5


                    U. S. 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 September 30, 2005

              For the transition period from __________ to________

                        Commission file number 000-09358
                                               ---------




                               3Si HOLDINGS, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in our charter)

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

              19 N. Tejon Street, Colorado Springs, Colorado 80903
              ----------------------------------------------------
                    (Address of principal executive offices)

                                 (719) 302-3500
                                 --------------
                         (Registrant's telephone number)

                 6886 S. Yosemite Street, Centennial, CO 80112
                 ---------------------------------------------
                                (Former Address)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 of 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

Yes            No     X
    --------      --------

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes            No     X
    --------      --------

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

     Common Stock,  $.01 par value                 39,325,943 Shares
     -----------------------------        --------------------------------
                Class                     (outstanding at August 31, 2006)

Transitional Small Business Disclosure Format

Yes            No     X
    --------      --------


<PAGE>

                               3SI HOLDINGS, INC.

                                  FORM 10-QSB

                    For the Quarter Ended September 30, 2005


                                      INDEX


                                                                           Page
                                                                          Number
                                                                          ------

PART I.  UNAUDITED FINANCIAL INFORMATION

         ITEM 1 - Condensed Consolidated Interim Financial Statements:
                - Condensed Consolidated Balance Sheets as of
                    September 30, 2005 and June 30, 2005....................   3
                - Condensed Consolidated Statements of Operations for
                     the Three Months Ended September 30, 2005 and 2004.....   4
                - Condensed Consolidated Statements of Cash Flows for
                     the Three Months Ended September 30, 2005 and 2004.....   5
                - Notes to Condensed Consolidated Interim Financial
                     Statements.............................................   6

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

         ITEM 3 - Controls and Procedures...................................  17


PART II. OTHER INFORMATION

        ITEM 1 - Legal Proceedings..........................................  18

         ITEM 2 - Changes in Securities.....................................  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 and Reports on Form 8-K..........................  18

         SIGNATURE..........................................................  19


                                       2

<PAGE>

                    PART I - UNAUDITED FINANCIAL INFORMATION

ITEM 1   -   CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

<TABLE>
                               3SI HOLDINGS, INC.
                               ------------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------

<CAPTION>
                                                               September 30,        June 30,
                                                                    2005              2005
                                     ASSETS                     (unaudited)         (audited)
                                     ------                    -------------      ------------
<S>                                                            <C>                <C>
CURRENT ASSETS:
    Cash and cash equivalents                                  $     23,363       $     2,568
    Accounts receivable                                               9,140            13,500
    Prepaid expenses                                                  3,190               483
                                                               ------------       -----------
              Total current assets                                   35,693            16,551
                                                               ------------       -----------
PROPERTY AND EQUIPMENT, at cost:
    Computer systems, software, furniture and vehicle               268,428           268,428
    Less - accumulated depreciation                                (200,003)         (191,276)
                                                               ------------       -----------
              Property and Equipment, net                            68,425            77,152
                                                               ------------       -----------
              Total assets                                     $    104,118       $    93,703
                                                               ============       ===========

                    LIABILITIES AND SHAREHOLDERS' (DEFICIT)
                    ---------------------------------------

CURRENT LIABILITIES:
    Accounts payable and accrued liabilities                   $    346,776       $   187,335
    Accounts payable - related parties                               31,704            36,202
    Unearned revenue                                                 86,013           130,588
    Current portion of capital lease obligations                      7,408             7,408
    Shareholder advances (Note 3)                                   158,600           158,600
                                                               ------------       -----------
              Total current liabilities                             630,501           520,133
                                                               ------------       -----------

LONG-TERM LIABILITIES:
    Note payable--Shareholder (Note 3)                              345,000           345,000

SHAREHOLDERS' (DEFICIT):
    Common stock, $.01 par value, 50,000,000 shares
       authorized, 39,325,943 shares outstanding
       at September 30 and June 30, 2005                            393,358           393,358
    Additional paid-in capital                                    5,617,420         5,617,420
    Accumulated (deficit)                                        (6,843,977)       (6,744,024)
    Treasury stock at cost--215,000 shares                          (38,184)          (38,184)
                                                               ------------       -----------
              Total shareholders' (deficit)                        (871,383)         (771,430)
                                                               ------------       -----------
              Total liabilities and shareholders' (deficit)    $    104,118       $    93,703
                                                               ============       ===========
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       3
<PAGE>

<TABLE>
                               3SI HOLDINGS, INC.
                               ------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 -----------------------------------------------
                                   (Unaudited)


<CAPTION>
                                                              For the Three Months
                                                               Ended September 30,
                                                            -----------------------
                                                                2005         2004
                                                            ----------   ----------
<S>                                                         <C>          <C>
SOFTWARE DELIVERY, CONSULTING AND OTHER SERVICE REVENUES    $   73,217   $   53,955

COST OF REVENUES                                                43,355       78,714
                                                            ----------   ----------
              Gross profit (loss)                               29,862      (24,759)
                                                            ----------   ----------
OPERATING EXPENSES:
    Selling and administrative expenses                        122,671      197,342
                                                            ----------   ----------
(LOSS) FROM OPERATIONS                                         (92,809)    (222,101)

OTHER INCOME (EXPENSE):
    Interest income (expense)                                   (7,144)      (6,532)
                                                            ----------   ----------
NET (LOSS)                                                  $  (99,953)  $ (228,633)
                                                            ==========   ==========
NET (LOSS) PER SHARE:
    Basic and diluted net (loss) per common share           $     0.00   $    (0.01)
                                                            ==========   ==========
    Weighted average shares used in computing basic
       and diluted net (loss) per common share              39,325,943   36,325,943
                                                            ==========   ==========

</TABLE>


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       4
<PAGE>

<TABLE>
                               3SI HOLDINGS, INC.
                               ------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                   (Unaudited)

<CAPTION>
                                                                         For the Three Months
                                                                          Ended September 30,
                                                                       ------------------------
                                                                          2005          2004
                                                                       ---------     ----------
<S>                                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss)                                                         $ (99,953)    $ (228,633)
    Adjustments to reconcile net (loss) to net cash
       provided by (used in) operating activities -
          Depreciation                                                     8,727         10,554
          Changes in operating assets and liabilities -
              Accounts receivable                                          4,360         28,376
              Prepaid expenses and other assets                           (2,707)        (2,121)
              Accounts payable and accrued liabilities                   154,943         21,818
              Unearned revenue                                           (44,575)       (29,268)
                                                                       ---------     ----------
                 Net cash provided by (used in) operating activities      20,795       (199,274)
                                                                       ---------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payment of capital lease obligation                                        -         (6,767)
                                                                       ---------     ----------
                 Net cash (used in) financing activities                       -         (6,767)
                                                                       ---------     ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      20,795       (206,041)

CASH AND CASH EQUIVALENTS, beginning of period                             2,568        258,864
                                                                       ---------     ----------
CASH AND CASH EQUIVALENTS, end of period                               $  23,363     $   52,823
                                                                       =========     ==========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Interest paid                                                      $     244     $    6,532
                                                                       =========     ==========

</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       5
<PAGE>

                               3SI HOLDINGS, INC.
                               ------------------

          NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
          ------------------------------------------------------------

                               SEPTEMBER 30, 2005
                                   (Unaudited)


(1)  ORGANIZATION AND NATURE OF BUSINESS
     -----------------------------------

3Si Holdings, Inc.  ("TSIH" or "Company") was incorporated in Wyoming in 1999.

