U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

{x}      Quarterly Report under section 13 or 15(d) of the Securities Exchange
         Act of 1934

For the quarterly period ended December 31, 1999

                                       Or

{  }     Transition Report under section 13 or 15(d) of the Securities Exchange
         Act of 1934

For the transition period from ____________________ to _________________

Commission file number: 0-9358


                               3Si Holdings, Inc.
             (Exact Name of Registrant as specified in its Charter)


           Wyoming                                              83-0245581
 (State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                           Identification No.)


             6886 S. Yosemite Street                             80112
              Englewood, Colorado
    (Address of principal executive offices)                   (Zip Code)


                                 (303) 741-9123
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                           Yes        X            No
                                                   -------            -------


At February 1, 2000, 35,133,530 shares of the Registrant's $.01 par value common
stock were outstanding.

<PAGE>
                               3Si Holdings, Inc.

                                      Index



 Part I: Financial Information

          Item 1. Financial Statements

                   Accountants' Report                                         3

                   Consolidated Balance Sheets, at December 31, 1999
                   (unaudited) and June 30, 1999                               4

                   Consolidated Statements of Operations for the quarter
                   and six months ended December 31, 1999 and
                   1998 (Unaudited)                                            5

                   Consolidated Statements of Cash Flows for the six
                   months ended December 31, 1999 and
                   1998 (Unaudited)                                            6

                   Notes to Interim Consolidated Financial Statements
                   (Unaudited)                                                 7

          Item 2. Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                     8 - 9

 Part II: Other Information

          Item 6. Exhibits and Reports on Form 8-K                            10

          Signature                                                           10






                                       2
<PAGE>
         Board of Directors

         3Si Holdings, Inc.


         The accompanying  consolidated balance sheets of 3Si Holdings,  Inc. as
         of December 31, 1999,  and the  statements of operations and cash flows
         for the periods ended  December 31, 1999 and 1998,  were not audited by
         us, and, accordingly, we do not express an opinion on them.

         The  balance  sheet  as of June  30,  1999,  was  audited  by us and we
         expressed an  unqualified  opinion on it in our report dated  September
         28, 1999, but we have not performed any auditing  procedures since that
         date.


                                               /s/ Balogh & Tjornehoj, LLP


         Denver, Colorado

         February 01, 2000









<PAGE>
                               3Si Holdings, Inc.
<TABLE>
<CAPTION>
                           Consolidated Balance Sheets

                                                December 31, 1999  June 30, 1999
                                                      -----------   ------------
                                                      (Unaudited)
<S>                                                   <C>            <C>
ASSETS

CURRENT ASSETS
     Cash and cash equivalents .....................   $   568,549    $ 1,372,293
     Accounts receivable - trade ...................          --          437,221
     Other current assets ..........................         1,769         11,000
                                                       -----------    -----------
         Total current assets ......................       570,318      1,820,514

PROPERTY AND EQUIPMENT AT COST
     Computer systems ..............................        34,448         28,575
     Less accumulated depreciation and amortization        (10,358)        (7,500)
                                                       -----------    -----------
         Net property and equipment ................        24,090         21,075

OTHER ASSETS
     Software development costs (net) ..............        46,852         42,827
     Other non-current assets ......................        24,861         50,000
                                                       -----------    -----------
         Total other assets ........................        71,713         92,827
                                                       -----------    -----------
Total assets .......................................   $   666,121    $ 1,934,416
                                                       ===========    ===========



LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES
     Accounts payable - trade ......................   $ 2,606,836    $ 3,301,354
     Accrued liabilities ...........................       171,830        427,845
                                                       -----------    -----------
         Total current liabilities .................     2,778,666      3,729,199

MINORITY INTEREST ..................................        85,954        149,932

STOCKHOLDERS' (DEFICIT) EQUITY
     Common stock ..................................       411,842        400,842
     Additional paid in capital ....................     2,907,196      2,773,536
     Accumulated (deficit) .........................    (3,660,184)    (3,261,740)
     Treasury stock ................................    (1,857,353)    (1,857,353)
                                                       -----------    -----------
         Total stockholders' (deficit) equity ......    (2,198,499)    (1,944,715)
                                                       -----------    -----------
Total liabilities and stockholders' (deficit) equity   $   666,121    $ 1,934,416
                                                       ===========    ===========
</TABLE>

     See accompanying notes to interim consolidated financial statements.

