UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549


FORM
      10-KSB


þ
            
            ANNUAL
                REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                1934.




For
      the
      fiscal year ended December 31, 2007


o
            
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





Commission
      file number: 333-126158




SPUTNIK
      ENTERPRISES, INC.


(Exact
      name of small business issuer as specified in its charter)


Nevada
            
            52-2348956(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Identification No.)





650
                5thStreet, Suite 303, San Francisco, CA
            
            94107(Address
                of principal executive offices)
            
            (Zip
                Code)




(415)
      355-9500


(Issuer’s
      telephone number, including area code)





Securities
      registered pursuant to Section 12(b) of the Exchange Act:


[___]




Securities
      registered pursuant to Section 12(g) of the Exchange Act:


Common
      Stock, $0.001 par value


(Title
      of
      Class)





Check
      whether the issuer is not required to file reports pursuant to Section 13
      or Section 15(d) of the Exchange Act. o.





Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 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 x No o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB x.





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act), at March 1, 2008. Yes x   No o





State
      issuer’s revenue for its most recent fiscal year: $575,865.





The
      aggregate market value of the Company’s shares of voting and non-voting stock
      held by non-affiliates of the Company at December 31, 2007, computed by
      reference to the $.16 per-share closing price on December 31, 2007, was
      $922,227.





The
      number of shares outstanding of the issuer’s common equity as of March 14, 2008
      was 14,763,919.





Documents
      incorporated by reference:


None





Transitional
      Small Business Disclosure Format:  o   Yes x No









TABLE
      OF
      CONTENTS


PagePART
                  IITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              
              2ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              
              5ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              
              5ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              5PART
                  IIITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              
              6ITEM
                  6.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
              
              8ITEM
                  7.
              FINANCIAL
                  STATEMENTS
              
              12ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              
              13ITEM8A.
              CONTROLS
                  AND PROCEDURES
              
              13ITEM8B.
              OTHER
                  INFORMATION
              
              14PART
                  IIIITEM
                  9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSON AND CORPORATE GOVERNANCE;
                  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
              
              14ITEM
                  10.
              EXECUTIVE
                  COMPENSATION
              
              17ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS
              
              17ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
              
              19ITEM
                  13.
              EXHIBITS
              
              19ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              
              19SIGNATURES
              
              
              21Certification
                  Pursuant to Rule 13a-14(a) or 15d-14(a)Certification
                  Pursuant to Rule 13a-14(a) or 15d-14(a)Certification
                  Pursuant to Section 906








SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS




Information
      included or incorporated by reference in this filing may contain forward-looking
      statements.  This information may involve known and unknown risks,
      uncertainties and other factors which may cause our actual results, performance
      or achievements to be materially different from the future results, performance
      or achievements expressed or implied by any forward-looking statements.
 Forward-looking statements, which involve assumptions and describe our
      future plans, strategies and expectations, are generally identifiable by use
      of
      the words "may," "will," "should," "expect," "anticipate," "estimate,"
      "believe," "intend" or "project" or the negative of these words or other
      variations on these words or comparable terminology.





This
      filing contains forward-looking statements, including statements regarding,
      among other things, (a) our projected sales and profitability, (b) our growth
      strategies, (c) anticipated trends in our industry, (d) our future financing
      plans and (e) our anticipated needs for working capital.  These statements
      may be found under "Management's Discussion and Analysis or Plan of Operations"
      and "Description of Business," as well as in this filing generally.  Actual
      events or results may differ materially from those discussed in forward-looking
      statements as a result of various factors, including, without limitation, the
      risks outlined under "Risk
      Factors" and matters described in this filing generally.  In light of these
      risks and uncertainties, there can be no assurance that the forward-looking
      statements contained in this filing will in fact occur.





ADDITIONAL
      INFORMATION




We
      are subject to the information and periodic reporting requirements of the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in
      accordance with the Exchange Act, we file annual, quarterly and special reports,
      and other information with the Securities and Exchange Commission. These
      periodic reports, and other information are available for inspection and copying
      at the regional offices, public reference facilities and website of the
      Securities and Exchange Commission referred to above.





Statements
      contained in this report about the contents of any contract or any other
      document that is filed as an exhibit are not necessarily complete, and we refer
      you to the full text of the contract or other document filed as an exhibit.
      A
      copy of annual, quarterly and special reports and related exhibits and schedules
      may be inspected without charge at the Public Reference Room maintained by
      the
      Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C.
      20549, and copies of such reports may be obtained from the Securities and
      Exchange Commission upon payment of the prescribed fee. Information regarding
      the operation of the Public Reference Room may be obtained by calling the
      Securities and Exchange Commission at 1-800-SEC-0330. The Securities and
      Exchange Commission maintains a web site that contains reports, proxy and
      information statements, and other information regarding registrants that file
      electronically with the SEC. The address of the site is www.sec.gov .





1




PART
      I





ITEM
      1.
      DESCRIPTION OF BUSINESS





Organization





Sputnik,
      Inc. was incorporated in Delaware on September 27, 2001. On February 10, 2005,
      we filed Articles of Conversion and new articles of incorporation in Nevada
      and
      became a Nevada corporation due to lower annual corporate filing fees.





On
      November 13, 2007, we formed a wholly owned subsidiary, Laika, Inc., and
      transferred all of our assets and liabilities to Laika. On February 29, 2008,
      we
      closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to
      AstroChimp, Inc., leaving us as a shell company. We also changed our name to
      Sputnik Enterprises on February 29, 2008. References in this filing to “Sputnik,
      Inc.” refer to our business before this transaction closed.





Except
      as
      set forth above, there have been no reclassifications, mergers, consolidations
      or purchases or sales of significant amounts of assets not in the ordinary
      course of our business in the past three years. All of our business developments
      in the past three years are described below.





Our
      mailing address is 650 5th Street, Suite 303, San Francisco, CA 94107, our
      telephone number is (415) 355-9500, and our fax number is (415) 354-3342.
 Our website is www.sputnik.com ,
      and
      contains information which is not a part of this filing.





Our
      Business at December 31, 2007





Sputnik
      provides software that gives service providers and businesses the ability to
      control and limit access to their Wi-Fi networks. It also provides them the
      ability to generate revenues from the operation of their networks as follows:





·
            Our
                software can be configured by these service providers and businesses
                to
                require users to pay a fee for wireless internet access.


·
            It
                can alternatively be configured to require users to view service
                provider
                or business marketing information or advertising before the users
                can
                obtain free access to the networks.





Our
      software further enables service providers to monitor the status of their
      networks from anywhere over the internet, to remotely control wireless access
      points on their network, and to remotely upgrade software running on these
      access points.





Sputnik
      additionally provides Wi-Fi access point hardware and accessories, such as
      antennas and power supplies. We purchase standard Wi-Fi hardware components
      from
      original equipment manufacturers, on an as-needed basis. We then configure
      these
      components to work with our software. There are many suppliers of the standard
      Wi-Fi hardware that we use. Our current suppliers include Linksys, a division
      of
      Cisco Systems, Inc.; ValuePoint Networks; and AMAX Engineering
      Corporation.




2





Wi-Fi
      access points and related equipment that we resell
      operate in unlicensed radio frequencies.  The wireless access
      points that we resell are subject to Part 15 of Title 47 of the Code
      of Federal Communications Commission regulations that apply to
      the use of low- power, unlicensed wireless devices. We require
      that the equipment we purchase from original equipment
      manufacturers for resale fully complies with these regulations. If at
      some point in the future Sputnik builds proprietary Wi-Fi access
      point  hardware, we will take  all necessary steps to  comply
      with these  regulations. Sputnik software technology works with
      networks operating in both licensed and unlicensed radio frequencies.
      We are not subject to any other federal, state or local regulations, and we
      do not anticipate that any probable changes to these regulations will
      materially affect us.





Marketing





Currently,
      Sputnik software and hardware is sold through our  online  store at www.sputnik.com .
      Sputnik
      customers include  Internet service  providers, wireless Internet
      service providers,  network system  integrators, and hotspot
      providers. These  customers purchase and install, at their  expense,
      Sputnik Wi-Fi technology in  businesses and public venues  such as
      hotels, airports, resorts,  RV parks, commercial and  residential real
      estate, cafes, and  marinas. We reach these customers through public
      relations and  paid online advertising on Google. We do not install our
      products ourselves. We do not sell directly to the venues described
      above.