On May 28, 1997,  TSIH acquired  100% of the common stock of 3Si, Inc.  ("3Si").
3Si was  incorporated  in the State of Colorado  in 1979.  The  acquisition  was
accounted for as a purchase of TSIH by 3Si, since the reverse merger resulted in
72% of the outstanding stock of TSIH being held by the 3Si shareholders.

KEWi.net,  Inc.  ("KEWi") was incorporated in February 1999 as a TSIH subsidiary
in Colorado.  TSIH owned 69% of the outstanding  common stock of KEWi as of June
30, 2003. Effective September 23, 2003, we acquired the 31% minority interest in
KEWi and now own 100% of KEWi.net, Inc.

We focus our efforts on the 5.0  version of our  "Business  Collaboration,  Data
Consolidation"  software known as iKEW. This development includes the marketing,
sales, and implementation of the family of products known as iKEW. Our principal
services  during the years  ending June 30, 2005 and 2004 were web enabled  data
integration and business  collaboration  activities  through the use of the iKEW
family of products. Our principal markets continue to be large corporations. Our
KEWi subsidiary is effectively dormant at this time in order to minimize cost.

Our corporate offices are located in Colorado Springs, Colorado.

At September 30, 2005, we had a  shareholders'  deficit of $871,383.  Operations
have been financed primarily through issuance of common stock.


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     ------------------------------------------

     Basis of Presentation
     ---------------------

The accompanying  financial  statements have been prepared assuming that we will
continue as a going concern.  At September 30, 2005, current  liabilities exceed
current assets by $594,808,  we had a shareholders'  (deficit) of ($871,383) and
we had  incurred  significant  operating  losses.  We  have  limited  access  to
additional  working capital at this time. These factors raise  substantial doubt
about our 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 classifications of liabilities that might be
necessary in the event we cannot continue in existence.

     Use of Estimates in the Preparation of Financial Statements
     -----------------------------------------------------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions.  Such estimates and assumptions  affect the reported amounts of
assets  and  liabilities  as  well  as  disclosure  of  contingent   assets  and
liabilities at the date of the financial  statements and the reported amounts of
revenue and expense  during the reporting  period.  Actual  results could differ
from those estimates.

     Interim Financial Information
     -----------------------------

In our  opinion,  the  accompanying  unaudited  interim  consolidated  financial
statements  reflect  all  adjustments,   including  normal  recurring  accruals,
necessary to present  fairly our financial  position at September 30, 2005,  and
the results of  operations  and cash flows for the three months ended  September
30,  2005 and  2004.  The  results  of  operations  for the three  months  ended
September 30, 2005 are not  necessarily  indicative  of the expected  results of
operations for the full year or any future period.  The balance sheet as of June
30, 2005 is derived  from the  Company's  audited  financial  statements.  These
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements and footnotes  included in the Company's  Annual Report on
10-KSB for the  period  ended June 30,  2005 as filed  with the  Securities  and
Exchange Commission.

                                       6
<PAGE>

     Cash and Cash Equivalents
     -------------------------

For purposes of the  statements  of cash flows,  we consider  all highly  liquid
investments  with  an  original  maturity  of  three  months  or less to be cash
equivalents.

     Property, Equipment and Depreciation
     ------------------------------------

Depreciation  has been  provided in amounts  sufficient to allocate the costs of
depreciable  assets to operations over their estimated  useful lives of three to
seven years using the  straight-line  method.  In prior periods,  we capitalized
$103,612 of equipment that was acquired  through the assumption of capital lease
obligations. These assets are amortized on a straight-line basis over the lesser
of lease period or estimated useful life, depending on the lease terms.

     Revenue Recognition
     -------------------

Our  revenue  recognition   policies  are  in  compliance  with  all  applicable
accounting  regulations,   including  American  Institute  of  Certified  Public
Accountants  ("AICPA")  Statements of Position ("SOP") 97-2 and 98-4,  "Software
Revenue  Recognition."  These statements provide criteria to be met in order for
revenue to be  recognized.  In summary,  we recognize  revenues from the sale of
software  products  when it can be  determined  that  persuasive  evidence of an
arrangement  exists,  delivery  has  occurred,  the  vendor's  fee is  fixed  or
determinable  and  collectability  is  probable.  Revenues  from other  contract
services are generally recognized under the percentage-of-completion  method, as
measured by achievement of the milestones specified in the agreements.

Maintenance  and support  revenues are  recognized  ratably over the term of the
related agreements.

Revenue from licensed software is recognized ratably over the license period.

     (Loss) per Share
     ----------------

Basic  (loss) per share is  computed  by  dividing  (loss)  available  to common
shareholders by the weighted-average number of common shares outstanding for the
year.  Diluted earnings per share, if any, reflects the potential  dilution that
could occur if additional equity instruments  (including common stock subject to
redemption)   were  exercised  or  converted  into  common  stock.  For  losses,
potentially  dilutive  securities  are not  included  since the result  would be
anti-dilutive.

Since we had net  (losses) for the three  months  ended  September  30, 2005 and
September  30,  2004,  per  share  amounts  were  computed  only on the basis of
39,325,943 and 36,325,943  weighted average number of common shares outstanding,
respectively.  Inclusion of common shares  subject to warrants and stock options
would have had an anti-dilutive effect.

     Fair Value of Financial Instruments
     -----------------------------------

Estimated fair values of our financial instruments are as follows:

                                               As of  September 30, 2005
                                             -----------------------------
                                              Carrying
                                               Amount           Fair Value
                                             ----------         ----------
     Cash and cash equivalents               $   23,363         $  23,363
     Capital lease obligations                   (7,408)           (7,408)
     Shareholder advances                      (158,600)         (158,600)
     Note payable - shareholder                (345,000)         (345,000)

The fair value of debt is based on current  rates at which we could borrow funds
with similar remaining maturities.

     Income Taxes
     ------------

We account for income  taxes under the  provisions  of  Statement  of  Financial
Accounting  Standards ("SFAS") No. 109, "Accounting for Income Taxes" ("SFAS No.
109").  SFAS No. 109  requires  recognition  of  deferred  income tax assets and
liabilities  for the expected future income tax  consequences,  based on enacted
tax laws, of temporary differences between the financial reporting and tax bases
of assets and  liabilities.  SFAS No. 109 also requires  recognition of deferred
tax  assets for the  expected  future tax  effects of all  deductible  temporary
differences,  loss  carryforwards  and tax credit  carryforwards.  Deferred  tax
assets are then reduced,  if deemed necessary,  by a valuation allowance for the
amount  of any tax  benefit  which,  more  likely  than  not  based  on  current
circumstances,  are not expected to be realized. During fiscal year 2005, no tax
benefit was obtained from our loss. As a result,  no tax benefit is reflected in
the  accompanying  statements  of  operations.  During the first three months of


                                       7
<PAGE>

fiscal year 2006, no tax benefit was obtained from our loss. As a result, no tax
benefit is reflected in the  accompanying  statements of  operations.  Should we
achieve sufficient, sustained income in the future, we may conclude that some or
all of the valuation allowance should be reversed.

     Software Development Costs
     --------------------------

Software  development  costs  are  expensed  as  research  costs  until  we have
determined that the software has achieved technological feasibility, will result
in  probable  future  economic  benefit,  and we have  committed  to funding the
project.  Thereafter,  the costs to develop the  software  are  capitalized  and
amortized using the  straight-line  method over the remaining  estimated  useful
lives.  To date,  all software  development  costs have been expensed due to the
development nature of our business and products.  We continue to develop our 5.0
version of iKEW at our cost.