                                        4
<PAGE>
                               3Si Holdings, Inc.
<TABLE>
<CAPTION>
                      Consolidated Statements of Operations
                                   (Unaudited)

                                                   Quarter Ended                Six Months Ended
                                                    December 31,                   December 31,
                                                1999            1998             1999           1998
                                           -------------    -------------   -------------   --------
<S>                                        <C>             <C>             <C>             <C>
Product sales ..........................   $       --      $  3,339,971    $       --      $  9,657,525
Consulting, service, and license fees ..         21,722       1,597,076          48,211       3,598,381
                                           ------------    ------------    ------------    ------------
     Net revenues ......................         21,722       4,937,047          48,211      13,255,906

Cost of products sold ..................           --         3,270,550            --         9,189,539
Contract labor and other costs .........         15,323       1,265,557          31,951       2,751,065
                                           ------------    ------------    ------------    ------------
     Total cost of revenues ............         15,323       4,536,107          31,951      11,940,604
                                           ------------    ------------    ------------    ------------

         Gross profit ..................          6,399         400,940          16,260       1,315,302

Selling and administrative expenses ....        166,879       1,785,707         379,864       2,716,573
                                           ------------    ------------    ------------    ------------

     (Loss) earnings from operations ...       (160,480)     (1,384,767)       (363,604)     (1,401,271)

Other income (expense)
     Interest income ...................          6,717           3,211          18,045           4,255
     Interest expense ..................        (64,771)        (48,866)       (127,942)       (119,527)
     Loss on disposition of assets .....           --          (283,097)           --          (283,097)
     Miscellaneous income ..............         11,079             124          11,079           4,378
                                           ------------    ------------    ------------    ------------
         Total other income (expense) ..        (46,975)       (328,628)        (98,818)       (393,991)
                                           ------------    ------------    ------------    ------------

     Net (loss) before minority interest       (207,455)     (1,713,395)       (462,422)     (1,795,262)

Minority interest ......................         36,078            --            63,978            --
                                           ------------    ------------    ------------    ------------

         (Loss) before income taxes ....       (171,377)     (1,713,395)       (398,444)     (1,795,262)

Income taxes____ .......................           --           (69,000)           --           (69,000)
                                           ------------    ------------    ------------    ------------

     Net (loss)_ .......................   $   (171,377)   $ (1,782,395)   $   (398,444)   $ (1,864,262)
                                           ============    ============    ============    ============

     (Loss) per common share ...........   $       --      $       (.05)   $       (.01)   $       (.05)
                                           ============    ============    ============    ============

Weighted average shares outstanding ....     35,133,530      33,934,298      34,643,313      33,946,955

</TABLE>

     See accompanying notes to interim consolidated financial statements.

                                        5
<PAGE>
                               3Si Holdings, Inc.
<TABLE>
<CAPTION>
                      Consolidated Statements of Cash Flows
               For the Six Months Ended December 31, 1999 and 1998
                                   (Unaudited)
                                                              1999           1998
                                                          -----------    -----------
<S>                                                       <C>            <C>
Operating activities
     Net (loss) ........................................  $  (398,444)   $(1,864,262)
     Reconciling adjustments
         Depreciation and amortization .................       18,858        114,104
         Reserve for stockholders' loan ................         --          130,344
         Stock option compensation .....................         --           52,726
         Net loss on disposition of assets .............         --          283,097
         Loss attributable to minority interest ........      (63,978)          --
         Change in operating assets and liabilities
              Accounts receivable ......................      386,517      1,374,946
              Inventory ................................         --          (14,411)
              Other assets .............................       90,074         37,441
              Accounts payable .........................     (640,134)       941,143
              Other liabilities ........................     (160,711)        99,027
              Deferred taxes ...........................         --           69,000
                                                          -----------    -----------
                 Total adjustments .....................     (369,374)     3,087,417
                                                          -----------    -----------

     Net cash (used for) provided by operating
       activities ......................................     (767,818)     1,223,155

Investing activities
     Purchases of equipment ............................       (5,873)      (167,523)
     Software development costs ........................      (20,025)          --
     Loans to stockholders .............................         --          (50,462)
                                                          -----------    -----------

     Net cash (used for) investing activities ..........      (25,898)      (217,985)