In
      the
      year ending December 31, 2007, one customer purchased a total of $80,249 worth
      of products and services from Sputnik. That amount corresponded to 13.9% of
      our
      annual revenues for the year ending December 31, 2007. In the year ending
      December 31, 2006, we had no customers who accounted for more than 10% of our
      revenues.





We
      license our software on a per wireless access point basis. Software license
      fees
      start at $299 per access point and decline based on volume. For example, the
      per
      wireless access point license fee if purchasing 10 licenses at once is $169.90.
      In addition we license add-on software modules that enhance the capabilities
      of
      our core software on a per-server basis. These add-on software modules cost
      between $299 and $499. There are no volume discounts for add-on software
      modules.





We
      also
      provide ongoing services in the form of monthly and annual software
      subscriptions on a per wireless access point basis. Software subscription fees
      per access point range from $19.95 to $49.95 monthly, or $199 to $499 annually,
      depending upon level of service. Volume discount schedules for software
      subscriptions for up to 10 wireless access points are available.





Our
      hardware ranges from $89 to $539 per access point depending upon the features
      the customer selects, $2,699 for a server pre-loaded with Sputnik software,
      $99
      to $169 for antennas depending upon the features the customer selects, and
      $69
      for power accessories. We do not offer volume discounts on
      hardware.




3





In
      addition, we offer the following on-going services: online and phone-based
      technical support services, and both online and in-person training at our
      facilities. Sputnik offers two levels of technical support:





·
            Free
                support. Free installation support is provided for 90 days from date
                of
                purchase, and is available by email
                only.


·
            Urgent
                support. Each support incident costs $199 for up to 60 initial minutes
                of
                troubleshooting, and $50 for each additional 15 minutes of support
                or any
                portion thereof.





Competition





Our
      market, business software for Wi-Fi networks, is new and dynamic.  Downward
      price pressure of managed Wi-Fi access software and services due to the increase
      of free, open and unmanaged Wi-Fi networks, competition from Wi-Fi technology
      providers, and competition from cellular broadband alternatives could reduce
      our
      market potential.  Additionally, new products may be developed in the
      future that will supplant Wi-Fi networks and render them obsolete.  If the
      price of, or demand for, managed Wi-Fi access software and services is depressed
      downward, or Wi-Fi networks become obsolete, we could lose client market,
      resulting in insufficient demand for our software.





Many
      of
      our current and potential competitors, including Cisco Systems, Inc. (NASDAQ:
      CSCO), Linksys (a division of Cisco Systems), Netgear Inc. (NASDAQ: NTGR),
      D-Link Corporation, (Taiwan: 2332.tw), and a number of start-up companies
      currently operate in the Wi-Fi market. They have significantly greater name
      recognition, better access to capital, more established distribution networks
      and relationships with customers.





Sputnik
      is a much smaller company than our larger competitors. Our ability to compete
      successfully will depend on a number of factors both within and outside our
      control, including:





·
            product
                innovation;


·
            product
                quality and performance;


·
            customer
                service and support;


·
            the
                experience of our sales, marketing and service professionals;


·
            rapid
                development of new products and features;


·
            price;
                and


·
            product
                and policy decisions announced by competitors.





We
      intend
      to compete by focusing on developing and marketing affordable, easy-to-use
      software and services that enable our customers to:





·
            control
                and “brand” the Wi-Fi end-user’s
                experience


·
            charge
                for Wi-Fi access; and


·
            offer
                free Wi-Fi services supported by branding or
                advertising.





Our
      software currently allows our customers to provide these services.





4





Research
      and Development





During
      each of our fiscal years ending December 31, 2007 and 2006 we have expensed $382,260 and
      $163,204, respectively, for research and development.





Employees





As
      of
      December 31, 2007 we had eight full-time employees. All other persons who
      provide services to us, for example legal, accounting, public relations, and
      software development, are independent contractors.




ITEM
      2.
      DESCRIPTION OF PROPERTIES





At
      December 31, 2007, we rented office space from Townsend Associates, LLC, a
      California Limited Liability Company, at 650 5th Street, Suite 303, San
      Francisco, CA 94107.  The rental cost is $2,933 per month.  We signed
      a three-year lease effective January 1, 2007 for the office space.
  Monthly rent will increase to $3,227 on January 1, 2008 and to
      $3,520 on January 1, 2009. Currently, our office space is provided by Laika
      at
      no charge.





We
      do not
      anticipate any significant difficulties in renewing any facility leases or
      in
      leasing alternative or additional space, if required.





ITEM
      3.
      LEGAL PROCEEDINGS





There
      are
      no pending or threatened lawsuits against us.





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





On
      October 11, 2007, we adopted a director’s written action to dismiss Malone &
Bailey, PC as our auditor and appoint McElravy, Kinchen & Associates, P.C.
      as our auditor.





On
      November 15, 2007, we adopted a director’s written action to transfer all of our
      assets, tangible and intangible, and all liabilities to Laika, Inc., for
      15,000,000 shares of common stock of Laika, Inc., constituting all issued and
      outstanding stock of Laika, Inc. and making Laika, Inc. a wholly-owned
      subsidiary of the Corporation.





On
      December 8, 2007, we proposed a special resolution to sell all of our stock
      of
      Laika to AstroChimp, Inc., to amend our Articles of Incorporation to change
      the
      name of Sputnik, Inc. to Sputnik Enterprises, Inc., and upon conclusion of
      the
      sale of the stock of Laika, Inc. to AstroChimp, Inc., and to give us the
      authority to issue an additional 10,000,000 shares which will be designated
      “Preferred Stock.” The sale was completed February 29, 2008.




5





These
      actions were undertaken because Sputnik needs additional capital to implement
      its business plan. Management had initially believed that it would have a better
      opportunity to obtain such capital as a public company. However, after becoming
      a public company and exploring financing alternatives, management determined
      that it was unable to raise sufficient capital as a public company and that
      Sputnik’s prospects of raising capital appear to be better by being a private
      company rather than a public company. The sale of stock of Laika to AstroChimp
      makes Laika a private company and further a company without a Ticker Symbol
      and
      thus not readily capable of Pink Sheet trading.




Further, management
      determined that additional capital could be raised by transforming itself into
      a
      public shell, having management sell a controlling interest in the public shell,
      and management agreeing to invest all proceeds of the sale of such controlling
      interest into Laika, after payment of all personal tax liabilities and
      out-of-pocket expenses as a result of such sale, and management has agreed
      to do
      so.





PART
      II




ITEM
      5. MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





Market
      Information




Our
      common stock trades on the OTC Bulletin Board under the trading symbol “SPUT.”
The figures set forth below reflect the quarterly high and low bid information
      for shares of our common stock during the last two fiscal years, as reported
      by
      the OTC Bulletin Board. These quotations reflect inter-dealer prices without
      retail markup, markdown, or commission, and may not represent actual
      transactions. Our stock commenced trading on August 15, 2007.




2007
                Quarter Ended
            
            High
            
            LowDecember 31,
                2007
            
            $
            .255
            
            $
            .16September 30,
                2007
            
            $
            .65
            
            $
            .37





Penny
      Stock Considerations





Our
      shares are "penny stocks" as that term is generally defined in the Securities
      Exchange Act of 1934 to mean equity securities with a price of less than $5.00.
       Our shares thus will be subject to rules that impose sales practice and
      disclosure requirements on broker-dealers who engage in certain transactions
      involving a penny stock.





Under
      the
      penny stock regulations, a broker-dealer selling a penny stock to anyone other
      than an established customer or accredited investor must make a special
      suitability determination regarding the purchaser and must receive the
      purchaser's written consent to the transaction prior to the sale, unless the
      broker-dealer is otherwise exempt.  Generally, an individual with a net
      worth in excess of $1,000,000, or annual income exceeding $100,000 individually
      or $300,000 together with his or her spouse, is considered an accredited
      investor.  In addition, under the penny stock regulations the broker-dealer
      is required to:





·
            Deliver,
                prior to any transaction involving a penny stock, a disclosure schedule
                prepared by the Securities and Exchange Commission relating to the
                penny
                stock market, unless the broker-dealer or the transaction is otherwise
                exempt;




6




·
            Disclose
                commissions payable to the broker-dealer and our registered
                representatives and current bid and offer quotations for the
                securities;





·
            Send
                monthly statements disclosing recent price information pertaining
                to the
                penny stock held in a customer's account, the account's value and
                information regarding the limited market in penny stocks;
                and·
            Make
                a special written determination that the penny stock is a suitable
                investment for the purchaser and receive the purchaser's written
                agreement
                to the transaction, prior to conducting any penny stock transaction
                in the
                customer's account.