     Recent Accounting Pronouncements
     --------------------------------

     Exchanges of Nonmonetary Assets
     -------------------------------

In December  2004,  the FASB  issued FASB  Statement  No.  153.  This  Statement
addresses the  measurement of exchanges of nonmonetary  assets.  The guidance in
APB Opinion No. 29,  Accounting for  Nonmonetary  Transactions,  is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair value of the assets  exchanged.  The  guidance  in that  Opinion,  however,
included certain exceptions to that principle.  This Statement amends Opinion 29
to eliminate  the  exception  for  nonmonetary  exchanges of similar  productive
assets and replaces it with a general  exception  for  exchanges of  nonmonetary
assets  that do not  have  commercial  substance.  A  nonmonetary  exchange  has
commercial  substance  if the future  cash flows of the entity are  expected  to
change  significantly  as a result of the exchange.  This Statement is effective
for financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges  incurred during fiscal
years  beginning  after the date of this  Statement  is issued.  We believe this
Statement will have no impact on our financial statements once adopted.

     Share-Based Payments
     --------------------

In  December  2004,  the FASB  issued a  revision  to FASB  Statement  No.  123,
Accounting for Stock Based Compensation.  This Statement  supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and our related implementation
guidance.   This  Statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges our equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity   instruments.   This  Statement  focuses  primarily  on  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  This  Statement  does not  change  the  accounting  guidance  for
share-based  payment  transactions with parties other than employees provided in
Statement 123 as originally  issued and EITF Issue No.  96-18,  "Accounting  for
Equity Instruments That Are Issued to Other Than Employees for Acquiring,  or in
Conjunction  with Selling,  Goods or Services."  This Statement does not address
the accounting for employee share  ownership  plans,  which are subject to AICPA
Statement of Position 93-6,  Employers'  Accounting for Employee Stock Ownership
Plans.

A public entity will initially measure the cost of employee services received in
exchange for an award of liability  instruments based on our current fair value;
the fair value of that award will be re-measured  subsequently at each reporting
date through the  settlement  date.  Changes in fair value during the  requisite
service  period will be  recognized  as  compensation  cost over that period.  A
nonpublic  entity may elect to measure our liability  awards at their  intrinsic
value through the date of settlement.

The grant-date fair value of employee share options and similar instruments will
be  estimated   using  the   option-pricing   models  adjusted  for  the  unique
characteristics  of those instruments  (unless  observable market prices for the
same or similar instruments are available).

Excess tax  benefit,  as defined by this  Statement,  will be  recognized  as an
addition  to  paid-in-capital.  Cash  retained  as a result of those  excess tax
benefits  will be  presented in the  statement  of cash flows as financing  cash
inflows. The write-off of deferred tax assets relating to unrealized tax benefit
associated  with recognized  compensation  cost will be recognized as income tax
expense unless there are excess tax benefits from previous  awards  remaining in
paid-in capital to which it can be offset.

The notes to the financial statements of both public and nonpublic entities will
disclose information to assist users of financial  information to understand the
nature of share-based payment transactions and the effects of those transactions
on the financial statements.

The effective date for public entities that file as small business  issuers will
be as of the  beginning  of the first  interim or annual  reporting  period that
begins after  December 15, 2005. We intend to comply with this  Statement at the
scheduled effective date for our relevant financial statements.

                                       8
<PAGE>

     Accounting Changes and Error Corrections
     ----------------------------------------

In May 2005, the FASB issued FASB Statement  154,  Accounting  Changes and Error
Corrections. This Statement replaces APB Opinion No. 20, Accounting Changes, and
FASB  Statement  No.  3,  Reporting  Accounting  Changes  in  Interim  Financial
Statements, and changes the requirements for the accounting for and reporting of
a change in  accounting  principle.  This  Statement  applies  to all  voluntary
changes in accounting  principle.  We believe this Statement will have no impact
on our financial statements.


(3)  SHAREHOLDER ADVANCES AND NOTE PAYABLE TO SHAREHOLDER
     ----------------------------------------------------

Prior  to  2005,  the  former  President  and CEO who is  still a  Director  and
principal  stockholder  had  loaned  $495,412  to us.  As of June 30,  2005,  we
renegotiated that debt with the following terms and conditions:

In May 2005, $345,000 of the debt was converted to a Note from us with quarterly
interest only payments at an eight percent (8%) simple annualized  interest rate
equaling  $6,900 per  payment  over a period not to exceed  seven years from the
first  payment.  The last payment shall be in the  principal  amount of $345,000
plus the last interest  amount of $6,900.  The $345,000 debt has been classified
as long term in the accompanying balance sheet.

During the fiscal year ending June 30, 2005,  an amount of $150,000 or a portion
of a currently  outstanding  note to a shareholder was  extinguished in exchange
for a  cashless  exercise  of  3,000,000  stock  options  at $0.05  per share or
$150,000.

At September 30, 2005 and June 30, 2005, advances from certain shareholders were
outstanding  in the amounts of $67,600,  $43,500 and $47,500.  These amounts are
due on demand.

(4)  CAPITAL LEASE OBLIGATIONS
     -------------------------

We have capitalized the cost of computer systems and software  totaling $103,612
that was acquired  under the  provisions  of  long-term  capital  leases.  As of
September 30, 2005, all capital lease  obligations  are classified as current in
the accompanying balance sheet.

(5)  COMMITMENTS AND CONTINGENCIES
     -----------------------------

Subsequent  to  September  30,  2005,  and  effective  June 1,  2006,  we leased
additional space to replace our location in Colorado Springs,  Colorado. The new
space has been leased for a 36-month term at an initial rent of $2,000 per month
through February 28, 2007, then increasing to $2,450 per month through April 30,
2007,  $2,524 per month  through  April 30, 2008,  and $2,599  through April 30,
2009.  Office space and other rent expense for the three months ended  September
30, 2005 and 2004, was $7,425 and $7,497, respectively.

(6)  OPTIONS
     -------

During the quarter ended  September 30, 2005,  the Company issued to an employee
500,000  options to purchase equal shares of common stock of the Company at $.05
per share.  The options vest over a period of three years and are subject to the
provisions of the 1998 Stock Option Plan.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Certain  statements  contained in this section on  Management's  Discussion  and
Analysis are not historical facts, including statements about our strategies and
expectations about new and existing products,  market demand,  acceptance of new
and  existing  products,  technologies  and  opportunities,  market and industry
segment  growth,  and return on  investments  in  products  and  markets.  These
statements  are  forward  looking  statements  within the meaning of the Private
Securities  Litigation  Reform  Act of 1995 and  involve  substantial  risks and
uncertainties  that may cause  actual  results to differ  materially  from those
indicated by the forward looking  statements.  All forward looking statements in
this section on  Management's  Discussion  and Analysis are based on information
available to us on the date of this  document,  and we assume no  obligation  to
update such forward looking statements. Readers of this Form 10-QSB are strongly
encouraged to review the section entitled "Risk Factors."

