**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**








xQUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
      the
      quarterly period ended September
      30, 2007




o TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For
      the
      transition period from _____________________ to ______________





Commission
      file number **333-126158**





SPUTNIK,
      INC.


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





Nevada
            52-2348956(State
                or other jurisdiction of incorporation
              or
                organization)
            (IRS
                Employer Identification No.)





650
      5th
      Street, Suite 303


San
      Francisco, CA 94107


(Address
      of principal executive offices)





(415)
      355-9500


(Issuer’s
      telephone number)





N/A


(Former
      name, former address and former fiscal year, if changed since last
      report)





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


Yes x  No ̈





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


Yes  ̈   No x





As
      of
      September 30, 2007, there were 14,763,919 **** shares
      issued and outstanding of the registrant’s common stock.





Transitional
      Small Business Disclosure Format:


Yes o  No x







**INDEX**




**Page**PART
                I.
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                Statements
            3Balance
                Sheets as of September 30, 2007 (unaudited) and December 31, 2006
            3Statements
                of Operations for the Three and Nine Months Ended September 30, 2007
                and
                2006 (unaudited)
            4Statements
                of Cash Flows for the Nine Months Ended September 30, 2007 and 2006
                (unaudited)
            5Notes
                to Unaudited Financial Statements
            6Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            7Item
                3.
            Controls
                and Procedures
            9PART
                II.
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            10Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            10Item
                3.
            Defaults
                Upon Senior Securities
            11Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            11Item
                5.
            Other
                Information
            11Item
                6.
            Exhibits
            11Signatures
            
            11








**PART
      I — FINANCIAL INFORMATION**





**Item
      1.** **Financial
      Statements.**





SPUTNIK,
      INC.


BALANCE
      SHEETS


September
      30, 2007 and December 31, 2006


(unaudited)





September
                30, 2007
            
            December
                31, 2006ASSETSCurrent
                AssetsCash
            
            $
            86,027
            
            $
            7,927Accounts
                receivable
            
            
            60,072
            
            
            4,599Inventory
            
            
            17,615
            
            
            10,053Prepaid
                software subscription
            
            
            34,396
            
            
            4,968Prepaid
                expensesand other assets
            
            
            9,070
            
            
            2,933Total
                Current Assets
            
            
            207,180
            
            
            30,480Property
                and equipment, net of accumulated depreciation of $16,391 and $9,386,
                respectively
            
            
            12,122
            
            
            14,638Deposit
            
            
            6,101
            
            
            8,567TOTAL
                ASSETS
            
            $
            225,403
            
            $
            53,685LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)Current
                LiabilitiesAccounts
                payable
            
            $
            52,128
            
            $
            45,940Accrued
                liabilities
            
            
            64,118
            
            
            19,470Total
                Current Liabilities
            
            
            116,246
            
            
            65,410Stockholders'
                Equity (Deficit)Common
                stock, $.001 par value, 50,000,000 shares authorized,
                14,763,919****and
                13,806,312 shares issued and outstanding, respectively
            
            
            14,764
            
            
            13,806Paid-in
                capital
            
            
            1,696,191
            
            
            1,074,705Accumulated
                deficit
            
            
            (1,601,798
            )
            
            (1,100,236
            )Total
                Stockholders' Equity (Deficit)
            
            
            109,157
            
            
            (11,725
            )TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
            
            $
            225,403
            
            $
            53,685








See
      accompanying summary of accounting policies


and
      notes
      to financial statements.





SPUTNIK,
      INC.


