*Table
          of Contents*





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**








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


For
      the
      quarterly period ended March
      31, 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 May
      11, 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





*Table
        of Contents*




**INDEX**




**Page**PART
                I.
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                Statements
            3Balance
                Sheets as of March 31, 2007 and December 31, 2006
                (unaudited)
            3Statements
                of Operations for the Three Months Ended March 31, 2007 and 2006
                (unaudited)
            4Statements
                of Cash Flows for the Three Months Ended March 31, 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




-2-
 *Table
          of Contents*




**PART
      I — FINANCIAL INFORMATION**





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





SPUTNIK,
      INC.


BALANCE
      SHEETS


March
      31,
      2007 and December 31, 2006


(unaudited)





March
                31, 2007
            
            December
                31, 2006ASSETSCurrent
                AssetsCash
            
            $
            493,877
            
            $
            7,927Accounts
                receivable
            
            
            30,522
            
            
            4,599Inventory
            
            
            10,399
            
            
            10,053Prepaid
                expensesand other assets
            
            
            11,376
            
            
            7,901Total
                Current Assets
            
            
            546,174
            
            
            30,480Property
                and equipment, net of accumulated depreciation of $11,648 and $9,386,
                respectively
            
            
            16,075
            
            
            14,638Deposit
            
            
            6,101
            
            
            8,567TOTAL
                ASSETS
            
            $
            568,350
            
            $
            53,685LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)Current
                LiabilitiesAccounts
                payable
            
            $
            58,655
            
            $
            45,940Accrued
                liabilities
            
            
            28,496
            
            
            19,470Total
                Current Liabilities
            
            
            87,151
            
            
            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 in 2007 and 2006,
                respectively
            
            
            14,765
            
            
            13,806Paid-in
                capital
            
            
            1,696,190
            
            
            1,074,705Retained
                deficit
            
            
            (1,229,756
            )
            
            (1,100,236
            )Total
                Stockholders' Equity (Deficit)
            
            
            481,199
            
            
            (11,725
            )TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
            
            $
            568,350
            
            $
            53,685


-3-
 *Table
          of Contents*


SPUTNIK,
      INC.


STATEMENTS
      OF OPERATIONS


Three
      Months Ended March 31, 2007 and 2006


(unaudited)




Three
                Months EndedMarch
                31,2007
            
            2006Revenue
            
            $
            133,013
            
            $
            97,369Cost
                of goods sold
            
            
            43,439
            
            
            34,868Gross
                profit
            
            
            89,574
            
            
            62,501ExpensesGeneral
                and administrative costs
            
            
            217,557
            
            
            108,048Depreciation
                and amortization
            
            
            2,261
            
            
            852Total
                operating expense
            
            
            (219,818
            )
            
            (108,900
            )Operating
                Loss
            
            
            (130,244
            )
            
            (46,399
            )Interest
                income
            
            
            745
            
            
            12Interest
                expense
            
            
            (21
            )
            
            (375
            )NET
                LOSS
            
            $
            (129,520
            )
            $
            (46,762
            )Basic
                and diluted loss per share
            
            $
            (
                0.01
            )
            $
            (
                0.00
            )Weighted
                average shares outstanding
            
            
            14,399,409
            
            
            13,513,919





-4-
 *Table
          of Contents*


SPUTNIK,
      INC.


STATEMENTS
      OF CASH FLOWS


Three
      Months Ended March 31, 2007 and 2006


(unaudited)





2007
            
            2006Cash
                Flows from Operating ActivitiesNet
                loss
            
            $
            (129,520
            )
            $
            (46,762
            )Adjustments
                to reconcile net loss to cash used in operating
                activities:Depreciation
            
            
            2,261
            
            
            852Changes
                in working capital:Accounts
                receivable
            
            
            (25,923
            )
            
            (2,410
            )Inventory
            
            
            (346
            )
            
            1,596Prepaid
                expenses and other assets
            
            
            (3,475
            )
            
            (319
            )Accounts
                payable and accrued liabilities
            
            
            21,741
            
            
            12,131Deposit
            
            
            2,466
            
            
            —Net
                cash used in operating activities
            
            
            (132,796
            )
            
            (34,912
            )Cash
                Flows from Investing ActivitiesPurchase
                of property and equipment
            
            
            (3,698
            )
            
            (4,245
            )Cash
                Flows from Financing ActivitiesLine
                of credit
            
            
            —
            
            
            40,388Common
                stock issued for cash
            
            
            622,444
            
            
            —Net
                cash provided by financing activities
            
            
            622,444
            
            
            40,388Net
                change in cash
            
            
            485,950
            
            
            1,231Cash
                at beginning of period
            
            
            7,927
            
            
            26,782Cash
                at end of period
            
            $
            493,877
            
            $
            28,013Supplemental
                Disclosures of Cash Flow InformationCash
                paid for interest
            
            $
            —
            
            $
            —Cash
                paid for income taxes
            
            
            —
            
            
            —




-5-
 *Table
          of Contents*
  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 Sates 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 $129,520 for the three months ended March 31, 2007,
      has an accumulated deficit of $1,229,756 at March 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 -
      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.


-6-
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          of Contents*




**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
      else where 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
      March 31, 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





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 and accessories, such as
      antennas and power supplies.