Financing activities
     Revolving line of credit, net .....................         --         (809,216)
     Payments on capital lease .........................         --          (39,079)
     Proceeds from exercise of stock options ...........       11,500           --
     Purchase of treasury shares .......................      (21,528)          --
                                                          -----------    -----------

     Net cash provided by financing activities .........      (10,028)      (848,295)
                                                          -----------    -----------

Net change in cash and cash equivalents ................     (803,744)       156,875

Cash and cash equivalents, beginning ...................    1,372,293         13,843
                                                          -----------    -----------

Cash and cash equivalents, ending ......................  $   568,549    $   170,718
                                                          ===========    ===========

Supplemental disclosures of cash flow information
     Interest paid .....................................  $   127,942    $   127,034
                                                          ===========    ===========

     Income tax paid ...................................  $      --      $    15,000
                                                          ===========    ===========
</TABLE>
     See Note 3 related to non-cash consideration in settlement of litigation

     See accompanying notes to interim consolidated financial statements.

                                        6
<PAGE>
                               3Si Holdings, Inc.

               Notes to Interim Consolidated Financial Statements
                                December 31, 1999
                                   (Unaudited)

Note 1. Management's Statement

In the opinion of management,  the accompanying  unaudited financial  statements
contain  all  adjustments  (all of which are  normal  and  recurring  in nature)
necessary to present  fairly the  financial  position of 3Si  Holdings,  Inc. at
December  31, 1999 and June 30,  1999,  and the results of  operations  and cash
flows for periods ended  December 31, 1999,  and December 31, 1998. The Notes to
the Consolidated  Financial Statements which are contained in the June 30, 1999,
Form  10-K  should  be read  in  conjunction  with  these  Interim  Consolidated
Financial Statements.

Note 2. (Loss) Earnings Per Share

Net (loss) earnings per share was computed on the basis of the weighted  average
number of common  shares only,  as shares  subject to warrants and stock options
would have an anti-dilutive effect.

Note 3 - Contingencies

Lease Agreement
During the year ended June 30, 1998,  the Company  entered into a Federal Master
Assignment  Agreement  with a leasing  company to effect a  government  lease of
certain  equipment.  Under  the  terms  of  the  assignment  agreement,  if  the
government  terminated  the lease for any  reason  other than  "Termination  for
Convenience or Non-appropriation", 3SiH would be liable for the present value of
the  discounted  cash flows then owed under the  lease.  On July 31,  1998,  the
lessee terminated the lease for convenience.

The leasing  company filed suit against 3SiH to recover the present value of the
discounted cash flows. A settlement was reached in September 1999. 3SiH paid the
plaintiffs  $75,000 and issued 1,100,000  shares of its restricted  common stock
(valued at $154,688) to the plaintiffs. The $224,688 settlement (which is net of
the $5,000 value of inventory recovered) was accrued as a loss at June 30, 1999.

Accounts Payable
As of December  31,  1999,  accounts  payable  balances  owed to two vendors are
approximately $360,000 and $2,200,000.

The Company has made  payments to, and has  performed  services  for, one of the
vendors reducing the amount owed to approximately  $360,000. This vendor has not
taken any legal action to pursue collection.

The vendor  who is owed  approximately  $2,200,000  has filed suit to attempt to
attach the Company's assets for the collection of that liability.  3SiH does not
believe  that  this  amount is due at this  time so long as 3SiH is  current  on
interest payments as called for in the parties' written  agreement.  Counsel for
3SiH believes that it is too early to express an opinion as to whether the court
will find the liability due at this time.

                                       7
<PAGE>
                               3Si Holdings, Inc.

           Management's Discussion and Analysis of Financial Condition
                            And Results of Operations
                                December 31, 1999

         Financial Condition

         At December 31, 1999,  current  liabilities  exceed  current  assets by
         $2,208,348.  Also at December  31,  1999,  the Company has a deficit in
         stockholders'  equity of  $2,198,499.  The Company has sold its systems
         integration  business  effective  as of  May  1,  1999.  Its  remaining
         business is the licensing of its software  products.  Through  December
         31, 1999, there has been nominal license fee revenue generated from its
         software products.

