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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K

(Mark One)

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

For the fiscal year ended June 30, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from
______________to________________

Commission file number 000-29895

SMART-TEK SOLUTIONS
INC.(Name of small business issuer in its charter)

|Nevada                                                               | 98-0206542                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|1100 Quail Street, Suite 100, Newport Beach,
      California        | 92660                               
|(Address of principal executive offices)                             | (Zip Code)                          

Issuers telephone number (858) 798-1644

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

|None                | N/A                                      
|------------------- | -----------------------------------------
|Title of each class | Name of each exchange on which registered

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

Common Stock, $0.001 par value(Title of
class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. 
Yes [ ]    No [x]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act. 
Yes [ ]    No [x]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
Yes [ ]    No [ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not 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-K or any amendment to this Form
10-K.[x]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer | [ ] | Accelerated filer         | [ ]
|----------------------- | --- | ------------------------- | ---
|Non-accelerated filer   | [ ] | Smaller reporting company | [x]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).
Yes [ ]    No [x]

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $8,871,271 based on a price of $0.36 per share,
being the average of the bid and ask prices of the issuer on the
Over-the-Counter Bulletin Board on June 30, 2010.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. 
Yes [ ]    No [ ]
N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. As of September 30,
2010, there were 69,314,124 shares of common stock, par value $0.001,
outstanding

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to
security holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities
Act). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1980). N/A

Transitional Small Business Disclosure Format (Check one): Yes [
]    No [x]

-2-

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ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2010

TABLE OF CONTENTS

|                                                                                                                                 | Page
|-------------------------------------------------------------------------------------------------------------------------------- | ----
|PART I                                                                                                                           |     
|                                                                                                                                 |     
|ITEM 1. BUSINESS                                                                                                                 | 1   
|ITEM 1A. RISK FACTORS                                                                                                            | 5   
|ITEM 1B. UNRESOLVED STAFF
      COMMENTS                                                                                         | 5   
|ITEM 2. PROPERTIES                                                                                                               | 5   
|ITEM 3. LEGAL PROCEEDINGS                                                                                                        | 5   
|ITEM 4. SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS.                                                               | 5   
|                                                                                                                                 |     
|PART II                                                                                                                          |     
|                                                                                                                                 |     
|ITEM 5. MARKET FOR REGISTRANTS COMMON
      EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
      OF EQUITY SECURITIES | 5   
|ITEM 6. SELECTED
      FINANCIAL DATA                                                                                            | 7   
|ITEM 9. CHANGES IN AND
      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.                              | 31  
|ITEM 9B. OTHER
      INFORMATION                                                                                                 | 31  
|                                                                                                                                 |     
|PART III                                                                                                                         |     
|                                                                                                                                 |     
|ITEM 10. DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                            | 32  
|ITEM 11. EXECUTIVE
      COMPENSATION                                                                                            | 34  
|ITEM 12. SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.             | 37  
|ITEM 13. CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                         | 38  
|ITEM 14. PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                                                            | 39  
|                                                                                                                                 |     
|PART IV                                                                                                                          |     
|                                                                                                                                 |     
|SIGNATURES                                                                                                                       | 41  

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PART I

Forward Looking Statements.

This annual report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts,
potential or continue or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled Risk Factors and the risks set out below, any of which may cause our
or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:

- risks related to the potential of delays in customer orders or the failure
  to retain customers;
- the uncertainty of profitability based upon our history of losses;
- risks related to failure to obtain adequate financing on a timely basis
  and on acceptable terms for our planned exploration and development projects;
- risks related to competition;
- risks related to tax attributes; and
- other risks and uncertainties related to our business strategy.

This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.

Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles. In this annual report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
common stock refer to the common shares in our capital stock.

As used in this annual report, the terms we, us, our, the
Company and Smart-Tek mean Smart-Tek Solutions Inc. and its subsidiaries,
unless the context clearly requires otherwise.

ITEM 1. BUSINESS

Present Business

Smart-tek Solutions Inc. has two business lines. Through our
wholly owned subsidiary Smart-Tek Communications Inc. (SCI) we specialize in
the design and development of Radio Frequency Identification (RFID) integration,
monitoring and tracking solutions to meet industry demands. SCI operates in the
business of design, sale, installation and service of security technology with
electronic hardware and software products. Our projects range from residential
and commercial developments to system upgrades and monitoring contracts

Through our wholly owned subsidiary Smart-Tek Automated
Services Inc. (STASI) we provide professional employer organization (PEO)
services. In a PEO co-employment contract, the Company becomes the employer of
record for client company employees for tax and insurance
purposes. The client company continues to direct the employees day-to-day
activities, and Allegiant charges a service fee for providing services.