STATEMENTS
      OF OPERATIONS


Three
      and
      Nine Months Ended September 30, 2007 and 2006


(unaudited)








Three
                Months Ended
            
            Nine
                Months EndedSeptember
                30,
            
            September
                30,2007
            
            2006
            
            2007
            
            2006Revenue
            
            $
            181,269
            
            $
            125,607
            
            $
            446,913
            
            $
            393,694Cost
                of goods sold
            
            
            70,249
            
            
            40,354
            
            
            159,391
            
            
            129,588Gross
                profit
            
            
            110,020
            
            
            85,253
            
            
            287,522
            
            
            264,106Expenses:General
                and administrative costs
            
            
            286,555
            
            
            128,920
            
            
            784,287
            
            
            368,155Depreciation
                and amortization
            
            
            2,368
            
            
            2,987
            
            
            7,005
            
            
            4,692Total
                operating expense
            
            
            (288,923
            )
            
            (131,907
            )
            
            (791,292
            )
            
            (372,847
            )Operating
                Loss
            
            
            (177,903
            )
            
            (46,654
            )
            
            (503,770
            )
            
            (108,741
            )Interest
                income
            
            
            731
            
            
            -
            
            
            2,819
            
            
            -Interest
                expense
            
            
            (451
            )
            
            (1,353
            )
            
            (611
            )
            
            (2,584
            )NET
                LOSS
            
            $
            (177,623
            )
            $
            (48,007
            )
            $
            (501,562
            )
            $
            (111,325
            )Basic
                and diluted loss per share
            
            $
            (
                0.01
            )
            $
            (
                0.00
            )
            $
            (
                0.03
            )
            $
            (
                0.01
            )Weighted
                average shares outstanding
            
            
            14,763,919
            
            
            13,556,158
            
            
            14,458,748
            
            
            13,528,153








See
      accompanying summary of accounting policies


and
      notes
      to financial statements.





SPUTNIK,
      INC.


STATEMENTS
      OF CASH FLOWS


Nine
      Months Ended September 30, 2007 and 2006


(unaudited)





2007
            
            2006Cash
                Flows from Operating ActivitiesNet
                loss
            
            $
            (501,562
            )
            $
            (111,325
            )Adjustments
                to reconcile net loss to cash used in operating
                activities:Depreciation
            
            
            7,005
            
            
            4,692Changes
                in:Accounts
                receivable
            
            
            (55,473
            )
            
            (651
            )Inventory
            
            
            (7,562
            )
            
            (2,688
            )Prepaid
                expenses and other assets
            
            
            (33,099
            )
            
            2,011Accounts
                payable and accrued liabilities
            
            
            50,836
            
            
            (5,943
            )Net
                cash used in operating activities
            
            
            (539,855
            )
            
            (113,904
            )Cash
                Flows from Investing ActivitiesPurchase
                of property and equipment
            
            
            (4,489
            )
            
            (11,727
            )Cash
                Flows from Financing ActivitiesNet
                proceeds from line of credit
            
            
            -
            
            
            68,698Common
                stock issued for cash
            
            
            622,444
            
            
            43,550Net
                cash provided by financing activities
            
            
            622,444
            
            
            112,248Net
                change in cash
            
            
            78,100
            
            
            (13,383
            )Cash
                at beginning of period
            
            
            7,927
            
            
            26,782Cash
                at end of period
            
            $
            86,027
            
            $
            13,399Supplemental
                Disclosures of Cash Flow InformationCash
                paid for interest
            
            $
            611
            
            $
            -Cash
                paid for income taxes
            
            
            -
            
            
            -











See
      accompanying summary of accounting policies


and
      notes
      to financial statements.





SPUTNIK,
      INC.


Notes
      to
      Financial Statements


(unaudited)





NOTE
      1 -
      BASIS OF PRESENTATION





The
      accompanying unaudited interim financial statements of Sputnik, Inc. have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America and the rules of the Securities and Exchange
      Commission, and should be read in conjunction with Sputnik’s audited 2006 annual
      financial statements and notes thereto filed with the SEC on form 10-KSB. In
      the
      opinion of management, all adjustments, consisting of normal recurring
      adjustments, necessary for a fair presentation of financial position and the
      result of operations for the interim periods presented have been reflected
      herein. The results of operations for interim periods are not necessarily
      indicative of the results to be expected for the full year. Notes to the
      financial statements, which would substantially duplicate the disclosure
      required in Sputnik’s 2006 annual financial statements have been
      omitted.