                                       9
<PAGE>

GENERAL

Management is concerned with the increase in our working  capital  deficit,  and
lack of  significant  cash  resources,  which have resulted from our  operations
during recent reporting periods. However, we remain confident in our sales model
and  products,  and do not believe that our  performance,  over that period,  is
indicative of future performance or profitability. Rather, during this period we
continue to experience a nominal increase in inquiries from our market segments,
and positive feedback from existing customers, that it attributes to an increase
in communication and increased visibility of our product,  which we believe will
continue  to  increase  our  potential  sales  pipeline  when  compared to prior
periods.

Our sales  model has been  traditionally  slow  because  of the need to  educate
potential customers,  develop customized interfaces and migrate information from
outdated and old  technology or systems.  Our product has the unique  ability to
interface with such legacy operating systems.  Management  therefore  attributes
the increase in interest to an increased  awareness in the  capabilities  of our
product.  Because our customers are  accustomed to protecting  all trade secrets
related to their systems  operations,  it has been difficult to communicate  the
full array of capabilities of our product on a case-by-case basis. However, over
time,  companies  within our  target  market  segments  have  become  aware that
enhancing  capabilities  of older  operating  systems  is not a barrier  for our
product. In fact it has increased product acceptance.

Obtaining  new  business in our highly  competitive  industry  will  continue to
require us to focus on our sales model,  communicate our product's capabilities,
and focus on product development:  however, existing customers have expressed an
appreciation for our diligence, patience, creativity and commitment to our sales
model  when  establishing  stable  environments  for our  product  applications.
Moreover,  as our product begins to become the subject of additional inquiry, we
have  increased our efforts to develop  brand  recognition  in our products.  In
addition   to   rights    provided   at   common   law,   we   have    submitted
trademark/servicemark  applications with the U.S. Patent and Trademark Office to
register the marks "iKEW" and "REAL WORLD SIMPLICITY" and to have them listed in
our principal register.

Our principal services will continue to be focused on Business Collaboration and
Data  Consolidation  through the utilization of portal and collaborative  tools,
connectivity  of legacy  systems is  accomplished  through  the use of our queue
manager technology,  web-site development and notification system implementation
using  the  iKEW  product,  and  licensing  of the iKEW  internet-based  content
management and collaboration.

We continue to experience a slow down in finalizing contracts,  which we believe
is the result of budget concerns under current economic conditions, and there is
no guarantee that we will close our existing opportunities.  We are hopeful that
the agreements that we are discussing with independent contract  representatives
will increase this pipeline and expand our potential and actual customer base.

Company Product and Services.  Our iKEW (Internet powered Knowledge,  Experience
and Wisdom) product provides a set of business process tools and technology (the
"iKEW  Product")  that enable our potential and existing  customers to integrate
disparate data from various sources,  thereby making  specialized data available
in a secure format for use by designated members of a small business, a division
of  a  larger  corporation  or  an  entire  enterprise.  Once  an  interface  is
implemented, we can customize the features available through the integrated iKEW
Product to enable our customers to choose the  presentation of this  information
in a variety of formats and to access it from  anywhere at  anytime.  Thus,  the
Real  World  Simplicity  (SM)  of  iKEW  empowers  enterprises  and  facilitates
increased productivity.

This  customer  centric model allows a customer to log on once and touch all the
various sources of information that the customer utilizes.  This one-time log on
provides  a single  access  point to  multiple  sources of  information  such as
general industry websites, company specific internal systems such as finance and
marketing or  organizational  expertise such as live subject matter experts.  In
addition, the iKEW Product has been used to provide product comparison and price
comparison capabilities.

Sales Process. The sales process can be accomplished in as little as two months,
but typically has involved a negotiation process of four months from the time of
initial contact until an agreement is reached.  During the negotiation  process,
we usually need to provide  prototypes for the potential  customer to understand
the  capabilities  of the iKEW Product.  Potential  customers  also like to have
access  to a  demonstration  system to  better  understand  how they can use and
manipulate  the  technology.  This typically  leads to a negotiation  with their
management  team  where the costs are  reviewed  and the  specific  designs  and
services to be provided by us are developed in a written Statement of Work.

It is our goal in all transactions to create a flexible agreement that refers to
a Statement of Work (SOW) as the defining document to determine the requirements
for each  individual  deliverable.  This also allows us to attach future SOWs to
the contract as additional tasks. As part of this strategy, we provide ourselves
the  flexibility  to either use our ASP model (as defined  below) for  recurring
revenue or the one time purchase of a software license with ongoing  maintenance
which would run concurrent with the term of the software license,  typically for
at least a twelve month period. In either case, the sales cycle is basically the
same.  Corporate  financing will continue to impact the available resources that
can be allocated to potential customer opportunities.  Our

                                       10
<PAGE>

business  model  allows us to capture  projects  as small as  $50,000  and large
multi-million dollar opportunities. We reserve the right to change this model at
anytime.

Revenue  Cycle.  Our revenue cycle is a reflection of the sales cycle and nature
of our product sales.  When we sell a software  license and install the product,
there is typically a full and complete  sale of that  product.  This may trigger
revenue  recognition,  depending  on  payment  terms  of  the  product.  Ongoing
maintenance  and/or  customization  of the product often provide monthly revenue
and cash flow following the actual sale and installation, however is normally in
much lower financial amounts than the initial sale and installation. Maintenance
agreements  are  typically  for a twelve  month  period  but may  vary  based on
individual  contracts.  As stated  above,  we always  try to extend  maintenance
service for a longer  period.  The result of this cycle is that we benefit  from
significant  influxes of cash but then may have extended periods of minimal cash
flow. This results in wide fluctuations of cash on hand and accounts receivable.

New Revenue  Sources.  We have  developed a number of  potential  contacts  with
individual  contract sales reps and major  corporate  resellers.  There are also
additional sales  opportunities to existing  customers and there are a number of
follow-up discussions with those organizations.  As always there is no guarantee
that anything will come of these  opportunities but we are continuing to work to
fruition.

Targeted Markets.  We believe that opportunities exist for all components of the
iKEW Product in enterprises  ranging from small to large,  including  government
and military,  and public/private  education  institutions.  We categorize small
companies  as $50 million to $500 million in revenue,  medium  companies as $500
million to $1 billion in revenue and  enterprises  as in excess of $1 billion in
revenue.  We will  continue to pursue  these  opportunities  as a key factor for
growth and brand recognition. We anticipate that large enterprises will generate
significant  revenue from  licensing  and  reselling.  These  customers are cost
sensitive  and will  provide the user volume  needed to keep us  profitable  and
generate  positive  cash flow.  The  architecture  of iKEW  allows  support  for
multiple  customers  from  a  single  infrastructure,   keeping  costs  low  and
attractive to this market.

Enterprise  Market.   Large  enterprises  can  reap  significant   benefit  from
installation  and  utilization  of the iKEW Product.  These  companies have very
large,  expensive information technology staffs, and their priorities are to the
mission critical systems. They tend to be geared toward large, complex projects,
and find it difficult to adjust to rapidly  changing  business  environments and
"Internet  time."  our  strategy  for  these  organizations  is to offer  them a
license,  with annual  maintenance.  The Real World Simplicity (SM) of iKEW does
not  require  the  corporations'  information  technology  human  resources  for
implementation  or  maintenance,  freeing them to focus on the mission  critical
systems.

Channel  Sales.  Channel sales are those sales provided by resellers of the iKEW
Product.  These  resellers  typically  focus on using the iKEW  Product in their
vertical markets, such as professional services or price comparison products. We
expect  channel sales could be a significant  growth  vehicle  because we do not
have the resources to hire a global sales force at this time. To provide us with
greater access to those markets,  and to capitalize  through these channel sales
opportunities,  we plan to continue to develop our  reseller  relationships.  We
have been in the process of negotiating a reseller  agreement  with  established
organizations  which could provide  enterprise and vertical focuses.  Terms of a
reseller agreement have not been completed at this time.