-1-

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Recent Corporate Developments

Since the commencement of our fourth quarter ended June 30,
2009, we experienced the following significant corporate developments:

| | 1. | On May 29, 2009, Brian Bonar was appointed to our board
      of directors. Mr. Bonar has over 18 years of experience with IBM in
      Europe, Asia and the USA and an additional 20 years in high growth
      companies both private and public in various locations in the USA and the
      United Kingdom. From 2003 until 2006, Mr. Bonar was the Chairman and CEO
      of The Solvis Group, which provides staffing, PEO and ASO services to
      mainly the medical and call centre market segments. From September 2007
      until 2009, Mr. Bonar was the President and a member of the board of
      directors of Allegiant Professional, a publicly traded company. Also from
      September 2007 until 2009, Mr. Bonar founded AMS Outsourcing, a PEO
      focusing mainly in the transport market place and also established an
      international presence in the Czech Republic and Mexico. From 2004 to
      2009, he was a member of the board of directors of the following companies
      and organizations: The Solvis Group, Warning Management Corporation,
      Dalrada Financial Corporation, American Marine LLC, Alliance National
      Insurance Company and The Boys and Girls Club of Greater San Diego. Mr.
      Bonar holds a BSC in Mechanical Engineering from the Strathclyde
      University, Glasgow Scotland and a MBA and a PHD in the field of
      International Business Development Studies from the Stafford University,
      England UK.                                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 2. | On June 17, 2009, the board of Smart-Tek determined to
      add a new line of business providing integrated and cost-effective
      management solutions in the area of human resources for public and private
      companies. In connection with the expansion of business operations,
      Smart-Tek incorporated a subsidiary, Smart-Tek Automated Services, Inc., a
      private Nevada corporation, and entered into a marketing partner agreement
      dated June 17, 2009 with Smart-Tek Automated and Brian Bonar, a director
      of Smart-Tek. Pursuant to the terms of the marketing agreement, Brian
      Bonar agreed to provide certain services to Smart-Tek Automated to promote
      and market the new business of Smart-Tek to prospective clients, in
      consideration of which Smart-Tek agreed to pay Mr. Bonar a commission
      consisting of the following: (i) for every US$1,000,000 in annualized
      gross sales of Smart-Tek up to the first US$25,000,000 in annualized sales
      introduced by Mr. Bonar, Mr. Bonar will receive 1,800,000 shares of common
      stock of Smart-Tek up to a maximum of 45,000,000 shares of Smart-Teks
      common stock; and (ii) after an aggregated US$25,000,000 in annualized
      gross sales by Smart-Tek resulting from sales introduced by Mr. Bonar, Mr.
      Bonar will receive one percent of annualized gross revenues of Smart-Tek
      for the amounts in excess of US$5,000,000 of annualized gross sales in any
      given fiscal year payable in cash. The agreement is for an indefinite term
      and may be terminated by either party without cause on 30 days written
      notice.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 3. | On September 14, 2009, Perry Law resigned as President of
      Smart-Tek and appointed Brian Bonar as President to fill the
    vacancy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 4. | On September 14, 2009 Smart-Tek issued 45,000,000
      restricted shares of its common stock to Brian Bonar, a director of the
      Company. Mr. Bonar was issued the shares based on Mr. Bonar achieving
      certain milestone targets for annualized sales as set out in the Marketing
      Partner Agreement dated June 17, 2009 between the Company and Mr.
      Bonar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 5. | On September 29, 2009 Smart-Tek appointed Owen Naccarato
      to its board of directors. Mr. Naccarato has for the last twelve years
      been a practicing attorney specializing in corporate and securities law.
      Prior to practicing law, Mr. Naccarato held various high level financial
      and operating positions with fortune 500 firms. Mr. Naccarato is a member
      of the California State Bar Association, the Orange County and the Los
      Angeles County Bar Associations and their respective corporate law sections. Mr. Naccarato has a J.D.
from Western State University, an MBA from DePaul University and an
undergraduate degree in accounting from Northern Illinois University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