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 $501,562 for the nine months ended September 30,
      2007
      and has an accumulated deficit of $1,601,798 at September 30, 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 -
      EQUITY





From
      January 1, 2007 to February 10, 2007, Sputnik sold 957,607 shares of common
      stock for $622,444. The price per share was $.65 in this offering. The
      shares were issued in March 2007.





NOTE
      4 -
      PREPAID SOFTWARE SUBSCRIPTION





Sputnik
      entered into a three year lease for a web based accounting software system.
      The
      lease was paid in advance. Sputnik is amortizing the prepaid amount over the
      life of the lease.










**Item
      2.****Management’s
      Discussion and Analysis or Plan of Operation.**




*This
      10−QSB contains forward-looking statements. Our actual results could differ
      materially from those set forth as a result of general economic conditions
      and
      changes in the assumptions used in making such forward-looking statements.
      The
      following discussion and analysis of our financial condition and results of
      operations should be read together with the audited consolidated financial
      statements and accompanying notes and the other financial information appearing
      elsewhere in this report. The analysis set forth below is provided pursuant
      to
      applicable Securities and Exchange Commission regulations and is not intended
      to
      serve as a basis for projections of future events. Refer also to "Cautionary
      Note Regarding Forward Looking Statements" and “Risk Factors”
below.*




The
      following discussion of our financial condition and results of operations as
      of
      September 30, 2007 should be read in conjunction with our financial statements
      and the related notes as provided under Item 1. With respect to the discussion
      within this Item 2, the terms “Sputnik,” “we,” “us,” and “our” refer to Sputnik,
      Inc.





Overview




Sputnik
      provides solutions for building and running public access wireless network
      businesses of any size. We sell software, services, and equipment via our web
      site to service providers and businesses that want to offer their own,
      proprietary wireless internet access services to the public. Typically these
      wireless networks are called Wi-Fi hotspots or hotzones. Sputnik can be found
      on
      the internet at www.sputnik.com.




**How
      we generate revenue**




Sputnik
      generates revenue by selling management software (Sputnik Control Center),
      software subscriptions (SputnikNet), and hardware to build and manage wireless
      networks.




*Sputnik
      Control Center*




Sputnik
      Control Center is server software that runs in our customers’ data centers. It
      enables network administrators to provision, manage and secure wireless access
      points using a web interface.




Sputnik
      Control Center allows the administrator to track and log who is on the wireless
      network at any time and how much bandwidth they are using. It provides network
      security and handles AAA (Access, Authentication and Authorization) by applying
      dynamic, per-user firewall rules on the access point. In addition, Sputnik
      Control Center enables rapid, organic deployment of wireless networks; when
      a
      Sputnik-Powered Wi-Fi access point is plugged in, it downloads its configuration
      and can instantly become managed.




Software
      Modules add flexibility to Sputnik Control Center, allowing service providers
      to
      tailor their offerings to suit their unique business goals. Using Sputnik
      Control Center with one or more Software Modules, providers can generate
      revenues from the Wi-Fi services they provide, billing their customers’ PayPal
      accounts, credit cards (in more than 140 currencies), pre-paid cards, or by
      integrating with third-party billing systems.




*SputnikNet*




SputnikNet
      provides the same features as Sputnik Control Center, except that it runs in
      Sputnik’s data center, and is available to our customers on a monthly or annual
      subscription basis. SputnikNet enables service providers to remotely manage
      Wi-Fi hotspots, hotzones, or complete networks over the Internet without having
      to install or maintain server software. Service providers can simply plug
      Sputnik-Powered APs into broadband and manage the entire network from any web
      browser.




*Hardware*




Sputnik
      provides a range of indoor and outdoor wireless access points (APs), managed
      network gateways, a server appliance, plus range extenders and accessories
      to
      create virtually any Wi-Fi network configuration. These products are designed
      to
      work seamlessly with Sputnik software to enable rapid, plug-n’-play deployment
      of wireless networks.







