer and Principal Financial and Accounting                Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of                2002. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification                of Principal Executive Officer and Principal Financial and Accounting                Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.* |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| * | This                exhibit shall not be deemed “filed” for purposes of Section 18 of the                Securities Exchange Act of 1934 or otherwise subject to the liabilities                of                that section, nor shall it be deemed incorporated by reference in                any                filing under the Securities Act of 1933 or the Securities Exchange                Act of                1934, whether made before or after the date hereof and irrespective                of any                general incorporation language in any                filings. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                        |                                                                                                                                                                     |                               |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|
|                        | **SKINS                INC.**(Registrant)                                                                                                                                |
|                   |                                                                                                                                                                |                          |
| May                21, 2007 | By:                                                                                                                                                            | /s/ Mark                Klein |
|                        | Mark                Klein                                                                                                                                                |
|                        | Chief                Executive Officer, President and Director(Principal                Executive Officer and Principal Financial and Accounting                Officer) |

----