Because
      of these regulations, broker-dealers may encounter difficulties in their attempt
      to sell shares of our common stock, which may affect the ability of selling
      shareholders or other holders to sell their shares in the secondary market
      and
      have the effect of reducing the level of trading activity in the secondary
      market.  These additional sales practice and disclosure requirements could
      impede the sale of our securities, if our securities become publicly traded.
       In addition, the liquidity for our securities may be decreased, with a
      corresponding decrease in the price of our securities.  Our shares in all
      probability will be subject to such penny stock rules and our shareholders
      will,
      in all likelihood, find it difficult to sell their securities.





Holders





As
      of
      December 31, 2007, we had 99 shareholders of record of our common
      stock.





Dividends





We
      have
      not declared any cash dividends on our common stock since our inception and
      do
      not anticipate paying such dividends in the foreseeable future.  We plan to
      retain any future earnings for use in our business.  Any decisions as to
      future payments of dividends will depend on our earnings and financial position
      and such other facts, as the Board of Directors deems relevant.





Reports
      to Shareholders





We
      are
      subject to the information and reporting requirements of the Securities Exchange
      Act of 1934 and will file periodic reports, proxy statements, and other
      information with the Securities and Exchange Commission.   We will
      voluntarily send an annual report to shareholders containing audited financial
      statements.





7





ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





*The
      following discussion should be read in conjunction with our Financial
      Statements, including the related notes thereto, and other financial information
      included herein. The information in this report includes forward-looking
      statements. In addition, past operating results are not necessarily indicative
      of the results to be expected for future periods.*





Overview





On
      November 13, 2007 we formed a wholly owned subsidiary, Laika, Inc., and
      transferred all of our assets and liabilities to Laika. On February 29, 2008,
      we
      closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to
      AstroChimp, Inc., leaving us as a shell company.





In
      our
      business at December 31, 2007, our customers are service providers and
      businesses that want to offer their own, proprietary wireless internet access
      services to their customers. These networks are commonly referred to as Wi-Fi
      networks. However, our customers do not want to give the general public
      unrestricted access to these networks. Further, they want the ability to be
      able
      to generate revenues from the operation of their networks.





Sputnik
      provides software that gives service providers and businesses the ability to
      control and limit access to their Wi-Fi networks. It also provides them the
      ability to generate revenues from the operation of their networks.





Sputnik
      additionally provides Wi-Fi access point hardware that is pre-configured to
      work
      with Sputnik software, and accessories such as antennas and power supplies.





Summary
      of Significant Accounting Policies





Nature
      of business. Sputnik,
      Inc. was incorporated in Delaware on September 27, 2001. Sputnik provides
      software for public Wi-Fi services.





Use
      of
      Estimates.




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities, the disclosure of contingent assets and liabilities at the date
      of
      the financial statements, and the reported amounts of revenues and expenses
      during the reporting periods. Actual results could differ from those estimates
      and assumptions.





Cash
      and Cash Equivalents. For
      purposes of the statement of cash flows, Sputnik considers all highly liquid
      investments purchased with an original maturity of three months or less to
      be
      cash equivalents.





Allowance
      for Doubtful Accounts .




Sputnik
      records a reduction to revenue for estimates for returns based on management’s
      estimate of likely losses per year, past experience and an estimate of current
      year uncollectible amounts. There was no allowance for doubtful accounts as
      of
      December 31, 2007.




8





Inventories .
      Inventory that consists of finished goods to be sold to customers that use
      them
      to build Sputnik wireless networks is stated at the lower of average cost or
      market.





Property
      and Equipment is valued at cost .
      Additions are capitalized and maintenance and repairs are charged to expense
      as
      incurred. Gains and losses on dispositions of equipment are reflected in
      operations. Depreciation is provided using the straight-line method over the
      estimated five-year useful lives of the assets.





Impairment
      of Long-Lived Assets .
      Sputnik
      reviews the carrying value of its long-lived assets annually or whenever events
      or changes in circumstances indicate that the historical cost-carrying value
      of
      an asset may no longer be appropriate. Sputnik assesses recoverability of the
      carrying value of the asset by estimating the future net cash flows expected
      to
      result from the asset, including eventual disposition. If the future net cash
      flows are less than the carrying value of the asset, an impairment loss is
      recorded equal to the difference between the asset's carrying value and fair
      value.





Stock
      Based Compensation .


Sputnik
      accounts for stock-based employee compensation arrangements using the fair
      value
      method in accordance with the provisions of Statement of Financial Accounting
      Standards no.123(R) or SFAS No. 123(R), Share-Based Payments, and Staff
      Accounting Bulletin No. 107, or SAB 107, Share-Based Payments. The company
      accounts for the stock options issued to non-employees in accordance with the
      provisions of Statement of Financial Accounting Standards no. 123, or SFAS
      No.
      123, Accounting for Stock-Based Compensation, and Emerging Issues Task Force
      No.
      96-18, Accounting for Equity Instruments with Variable Terms That Are Issued
      for
      Consideration other Than Employee Services Under FASB Statement no. 123. The
      fair value of stock options and warrants granted to employees and non-employees
      is determined using the Black-Scholes option pricing model. The Company has
      adopted SFAS 123(R) and applied it in the period presented. Through December
      31,
      2007 no options to employees have been granted.





Income
      taxes .
      Sputnik
      recognizes deferred tax assets and liabilities based on differences between
      the
      financial reporting and tax bases of assets and liabilities using the enacted
      tax rates and laws that are expected to be in effect when the differences are
      expected to be recovered. Sputnik provides a valuation allowance for deferred
      tax assets for which it does not consider realization of such assets to be
      more
      likely than not.





Basic
      and diluted net loss per share. Basic
      and
      diluted net loss per share are computed by dividing the net loss by the weighted
      average number of shares of common stock and common stock equivalents
      outstanding during the years. Common stock equivalents consist of common stock
      issuable under Sputnik's stock compensation plan for its employees and
      consultants. Common stock equivalents are not included in diluted loss per
      share
      calculations because they would be anti-dilutive.




9





Recently
      issued accounting pronouncements .
      Sputnik
      does not expect the adoption of recently issued accounting pronouncements to
      have a significant impact on its results of operations, financial position
      or
      cash flow.





Revenue
      Recognition .
      Sputnik
      recognizes revenue for hardware, software and services when persuasive evidence
      of an arrangement exists, services have been rendered, the sales price is fixed
      or determinable, and collectability is reasonably assured. This typically occurs
      when the product is shipped or service is provided. Sputnik is responsible
      for
      fulfillment of the product or service, including the acceptability of the
      product or service ordered or purchased. Sputnik takes title to a product before
      it is ordered by a customer and has latitude in establishing a price with the
      customer. In all cases Sputnik reconfigures the software prior to delivery
      to
      the customer using multiple suppliers with discretion in choosing between
      suppliers. Sputnik is involved in the determination of product or service
      specifications. Sputnik has both physical loss inventory risk and credit risk.
      Sputnik generates service revenues primarily by selling monthly or annual
      subscriptions to its software, which it hosts on its servers. Service revenue
      is
      recognized as it is earned. In addition, it generates service revenues by
      selling technical support, online or in-person training sessions, and online
      configuration services.