The
      Sputnik Server 1100 is a high-performance, ready-to-rack 1U server appliance
      pre-loaded with Sputnik Control Center, ten access point licenses and one add-on
      software module. It is designed for service providers who want to run Sputnik
      Control Center in their data center, but require a dedicated, pre-configured
      server.




The
      Sputnik Gateway 700 is designed to authenticate a large population of concurrent
      users. The users can be connected through any third-party wired and/or wireless
      hardware that routes through the Sputnik Gateway 700.




**A
      brief history and recent developments**




Sputnik
      was founded in 2001, incorporated in 2002 and became public in 2007. We are
      headquartered in San Francisco. The company was named after the first man-made
      satellite to orbit the Earth, the Sputnik 1, which was launched on October
      4,
      1957. At Sputnik we believe that the combination of technical innovation and
      the
      rapid spread of wireless broadband networking will mark a no less significant
      milestone in the history of human communication. It is our mission to make
      possible a world in which broadband wireless connectivity enables people to
      move
      about freely while maintaining rich connections to email, the web, instant
      messaging and all other internet services.




From
      2001
      to 2006, Sputnik developed and refined our product offerings and business model.
      Over the last 18 months, we have driven our business toward a
      subscription-based, software-as-a-service model that carries advantages for
      our
      customers and ourselves. Simply, this model creates the lowest cost of entry
      available for our customers and allows them to align costs with usage and growth
      of their own networks. The software-as-a-service approach lowers our customers’
capital costs, thereby reducing their risk. From Sputnik’s perspective, once we
      have sold access points and services into a Wi-Fi network operator, we have
      created a high gross margin, recurring revenue stream. We have and will continue
      to optimize our products and business structure to further enhance these mutual
      benefits.




As
        we
        make progress in building our business, we will provide brief overviews of
        some
        of the recent accomplishments that we deem important to our future growth.
        Here
        are some of the milestones achieved in or near Q3, 2007.
  *New
        product enhancement: Quality of Service Management*
  Sputnik
        has added a key piece of functionality to our product in the 3.3.6.3 release
        of
        Control Center. With Quality of Service (QoS) management, network administrators
        can control bandwidth usage. For example, network administrators can stop
        users
        running peer-to-peer applications from consuming an “unfair share” of network
        bandwidth. The software upgrade also added bandwidth throttling, enabling
        providers to cap the total amount of bandwidth used by Sputnik-Powered devices,
        useful if they are part of a larger network.
  *New
        third-party hardware compatibility: Arrowspan Mesh Networks*
  Sputnik
        and Arrowspan have worked together to make Arrowspan’s mesh network hardware
        compatible with Sputnik’s Gateway 700 and Sputnik Control Center. Using Sputnik
        software with ArrowSpan mesh networks means more wireless service providers
        can
        provide branded Wi-Fi services that meet their unique business
        requirements.
  *New
        customer deployment: Marshall Islands National Communications
        Authority*
  Sputnik
        powers Wi-Fi to the home in the Marshall Islands. The Marshall Islands National
        Communications Authority (NCA) is using Sputnik hardware and software to
        extend
        broadband to underserved communities. While in its early phases of deployment,
        the NCA is creating Wi-Fi zones for homes that would only be able to use
        dial-up
        otherwise.
  *New
        customer deployment: Intercontinental Playa Bonita Resort*
  Sputnik
        hardware and software will power the Wi-Fi service at the Intercontinental
        Playa
        Bonita resort in Panama (playabonitapanama.com). Playa Bonita will cover
        and
        manage Wi-Fi over their property using a Sputnik Server 1100, a Sputnik Gateway
        700, and several Wi-Fi access points.
  *Customer
        expansion: Nomadnet*
  Sputnik
        expanded its relationship with NomadNet, an Australian provider of Wi-Fi
        services (http://www.nomadnet.net.au). NomadNet has deployed Wi-Fi into more
        than 100 RV parks, motels, and cafes around the country, managing them all
        with
        SputnikNet.
  *New
        reseller partnership: IRG*
  Sputnik
        added Industry Retail Group (IRG) as a reseller. IRG’s goal is to provide
        retailers and other multi-site organizations with the premier suite of
        broadband-enabled network services. This partnership further enhances Sputnik’s
        effort to scale our sales presence.