-2-

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Corporate History

Smart-Tek was incorporated in the State of Nevada on March 22,
1995 under the name Royce Biomedical Inc.. In July, 2005, we changed our name
from Royce Biomedical Inc. to Smart-Tek Solutions Inc. The address of our
principal executive office is 3702 South Virginia Street, Suite G12-401, Reno,
NV 89502. On March 31, 2009 we effected a 250 to 1 reverse stock split of our
issued and outstanding common stock. Effective March 31, 2009, our stock symbol
changed to STTN on the Financial Industry Regulatory Authoritys
Over-the-Counter Bulletin Board.

The Company incorporated Smart-Tek Automated Services Inc. on
February 11, 2009 in the anticipation of starting a to-be determined new
business line. The Company incorporated Smart-Tek Automated Services Inc.s new
business line officially started with the signing of the June 2009 marketing
agreement with Brian Bonar.

Products and Services

Through our wholly-owned subsidiary, Smart-tek Communication
Inc. (SCI), we specialize in the design, sale, installation and service of the
latest and most sophisticated security technology in the Greater Vancouver Area.
Customers for SCIs products and services include land developers, general and
electrical contractors, hospitals, corporations, law enforcement agencies and
retail facilities.

Our integrated systems project is typically done in the
following stages:

|1. | Initial consultation to gain an understanding of the
      project needs and the general scope of work;                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                  
|2. | The design of the integrated system is the second phase
      of our process. During this stage, the appropriate hardware and software
      is selected;                        
|   |                                                                                                                                                                                  
|3. | Once the equipment has been selected and the contractors
      are ready to accommodate our installations experts, our highly qualified
      team installs the security systems;
|   |                                                                                                                                                                                  
|4. | Once the integrated system is installed, our team of
      experts trains our customers on the systems and how to use it effectively;
      and                                  
|   |                                                                                                                                                                                  
|5. | Before we walk away from a job site, a vigorous quality
      assurance process is undertaken to make sure the systems are functioning
      as designed.                        

We provide a wide variety of systems: access control, alarm
systems, closed circuit TV systems (CCTV), intercom and data communication
systems.

Smart-Tek Automated Systems Inc.

In connection with the expansion of business operations, we
incorporated a subsidiary, Smart-Tek Automated Services, Inc. through which we
operate our new line of business. Through Smart-Tek Automated we provide
staffing and business processing services to small and medium sized businesses
principally located in major business centers in the Unites States. We also
provide a variety of financial services including: benefits and payroll
administration, health and workers' compensation insurance programs, personnel
records management, employer liability management, and full time and temporary
staffing services. The services feature advising in coaching in recruitment,
training and discipline and payment of employee wages, payroll taxes, state and
federal unemployment insurance, claims, and workers compensation premiums. As part
of our staffing services, Smart-Tek Automated can also provide recruitment,
reference checks, initial interviews, pre-employment and random drug testing,
and criminal background investigations

-3-

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Our services allow our customers to outsource many human
resource tasks, including payroll processing, workers' compensation insurance,
health insurance, employee benefits, 401k investment services, personal
financial management, and income tax consultation. These services also relieve
existing and potential customers of the burdens associated with personnel
management and control.

Product Liability Insurance

Smart-Tek Automated Services, Inc. does not carry product
liability insurance. Smart-Tek Communications, Inc. carries product liability
insurance.

Competition

We face competition from four or five competitors in our target
market in the security and surveillance technology industry. In general, we
believe that our current primary competitive advantages include product and
service quality at competitive pricing and our long-standing relationships with
our customers as evidenced by its stellar customer retention.

Patents, Licenses and Trademarks

Not Applicable.

Royalty Agreements

Not Applicable.

Government Regulations

Not Applicable.

Research and Development Plan

Not Applicable.

Employees

Smart-Tek Communications, Inc. has 14 full time employees.

Smart-Tek Automated Services, Inc has 10 full time
employees.

-4-

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ITEM 1A. RISK FACTORS

Not applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES.