Vertical Markets. Education is one of the markets that we will continue to focus
on. One issue that the iKEW Product  addresses  is how to deliver  training in a
cost  effective  manner.  Customers  want to limit or eliminate  travel  related
expense to keep the cost of training as low as possible.  Another issue faced is
how to secure this environment over the Internet,  and iKEW solves this with the
ability  to adopt a  company's  proprietary  security.  We  continue  to  pursue
educational initiatives through the internal organizations of various companies,
as well as, public and private educational institutions.

Price  Comparison  Solutions is another  market that we will continue to target.
One example of the price  comparison  market is an Overnight  Mail Service price
comparison solution which we developed for a large financial  institution.  With
Overnight Mail Service, addresses are certified against the United States Postal
Service  database,  prices from  different  carriers  are  provided,  labels are
created, and links are available to track packages. This resulted in substantial
savings in Overnight  Mail Service costs with improved  reliability  of delivery
for the large  financial  institution  that  purchased  the product.  This was a
license sale.

Governments at all levels have  time-to-market  requirements as well. We believe
that an implementation of iKEW could provide increased  productivity achieved by
simplification  of information  distribution,  reduction in IT resources,  and a
reduction in travel.  Significant  opportunity  exists within government for the
complete set of iKEW capabilities.

Small to Medium-sized  Business  Market.  Small to medium sized  enterprises can
take advantage of strengths,  low cost, and rapid  implementation of iKEW. These
types of  enterprises  need to be very cost  conscious  and,  at the same  time,
improve their time to market.  Our Application  Service  Provider (ASP) delivery
model for iKEW reduces the need for any capital investment. All that is required
is access to a web browser and an Internet  connection to take  advantage of the
iKEW capabilities.  We continue to upgrade our iKEW Product and believe that the
next major release will make this market segment more accessible.

                                       11

<PAGE>

CRITICAL ACCOUNTING POLICIES

Revenue Recognition. Our revenue recognition policies are in compliance with all
applicable accounting regulations, including the American Institute of Certified
Public  Accountants  ("AICPA")  Statements  of Position  ("SOP")  97-2 and 98-9,
"Software Revenue  Recognition".  These statements provide criteria to be met in
order for revenue to be recognized.  In summary,  we recognize revenues from the
sale of software products when it can be determined that persuasive  evidence of
an arrangement exists,  delivery and acceptance have occurred,  the vendor's fee
is fixed or  determinable  and  collection  is  probable.  Revenues  from  other
contract  services are generally  recognized under the  percentage-of-completion
method,  as  measured  by  achievement  of  the  milestones   specified  in  the
agreements.  Maintenance  and support  revenues are recognized  ratably over the
term of the  related  agreements.  The iKEW  software  is licensed to users on a
monthly subscription basis. License revenue is recognized monthly as the service
is  provided.  We  recognize  software  license  sales as  delivered  under  the
acceptable phase defined in the statement of work.

RESULTS OF OPERATIONS

For the three months ended September 30, 2005 compared to the three months ended
September 30, 2004.

Revenue.  Revenue for the quarter ended September 30, 2005 was $73,217  compared
to $53,955 for the quarter ended September 30, 2004, an increase of 36%. Revenue
for the current quarter was primarily from two major customers.  Revenue for the
quarter ended September 30, 2004 was primarily from one customer. We expect that
our revenue  will vary for each quarter  based upon the timing and  magnitude of
the major projects undertaken for these and other potential customers.

Cost of revenue.  Cost of revenue of $43,355 for the quarter ended September 30,
2005 decreased 45% compared to $78,714 for the quarter ended September 30, 2004.
The decrease was a result  primarily of a decrease in staff that was  undertaken
pursuant to our attempt to control  costs.  Cost of  revenues  includes  project
management and software engineering costs, depreciation and subcontract labor.

Gross profit.  Gross profit for the quarter ended September 30, 2005 was $29,862
compared to a gross loss of $(24,759) for the quarter ended September 30, 2004.

Operating  expenses.  Operating  expenses  of  $122,671  for the  quarter  ended
September  30, 2005  decreased by 38% compared to $197,342 for the quarter ended
September 30, 2004.  The decrease is a result  primarily of a decrease in staff,
marketing costs, consulting and accounting fees.

Net loss.  Net loss was  $(99,953)  for the  quarter  ended  September  30, 2005
compared to a net loss of $(228,633) for the quarter ended September 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

To date,  operating funds have been provided primarily by sales of common stock,
which totaled  $5,617,420  through  September 30, 2005, and, to a lesser degree,
funds provided by revenue from our products.

Our operations  provided $20,795 of cash in the three months ended September 30,
2005 on revenue of $73,217.  These  amounts of cash  generated  from and used in
operations  are not indicative of the expected cash to be generated from or used
in operations in fiscal year ending June 30, 2006 ("FY 06"). As of September 30,
2005,  we had  $23,363 in cash and cash  equivalents  available  to fund  future
operations.  Working  capital was  $(594,808)  at September 30, 2005 compared to
$(503,582) at June 30, 2005. Current  liabilities were $630,501 at September 30,
2005, compared to $520,133 at June 30, 2005.

If we are not  successful  in obtaining  profitability  and positive  cash flow,
additional  capital  may be required to  maintain  ongoing  operations.  We have
explored and are continuing to explore options to provide  additional  financing
to fund future  operations  as well as other  possible  courses of action.  Such
actions  include,  but are not limited to,  securing a line of credit,  sales of
debt  or  equity   securities   (which  may  result  in   dilution  to  existing
shareholders),  licensing of technology,  strategic  alliances and other similar
actions.  There can be no  assurance  that we will be able to obtain  additional
funding (if needed)  through a sale of our common stock or loans from  financial
institutions  or other third  parties or through  any of the  actions  discussed
above.  If we cannot sustain  profitable  operations  and additional  capital is
unavailable,  lack of  liquidity  could  have a material  adverse  effect on our
business viability, financial position, results of operations and cash flows.

Our trade receivables are all current.  Substantially not all trade payables are
current as of September 30, 2005.

Our former  President and CEO extended us access to his personal line of credit.
Interest is payable  monthly  and accrues at an interest  rate equal to 8% as of
September  30, 2005.  We do not have any  replacement  financing in place if the
debt was called. The current outstanding debt under this line is $345,000. There
have not been any negotiations with financial institutions since

                                       12
<PAGE>

the FY2005 Form 10KSB was filed. At September 30, 2005 and June 30, 2005,  notes
with principal amounts of $67,600, $43,500 and $47,500 are payable to certain of
our shareholders. These loans are due on demand.

On August 23,  2005,  we entered into a Letter of Intent to engage in a business
combination with Entellectual Solutions Properties Group, Inc. ("eSPG") based in
Tampa,  Florida.  As part of the terms of the  Letter of  Intent  ("LOI"),  eSPG
loaned us the  principal  sum of  $170,000.  The relevant LOI does not contain a
charge for interest on this loan. If  consummated,  the proposed terms include a
50-50 split in ownership of us,  provided that eSPG provides a minimum amount of
working  capital.   As  of  the  date  of  this  Report,  we  have  discontinued
negotiations on this proposed  transaction.  It is possible that we may also owe
an additional $25,000 to eSPG for a break-up fee. As of the date of this Report,
we are  examining  our rights and  obligations  concerning  this  matter.  As of
September 1, 2006, this LOI was  terminated.  The amount loaned to us remains in
accounts payable at September 30, 2005.