Results
      of Operations for the Three Months Ended September 30, 2007 Compared to the
      Three Months Ended September 30, 2006





We
      had
      revenue of $181,269 for the three months ended September 30, 2007, which was
      an
      increase of $55,662 from our revenue for the three months ended September 30,
      2006, which was $125,607. The
      increase in total revenue was primarily due to genera l
      increase in business activity, combined with the coincidence of a large order
      of
      hardware to for installation into retail chains that plan to offer Wi-Fi
      services to their customers. We generated $83,382 revenues from the sale of
      hardware in the September 30, 2007 quarter, an increase of $45,344 from the
      $38,038 worth of hardware sold in the September 30, 2006 quarter. The
      increase in hardware revenues was due primarily to the order referenced above.
      We generated $19,086 revenues from the sale of software licenses in the
      September 30, 2007 quarter, a decrease of $7,342 from the $26,428 worth of
      software licenses sold in the September 30, 2006 quarter. However,
      we generated $62,583 revenues from the sale of recurring software subscriptions
      in the September 30, 2007 quarter, an increase of $19,127 from the $43,456
      worth
      of software subscriptions sold in the September 30, 2006 quarter. The
      shift from software license revenue to software subscription revenue is due
      to
      customer acceptance of running our software over the internet, and is in line
      with our business goal to derive most of our software revenues from recurring
      subscriptions.




In
      both
      quarters our revenue streams included: hardware (Wi-Fi access points, antennas,
      and accessories), proprietary Sputnik software, recurring software subscriptions
      (SputnikNet setup, monthly, and annual fees), and services (training,
      support incidents, and consulting) .
      In the
      September 30, 2007 quarter, revenues broke down as follows: 49% hardware, 11%
      software, and 37% software subscriptions. In the September 30, 2006 quarter,
      revenues broke down as follows: 34% hardware, 24% software, and 39% software
      subscriptions. 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 $29,895 to $70,249, for the three months ended September
      30, 2007, as compared to cost of goods sold of $40,354 for the three months
      ended September 30, 2006.  Our cost of goods sold increased as a direct
      result of increased sales of our hardware products.





We
      had
      gross profit of $110,020 for the three months ended September 30, 2007, which
      was an increase of $24,767 when compared to our gross profit for the three
      months ended September 30, 2006, which was $ 85,253. Our increase in gross
      profit was attributable to higher sales of hardware and software subscriptions.
      Our gross margin decreased from 68% for the three months ended September 30,
      2006 to 61% for the three months ended September 30, 2007 primarily because
      the percentage of our revenue attributable to hardware
      sales increased.





Our
      operating expenses increased $157,016, to $288,923 for the three months ended
      September 30, 2007, as compared to operating expenses of $131,907 for the three
      months ended September 30, 2006. Our operating expenses for the three months
      ended September 30, 2007 included $286,555
      in general and administrative expenses, a $157,635 increase over general and
      administrative expenses of $128,920 for the three months ended September 30,
      2006 ;
      and
      depreciation and amortization expense of $2,368 compared to $2,987 for the
      three
      months ended September 30, 2006. The primary reason for the increase in general
      and administrative expense was due to increased payroll expenses due to an
      increase in the size of our staff. The
      increase in general and administrative expenses also included increased advertising
      and marketing expenses, as well as an increase in our office rent. Other
      income and losses included an increase in net interest income of $ 280
      for
      the three months ended September 30, 2007, as compared to net interest expense
      of $1,353 for the three months ended September 30, 2006 .