Results
      of Operations





Comparison
      of the Year ended December 31, 2007 to the Year ended December 31,
      2006





Revenue
      for 2007 was $575,865 which was an increase of $86,472 from our revenue for
      2006, which was $ 489, 394.
      Our
      revenue increased primarily due to higher sales of software subscriptions which
      are recognized monthly over the period of the subscription, and a slight
      increase in hardware revenues, combined with a slight decrease in software
      license revenues. In both years our revenue streams included: hardware (Wi-Fi
      access points, antennas, and accessories), proprietary Sputnik software,
      software subscriptions (SputnikNet setup, monthly, and annual fees), and
      services (training, support incidents, and consulting). In 2007, revenues broke
      down as follows: 45% hardware, 40% software subscriptions, 13% software, and
      2%
      services. In 2006, revenues broke down as follows: 45% hardware, 32% software
      subscriptions, 22% software, and 1% services. This shift in our revenue mix
      occurred as we
      put
      more emphasis on selling our software as a service or “web application”. Profit
      margins on the resale of hardware ranges from 20% for antennas to 40% for Wi-Fi
      access points.





Our
      cost
      of goods sold increased $38,686, to $208,260, for 2007, as compared to cost
      of
      goods sold of $169,574 for 2006.  Our cost of goods sold increased as a
      direct result of higher sales of our hardware products.





We
      had
      gross profit of $367,606 for 2007, which was an increase of $47,786 when
      compared to our gross profit for 2006, which was $319,820. Our gross margin
      decreased from 65% for 2006 to 64% for 2007, however this difference is too
      small to be material.





Our
      operating expenses increased $563,672, to $1,086,601 for 2007, as compared
      to
      operating expenses of $522,929 for 2006. Our
      operating expenses for 2007 included $694,969 in general and administrative
      costs, a $341,948 increase over general and administrative expense of $353,021
      for 2006; research and development expense of $382,260, an increase of $219,056
      over research and development expense of $163,204 for 2006; and depreciation
      and
      amortization expense of $9,372 which was an increase of $2,668 over depreciation
      and amortization expense of $6,704 for 2006. Our R&D expenditures are
      directed at adding new features and capabilities to our software products.
      The
      increase in operating expenses was primarily due to increased expenses related
      to payroll, but also included non-material increases in our rent, increased
      general office expenses due to increases in our staff, increased expenses
      related to public company filings and compliance, hosting fees in connection
      with the growth of our software subscription service, and increases in our
      advertising, public relations, and investor relations expenses. Other income
      and
      losses included a decrease in interest expense of $1,561, to $1,197 for 2007,
      as
      compared to interest expense of $2,758 for 2006; interest income of $2,896
      for
      2007, which was an increase of $2,709 over interest income in 2006, which was
      $187.




10





We
      had a
      net loss of $717,296 for 2007, which represented an increase of $511,616 from
      our net loss for 2006, which was $205,680.





Liquidity
      and Capital Resources





We
      had
      total assets of $97,050 as of December 31, 2007, which consisted of total
      current assets of $81,194, which itself included cash of $4,292, accounts
      receivable of $29,802, inventory of $9,785 prepaid expenses of $37,315. Other
      assets included property and equipment of $9,755, and deposit of
      $6,101.





We
      had
      total liabilities of $203,628 as of December 31, 2007, which consisted solely
      of
      current liabilities and included $55,041 of accounts payable, due to shareholder
      of $65,000 and $83,587 of other current liabilities. Our bank revolving
      line of credit had a balance of $ 20,418 at
      December 31, 2007 and is personally secured by the assets of our Directors,
      David LaDuke and Arthur Tyde. It has a maximum borrowing amount of $107,000,
      bearing interest at a variable annual rate which was 10.25% as of December
      31,
      2007.





We
      had an
      accumulated deficit of $1,817,532, as of December 31, 2007.





We
      had
      net cash used in operating activities of ($706,619) for the year ended December
      31, 2007, which consisted of net loss of ($717,296), depreciation of $9,372,
      changes in accounts receivable of ($25,203), inventory of $268, prepaid expenses
      of ($29,414), deposit of $2,466, and accounts payable and accrued liabilities
      of
      $52,800.





We
      had
      net cash used by investing activities of ($ 4, 489)
      for
      the year ended December 31, 2007, which consisted of purchase of property and
      equipment of ($4,489).





We
      had
      $707,861 in net cash provided by financing activities for the year ended
      December 31, 2007, which consisted of common stock issued for cash of $622,443,
      line of credit for $20,417, and loan from shareholders of $65,000 .




From
      January 1, 2007 to February 10, 2007, we sold 957,607 shares of our Common
      Stock
      in the same offering, without any involvement of underwriters or broker-dealers,
      to 25 investors in consideration for an  aggregate amount of $622,443. The
      offering closed on February 10, 2007. The price per share was $.65 in
      this offering. As of March 31,
      2007,
      all shares were issued.




11





Historically
      our cash has been provided by collection of sales revenues and short-term bank
      line of credit bearing an interest rate of 10.25% at December 31, 2007. Other
      than a loan of $65,000 provided to us by shareholders in 2007, there are no
      major outstanding cash commitments. As we expand, we may need to make sizeable
      cash commitments to secure inventory, and the impact of this potential trend
      on
      our business is uncertain. Our mix of capital resources has shifted from
      short-term debt to equity-based financing as we became a public company, which
      caused dilution of current shareholders. Because Sputnik keeps minimal
      inventories and receivables, the predominant component of our liquidity is
      our
      cash on hand. We also anticipate that continued growth of our company will
      require a substantial increase in capital needs. We believe that we can better
      serve these future capital requirements by issuing equity.





Sputnik
      suffered losses of $717,296 and $205,680 in 2007 and 2006, respectively, has
      an
      accumulated deficit of $1,817,532 and a working capital deficit of $122,434
      at
      December 31, 2007. Our
      ability to continue as a going concern is dependent upon our ability to
      successfully accomplish our business plans and secure additional funding sources
      and attaining profitable operations.  We do not have any commitments or
      identified sources of additional capital from third parties or from our
      officers, directors or majority shareholders. Additional financing may not
      be
      available to us on favorable terms, if at all.





Accordingly,
      our accountants have indicated there is substantial doubt about our ability
      to
      continue as a going concern over the next twelve months. Revenues have not
      been
      sufficient to cover operating costs and to allow us to continue as a going
      concern. Our poor financial condition could inhibit our ability to continue
      in
      business or achieve our business plan.





ITEM
      7.
      FINANCIAL STATEMENTS





The
      information required by this Item 7 is incorporated by reference to the Index
      to
      Financial Statements beginning at page F-1 of this Form 10-KSB.





12


INDEX
      TO
      FINANCIAL STATEMENTS





SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


INDEX
      TO
      CONSOLIDATED FINANCIAL STATEMENTS




PageREPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
            F-2REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
            F-3CONSOLIDATED
                FINANCIAL STATEMENTSConsolidated
                Balance Sheet as of December 31, 2007
            
            F-4Consolidated
                Statements of Operations for the years ended December 31, 2007 and
                2006
            
            F-6Consolidated
                Statements of Stockholders' Deficit for the years ended December
                31, 2007
                and 2006
            
            F-6Consolidated
                Statements of Cash Flows for the years ended December 31, 2007 and
                2006
            
            F-7Notes
                to Consolidated Financial Statements
            
            F-8





F-1





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors


Sputnik,
      Inc.


San
      Francisco, California





We
      have
      audited the accompanying balance sheet of Sputnik, Inc. as of December 31,
      2007,
      and the related statements of operations, stockholders' deficit and of cash
      flows for the year then ended. These financial statements are the responsibility
      of the management of Sputnik, Inc. Our responsibility is to express an opinion
      on these financial statements based on our audits. The financial statements
      for
      the period January 1, 2005 through December 31, 2006, were audited by other
      auditors whose reports expressed unqualified opinions on those statements.





We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Sputnik, Inc. as of December 31,
      2007, and the results of its operations and its cash flows the year then ended
      in conformity with accounting principles generally accepted in the United States
      of America.





The
      accompanying financial statements have been prepared assuming that Sputnik
      will
      continue as a going concern. As shown in the financial statements, Sputnik
      suffered recurring losses from operations and has a working capital deficiency
      at December 31, 2007. These factors and others raise substantial doubt about
      Sputnik's ability to continue as a going concern. Management's plans in regard
      to these matters are described in Note 2 to the financial statements. The
      financial statements do not include any adjustments relating to the
      recoverability and classification of recorded assets, or to the amounts and
      classification of liabilities that might be necessary in the event Sputnik
      cannot continue in existence.








/s/
      McElravy, Kinchen & Associates, P.C.