Our  ability to meet our  obligations  for the next  twelve  months  will depend
largely on the amount of subscription  revenue generated and sales to additional
prospects.

TRENDS

We believe that our sales model is beginning to be accepted by our customer base
but has not been readily  accepted in the past by our target  market  because of
the need to educate our  potential  customers on the  development  of customized
interfaces and migrate  information from outdated and old technology or systems.
Our products  unique  ability to web-enable  the data within a legacy system has
created more interest.  Management  therefore  believes that our success and any
increase in interest in our product is tied to creating an  increased  awareness
in the  capabilities  of our product.  Because our customers  are  accustomed to
protecting all trade secrets  related to their systems  operations,  it has been
difficult to communicate the full  capabilities of our product on a case-by-case
basis.  However,  we believe that over time,  companies within our target market
segments  will  become  aware that  enhancing  capabilities  of older  operating
systems is not a barrier for our product, but rather, an opportunity to increase
our product acceptance.

Obtaining  new  business in our highly  competitive  industry  will  continue to
require  us to  focus  on  our  sales  model,  communication  of  our  product's
capabilities, and focus on product development. However, existing customers have
expressed an appreciation for our diligence, patience, creativity and commitment
to our  sales  model  when  establishing  stable  environments  for our  product
applications.  Moreover,  as  our  product  begins  to  become  the  subject  of
additional interest in the marketplace, we have increased our efforts to develop
brand recognition in our products.

Our principal  services will continue to be focused on portal and  collaborative
tools,  connectivity of legacy systems,  web-site  development and  notification
system  implementation  using  the  iKEW  product,  and  licensing  of the  iKEW
internet-based content management and collaboration.

Currently, we believe we are poised to grow with new customers to take advantage
of the strength  iKEW(TM)  has created for  customers  such as MCI,  Wells Fargo
Service Co., SMI International  and others.  The current version of iKEW(TM) has
proven to be one of the most  flexible  and  robust  tools on the  Collaborative
Content  Management  market.  Its tightly  integrated  blend of customer  driven
Portal Management, Request Tracking, Content Management and Work Flow Management
is not found in any other  product  on the market  today.  In  addition,  we can
provide  multiple  languages  (due to its double byte design),  custom  reports,
versioning control,  different presentation templates and many other features in
every implementation,  if desired by the customer.  All of this customer centric
design allows for the typical iKEW(TM) implementation to come to the customer in
as little as six (6) weeks,  creating a tremendous time to market advantage when
compared to traditional vendors.

We believe that lack of working capital has been the principal reason behind our
inability to grow our business. This shortage of capital has caused customers as
well as potential  business  partners to have concern about doing  business with
us. We have  addressed  this issue  primarily by suggesting  that source code be
kept in  escrow.  From  November  2005  through  January  2006,  we have seen an
increased  interest in our product and have signed agreements  representing over
$400,000. There can be no assurances that we will be able to maintain this level
of business in the future.

INFLATION

Although our operations are influenced by general economic conditions, we do not
believe that inflation had a material effect on our results of operations during
our three months ended September 30, 2005.

INCOME TAXES

As of June 30, 2005, net operating  loss  carryforwards  totaling  approximately
$1,199,000  were  available  to reduce  taxable  income in the  future.  The net
operating loss  carryforwards  expire,  if not previously  utilized,  at various
dates  beginning in the fiscal year ended June 30,  2019.  The Tax Reform Act of
1986 and other income tax regulations contain provisions which may limit the net
operating loss carryforwards  available to be used in any given year, if certain
events occur,  including changes in ownership

                                       13
<PAGE>

interests.  We have  established a valuation  allowance for the entire amount of
our  deferred  tax  asset  due to our  history  of  losses.  Should  we  achieve
sufficient,  sustained income in the future, we may conclude that some or all of
the  valuation  allowance  should be reversed.  If some or all of the  valuation
allowance  were  reversed,  then, to the extent of the  reversal,  a tax benefit
would be recognized which would result in an increase to income.

CONTRACTUAL OBLIGATIONS

Aside  from  our  operating  lease  commitments,  we do not  have  any  material
contractual commitments requiring settlement in the future.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our critical  accounting  policies  have not changed from those  reported in our
annual report on Form 10-KSB for the year ended June 30, 2005.

RISK FACTORS

You should  carefully  consider the risk factors  described below. If any of the
following  risk factors  actually  occur,  our  business,  prospects,  financial
condition  or results of  operations  would  likely  suffer.  In such case,  the
trading  price of our common  stock could fall  resulting  in the loss of all or
part of your  investment.  You should  look at all these risk  factors in total.
Some risk  factors may stand on their own.  Some risk  factors may affect (or be
affected by) other risk factors.  You should not assume we have identified these
connections.  You should not assume that we will always  update these and future
risk factors in a timely manner. We are not undertaking any obligation to update
these risk  factors to reflect  events or  circumstances  after the date of this
report or to reflect the occurrence of unanticipated events.

Unless we continue to develop new  software  products  that are  accepted by our
--------------------------------------------------------------------------------
industry,  there is a limited window of opportunity for us to market our current
--------------------------------------------------------------------------------
products.
---------

We recognize that with the trend toward Internet-based software products,  there
is a short window of opportunity where iKEW, a developed and available  product,
can capture a market demanding Internet designed  solutions.  The risk of losing
this advantage exists. There is no assurance that we will be able to capture and
maintain enough market share to compete successfully in the future.

There can be no  assurance  that we will  generate  significant  revenues in the
--------------------------------------------------------------------------------
future from our developed  products;  and there can be no assurance that we will
--------------------------------------------------------------------------------
operate at a profitable level.
------------------------------

If we are unable to obtain customers and generate sufficient revenues so that we
can profitably operate, our business will not succeed. In such event,  investors
in the shares of our common stock may lose their entire investment.

As a result of the fixed  nature  of many of our  expenses,  we may be unable to
adjust  spending in a timely manner to compensate for any  unexpected  delays in
the marketing of our products or any capital raising or revenue  shortfall.  Any
such delays or shortfalls will have an immediate adverse impact on our business,
operations and financial condition.

We will need to raise  additional  capital  to expand our  operations  in future
--------------------------------------------------------------------------------
periods.  If we cannot raise  sufficient  capital,  our ability to implement our
--------------------------------------------------------------------------------
business strategies and continue to expand will be at risk.
-----------------------------------------------------------

We want to upgrade our technologies in order to expand our business.  Based upon
our preliminary  estimates this will require  capital and other  expenditures of
approximately USD $1 million to $2 million.  We do not presently have sufficient
working  capital  to  upgrade  our  technologies,  and we  will  need  to  raise
additional  working capital to accomplish these objectives.  We do not presently
have any  external  sources  of  capital  and will in all  likelihood  raise the
capital in a debt or equity offering.  If we raise the necessary capital through
the issuance of debt,  this will result in  increased  interest  expense.  If we
raise  additional  funds  through  the  issuance of equity or  convertible  debt
securities,   the   percentage   ownership  of  our  Company  held  by  existing
shareholders will be reduced and those  shareholders may experience  significant
dilution. In addition, new securities may contain certain rights, preferences or
privileges  that are  senior  to  those of our  Common  Stock.  There  can be no
assurance that  acceptable  financing can be obtained on suitable  terms,  if at
all. Our ability to continue to implement our growth strategy could suffer if we
are unable to raise the additional  funds on acceptable terms that will have the
effect of adversely affecting our ongoing operations and limiting our ability to
increase our revenues in the future.