We
      had a
      net loss of $177,623 for the three months ended September 30, 2007, which
      represented an increase of $129,616 from our net loss for the three months
      ended
      September 30, 2006, which was $48,007.





Results
      of Operations for the Nine Months Ended September 30, 2007 Compared to the
      Nine
      Months Ended September 30, 2006





We
      had
      revenue of $446,913 for the nine months ended September 30, 2007, which was
      an
      increase of $53,219 from our revenue for the nine months ended September 30,
      2006, which was $393,694. The revenue mix includes a comparable percentage
      of
      hardware sales in both periods. However it reflects a shift from software
      license revenues to a greater contribution from recurring software subscription
      revenues. In both periods 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 the nine months ended
      September 30, 2007, revenues broke down as follows: 46% hardware, 15% software,
      36% software subscriptions, and 2% services. In the nine months ended September
      30, 2006 revenues broke down as follows: 47% hardware, 28% software, 23%
      software subscriptions, and 1% services. The relative shift from software
      license sales revenue to recurring software subscription revenue is due to
      cumulative growth in the number of subscribers to our SputnikNet hosted software
      service.





Our
      cost
      of goods sold increased by $29,803, to $159,391, for the nine months ended
      September 30, 2007, as compared to cost of goods sold of $129,588 for the nine
      months ended September 30, 2006.  Our cost of goods sold increased as a
      direct result of increased sales of our hardware products.








We
      had
      gross profit of $287,522 for the nine months ended September 30, 2007, which
      was
      an increase of $23,416 when compared to our gross profit for the nine months
      ended September 30, 2006, which was $ 264,106. Our increase in gross profit
      was
      attributable to our higher overall sales in the 2007 period. Our gross margin
      decreased from 67.1% for the nine months ended September 30, 2006 to 64.3%
      for
      the nine months ended September 30, 2007, which was not
      significant.





Our
      operating expenses increased $418,445, to $791,292 for the nine months ended
      September 30, 2007, as compared to operating expenses of $372,847 for the nine
      months ended September 30, 2006. Our operating expenses for the nine months
      ended September 30, 2007 included $784,287 in general and administrative
      expenses, a $416,132 increase over general and administrative expenses of
      $368,155 for the nine months ended September 30, 2006; and depreciation and
      amortization expense of $7,005 compared to $4,692 for the nine months ended
      September 30, 2006. The primary reason for the increase in general and
      administrative expense was due to increased payroll expenses in connection
      with
      converting consultants to employees, and an increase in the size of our staff.
      The increase in general and administrative expenses also included increased
      advertising and marketing expenses, as well as an increase in our office rent.
      Other income and losses included an increase in net interest income of $2,208
      for the nine months ended September 30, 2007, as compared to net interest
      expense of $2,584 for the nine months ended September 30, 2006.





We
      had a
      net loss of $501,562 for the nine months ended September 30, 2007, which
      represented an increase of $ 390,237
      from our net loss for the nine months ended September 30, 2006, which was
      $111,325.





Liquidity
      and Capital Resources





We
      had
      total assets of $225,403 as of September 30, 2007. This consisted of total
      current assets of $207,180, which included cash of $86,027, accounts receivable
      of $60,072, inventory of $17,615 and prepaid expenses of $43,466. Other assets
      included property and equipment of $12,122 net of $16,391 of accumulated
      depreciation, and deposit of $6,101. Based on the amount of cash on our balance
      sheet and our anticipated revenues, we do not believe that we have sufficient
      funds to operate as a going concern beyond the next quarter without further
      financing. Should sufficient financing not occur on a timely basis, we will
      reduce staff and curtail our expansion plans.





We
      had
      total liabilities of $116,246 as of September 30, 2007, which consisted solely
      of current liabilities and included $52,128 of accounts payable, and $64,118
      of
      accrued liabilities.  Our bank revolving line of credit had a balance of $0
      at September 30, 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 11% as of September 30,
      2007.