McElravy,
      Kinchen & Associates, P.C.


www.mkacpas.com


Houston,
      Texas





March
      17,
      2008




F-2





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To
      the
      Board of Directors


Sputnik,
      Inc.


San
      Francisco, California




We
      have
      audited the accompanying statements of operations, stockholders’ deficit and of
      cash flows for the year ended December 31, 2006. These financial statements
      are
      the responsibility of the management of Sputnik, Inc. Our responsibility is
      to
      express an opinion on these financial statements based on our
      audits.




We
      conducted our audit in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audit provides a
      reasonable basis for our opinion.




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the results of Sputnik, Inc.’s operations and its cash flows
      for the year ended December 31, 2006 in conformity with accounting principles
      generally accepted in the United States of America.






MALONE
      & BAILEY, PC


www.malone-bailey.com


Houston,
      Texas




April
      12,
      2007





F-3


SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


CONSOLIDATED BALANCE
      SHEET


As
      of
      December 31, 2007





ASSETSCurrent
                AssetsCash
            
            $
            4,292Accounts
                receivable
            
            
            29,802Inventory
            
            
            9,785Prepaid
                expenses
            
            
            37,315Total
                Current Assets
            
            
            81,194Property
                and equipment, net of accumulated depreciation of $18,758
            
            
            9,755Deposit
            
            
            6,101TOTAL
                ASSETS
            
            $
            97,050LIABILITIES
                AND STOCKHOLDERS' DEFICITCurrent
                LiabilitiesAccounts
                payable
            
            $
            55,041Accrued
                liabilities
            
            
            50,161Deferred
                revenue
            
            
            13,008Line
                of credit
            
            
            20,418Due
                to shareholder
            
            
            65,000Total
                Current Liabilities
            
            
            203,628Stockholders'
                DeficitCommon
                stock, $.001 par value, 50,000,000 shares authorized,14,763,919
                shares issued and outstanding
            
            
            14,764Additional
                paid-in capital
            
            
            1,696,190Retained
                deficit
            
            
            (1,817,53
            )Total
                Stockholders' Deficit
            
            
            (106,578
            )TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT
            
            $
            97,050




See
      summary of accounting policies and notes to consolidated financial
      statements.




F-4


SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


CONSOLIDATED
      STATEMENTS OF OPERATIONS


Years
      Ended December 31, 2007 and 2006





2007
            
            2006Revenue
            
            $
            575,866
            
            $
            489,394Cost
                of goods sold
            
            
            208,260
            
            
            169,574Gross
                profit
            
            
            367,606
            
            
            319,820ExpensesGeneral
                and administrative costs
            
            
            694,969
            
            
            353,021Research
                and development
            
            
            382,260
            
            
            163,204Depreciation
                and amortization
            
            
            9,372
            
            
            6,704Total
                operating expense
            
            
            1,086,601
            
            
            522,929Operating
                Loss
            
            
            (718,995
            )
            
            (203,109
            )Interest
                income
            
            
            2,896
            
            
            187Interest
                expense
            
            
            (1,197
            )
            
            (2,758
            )NET
                LOSS
            
            $
            (717,296
            )
            $
            (205,680
            )Basic
                and diluted loss per share
            
            $
            (0.05
            )
            $
            (0.02
            )Weighted
                average shares outstanding
            
            
            14,699,455
            
            
            13,552,020




See
      summary of accounting policies and notes to consolidated financial
      statements.




F-5


SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


Years
      Ended December 31, 2006 and 2007





Common
            
            Additional
                Paid
            
            RetainedShares
            
            Stock
            
            in
                Capital
            
            Deficit
            
            TotalsBalances,
                December 31, 2005
            
            
            13,513,919
            
            $
            13,514
            
            $
            884,941
            
            $
            (894,556
            )
            $
            3,899Share
                issuances:For
                cash
            
            
            292,393
            
            
            292
            
            
            189,764
            
            
            -
            
            
            190,056Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (205,680
            )
            
            (205,680
            )Balances,
                December 31, 2006
            
            
            13,806,312
            
            
            13,806
            
            
            1,074,705
            
            
            (1,100,236
            )
            
            (11,725
            )Share
                issuances:For
                cash
            
            
            957,607
            
            
            958
            
            
            621,485
            
            
            -
            
            
            622,443Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (717,296
            )
            
            (717,296
            )Balances,
                December 31, 2007
            
            
            14,763,919
            
            $
            14,764
            
            $
            1,696,190
            
            $
            (1,817,532
            )
            $
            (106,578
            )





See
      summary of accounting policies and notes to consolidated financial
      statements.




F-6


SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


Years
      Ended December 31, 2007 and 2006





2007
            
            2006Cash
                Flows from Operating ActivitiesNet
                loss
            
            $
            (717,296
            )
            $
            (205,680
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Depreciation
            
            
            9,372
            
            
            6,704Changes
                in working capital:Accounts
                receivable
            
            
            (25,203
            )
            
            (2,779
            )Inventory
            
            
            268
            
            
            9,672Prepaid
                expenses and other current assets
            
            
            (29,414
            )
            
            (2,823
            )Deposit
            
            
            2,466
            
            
            (5,867
            )Accounts
                payable and accrued liabilities
            
            
            52,800
            
            
            4,804Net
                cash used in operating activities
            
            
            (707,007
            )
            
            (195,969
            )Cash
                Flows from Investing ActivitiesPurchase
                of property and equipment
            
            
            (4,489
            )
            
            (12,942
            )Cash
                Flows from Financing ActivitiesLine
                of credit and other liabilities
            
            
            24,418
            
            
            -Proceeds
                from advance from shareholder
            
            
            65,000
            
            
            -Common
                stock issued for cash
            
            
            622,443
            
            
            190,056Net
                cash provided by financing activities
            
            
            707,861
            
            
            190,056Net
                change in cash
            
            
            (3,635
            )
            
            (18,855
            )Cash
                at beginning of year
            
            
            7,927
            
            
            26,782Cash
                at end of year
            
            $
            4,292
            
            $
            7,927Supplemental
                Disclosures of Cash Flow InformationCash
                paid for interest
            
            $
            1,197
            
            $
            2,758Cash
                paid for income taxes
            
            
            -
            
            
            -Supplemental
                Non-cash Investing and Financing InformationStock
                issued for debt
            
            $
            -
            
            $
            0





See
      summary of accounting policies and notes to consolidated financial
      statements.





F-7





SPUTNIK
      ENTERPRISES, INC.


(FORMERLY
      SPUTNIK, INC.)


Notes
      to
      Financial Consolidated Statements





NOTE
      1 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature
      of business .
      Sputnik, Inc. was incorporated in Delaware on September 27, 2001.  On
      February 10, 2005, we filed Articles of Conversion and new articles of
      incorporation in Nevada and became a Nevada corporation. Sputnik provides
      software for public Wi-Fi services. Sputnik's software is designed to give
      service providers and businesses the ability to control access to their Wi-Fi
      networks, and to offer free, branded, or fee-based Wi-Fi services. The software
      also enables centralized, web-based management of Wi-Fi networks. Sputnik also
      provides Wi-Fi hardware components that are pre-configured to work with Sputnik
      software.





Principles
      of Consolidation. The
      consolidated financial statements include the accounts of the Company and its
      100% owned subsidiary, Laika, Inc. (Subsidiary). All significant intercompany
      transactions and balances have been eliminated in consolidation.





Use
      of
      Estimates .
      The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities, the disclosure of contingent assets and liabilities at the date
      of
      the financial statements, and the reported amounts of revenues and expenses
      during the reporting periods. Actual results could differ from those estimates
      and assumptions.





Cash
      and Cash Equivalents .
      For
      purposes of the statement of cash flows, Sputnik considers all highly liquid
      investments purchased with an original maturity of three months or less to
      be
      cash equivalents.