Executive Offices

We do not maintain an executive office but rather utilize the
facilities, when required, of our operating subsidiary located at #10-11720
Voyageur Way, Richmond, BC, Canada, V6X 3G9. The office leased by our subsidiary
is approximately 2,000 square feet and is on a two year term with a payment of
approximately $1,800 per month. We utilize a mail service for our corporate
correspondence at 3702 South Virginia Street, Unit G12-401, Reno, Nevada,
89502.

Smart-Tek Automates Services Inc. maintains an executive office
of approximately 1,200 square feet at 11838 Bernardo Plaza Ct Suite 240 San
Diego, CA 92128. The Company does not have a lease and pays $2,500 a month on a
month to month basis.

ITEM 3. LEGAL PROCEEDINGS.

In July, 2009 Smart-Tek negotiated a settlement with Richardson
& Patel LLP pursuant to the terms of which Smart-Tek would be required to
pay Richardson & Patel $10,000 per month, commencing August 1, 2009, until
payments in the aggregate of $200,000 were made in full and final settlement of
all claims that the firm had or may have had against Smart-Tek with respect to
certain outstanding accounts owed by Smart-Tek to the firm totaling
approximately $315,000 for legal services rendered. In connection with the
settlement, Richardson & Patel requested that the parties enter into a stock
pledge agreement pursuant to which Perry Law (1,829 shares pledged), P5 Holdings
Ltd (30,984 shares pledged), Agri-Tech Marketing (22,000 shares pledged), Donald
Gee (40,000 shares pledged) and Joe Law (21,795 shares pledged) would pledge an
aggregate of 116,608 (post-split) shares of Smart-Teks issued and outstanding
common stock as security for repayment of the amounts owed to Richardson &
Patel. As of the date of this Annual Report the Company has not made any
payments and is in default of this agreement.

ITEM 4. (REMOVED AND RESERVED)

PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Securities

Our common shares are quoted on the Over-The-Counter Bulletin
Board under the trading symbol STTN.OB. Our shares have been quoted on the
Over-The-Counter Bulletin Board since May 15, 1998. The following quotations
obtained from the Over-The-Counter Bulletin Board reflect the high and low bids
for our common stock based on inter-dealer prices, without retail mark-up,
mark-down or commission an may not represent actual transactions.

-5-

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The high and low bid prices of our common stock for the periods
indicated below are as follows:

OTC Bulletin BoardFiscal Quarter Ended
    High
    Low20104th Quarter April 1, 2010  June 30, 2010
    $1.24
    $0.263rd Quarter January 1, 2010  March 31, 2010
    $0.685
    $0.3552nd Quarter October 1, 2009  December 31, 2009
    $0.04
    $0.011st Quarter July 1, 2009 September 30, 2009
    $0.01
    $0.0120094th Quarter April 1, 2009  June 30, 2009
    $0.02
    $0.0023rd Quarter January 1, 2009  March 31, 2009
    $0.11
    $0.0012nd Quarter October 1, 2008  December 31, 2008
    $0.013
    $0.0011st Quarter July 1, 2008 September 30, 2008
    $0.02
    $0.004


Our transfer agent is Corporate Stock Transfer Inc., 3200
Cherry Creek Drive South, Suite 4300, Denver, CO 80209 US.

Holders of our Common Stock

As of September 30, 2010, there were 384 total registered
shareholders holding 69,314,124 shares of our issued and outstanding common
stock.

Dividend Policy

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

| | 1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                             
| | 2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      shareholders who have preferential rights superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

Other than as described below and as reported in our quarterly
reports on Form 10-QSB and current reports on Form 8-K, we have not sold any
equity securities that were not registered under the Securities Act during the
fiscal year ended June 30, 2008.

| | 1. | On September 14, 2009 Smart-Tek issued 45,000,000
      restricted shares of its common stock to Brian Bonar, a director of the
      Company. Mr. Bonar was issued the shares based on Mr. Bonar achieving
      certain milestone targets for annualized sales as set out in the Marketing
      Partner Agreement dated June 17, 2009 between the Company and Mr.
      Bonar.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-6-

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| | 2. | On September 30, 2009 Smart-Tek entered into debt
      settlement agreements with seven subscribers pursuant to which it agreed
      to settle $310,265 of debt in consideration of the issuance of 23,866,535
      shares of its common stock. Each of the subscribers represented to
      Smart-Tek that they were an accredited investor as such term is defined
      in Canadian National Instrument 45- 106 and not a US person as such term
      is defined in Regulation S of the Securities Act of
1933.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