We
      had an
      accumulated deficit of $1,601,798 as of September 30, 2007.





We
      had
      net cash used in operating activities of ($539,855) for the nine months ended
      September 30, 2007, which consisted of net loss of ($501,562), depreciation
      of
      $7,005, changes in accounts receivable of ($55,473), inventory of ($7,562),
      prepaid expenses and other current assets of (33,099), accounts payable and
      accrued liabilities of $50,836.





We
      had
      net cash used by investing activities of ($4,489) for the nine months ended
      September 30, 2007, which consisted solely of purchase of property and
      equipment.





We
      had
      $622,444 in net cash provided by financing activities for the nine months ended
      September 30, 2007, which consisted solely of proceeds from sale of common
      stock.





In
      the
      nine months ended September 30, 2007, we sold 957,607 shares of our common
      stock
      in consideration for an aggregate amount of $622,444. The shares were sold
      pursuant to our prospectus dated June 15, 2006. The price per share was $.65.





Historically,
      our cash has been provided by collection of sales revenues and short-term bank
      line of credit bearing an interest rate of 11% at September 30, 2007. As we
      expand, we may need to make sizeable cash commitments to hire additional
      personnel and secure inventory, and the impact of this potential trend on our
      business is uncertain. We believe that our mix of capital resources will shift
      from short-term debt to equity-based financing as we operate as a public
      company, which will cause dilution of current shareholders. Because Sputnik
      keeps minimal inventories and receivables, the predominant component of our
      liquidity is our cash on hand.





Our
      ability to continue as a going concern is dependent upon our 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.




Critical
      Accounting Estimates





Due
      to
      the nature of our business, the majority of Sputnik’s revenue is recognized
      either upon shipping of product or delivery of service. Approximately
      4% of our overall revenue is deferre d,
      as it
      is associated with annual software subscriptions, recognized over the period
      of
      the subscription. Stock for compensation is computed at fair value. Since we
      carry minimal inventories we do not set aside an inventory allowance. We make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities in the balance sheet and revenues and expenses in the statement
      of
      operations, and the disclosure of contingent assets and liabilities. Actual
      results could differ from those estimates.




**Cautionary
      Note About Forward-Looking Statements**




The
      information contained in this Report includes some statements that are not
      purely historical and that are “forward-looking statements” within the meaning
      of Section 27A of the Securities Act and Section 21E of the Exchange Act, and
      as
      such, may involve risks and uncertainties. These forward-looking statements
      relate to, among other things, expectations of the business environment in
      which
      we operate, perceived opportunities in the market and statements regarding
      our
      mission and vision. In addition, any statements that refer to projections,
      forecasts or other characterizations of future events or circumstances,
      including any underlying assumptions, are forward-looking statements. You can
      generally identify forward-looking statements as statements containing the
      words
“anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,”
“projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the
      negatives of such terms, but the absence of these words does not mean that
      a
      statement is not forward-looking. For example, our forward-looking statements
      may include statements regarding:





·
            Our
                projected sales and profitability,




·
            Our
                growth strategies,




·
            Anticipated
                trends in our industry,




·
            Our
                future financing plans, and




·
            Our
                anticipated needs for working
                capital.




In
      light
      of these risks, uncertainties and assumptions, the future events, developments
      or results described by our forward-looking statements herein could turn to
      be
      materially different from those we discuss or imply.





**Item
      3.**  **Controls
      and Procedures.**




**Evaluation
      of Disclosure Controls and Procedures**




As
      of the
      end of the period covered by this report on Form 10-QSB, our Chief Executive
      Officer performed an evaluation of the effectiveness of our disclosure controls
      and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange
      Act. Based upon this evaluation, our chief executive officer concluded that
      our
      disclosure controls and procedures were effective to ensure that the information
      required to be disclosed by us in the reports that we file or submit under
      the
      Exchange Act is (i) recorded, processed, summarized and reported within the
      time
      periods specified in the Securities and Exchange Commission’s rules and forms,
      and (ii) is accumulated and communicated to our management, including our chief
      executive officer, to allow timely decisions regarding required
      disclosure.