Revenue
      Recognition .
      Sputnik
      recognizes revenue for hardware, software and services when persuasive evidence
      of an arrangement exists, services have been rendered, the sales price is fixed
      or determinable, and collectability is reasonably assured. This typically occurs
      when the product is shipped or service is provided. Sputnik is responsible
      for
      fulfillment of the product or service, including the acceptability of the
      product or service ordered or purchased. Sputnik takes title to a product before
      it is ordered by a customer and has latitude in establishing a price with the
      customer. In all cases Sputnik reconfigures the software prior to delivery
      to
      the customer using multiple suppliers with discretion in choosing between
      suppliers. Sputnik is involved in the determination of product or service
      specifications. Sputnik has both physical loss inventory risk and credit risk.
      Sputnik generates service revenues primarily by selling monthly or annual
      subscriptions to its software, which it hosts on its servers. Service revenue
      is
      recognized as it is earned. In addition, it generates service revenues by
      selling technical support, online or in-person training sessions, and online
      configuration services.




F-8





Allowance
      for Doubtful Accounts .
      Sputnik
      records a reduction to revenue for estimates for returns based on management’s
      estimate of likely losses per year, past experience and an estimate of current
      year uncollectible amounts. There was no allowance for doubtful accounts as
      of
      December 31, 2007.





Inventory .
      Inventory consists of finished goods to be sold to customers that use them
      to
      build Sputnik wireless networks is stated at the lower of average cost or
      market.





Property
      and Equipment .
      Property and Equipment is valued at cost. Additions are capitalized and
      maintenance and repairs are charged to expense as incurred. Gains and losses
      on
      dispositions of equipment are reflected in operations. Depreciation is provided
      using the straight-line method over the estimated five-year useful lives of
      the
      assets.





Fair
      Value of Financial Instruments .
      SFAS
      No. 107 disclosures about fair value of financial instruments define the fair
      value of a financial instrument as the amount at which the instrument could
      be
      exchanged in a current transaction between willing parties. The carrying values
      of the Company’s financial instruments, which include cash, accounts receivable,
      and accrued expenses, approximate fair values due to the short-term maturities
      of such instruments.





Impairment
      of Long-Lived Assets .
      Sputnik
      reviews the carrying value of its long-lived assets annually or whenever events
      or changes in circumstances indicate that the historical cost-carrying value
      of
      an asset may no longer be appropriate. Sputnik assesses recoverability of the
      carrying value of the asset by estimating the future net cash flows expected
      to
      result from the asset, including eventual disposition. If the future net cash
      flows are less than the carrying value of the asset, an impairment loss is
      recorded equal to the difference between the asset's carrying value and fair
      value.





Stock
      Based Compensation .
      Sputnik
      accounts for stock-based employee compensation arrangements using the fair
      value
      method in accordance with the provisions of Statement of Financial Accounting
      Standards no.123(R) or SFAS No. 123(R), Share-Based Payments, and Staff
      Accounting Bulletin No. 107, or SAB 107, Share-Based Payments. The company
      accounts for the stock options issued to non-employees in accordance with the
      provisions of Statement of Financial Accounting Standards no. 123, or SFAS
      No.
      123, Accounting for Stock-Based Compensation, and Emerging Issues Task Force
      No.
      96-18, Accounting for Equity Instruments with Variable Terms That Are Issued
      for
      Consideration other Than Employee Services Under FASB Statement no. 123. The
      fair value of stock options and warrants granted to employees and non-employees
      is determined using the Black-Scholes option pricing model. The Company has
      adopted SFAS 123(R) and applied it in the period presented. Through December
      31,
      2007 no options to employees have been granted.





Income
      Taxes .
      Sputnik
      recognizes deferred tax assets and liabilities based on differences between
      the
      financial reporting and tax bases of assets and liabilities using the enacted
      tax rates and laws that are expected to be in effect when the differences are
      expected to be recovered. Sputnik provides a valuation allowance for deferred
      tax assets for which it does not consider realization of such assets to be
      more
      likely than not.




F-9





Basic
      and Diluted Net Loss Per Share .
      Basic
      and diluted net loss per share are computed by dividing the net loss by the
      weighted average number of shares of common stock and common stock equivalents
      outstanding during the years. Common stock equivalents consist of common stock
      issuable under Sputnik's stock compensation plan for its employees and
      consultants. Common stock equivalents are not included in diluted loss per
      share
      calculations because they would be anti-dilutive. There were no common stock
      equivalents during 2007 and 2006.





Recently
      Issued Accounting Pronouncements .
      Sputnik
      does not expect the adoption of recently issued accounting pronouncements to
      have a significant impact on its results of operations, financial position
      or
      cash flow.





NOTE
      2 -
      GOING CONCERN





The
      accompanying financial statements have been prepared assuming that Sputnik
      will
      continue as a going concern. As shown in the accompanying financial statements,
      Sputnik suffered losses of $717,296 and $205,680 in 2007 and 2006, respectively,
      has an accumulated deficit of $1,817,532 and a working capital deficit of
      $122,434 at December 31, 2007. These conditions raise substantial doubt as
      to
      Sputnik's ability to continue as a going concern. The financial statements
      do
      not include any adjustments that might be necessary if Sputnik is unable to
      continue as a going concern. Management intends to finance these deficits by
      selling its common stock.





NOTE
      3 -
      BANK REVOLVING LINE OF CREDIT





Sputnik
      has a revolving line of credit that is secured by the assets of certain
      stockholders. The line of credit has a maximum borrowing amount of $107,000,
      an
      interest rate of 10.25% and a balance due of $20,418 at December 31,
      2007.




NOTE
      4 -
      INCOME TAXES





Sputnik
      uses the liability method, where deferred tax assets and liabilities are
      determined based on the expected future tax consequences of temporary
      differences between the carrying amounts of assets and liabilities for financial
      and income tax reporting purposes. During fiscal 2007 and 2006, Sputnik incurred
      net losses and, therefore, has no tax liability. The net deferred tax asset
      generated by the loss carryforward has been fully reserved. The cumulative
      net
      operating loss carryforward is approximately $1,402,975 at December 31, 2007,
      and will expire in years 2023 through 2027.





At
      December 31, 2007, deferred tax assets consisted of the following:





Net
                operating losses
            
            $
            477,012Less:
                 valuation allowance
            
            
            (477,012
            )Net
                deferred tax asset
            
            $
            -





F-10




NOTE
      5 -
      PROPERTY, PLANT & EQUIPMENT





Property
      and equipment as of December 31, 2007 consists of the following:





DescriptionComputers
                and office equipment
            
            $
            28,513Less:
                Accumulated depreciation
            
            
            (18,758
            )Property
                & equipment, net
            
            $
            9,755





Depreciation
      expense for was $9,372 and $6,704 for the years ended December 31, 2007 and
      2006, respectively.





NOTE
      6 -
      DUE TO SHAREHOLDER





In
      December, 2007, we received $65,000 from our Chief Executive Officer,
      Director and Shareholder for working capital purposes. The amount is
      unsecured, non interest bearing, with no specific terms of repayment. No
      interest has been imputed due to the immaterial of the amount.




NOTE
      7 -
      COMMITMENTS AND CONTINGENCIES





In
      2007,
      Sputnik leased office space under an operating lease that expires in December
      2009 that requires monthly rental payments of $2,933, $3,277 and $3,520 per
      month for the years 2007, 2008 and 2009, respectively. Rent expense was $35,200
      and $17,313 in 2007 and 2006 respectively.





Minimum
      lease payments due under non-cancelable leases over the next five years and
      thereafter are as follows as of December 31, 2007:


Year
                  Ending December 31,2008
              
              $
              39,3242009
              
              $
              42,240Total
              
              $
              81,564


F-11




NOTE
      8 -
      EQUITY





Sputnik
      was incorporated on September 27, 2001 in the State of Delaware, with 10,000,000
      shares of authorized stock at $0.0001 par value. On February 10, 2005 Sputnik
      converted to a Nevada Corporation, with 50,000,000 shares of authorized stock
      at
      $0.001 par value.





From
      January 1, 2007 to February 10, 2007, we sold 957,607 shares of our Common
      Stock
      in the same offering, without any involvement of underwriters or broker-dealers,
      to 25 investors in consideration for an  aggregate amount of $622,443. The
      offering closed on February 10, 2007. The price per share was $.65 in
      this offering. As of March 31, 2007, all shares were
      issued.





NOTE
      9 -
      CONCENTRATIONS





For
      the
      year ended December 31, 2007, one customer accounted for 13.9% of revenues.
      For
      the year ended December 31, 2006, no customers accounted for more than 10%
      of
      revenues.