         As of December 31, 1999,  accounts payable balances owed to two vendors
         are  approximately  $360,000  and  $2,200,000.  The  Company  has  made
         semi-monthly  payments to, and has  performed  services for, one of the
         vendors reducing the amount owed to approximately $360,000. This vendor
         has not taken any legal action to pursue collection.  The vendor who is
         owed  approximately  $2,200,000 has filed suit to attempt to attach the
         Company's  assets for the collection of that  liability.  3SiH does not
         believe that this amount is due at this time so long as 3SiH is current
         on interest payments as called for in the parties' written agreement.

         These factors raise  substantial  doubt about the Company's  ability to
         continue as a going  concern.  The financial  statements do not include
         any adjustments  relating to the  recoverability  and classification of
         recorded assets, or the amounts and  classification of liabilities that
         might  be  necessary  in the  event  the  Company  cannot  continue  in
         existence.

         3SiH  received  $802,000  of the  purchase  price  for the  sale of its
         systems  integration  business on June 30, 1999. 3SiH will also be able
         to earn up to an additional  $2,198,000 over a three-year  period based
         upon the  contingencies  set  forth  in the  agreement.  The  agreement
         provides for  additional  contingent  payments to 3SiH of $325,000 when
         key contracts are renewed.  The agreement  also provides for contingent
         payments to 3SiH of 75% of the  profits in excess of  contract  renewal
         payments  from the sold  business  for the first  year,  and 50% of the
         profits in excess of contract renewal payments for the second and third
         years.

         Contract  renewal  payments  of  $302,000  were  included in the amount
         received at June 30,  1999.  Profits  from the sold  business  have not
         exceeded   $302,000  through  December  31,  1999,  and  no  additional
         contingent payments are due to 3SiH at December 31, 1999.

         The first  $158,000 of additional  contingent  payments  earned by 3SiH
         will be  retained  by the  buyer to pay for  compensated  absences  for
         former  3SiH   employees.   This  amount  is  included   under  accrued
         liabilities in the December 31, 1999, balance sheet.

         Management  is seeking to attract  sponsors  or  investors  to fund its
         continuing  software  sales and  development  operations.  The  Company
         intends  to make  additional  payments  to  vendors  as the  contingent
         payments  from  the  sale  of  its  systems  integration  business  are
         received.  There  is  currently  no  assurance  as to  when  or if  any
         contingent  payments  will  be  received,  or  whether  there  will  be
         sufficient funds to pay all creditors.

                                       8
<PAGE>
                               3Si Holdings, Inc.

           Management's Discussion and Analysis of Financial Condition
                            And Results of Operations
                                December 31, 1999

         Results of Operations

         The Company  reported a net loss of $398,444  for the six months  ended
         December 31, 1999,  while a net loss of $1,864,262 was reported for the
         six months ended December 31, 1998*.

         The  operations  for the period ended  December  31, 1998,  include the
         Company's  systems  integration  business which was  subsequently  sold
         effective  as of May 1,  1999.  The  operations  for the  period  ended
         December 31, 1999, only include the remaining business of licensing its
         software products and revenue related to those products.

         Revenues for the three  months and six months ended  December 31, 1999,
         include $15,000 and $38,000,  respectively, for consulting and services
         to one customer. This customer is also a 3SiH vendor, who is owed a net
         $360,000 at December 31, 1999. The revenues  generated have reduced the
         amount owed to this vendor.

         The Company has four remaining employees as of December 31, 1999.

         Interest  expense for the period ended  December  31, 1999,  represents
         payments to a vendor as called for in the parties' written agreements.

         *Restatement

         The  statements of operations for the three months and six months ended
         December 31, 1998,  have been restated to reflect  adjustments  of $1.9
         million applicable to these periods.  These adjustments were discovered
         in the fourth quarter of fiscal year June 30, 1999.

                                       9
<PAGE>
                               3Si Holdings, Inc.

                                Other Information
                                December 31, 1999

         Item 6. Exhibits and Reports on Form 8-K

(a)      Not applicable.

         (b)   A Form 8-K was not required to be filed in the period  covered by
               this report.


         Signatures

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
         the  Registrant  has duly caused this report to be signed on its behalf
         by the undersigned thereunto duly authorized.

                                                     3Si Holdings, Inc.
                                                     (Registrant)

         Date:    February 1, 2000          By:     /s/ Frank Backes
                                               -------------------------
                                                    Frank Backes, CEO, CFO