Certain statements in this annual report on Form 10-K that are
not historical in fact constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). The
PSLRA provides certain safe harbor provisions for forward-looking statements.
All forward-looking statements made in this annual report on Form 10-K are made
pursuant to the PSLRA. Words such as, but not limited to, believe, expect,
anticipate, estimate, intend, plan, and similar expressions are intended
to identify forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors based on the Companys
estimates and expectations concerning future events that may cause the actual
results of the Company to be materially different from historical results or
from any results expressed or implied by such forward-looking statements. These
risks and uncertainties, as well as the Companys critical accounting policies,
are discussed in more detail under Managements Discussion and
AnalysisCritical Accounting Policies and in periodic filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise.

You should read the following discussion of our financial
condition and results of operations together with the audited financial
statements and the notes to the audited financial statements included in this
annual report. This discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results may differ materially from
those anticipated in these forward-looking statements.

Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.

Overview

We currently operate two distinct lines of business. Through
our wholly owned subsidiary Smart-Tek Communications Inc. we operate in the
business of design, sale, installation and service of security technology with
electronic hardware and software products. Our projects range from residential
and commercial developments to system upgrades and monitoring contracts.
Customers include major developers, general and electrical contractors,
hospitals, Crown Corporations, law enforcement agencies and retail facilities.
Currently, 100% of the Companys operations are in Canada. We have a sales and
technical installation team with over 50 years of experience specializing in the
design, sales, installation and service of CCTV, access control, intercom,
security, structured cabling and wireless communication systems.

On June 17, 2009, we determined to add a new line of business
providing integrated and cost-effective management solutions in the area of
human resources for public and private companies. In connection with the
expansion of business operations, we incorporated a subsidiary, Smart-Tek
Automated Services, Inc. (Smart-Tek Automated), a private Nevada corporation
through which we operate our new line of business. Since its inception,
Smart-Tek Automated Services Inc. has provided services to small and medium-size
businesses, relieving its clients from many of the day-to-day tasks that negatively impact their core
business operations, such as payroll processing, human resources support,
workers' compensation insurance, safety programs, employee benefits, and other
administrative and aftermarket services predominantly related to staffing -
staff leasing, temporary staffing and co-employment. We intend to continue to
expand this new business in the next twelve months.

-7-

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Plan of Operation

Short Term

Smart-Tek Communications Inc.: Continue to rely on current
relationships as our primary means of marketing the security technology products
and services in the Greater Vancouver Area.

Smart-Tek Automated Services Inc.: Continue to concentrate of
signing up new brokers who have a large book of business that we can
service.

Long Term

Smart-Tek Automated Services Inc.: Our current strategy is to
expand our service business, including staff leasing, PEO services, and value
added products and services to small and medium-size businesses.

PEO Business
Environment

We provide professional employer organization outsourcing (PEO)
and human resources services to small and medium-size businesses. These services
allow our customers to outsource many human resources tasks, including payroll
processing, workers' compensation insurance, employee benefits administration,
risk management and human resource administration. These services relieve
existing and potential customers of the burdens associated with personnel
management and control.

As a human resource department and strategic business partner
for our clients, our service offerings allow our clients to:

- comply with ever evolving complex employment related regulatory and tax
  issues;
- increase productivity by improving employee satisfaction and retention;
- reduce payroll expenses with lower workers' compensation costs; and
- focus on core business activities instead of human resource matters.

Our main business, a co-employment or PEO contract arrangement,
we become a co-employer of the client's existing workforce and assume some or
all of the client's human resource management responsibilities.

Our business continues to experience some liquidity problems.
Accordingly, year-to-year comparisons may be of limited usefulness as our
business continues to seek growth.

Our current strategy is to expand our service business,
including staff leasing, PEO services, and value added products and services to
small and medium-size businesses.

To successfully execute our current strategy, we will need to
improve our working capital position. The report of our independent auditors
accompanying our September 30, 2008 financial statements included elsewhere in
this Form 10K includes an explanatory paragraph indicating there is a
substantial doubt about our ability to continue as a going concern, due
primarily to a working capital deficiency and negative net worth. In addition,
we are delinquent in our filing of payroll tax returns for certain of our PEO
divisions and are delinquent in the payment of payroll tax withholdings. We plan
to overcome the circumstances that impact our ability to remain a going concern
through a combination of achieving profitability and renegotiating existing
obligations. In addition, we continue to work with the Internal Revenue Service
and State taxing Authorities to reconcile and resolve all open accounts and
issues.

