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 March 31, 2006


             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

                                 3SI HOLDINGS, INC.

                                    FORM 10-QSB

                      For the Quarter Ended March 31, 2006


                                        INDEX


                                                                        Page
                                                                        Number

PART I.  UNAUDITED FINANCIAL INFORMATION

         ITEM 1  Condensed Consolidated Interim Financial Statements:
                 Condensed Consolidated Balance Sheets as of
                 March 31, 2006 and June 30, 2005                            3
                 Condensed Consolidated Statements of Operations for
                 the Three Months Ended March 31, 2006 and 2005              4
                 Condensed Consolidated Statements of Operations for
                 the Nine Months Ended March 31, 2006 and 2005               5
                 Condensed Consolidated Statements of Cash Flows for
                 the Nine Months Ended March 31, 2006 and 2005               6
                 Notes to Condensed Consolidated Interim Financial
                 Statements                                                  7

         ITEM 2  Management's Discussion and Analysis
                 of Financial Condition and Results of Operations           11

         ITEM 3  Controls and Procedures                                    19

PART II.  OTHER INFORMATION

         ITEM 6  Exhibits                                                   20

SIGNATURE                                                                   21

PART I  FINANCIAL INFORMATION

ITEM 1  CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

                                      3SI HOLDINGS, INC.
                          CONDENSED CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                                          March 31,         June 30,
                                                                            2006             2005
                                               ASSETS                    (unaudited)       (audited)
<S>                                                                      <C>               <C>
CURRENT ASSETS:
  Cash and cash equivalents                                              $ 104,521         $ 2,568
  Accounts receivable                                                          450          13,500
  Prepaid expenses                                                             459             483
                                                                         ------------      -----------
  Total current assets                                                     105,430          16,551
                                                                         ------------      -----------

PROPERTY AND EQUIPMENT, at cost:
  Computer systems, software, furniture and vehicle                        271,965         268,428
  Less - accumulated depreciation                                         (216,793)       (191,276)
                                                                         ------------    -----------
  Property and equipment, net                                               55,172          77,152
                                                                         ------------    -----------
  Total assets                                                           $ 160,602        $ 93,703

LIABILITIES AND SHAREHOLDERS' (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                               $ 310,568       $ 187,335
  Accounts payable-related parties                                          33,127          36,202
  Unearned revenue                                                         301,661         130,588
  Current portion of capital lease obligations                                  --           7,408
  Shareholder advances (Note 3)                                            145,600         158,600
                                                                        ------------     -----------
   Total current liabilities                                               790,956         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)                                                 (6,947,948)      (6,744,024)
  Treasury stock at cost-215,000 shares                                    (38,184)         (38,184)
                                                                        ------------      -----------
   Total shareholders' (deficit)                                          (975,354)        (771,430)
                                                                        ------------      -----------
   Total liabilities and shareholders' (deficit)                        $ 160,602        $   93,703
</TABLE>


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


                                             3SI HOLDINGS, INC.
                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                             (Unaudited)


<TABLE>
<CAPTION>
                                                                         For the Three Months
                                                                            Ended March 31,
                                                                         2006            2005
<S>                                                                      <C>             <C>
SOFTWARE DELIVERY, CONSULTING AND OTHER SERVICE REVENUES                 $ 93,547        $ 47,075

COST OF REVENUES                                                           53,963          80,970
                                                                        ------------   ------------
  Gross profit (loss)                                                      39,584         (33,895)
                                                                        ------------    ------------

OPERATING EXPENSES:
  Selling and administrative expenses                                     137,108           160,537
                                                                        ------------     ------------
(LOSS) FROM OPERATIONS                                                    (97,524)         (194,432)

OTHER INCOME (EXPENSE):
  Interest (expense)                                                       (6,900)           (7,652)
                                                                         ------------     ------------

NET (LOSS)                                                               $(104,424)       $(202,084)

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.


                                      3SI HOLDINGS, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                           (Unaudited)




<TABLE>
<CAPTION>
                                                                         For the Nine Months
                                                                            Ended March 31,
                                                                         2006            2005
<S>                                                                      <C>             <C>
SOFTWARE DELIVERY, CONSULTING AND OTHER SERVICE REVENUES                 $ 420,553       $ 199,449

COST OF REVENUES                                                           199,021         237,843
                                                                         ------------   ------------
  Gross profit (loss)                                                      221,532         (38,394)
                                                                         ------------   ------------

OPERATING EXPENSES:
  Selling and administrative expenses                                      404,484         532,353
                                                                        ------------     ------------

(LOSS) FROM OPERATIONS                                                    (182,952)       (570,747)

OTHER INCOME (EXPENSE):
  Interest (expense)                                                       (20,972)        (21,039)
                                                                         ------------    ------------

NET (LOSS)                                                               $(203,924)      $(591,786)

NET (LOSS) PER SHARE:
  Basic and diluted net (loss) per common share                          $   (0.01)         $(0.02)

  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.


                                               3SI HOLDINGS, INC.
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (Unaudited)



<TABLE>
<CAPTION>
                                                                         For the Nine Months
                                                                            Ended March 31,
                                                                         2006            2005
<S>                                                                      <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss)                                                             $ (203,924)     $ (591,786)
  Adjustments to reconcile net (loss) to net cash
  provided by (used in) operating activities - Depreciation                  25,517          30,642
  Changes in operating assets and liabilities -
  Accounts receivable                                                        13,050          51,063
  Prepaid expenses and other assets                                              24          (1,608)
  Accounts payable and accrued liabilities                                   29,158          90,262
  Unearned revenue                                                          171,073          75,189
                                                                          -----------     -----------
  Net cash provided by (used in) operating activities                        34,898        (346,238)
                                                                          -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in equipment                                                    (3,537)             --
                                                                          ------------    -----------
  Net cash (used in) investing activities                                    (3,537)             --

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment of capital lease obligation                                        (7,408)        (20,935)
  Borrowings on notes payable - stockholder                                  78,000         109,657
                                                                          -----------      ----------
  Net cash provided by (used in) financing activities                        70,592          88,722
                                                                          -----------      ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        101,953        (257,516)

CASH AND CASH EQUIVALENTS, beginning of period                                2,568         258,864
                                                                          -----------     -----------

CASH AND CASH EQUIVALENTS, end of period                                   $104,521       $   1,348

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Interest paid                                                            $  7,172       $  21,039
</TABLE>


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

                                           3SI HOLDINGS, INC.

                NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                           MARCH 31, 2006
                                            (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 March 31, 2006, we had a shareholders' (deficit) of $(975,354).
Operations have been financed primarily through issuance of common stock.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation

The condensed interim financial statements included herein have been
prepared by us, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations, although we believe that the disclosures made are
adequate to make the information presented not misleading. The
condensed interim financial statements and notes thereto should be
read in conjunction with the financial statements and the notes
thereto, included in our Form 10-KSB filed June 14, 2006.

The accompanying condensed interim financial statements have been
prepared, in all material respects, in conformity with the standards
of accounting measurements set forth in Accounting Principles Board
Opinion No. 28 and reflect, in the opinion of management, all
adjustments necessary to summarize fairly the financial position and
results of operations for such periods in accordance with accounting
principles generally accepted in the United States of America. All
adjustments are of a normal recurring nature. The results of
operations for the most recent interim period are not necessarily
indicative of the results to be expected for the full year.

     Going Concern and Liquidity

The accompanying financial statements have been prepared assuming
that we will continue as a going concern. At March 31, 2006, current
liabilities exceed current assets by $685,526, we had a shareholders'
(deficit) of $(975,354) 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.

     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 March 31, 2006
and March 31, 2005, 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  March 31, 2006
                                                   Carrying
                                                     Amount     Fair Value

Cash and cash equivalents                          $ 104,521    $ 104,521
Shareholder advances                                (145,600)   (145,600)
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 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.

     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 March 31, 2006, advances from certain shareholders were
outstanding in the amounts of $67,600, $44,000 and $34,000. These
amounts are due on demand.

(4)  COMMITMENTS AND CONTINGENCIES

Subsequent to March 31, 2006, 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 March
31, 2006 and 2004, was $7,425 and $7,497, respectively.

(5)  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."

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 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.

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 March 31, 2006 compared to the three months
ended March 31, 2005.

Revenue.  Revenue for the quarter ended March 31, 2006 was $93,547
compared to $47,075 for the quarter ended March 31, 2005, an increase
of 99%. Revenue for the current quarter was primarily from two major
customers. 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 $53,963 for the quarter ended
March 31, 2006 decreased 33% compared to $80,970 for the quarter ended
March 31, 2005. 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 March 31, 2006 was
$39,584 compared to a gross loss of $(33,895) for the quarter ended
March 31, 2005.

Operating expenses.  Operating expenses of $137,108 for the quarter
ended March 31, 2006 decreased by 15% compared to $160,537 for the
quarter ended March 31, 2005. The decrease is a result primarily of a
decrease in staff.

Net loss.  Net loss was $(104,424) for the quarter ended March 31,
2006 compared to a net loss of $(202,084) for the quarter ended March
31, 2005.

For the nine months ended March 31, 2006 compared to the nine months
ended March 31, 2005.

Revenue.  Revenue for the nine months ended March 31, 2006 was
$420,553 compared to $199,449 for the nine months ended March 31,
2005, an increase of 111%. Revenue for the nine months ended March 31,
2006 was primarily from three major customers. Revenue for the nine
months ended March 31, 2005 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 $199,021 for the nine months
ended March 31, 2006 decreased 16% compared to $237,843 for the nine
months ended March 31, 2005. 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 nine months ended March 31, 2006
was $221,532 compared to a gross loss of $(38,394) for the nine months
ended March 31, 2005.

Operating expenses.  Operating expenses of $404,484 for the nine
months ended March 31, 2006 decreased by 24% compared to $532,353 for
the nine months ended March 31, 2005. The decrease is a result
primarily of a decrease in staff and travel and entertainment.

Net loss.  Net loss was $(203,924) for the nine months ended March 31,
2006 compared to a net loss of $(591,786) for the nine months ended
March 31, 2005.

Liquidity and Capital Resources

To date, operating funds have been provided primarily by sales of
common stock, which totaled $5,617,420 through March 31, 2006, and,
to a lesser degree, funds provided by revenue from our products.

Our operations provided $34,898 of cash in the nine months ended
March 31, 2006 on revenue of $420,553. 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 March 31, 2006, we had
$104,521 in cash and cash equivalents available to fund future
operations. Working capital was $(685,526) at March 31, 2006 compared
to $(503,582) at June 30, 2005. Current liabilities were $790,956 at
March 31, 2006, 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 March 31, 2006.

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 March 31, 2006. 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 the FY2005 Form 10KSB
was filed. At March 31, 2006 and June 30, 2005, notes with principal
amounts of $67,600, $44,000 and $34,000 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
March 31, 2006.

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 iKEWT has created for customers such
as MCI, Wells Fargo Service Co., SMI International and others. The
current version of iKEWT 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
iKEWT 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 March 31, 2006.

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 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.

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.

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
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 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.

We do not anticipate payment of dividends, and investors will be
wholly 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 March 31, 2006 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 March 31, 2006, 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.

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 March 31, 2006, or subsequent thereto.


                                             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: July 26, 2007                   By: /s/  Frederick J. Slack
                                       Frederick J. Slack, Chief Executive
                                       Officer