**Changes
      in Internal Control Over Financial Reporting**




There
      were no changes in the Company’s internal control over financial reporting that
      occurred during the most recent fiscal quarter that have materially affected,
      or
      are reasonably likely to materially affect, its internal control over financial
      reporting for that period.







**PART
      II — OTHER INFORMATION**




**Item
      1.**  **Legal
      Proceedings.**




None.




**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds.**




(a)
            Unregistered
                Sales of Equity Securities.




The
      Registrant did not sell any unregistered securities during the three months
      ended September 30, 2007.




(b)
            Use
                of Proceeds.




On
      June
      15, 2006, the Securities and Exchange Commission declared effective the
      Company's registration statement on Form SB-2 (File No. 333-126158) relating
      to
      the offer and sale of 1,250,000 shares of the Company’s common stock, at a price
      of $0.65 per share. The
      aggregate price of the offering amount registered was $812,500. As of September
      30, 2007, all 1,250,000 shares had been sold with $812,500 in aggregate
      proceeds, of which $10,000 was used to pay offering costs and $68,698 was
      used
      to pay down the Company’s outstanding 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, and an interest rate
      of
      11%. At September 30, 2007, $0 was outstanding under the line of credit. The
      offering was extended for an additional 120 days, thus terminated on February
      10, 2007.





The
      offering was conducted in a best efforts, no minimum, direct public offering
      without any involvement of underwriters or broker- dealers and the Company
      has
      not paid and will not pay commissions in connection with the sale of the shares.
      Since June 15, 2006 through the end of the period covered by this Report on
      Form
      10-QSB, the Company’s offering expenses (all of which were incurred to persons
      other than our directors, officers or ten percent or greater stockholders)
      were
      $0.








**Item
      3.**  **Defaults
      Upon Senior Securities**




None.





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders.**




The
      Registrant did not submit any matters to a vote of its security holders during
      the three-months ended September 30, 2007.




**Item
      5.**  **Other
      Information.**




Not
      applicable.




**Item
      6.**  **Exhibits.**




(a)
      Exhibits.




**Exhibit**
            
            **Item**31.1
            
            Certification
                of Principal Executive and Principal Financial Officer pursuant to
                Section
                302(a) of the Sarbanes-Oxley Act of 200232.1*
            
            Certification
                of Principal Executive and Principal Financial Officer pursuant to
                Section
                302(a) of the Sarbanes-Oxley Act of
                2002


________________


*
      This
      exhibit shall not be deemed “filed” for purposes of Section 18 of the
      Securities Exchange Act of 1934 or otherwise subject to the liabilities of
      that
      section, nor shall it be deemed incorporated by reference in any filing under
      the Securities Act of 1933 of the Securities Exchange Act of 1934, whether
      made
      before or after the date hereof and irrespective of any general incorporation
      language in any filings.





**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.






SPUTNIK,
                INC.Date:October
                26, 2007
            By:
            /s/ David
                LaDuke(Authorized
                Officer and Principal Executive
                Officer)









**EXHIBIT
      INDEX**






**Exhibit**
            
            **Item**31.1
            
            Certification
                of Principal Executive and Principal Financial Officer pursuant to
                Section
                302(a) of the Sarbanes-Oxley Act of 200232.1*
            
            Certification
                of Principal Executive and Principal Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002




________________


*
      This
      exhibit shall not be deemed “filed” for purposes of Section 18 of the
      Securities Exchange Act of 1934 or otherwise subject to the liabilities of
      that
      section, nor shall it be deemed incorporated by reference in any filing under
      the Securities Act of 1933 of the Securities Exchange Act of 1934, whether
      made
      before or after the date hereof and irrespective of any general