-8-

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There can be no assurance that we will be able to complete any
additional debt or equity financings on favorable terms or at all, or that any
such financings, if completed, will be adequate to meet our capital
requirements. Any equity or debt financings could result in substantial dilution
to our shareholders. If adequate funds are not available, we may be required to
delay, reduce or eliminate some or all of our planned activities, including any
potential mergers or acquisitions. Our inability to fund our capital
requirements would have a material adverse effect on the Company.

PEO Market Overview

The burdens placed on small and medium-sized employers by the
complex legal and regulatory issues related to human resources management caused
our industry segment to grow beginning in the 1980's. While various service
providers have been available to assist these businesses with specific tasks,
companies like ours emerged as providers of a more comprehensive range of
services relating to the employer/employee relationship. We assume broad aspects
of the employer/employee relationship for our clients. Because we provide
employee-related services to a large number of employees, we provide economies
of scale that provide our clients employment-related functions more efficiently,
provide a greater variety of employee benefits, and devote more attention to
human resources management.

We believe that the demand for our services is driven by (1)
the trend by small and medium-sized businesses toward outsourcing management
tasks outside of core competencies; (2) the difficulty of providing competitive
health care and related benefits to attract and retain employees; (3) the
increasing costs of health and workers' compensation insurance coverage and
workplace safety programs; and (4) complex regulation of labor and employment
issues and the related costs of compliance.

RESULTS OF OPERATIONS

Year Ended June 30, 2010 Summary

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the year ended
June 30, 2010 which are included herein.

|                 |   | June 30, 2010 |  |   | June 30, 2009 |   |  | Percentage |  
|---------------- | - | ------------- |  | - | ------------- | - |  | ---------- | -
|                 |   |               |  |   |               |   |  | Increase/  |  
|                 |   |               |  |   |               |   |  | (Decrease) |  
|Revenue          | $ | 12,038,390    |  | $ | 3,274,139     |   |  | 267.7%     |  
|Expenses         |   | 3,301,563     |  |   | 807,250       |   |  | 309.0%     |  
|Interest Expense |   | 9,616         |  |   | 44,549        |   |  | (78.4%     | )
|Net Income       | $ | 203,080       |  | $ | (136,367      | ) |  | 248.9%     |  

Revenue

The 267.7% increase in revenues for the twelve months ended
June 30, 2010 as compared to the comparative period in 2009 is primarily
attributable to: (i) the continued development of our payroll and staffing
business through Smart-Tek Automated; and (ii) a slight increase in business
during the period for our security business through Smart-Tek Communications
Inc. During the twelve month period ended June 30, 2010 we had a gross profit of
$3,514,159 as compared to a gross profit of $715,433 for an increase of
42,798,826 of 391.2% during the comparative period in 2009. The business of our
subsidiary Smart-Tek Automated accounted for 60.8% of our gross profit and 61.5%
of our total revenues during the period.

-9-

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Expenses

Our expenses for the years ended June 30, 2010 and June 30,
2009 are outlined in the table below:

|                                                   |   | Year Ended    |  |  | Year Ended    |  |  | Percentage |  
|-------------------------------------------------- | - | ------------- |  |  | ------------- |  |  | ---------- | -
|                                                   |   | June 30, 2010 |  |  | June 30, 2009 |  |  | Increase/  |  
|                                                   |   |               |  |  |               |  |  | (Decrease) |  
|Selling, general and administrative
      expenses | $ | 3,301,563$    |  |  | 807,250       |  |  | 309.0%     |  
|Cost of revenues and service delivery              |   | 8,607,646     |  |  | 2,558,706     |  |  | 236.4%     |  
|Interest expense                                   |   | 9,616         |  |  | 44,550        |  |  | (78.4%     | )
|Total expenses                                     | $ | 11,918,824$   |  |  | 3,410,506     |  |  | 249.5%     |  

Cost of revenue and service delivery

The Cost of revenue and service delivery for the twelve month
period ended June 30, 2010 was $8,607,646 compared to $2,558,706 for the same
period prior year for an increase of $6,048,940 or 236.4% . The increase was
primarily due to the business of our subsidiary Smart-tek Automated Services,
which accounts for $5,349,529 of the increase with the balance of $3,258,117
relating to the core business.