NOTE
      10 -
      DISCONTINUED OPERATIONS





On
      February 6, 2008, we proposed a special resolution to amend our Articles of
      Incorporation to change the name of Sputnik, Inc. to Sputnik Enterprises, Inc.
      upon conclusion of the sale of the stock of Laika, Inc. to AstroChimp, Inc.,
      and
      to give us the authority to issue an additional 10,000,000 shares which will
      be
      designated “Preferred Stock”





This
      resolution was undertaken because management determined that additional capital
      could be raised by transforming itself into a public shell, having management
      sell a controlling interest in the public shell, and management agreeing to
      invest all proceeds of the sale of such controlling interest into Laika, after
      payment of all personal tax liabilities and out-of-pocket expenses as a result
      of such sale, and management has agreed to do so.





On
      February 29, 2008, we closed the sale of the stock of our wholly owned
      subsidiary, Laika, Inc. to AstroChimp, Inc., leaving us as a shell
      company.




F-12





ITEM
      8.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE





Incorporated
      by reference from the information under the captions “Changes in Registrant’s
      Certifying Accountant” and “Letter from Malone & Bailey, PC” in the
      Registrant’s Current Report Form 8-K dated October 11, 2007.





ITEM
      8A.
      CONTROLS AND PROCEDURES




Evaluation
      of Disclosure Controls and Procedures




The
      Company’s Chief Executive Officer and acting Chief Financial Officer has
      evaluated the effectiveness of the Company’s disclosure controls and procedures
      (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of
      the
      fiscal period ending December 31, 2007 covered by this Annual Report
      on Form 10-KSB. Based upon such evaluation, the Chief Executive Officer and
      acting Chief Financial Officer has concluded that, as of the end of such period,
      the Company’s disclosure controls and procedures were effective as required
      under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This conclusion
      by
      the Company’s Chief Executive Officer and acting Chief Financial
      Officer does not relate to reporting periods after December 31,
      2007.




Management’s
      Report on Internal Control Over Financial Reporting




Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
      Act) of the Company. Internal control over financial reporting is a process
      designed to provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external purposes
      in
      accordance with accounting principles generally accepted in the United States
      of
      America.




The
      Company’s internal control over financial reporting includes those policies and
      procedures that (i) pertain to the maintenance of records that, in
      reasonable detail, accurately and fairly reflect the transactions and
      dispositions of the assets of the company; (ii) provide reasonable
      assurance that transactions are recorded as necessary to permit preparation
      of
      financial statements in accordance with accounting principles generally accepted
      in the United States of America, and that receipts and expenditures of the
      Company are being made only in accordance with authorizations of management
      and
      directors of the Company; and (iii) provide reasonable assurance regarding
      prevention or timely detection of unauthorized acquisition, use or disposition
      of the Company’s assets that could have a material effect on the financial
      statements.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.





13




Management,
      under the supervision of the Company’s Chief Executive Officer and acting Chief
      Financial Officer, conducted an evaluation of the effectiveness of internal
      control over financial reporting based on the framework in *Internal
      Control—Integrated Framework* issued
      by the Committee of Sponsoring Organizations of the Treadway Commission. Based
      on this evaluation, management concluded that the Company’s internal control
      over financial reporting was effective as of December 31, 2007 under the
      criteria set forth in the in *Internal
      Control—Integrated Framework* .




This
      annual report does not include an attestation report of the Company’s registered
      public accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by our registered public
      accounting firm pursuant to temporary rules of the SEC that permit us to provide
      only management’s report in this Annual Report on Form 10-KSB.




Changes
      in Internal Control Over Financial Reporting




No
      change
      in the Company’s internal control over financial reporting occurred during the
      quarter ended December 31, 2007, that materially affected, or is reasonably
      likely to materially affect, the Company’s internal control over financial
      reporting.




ITEM
      8B.
      OTHER INFORMATION




None




PART
      III




ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE
      GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT




Our
      directors and executive officers are as follows:





Name
            
            Age
            
            PositionDavid
                LaDuke
            
            47
            
            President,
                Chief Executive Officer, Treasurer, Secretary and
                DirectorArthur
                Tyde
            
            40
            
            Director





Directors
      serve for a one-year term.  Our Bylaws provide for three to nine
      directors.





Biographical
      Information





David
      LaDuke, President and Chief Executive Officer




14





Mr.
      LaDuke has served as President and Chief Executive Officer of Sputnik since
      February 2002. Since April 12, 2005, Mr. LaDuke has served as our Treasurer.
       Since November 2003, he has served as Secretary of Sputnik. In November
      1998, he co-founded Linuxcare Inc., now Levanta, Inc., a provider of enterprise
      services for open-source software. He served as Vice President of Marketing
      there until April 2001. From June 2001 to July 2003 and March 1993 to November
      1998, Mr. LaDuke was an independent consultant in technology, marketing and
      business strategy for various companies including Apple Computer, Crystal
      Decisions, Netscape Communications, Oracle Corporation, Pinnacle Systems,
      Silicon Graphics, and others. From November 1989 to February 1993, Mr. LaDuke
      worked as the manager of publishing industry marketing at NeXT Computer, Inc.,
      a
      computer manufacturing company acquired by Apple Computer in 1996.  From
      September 1986 to October 1989, Mr. LaDuke worked in marketing positions at
      Apple Computer, Inc. Mr. LaDuke earned an M.B.A. from the Tuck School of
      Business Administration at Dartmouth College in 1985, an M.F.A. from Columbia
      University in 1983 and an A.B. from Columbia College, Columbia University in
      1982.





Arthur
      Tyde, Director





Mr.
      Tyde
      has served as a Director for Sputnik since February 2002.  From February
      2002 to June 30, 2003, Mr. Tyde served as our Chief Operating Officer and
      Director of Sales. In March 2005, Mr. Tyde accepted a position as the Chief
      Technology Officer of The Free Standards Group, a nonprofit organization
      dedicated to developing and promoting open-source software standards. From
      June
      1999 to January 2003, Mr. Tyde served as the Executive Vice President of
      Linuxcare Inc., now Levanta, Inc., which he co-founded.  From September
      1998 to June 1999, he served as the Chief Executive Officer of Linuxcare Inc.
      From January 1996 to September 1998, he served as a Consultant with Hall Kinion.
       Mr. Tyde received a Bachelors degree from Michigan State University in
      Telecommunications in 1988.





Board
      Committees





We
      currently have no compensation committee or other board committee performing
      equivalent functions. Currently, all members of our board of directors
      participate in discussions concerning executive officer
      compensation.





Director
      Compensation





Members
      of our Board of Directors did not receive compensation in 2007.




The
      Board of Directors and Committees





Members
      of our Board of Directors do not receive compensation for
      their
      services as Directors, although Directors may be reimbursed for reasonable
      expenses incurred in attending Board or committee meetings.




15





The
      Company has no formal audit committee. However, the entire Board of Directors
      (Board) is the Company's defacto audit committee. In discharging its oversight
      responsibility as to the audit process, the Board obtained from the independent
      auditors a formal written statement describing all relationships between the
      auditors and the Company that might bear on the auditors' independence as
      required by Independence Standards Board Standard No. 1, "Independence
      Discussions with Audit Committees." The Board discussed with the auditors any
      relationships that may impact their objectivity and independence, including
      fees
      for non-audit services, and satisfied itself as to the auditors' independence.
      The Board also discussed with management, the internal auditors and the
      independent auditors the quality and adequacy of the Company's internal
      controls.




Family
      Relationships





None.




Compliance
      With Section 16(a) of the Exchange Act





Section 16(a)
      of the Securities Exchange Act requires our executive officers and directors
      and
      person who own more than 10% of our common stock to file reports regarding
      ownership of and transactions in our securities with the Securities and Exchange
      Commissioner and to provide us with copies of those filings. Based solely on
      our
      review of the copies received by or a written representation from certain
      reporting persons we believe that during fiscal year ended December 31, 2006,
      we
      believe that all eligible persons are in compliance with the requirements of
      Section 16(a).





Code
      of Ethics.





The
      board
      of directors has not yet adopted a formal Code of Ethics.