                                       14

<PAGE>

Our executive officers and directors have the ability to significantly influence
--------------------------------------------------------------------------------
matters  requiring a shareholder  vote and other  shareholders  may not have the
--------------------------------------------------------------------------------
ability to influence corporate transactions.
--------------------------------------------

Currently, our existing officers and directors in the aggregate beneficially own
approximately 72% of our outstanding  stock. As a result,  such persons,  acting
together,  will have the  ability  to  significantly  influence  the vote on all
matters  requiring  approval  of our  shareholders,  including  the  election of
directors and approval of significant corporate  transactions.  Accordingly,  it
could be difficult  for the  investors to  effectuate  control over our affairs.
Therefore,  it should be assumed that our officers and directors who control the
majority of voting  rights will be able, by virtue of their stock  holdings,  to
control our affairs and policies.

There are no assurances that our business model and plan will be accepted by our
--------------------------------------------------------------------------------
target market.
--------------

We have  developed  and offer a  subscription-based  distribution  model for our
proprietary  products.  Although  subscription-based  services  are  commonplace
within the information technology industry,  this model represents a significant
deviation for the traditional  knowledge management and support center industry.
Existing support center call management products are Windows-based  applications
licensed  on a  per-user  basis with an  associated  annual  maintenance  fee. A
subscription-based  service offers many  advantages  over  traditional  software
distribution models, including but not limited to, recurring revenue. This model
has not yet been proven with our target market; however, interest in this method
of  delivery  has been  expressed  by the  Fortune  100  corporations  that have
recently contracted with us.

Our business is subject to changes in technology and new service introductions.
-------------------------------------------------------------------------------

Accordingly,  our  ability to compete  will  depend upon our ability to adapt to
technological  changes in the  industry and to develop  services  based on those
changes to satisfy  evolving  client  requirements.  Technological  changes  may
create new  products or services  that are  competitive  with,  superior  to, or
render obsolete the services currently offered.

The  implementation  of our business plan will expose us to overhead,  marketing
--------------------------------------------------------------------------------
and  support  costs and other risks  associated  with entry into new markets and
--------------------------------------------------------------------------------
solicitation of new customers.
------------------------------

We face  all  risks  that are  associated  with any  growing  business,  such as
under-capitalization,  cash flow problems, and personnel, financial and resource
limitations,  as well as special risks associated with our operations. To manage
growth  effectively,  we  will  need to  continue  to  improve  and  expand  our
operational,  financial and management information systems and to expand, train,
motivate  and  manage  our  employees.  Should we be  unable  to  manage  growth
effectively,  our results of operations could be adversely affected. There is no
assurance that we will be successful in implementing our business plan.

Our success in establishing an e-commerce business web site will be dependent on
--------------------------------------------------------------------------------
consumer  acceptance of  e-retailing  and an increase in the use of the Internet
--------------------------------------------------------------------------------
for e-commerce.
---------------

If the markets  for  e-commerce  do not  develop or develop  more slowly than we
expect, our e-commerce  business may be harmed.  Internet use by consumers is in
an early stage of development, and market acceptance of the Internet as a medium
for content,  advertising  and e-commerce is uncertain.  A number of factors may
inhibit   the  growth  of   Internet   usage,   including   inadequate   network
infrastructure,  security concerns, inconsistent quality of service, and limited
availability of cost-effective, high-speed access. If these or any other factors
cause use of the Internet to slow or decline, our results of operations could be
adversely affected.

Increased competition from e-commerce could result in reduced margins or loss of
--------------------------------------------------------------------------------
market share, any of which could harm both our retail and e-commerce businesses.
--------------------------------------------------------------------------------

Competition  is likely to  increase  significantly  as new  companies  enter the
market and current  competitors  expand their services.  Many of our present and
potential  competitors are likely to enjoy substantial  competitive  advantages,
including   larger   numbers   of   users,   more   fully-developed   e-commerce
opportunities,   larger  technical,   production  and  editorial   staffs,   and
substantially greater financial, marketing, technical and other resources. If we
do not compete  effectively or if it experiences any pricing pressures,  reduced
margins  or loss of market  share  resulting  from  increased  competition,  our
business could be adversely affected.

If the Internet continues to experience increased numbers of users, frequency of
--------------------------------------------------------------------------------
use or increased bandwidth requirements,  the Internet infrastructure may not be
--------------------------------------------------------------------------------
able to support these increased demands or perform reliably.
------------------------------------------------------------

The Internet has  experienced  a variety of outages and other delays as a result
of damage to  portions  of our  infrastructure,  and  could  face  delays in the
future.  These  outages and delays could reduce the level of Internet  usage and
traffic on our web site. In addition,  the Internet could lose our viability due
to delays in the  development  or adoption of new  standards  and  protocols  to
handle  increased  level of  activity.  If the  Internet  infrastructure  is not
adequately developed or maintained,  use of our web site may be reduced. Even if
the Internet  infrastructure  is adequately  developed,  and maintained,  we may
incur  substantial

                                       15
<PAGE>

expenditures  in order to adapt our services  and products to changing  Internet
technologies.  Such  additional  expenses  could  severely  harm  our  financial
results.

There is a risk that  government  regulation  of the Internet  could  negatively
--------------------------------------------------------------------------------
impact our operations.
----------------------

We are  subject to the same  federal,  state and local  laws as other  companies
conducting  business  on the  Internet.  Today,  there are  relatively  few laws
specifically  directed towards online services.  However,  due to the increasing
popularity and use of the Internet and online services, it is possible that laws
and regulations will be adopted with respect to the Internet or online services.
These laws and  regulations  could cover issues such as online  contracts,  user
privacy, freedom of expression,  pricing, fraud, content and quality of products
and  services,   taxation,   advertising,   intellectual   property  rights  and
information  security.  Applicability to the Internet of existing laws governing
issues such as property  ownership,  copyrights and other intellectual  property
issues, taxation, libel, obscenity and personal privacy is uncertain.

Several states have proposed  legislation  that would limit the uses of personal
user information gathered online or require online services to establish privacy
policies.  The Federal Trade  Commission also has recently  started a proceeding
with an online  service  regarding the manner in which  personal  information is
collected from users and provided to third parties. Changes to existing laws, or
the passage of new laws intended to address these issues,  could directly affect
the way that we do business,  or could create  uncertainty  in the  marketplace.
This could reduce  demand for our services or increase  the delivery  costs,  or
could otherwise harm our business. In addition,  foreign jurisdictions may claim
that we are required to comply with their laws. In some  jurisdictions,  we will
be required  to collect  value-added  taxes on our fees.  Failure to comply with
foreign  laws could  subject us to  penalties  ranging from fines to bans on our
ability to offer services.

There are no  automated  systems for  negotiating  trades on the OTCBB and it is
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possible for the price of a stock to go up or down significantly  during a lapse
--------------------------------------------------------------------------------
of time between placing a market order and its execution,  which may affect your
--------------------------------------------------------------------------------
trades in our securities.
-------------------------

Because there are no automated systems for negotiating trades on the OTCBB, they
are conducted via telephone. In times of heavy market volume, the limitations of
this  process  may  result  in a  significant  increase  in the time it takes to
execute investor orders. Therefore, when investors place market orders, an order
to buy or sell a specific  number of shares at the current  market price,  it is
possible  for the  price of a stock to go up or down  significantly  during  the
lapse of time between placing a market order and its execution.