Selling, General and Administrative

The 309.0% increase in our selling, general and administrative
expenses of $2,494,313 for the twelve month period ended June 30, 2010 from the
comparative period in 2009 was primarily due to: (i) increase of $1,640,265 due
to the business of our subsidiary Smart-tek Automated Services, (ii) increase of
$728,273 (64.4%) in management fees, (iii) increase of $93,643 (71.1%) in
professional fees, and miscellaneous items of $32,132 (11.7%) .

Net Income

Net Income for the twelve months ending June 30, 2010 is
$203,080 compared to a net loss of ($136,367) or an increase of $339,447
(248.9%) for the same period prior year. The net income consists of $490,340 in
income from the new Smart-Tek Automated Services subsidiary, offset by a loss of
($157,228) from the Smart-Tek Communications Inc. subsidiary plus corporate
charges of ($130,032).

Liquidity and Financial Condition

Working Capital

|                             |   | At June 30, 2010 |   |   | At June 30, 2009 |   |  | Percentage |  
|---------------------------- | - | ---------------- | - | - | ---------------- | - |  | ---------- | -
|                             |   |                  |   |   |                  |   |  | Increase/  |  
|                             |   |                  |   |   |                  |   |  | (Decrease) |  
|Current assets               | $ | 3,114,593        |   | $ | 986,225          |   |  | 215.8%     |  
|Current liabilities          |   | 4,108,871        |   |   | 2,254,759        |   |  | 82.2%      |  
|Working capital (deficiency) | $ | (994,278         | ) | $ | (1,268,534       | ) |  | (21.6%     | )

-10-

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Cash Flows

|                                            |   | Year Ended |   |   |          |  
|------------------------------------------- | - | ---------- | - | - | -------- | -
|                                            |   | June 30,   |   |   | June 30, |  
|                                            |   | 2010       |   |   | 2009     |  
|                                            |   |            |   |   |          |  
|Cash flows used in operating activities     | $ | 738,665    |   | $ | (3,092   | )
|Cash flows used in investing activities     |   | (112,932   | ) |   | (14,633  | )
|Cash flows provided by financing activities |   | (128,375   | ) |   | (14,094  | )
|Effects of exchange rates on cash           |   | (154,241   | ) |   | 53,846   |  
|Increase (decrease) in cash during period   | $ | 343,117    |   | $ | 22,027   |  

We had cash on hand of $416,389 and a working capital deficit
of $994,278 as of June 30, 2010 compared to cash on hand of $73,272 and working
capital deficit of $1,308,701 for the year ended June 30, 2009. We anticipate
that we will incur approximately $2,500,00 for operating expenses, including
professional, legal and accounting expenses associated with our reporting
requirements under the Exchange Act during the next twelve months.

Cash Used In Operating Activities

We generated cash from operating activities in the amount of
$738,665 for the fiscal year ended June 30, 2010 as compared to cash used in
operating activities of $3,092 in the comparative period in 2009. Cash from
operating activities resulted from the increased revenues from the business of
our new Smart-Tek Automated Services, Inc. subsidiary.

Cash Used In Investing Activities

We used cash in investing activities in the amount of $112,932
for the fiscal year ended June 30, 2010. Cash used in investing activities was
funded by cash from financing activities. At June 30, 2010 the Company is
indebted to a company controlled by the Companys president in the amount of
$821,756. The loan is unsecured, bears 7.5% interest and has no fixed terms of
repayment. The interest was waived for the year ended June 30, 2010.

Cash from Financing Activities

We used cash of $128,375 from financing activities during the
fiscal year ended June 30, 2010, an increase of $113,742 or 810.8% from the
comparative period in 2009. Cash provided by financing activities during the
period increased primarily due to an increase in proceeds from officers and
directors.

Financing

During the quarter ended March 31, 2010, Smart-tek Automated
Services secured a line of credit for $1,000,000 USD from J.P. Chase Manhattan
Bank to facilitate its automatic withdrawals from client accounts as well as for
the provision of direct deposit services to its clients.