Involvement
      on Certain Material Legal Proceedings During the Past Five (5)
      Years





(1)
            No
                director, officer, significant employee or consultant has been convicted
                in a criminal proceeding, exclusive of traffic violations or is subject
                to
                any pending criminal proceeding.





(2)
            No
                bankruptcy petitions have been filed by or against any business or
                property of any director, officer, significant employee or consultant
                of
                the Company nor has any bankruptcy petition been filed against a
                partnership or business association where these persons were general
                partners or executive officers.





(3)
            No
                director, officer, significant employee or consultant has been permanently
                or temporarily enjoined, barred, suspended or otherwise limited from
                involvement in any type of business, securities or banking
                activities.




16




(4)
            No
                director, officer or significant employee has been convicted of violating
                a federal or state securities or commodities
                law.




ITEM
      10.
      EXECUTIVE COMPENSATION





Executive
      Compensation





The
      following table sets forth summary information concerning the compensation
      received for services rendered to us during the fiscal years ended December
      31
      2007, 2006, 2005, and 2004 by our CEO.


Name
                  & Principal Position
              
              Year
              
              Salary
                ($)
              
              Bonus
                ($)
              
              Stock
                Awards
                ($)
              
              Option
                Awards
                ($)
              
              Non-Equity
                  Incentive Plan Compensation
                ($)
              
              Nonqualified
                  deferred compensation earnings
                ($)
              
              All
                  other Compensation
                ($)(2)
              
              Total
                ($)David
                  LaDuke
              
              
              2007
              
              $
              92,400
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0CEO,
              
              
              2006
              
              $
              43,500
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              13,500
              
              $
              57,000President,
                  and
              
              
              2005
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              43,000
              
              $
              43,500Director
              
              
              2004
              
              $
              0
              
              $
              0
              
              $
              600,000
              
              $
              0
              
              $
              0
              
              $
              0
              
              $
              17,000
              
              $
              617,0000





(1)
            Consists
                of 6,000,000 shares of common stock issued in 2004 which were valued
                at
                $.10 per share.


(2)
            Consists
                of consulting fees.





The
      compensation discussed herein addresses all compensation awarded to, earned
      by,
      or paid to our named executive officer.





ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The
      following tables set forth the ownership of our common stock by each person
      known by us to be the beneficial owner of more than 5% of our outstanding common
      stock, our directors, and our executive officers and directors as a group.
       To the best of our knowledge, the persons named have sole voting and
      investment power with respect to such shares, except as otherwise noted.
 There are not any pending or anticipated arrangements that may cause a
      change in control.





The
      information presented below regarding beneficial ownership of our voting
      securities has been presented in accordance with the rules of the Securities
      and
      Exchange Commission and is not necessarily indicative of ownership for any
      other
      purpose. Under these rules, a person is deemed to be a "beneficial owner" of
      a
      security if that person has or shares the power to vote or direct the voting
      of
      the security or the power to dispose or direct the disposition of the security.
      A person is deemed to own beneficially any security as to which such person
      has
      the right to acquire sole or shared voting or investment power within 60 days
      through the conversion or exercise of any convertible security, warrant, option
      or other right. More than one person may be deemed to be a beneficial owner
      of
      the same securities. The percentage of beneficial ownership by any person as
      of
      a particular date is calculated by dividing the number of shares beneficially
      owned by such person, which includes the number of shares as to which such
      person has the right to acquire voting or investment power within 60 days,
      by
      the sum of the number of shares outstanding as of such date plus the number
      of
      shares as to which such person has the right to acquire voting or investment
      power within 60 days. Consequently, the denominator used for calculating such
      percentage may be different for each beneficial owner. Except as otherwise
      indicated below and under applicable community property laws, we believe that
      the beneficial owners of our common stock listed below have sole voting and
      investment power with respect to the shares shown.





17





Name
                and Address of Beneficial Owner
            
            Shares
                Beneficially Owned
            
            Percentage
                Beneficially OwnedDavid
                LaDuke
              650
                5thStreet, Suite 303
              San
                Francisco, CA 94107
              
              President,
                Chief Executive Officer, Treasurer and Director
            
            
            8,000,000
            
            
            54.2
            %Arthur
                Tyde
              650
                5th St., Suite 303
              San
                Francisco, CA 94107
              
              Director
            
            
            1,000,000
            
            
            6.8
            %Kathy
                Giori
              650
                5th St., Suite 303
              San
                Francisco, CA 94107
            
            
            1,250,000
            
            
            8.5
            %Scott
                Hutton
              423
                Dell Ave, Mountain View CA 94035
            
            
            1,000,000
            
            
            6.8
            %*All
                Officers and Directors as a Group (2 persons)*
            
            
            9,000,000
            
            
            60.96
            %





This
      table is based upon information derived from our stock records. Unless otherwise
      indicated in the footnotes to this table and subject to community property
      laws
      where applicable, we believe that each of the shareholders named in this table
      has sole or shared voting and investment power with respect to the shares
      indicated as beneficially owned. Except as set forth above, applicable
      percentages are based upon 14,763,919 shares
      of
      common stock outstanding as of December 31, 2007.




18





ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





During
      2007, we have not entered into and as of December 31, 2007 we do not have any
      agreements to enter into any material transactions with any director, executive
      officer, and promoter, beneficial owner of five percent or more of our common
      stock, or family members of such persons. Mr. LaDuke and Mr. Tyde are promoters
      of Sputnik, except as follows:





On
      November 13, 2007 we formed a wholly owned subsidiary, Laika, Inc., and
      transferred all of our assets and liabilities to Laika. On February 29, 2008,
      we
      closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to
      AstroChimp, Inc. for cancellation of $65,000 of David LaDuke to us, leaving
      us
      as a shell company. AstroChimp is wholly-owned by Mr. LaDuke. The purchase
      price
      was not determined as a result of arms’-length negotiations. However, in view of
      the following:





Sputnik’s
      financial condition has continued to deteriorate since September 30, 2007.
      Sputnik’s liabilities now exceed its assets and it has negative shareholder
      equity and net worth. Unless its business plan succeeds, it will cease
      operations. Sputnik
      has explored all other transaction structures which will allow Sputnik to
      implement its business plan and avoid ceasing operations and has determined
      that
      no other viable alternative exists.





Sputnik’s
      Board of Directors determined the fairest measure of value of value of the
      stock
      of Laika in this situation was the amount of debt owed by Sputnik to Mr. LaDuke
      at December 15, 2007, which amount is approximately $65,000.





ITEM
      13.
      EXHIBITS





(a)
      List
      of documents filed as part of this Report:





None





(b)
      Exhibits:





The
      following exhibits listed are filed as part of this Report:





31.1
      Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial
      Officer, David LaDuke




32.1
      Section 1350 Certification, David LaDuke




ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





1.
      Audit
      Fees:  Aggregate
      fees billed for each of the last two (2) fiscal years for professional services
      rendered by the principal accountant for the audit of the annual financial
      statements and review of financial statements included on Form
      10-QSB:


2006:
              
              $
              23,4132007:
              
              $
              32,200




19





2.
      Audit-Related Fees: Aggregate fees billed in each of the last two (2) fiscal
      years for assurance and related services by the principal accountant that are
      reasonably related to the performance of the audit or review of the financial
      statements and are not reported previously.


2006:
              
              $
              02007:
              
              $
              0


3.
      Tax
      Fees: Aggregate fees billed in each of the last two (2) fiscal years for
      professional services rendered by the principal accountant for tax compliance,
      tax advice, and tax planning.


2006:
              
              $
              02007:
              
              $
              0




4.
      All
      Other Fees: Aggregate fees billed in each of the last two (2) fiscal years
      for
      products and services provided by the principal accountant, other than the
      services previously reported.


2006:
              
              $
              02007:
              
              $
              0





5.
      Audit
      Committee Pre-Approval Procedures. The Board of Directors has not, to date,
      appointed an Audit Committee.





20




SIGNATURES




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized, in the City of San Francisco, State
      of California, on March 21, 2008.




SPUTNIK, INC./s/ David
              LaDukeDavid
              LaDukeChief
                Executive Officer and Chairman of the Board




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.








SIGNATURE
            
            TITLE
            
            DATE/s/
                David LaDuke
            
            Director
            
            March
                21, 2008/s/
                Arthur Tyde
            
            Director
            
            March
                21, 2008





21