Because our stock currently  trades below $5.00 per share,  and is quoted on the
--------------------------------------------------------------------------------
OTCBB,  our stock is considered a "penny  stock" which can adversely  affect its
--------------------------------------------------------------------------------
liquidity.
----------

As the  trading  price of our Common  Stock is less than  $5.00 per  share,  our
Common Stock is  considered a "penny  stock," and trading in our Common Stock is
subject to the  requirements of Rule 15g-9 under the Securities  Exchange Act of
1934. Under this rule,  broker/dealers  who recommend  low-priced  securities to
persons other than established  customers and accredited  investors must satisfy
special  sales   practice   requirements.   The   broker/dealer   must  make  an
individualized  written suitability  determination for the purchaser and receive
the purchaser's written consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any trades
involving a "penny  stock,"  including  the  delivery,  prior to any penny stock
transaction,  of a disclosure schedule explaining the penny stock market and its
associated risks. These requirements  severely limit the liquidity of securities
in the  secondary  market  because few broker or dealers are likely to undertake
these compliance activities. In addition to the applicability of the penny stock
rules,  other risks  associated with trading in penny stocks could also be price
fluctuations and the lack of a liquid market.

"Penny Stock" rules may make buying or selling our Securities difficult.
------------------------------------------------------------------------

Trading in our  Securities  will be subject to the "penny  stock"  rules for the
foreseeable   future.  The  Securities  and  Exchange   Commission  has  adopted
regulations  that generally  define a penny stock to be any equity security that
has a market price of less than $5.00 per share,  subject to certain exceptions.
These rules require that any  broker-dealer  who  recommends  our  securities to
persons other than prior customers and accredited  investors must,  prior to the
sale, make a special  written  suitability  determination  for the purchaser and
receive the purchaser's written agreement to execute the transaction.  Unless an
exception is  available,  the  regulations  require the  delivery,  prior to any
transaction  involving a penny stock,  of a disclosure  schedule  explaining the
penny  stock  market and the risks  associated  with  trading in the penny stock
market. In addition,  broker-dealers  must disclose  commissions payable to both
the broker-dealer and the registered  representative  and current quotations for
the securities they offer. The additional burdens imposed upon broker-dealers by
such requirements may discourage  broker-dealers from recommending  transactions
in our  securities,  which could  severely limit the liquidity of our securities
and consequently adversely affect the market price for our securities.

                                       16
<PAGE>

We do not  anticipate  payment  of  dividends,  and  investors  will  be  wholly
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dependent upon the market for the Common Stock to realize  economic benefit from
--------------------------------------------------------------------------------
their investment.
-----------------

Our  shareholders  will only be entitled  to receive  those  dividends  that are
declared  by our board of  directors  out of  surplus.  We do not expect to have
surplus  available  for  declaration  of  dividends in the  foreseeable  future.
Indeed,  there is no assurance that such surplus will ever materialize to permit
payment of dividends to holders of our Common Stock. Our board of directors will
determine future dividend policy based upon our results of operations, financial
condition, capital requirements, reserve needs and other circumstances.

If our management  elects to sell their shares of our Common Stock, it will have
--------------------------------------------------------------------------------
a depressive impact on the price of our Common Stock.
-----------------------------------------------------

Our management currently owns 28,155,766 shares of our common stock. Such shares
will not be available for sale in the open market without separate  registration
except in reliance upon Rule 144 under the  Securities  Act of 1933. In general,
under  Rule 144 a person  (or  persons  whose  shares  are  aggregated)  who has
beneficially owned shares acquired in a non-public  transaction for at least one
year,  including  persons  who may be  deemed  our  affiliates  (as that term is
defined under that rule) would be entitled to sell within any three-month period
a  number  of  shares  that  does  not  exceed  the  greater  of 1% of the  then
outstanding  shares of common  stock,  or the average  weekly  reported  trading
volume during the four calendar weeks preceding such sale, provided that certain
current public  information is then  available.  If a substantial  number of the
shares  owned  by  these  shareholders  were  sold  pursuant  to  Rule  144 or a
registered  offering,  the market  price of our common  stock could be adversely
affected.

FORWARD-LOOKING STATEMENTS

The  foregoing  Management's  Discussion  and  Analysis and Results of Operation
contains  "Forward-Looking  Statements"  within  the  meaning of Rule 175 of the
Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Exchange Act
of 1934, as amended,  including  statements  regarding,  among other items,  our
business  strategies,   continued  growth  in  our  markets,   projections,  and
anticipated trends in our business and in the industry in which it operates. The
words "believe," "expect,"  "anticipate,"  "intends,"  "forecast," "project" and
similar expressions identify Forward-Looking  Statements.  These Forward-Looking
Statements are based largely on our  expectations and are subject to a number of
risks and  uncertainties,  certain of which are beyond our  control.  We caution
that these  statements  are further  qualified by  important  factors that could
cause  actual  results to differ  materially  from those in the  Forward-Looking
Statements,  including, among others, the following: reduced or lack of increase
in demand for our products,  competitive pricing pressures,  changes in the cost
of  providing  Company's  services  and the level of  expenses  incurred  in our
operations. In light of these risks and uncertainties, there can be no assurance
that the Forward-Looking  information contained herein will in fact transpire or
prove  to  be  accurate.   We  disclaim  any  intent  or  obligation  to  update
"Forward-Looking Statements."

ITEM 3   -   CONTROLS AND PROCEDURES

(a) We have  carried  out an  evaluation  under  the  supervision  and  with the
participation   of   our   management,   including   our   Principal   Executive
Officer/Principal  Accounting and Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14c of
the Securities and Exchange Act of 1934 (the "Exchange  Act")).  Based upon that
evaluation,  the  Chief  Executive  Officer  and the  Principal  Accounting  and
Financial  Officer  concluded  as of  September  30,  2005  that our  disclosure
controls and procedures were effective in ensuring that information  required to
be disclosed by us under the Exchange Act was  recorded,  processed,  summarized
and reported within the time periods  specified under the Exchange Act rules and
forms.

(b) During the quarter ended  September  30, 2005,  there were no changes in our
internal  control  over  financial  reporting  or in  other  factors  that  have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting, nor were there any significant deficiencies or
material  weaknesses  in such  disclosure  controls and  procedures  or internal
control over financial  reporting  requiring  corrective actions. As a result no
corrective actions were taken.

                                       17

<PAGE>

                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS - None

ITEM 2.  CHANGES IN SECURITIES - None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

ITEM 5.  OTHER INFORMATION - None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K -

         (a)      Exhibits

         31.1     Certification of Chief Executive Officer/Chief Financial
                  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.

         32.1     Certification of Chief Executive Officer/Chief Financial
                  Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.

         (b)      Reports on Form 8-K.

We did not file any  reports  on Form 8-K during the  three-month  period  ended
September 30, 2005, or subsequent thereto.

                                       18

<PAGE>

                                    SIGNATURE

     Pursuant to the  requirements  of Section 12 of the Securities and 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)

                                 Dated: September 15, 2006



                                 By: /s/  Frederick J.  Slack
                                    --------------------------------------------
                                    Frederick J.  Slack, Chief Executive Officer





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