Option 1 states that both statements are individually true and that statement II is the correct explanation of statement I. However, this is incorrect. Statement II, which states that sex organs are mandatory for reproduction, is false. There are organisms that can reproduce asexually, such as bacteria and some plants. These organisms do not have male and female sex organs but can still produce offspring.

Option 2 also states that both statements are individually true, but it acknowledges that statement II is not the correct explanation of statement I. This option is correct. Statement I is true, as reproduction is indeed the process by which living organisms produce young ones of their species. However, statement II is false, as reproductive organs are not mandatory for all forms of reproduction.

Option 3 states that statement I is true but statement II is false. This option is correct. As mentioned earlier, there are forms of reproduction that do not involve sex organs, making statement II false.

Option 4 states that statement I is false but statement II is true. This option is incorrect. Statement I is true, as reproduction is a process by which living organisms produce offspring, and statement II is false, as sex organs are not mandatory for all forms of reproduction.

Therefore, the correct answer is option 3.