Results
      of Operations for the Three Months Ended March 31, 2007 Compared to the Three
      Months Ended March 31, 2006





We
      had
      revenue of $133,013 for the three months ended March 31, 2007, which was an
      increase of $35,644 from our revenue for the three months ended March 31, 2006,
      which was $97,369. The
      increase in total revenue was primarily due to the fact that we sold
      significantly more software licenses-- $28,528 in
      the
      March 31, 2007 quarter versus
      $18,051 in the March
      31,
      2006 quarter --
      and
      software subscriptions-- $43,620 in the March 31, 2007 quarter versus $26,430
      in
      the March 31, 2006 quarter. Our
      hardware revenue increased slightly to $56,539 in the March 31, 2007 quarter
      from $52,006 in the March 31, 2006 quarter. The increase in software and
      subscription revenues was due to the fact that in April, 2006 we ported our
      Sputnik Agent software to run on third-party Wi-Fi access points, meaning that
      our customers could utilize Sputnik software and services without purchasing
      hardware from us. In both quarters 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
      March 31, 2007 quarter, revenues broke down as follows: 43% hardware, 21%
      software, 33% software subscriptions, and 3% services. In the March 31, 2006
      quarter, revenues broke down as follows: 53% hardware, 22% software, 23%
      software subscriptions, and 1% services. 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 $8,571, to $43,439, for the three months ended March
      31,
      2007, as compared to cost of goods sold of $34,868 for the three months ended
      March 31, 2006.  Our cost of goods sold increased as a direct result of
      increased sales of our hardware products.





We
      had
      gross profit of $89,574 for the three months ended March 31, 2007, which was
      an
      increase of $ $27,073 when compared to our gross profit for the three months
      ended March 31, 2006, which was $ 62,501. Our increase in gross profit was
      attributable to higher sales of software licenses and subscriptions, which
      are
      higher margin products. Our gross margin increased from 64% for the three months
      ended March 31, 2006 to 67% for the three months ended March 31, 2007
      primarily because the percentage of our revenue attributable to hardware
      sales decreased, while the percentage of our revenue attributable
      to software licenses and subscriptions increased.





Our
      operating expenses increased $110,918, to $219,818 for the three months ended
      March 31, 2007, as compared to operating expenses of $108,900 for the three
      months ended March 31, 2006. Our operating expenses for the
      three


-7-
 *Table
            of Contents*




months
      ended March 31, 2007 included $217,557
      in general and administrative expenses, a $109,509 increase over general and
      administrative expenses of $108,048 for the three months ended March 31,
      2006 ;
      and
      depreciation and amortization expense of $2,261 compared to $852 for the three
      months ended March 31, 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 $ 724
      for
      the three months ended March 31, 2007, as compared to net interest expense
      of
      $363 for the three months ended March 31, 2006 .





We
      had a
      net loss of $129,520 for the three months ended March 31, 2007, which
      represented an increase of $82,758 from our net loss for the three months ended
      March 31, 2006, which was $46,762.





Liquidity
      and Capital Resources





We
      had
      total assets of $568,350 as of March 31, 2007. This consisted of total current
      assets of $546,174, which included cash of $493,877, accounts receivable of
      $30,522, inventory of $10,399 and prepaid expenses of $11,376. Other assets
      included property and equipment of $16,075, 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 for the
      next
      six months without further financing. Should sufficient financing not occur,
      we
      will reduce staff and curtail our expansion plans.





We
      had
      total liabilities of $87,151 as of March 31, 2007, which consisted solely of
      current liabilities and included $58,655 of accounts payable, and $28,496 of
      accrued liabilities.  Our bank revolving line of credit had a balance of $0
      at March 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 11% as of March 31,
      2007.





We
      had a
      retained deficit of $1,229,756 as of March 31, 2007.





We
      had
      net cash used in operating activities of ($132,796) for the three months ended
      March 31, 2007, which consisted of net loss of ($129,520), depreciation of
      $2,261, changes in accounts receivable of ($25,923), inventory of ($346),
      prepaid expenses and other current assets of ($3,475), accounts payable and
      accrued liabilities of $21,741, and deposit of $2,466.





We
      had
      net cash used by investing activities of ($3,698) for the three months ended
      March 31, 2007, which consisted solely of purchase of property and
      equipment.





We
      had
      $622,444 in net cash provided by financing activities for the three months
      ended
      March 31, 2007, which consisted solely of proceeds from sale of common
      stock.





In
      the
      three months ended March 31, 2007, we sold 957,607 shares of our Common Stock
      in
      consideration for an aggregate amount of $622,445. 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 March 31, 2007. The only
      major
      outstanding cash commitments as of March 31, 2007 was our debt for  legal
      services to DLA Piper Rudnick Gray Cary, LLC, Sputnik’s  original law firm,
      which is $18,068. 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 become 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 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.


-8-
 *Table
            of Contents*




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. Less
      than
      2% of our overall revenue is deferred ,
      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 and our Chief Financial 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 on that evaluation,
      our Chief Executive Officer and our Chief Financial Officer concluded that
      as of
      the end of the period covered by this report on Form 10-QSB, our disclosure
      controls and procedures were effective in timely recording, processing,
      summarizing and reporting material information required to be included in our
      Exchange Act filings.




**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.


-9-
 *Table
            of Contents*




**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 March 31, 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 March
      31,
      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 March 31, 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.


-10-
 *Table
            of Contents*




**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 March 31, 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:May
                11, 2007
            By:
            /s/ David
                LaDuke(Authorized
                Officer and Principal Executive
                Officer)





-11-
 *Table
            of Contents*




**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




-12-