-11-

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Going Concern

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. The Company
incurred a net income of $203,080 and cash flow from operations of $738,665
during the year ended June 30, 2010, and had a working capital deficiency of
$994,278 and a shareholders deficiency of $438,164. These matters raise
substantial doubt about its ability to continue as a going concern. Management
believes that actions are presently being taken to revise the Companys
operating results. Management believes that the Company will have adequate cash
to fund anticipated needs through June 30, 2011 and beyond primarily as a result
of our contract backlog. The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be forced to scale down or perhaps even cease the operation of our
business.

Future Financings

Based on the success of the Companys new business line,
management feels that its current operations will generate enough liquidity to
satisfy its cash requirements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.

Subsequent Event

On April 19, 2010, the Company filed a preliminary proxy
seeking the shareholders of the Company to vote on the certain proposals. The
Proxy was amended and refilled on August on August 20, 2010 to approve the sale
of the Companys wholly owned subsidiary Smart-Tek Communications Inc. to its
president and founder Perry Law.

The aggregate purchase price of Smart-Tek Communications, Inc.
is $821,757 allocated as follows:

| | (a) | $821,756 of the purchase price shall be paid and
      satisfied by setting-off the Companys indebtedness to the Perry Law
      pursuant to a Loan, including all accrued and unpaid interest there under
      up to the date that the sale close; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                          
| | (b) | $1.00 of the purchase price shall be paid by Perry Law
      for transferring 32,817 shares owned by him to the Company;
  and                                                                                                                           

On September 15, 2010 the Company received comments from the
Securities and Exchange Commission to be cleared before a definitive proxy can
be distributed.

-12-

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Critical Accounting Policies

The preparation of financial statements in conformity with
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations.

Revenue Recognition  contract business

The Company accounts for its construction projects using the
percentage of completion method, measured using the cost-to-cost method. This
method of accounting requires a calculation of job profit to be recognized in
each reporting period for each contract based upon estimates of future outcomes,
which include:

- Estimates of total cost to complete the contract;
- Estimates of contract schedule and completion date;
- Estimates of the percentage the contract is complete; and
- Amounts of any probable unapproved claims and change orders included in
  revenue.

At the outset of each contract, a detailed analysis of
estimated cost to complete the contract is prepared. Periodically, evaluation of
the estimated cost, claims, change orders and percentage of completion at the
project level will be performed. The recording of profits and losses on
long-term contracts requires an estimate of the total profit and loss over the
life of each contract. This estimate requires consideration of contract
revenues, change orders and claims, less cost incurred and estimated costs to
complete. Anticipated losses on contracts are recorded in full in the period in
which they become evident. Profits are recorded based upon the total estimated
contract profit times the current percentage of completion for the contract.

When calculating the amount of total profit or loss on a
long-term contract, unapproved claims are recorded as revenue when collection is
deemed probable based upon the four criteria for recognizing unapproved claims
under the AICPA Statement of Position 81-1 (SOP 81-1) Accounting for
Performance of Construction Type and Certain Production Type Contracts. The
Company is actively engaged in claims negotiations with customers and the
success of the claims negotiations have a direct impact on the profit or loss
recorded for any long-term contract. On a quarterly basis, significant contracts
are reviewed. However, there are many factors that impact future costs,
including but not limited to, weather, inflation, labor and community
disruptions, timely availability of materials, productivity and other factors.
These factors can affect the accuracy of our estimates and materially impact our
future earnings. The Company also provides various other services to customers
not covered under construction contracts such as equipment repairs. The revenue
from the provision of these types of services is recorded once the specific job
is complete.

Revenue Recognition  PEO business

Revenues are comprised of the Companys charges to clients for
workers compensation insurance, administrative, and service fees based on
periodic payrolls processed. The Company recognizes revenues when each periodic
payroll is delivered to the client. Revenues are reported in accordance with
authoritative guidance issued by the Financial Accounting Standards Board
(FASB) for reporting revenues gross when acting as a principal versus net as
an agent. The Company records revenue on a net basis and does not include the
gross payroll of its client company employees in its revenues.

-13-

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Insurance Reserves

We maintain reserves for workers' compensation claims which are
made up of estimated claims and estimated expenses related to settle the claims.
These estimates are impacted by claims that have been reported but not settled
and claims that have been incurred but not reported. We evaluate the reserves
regularly throughout the year and make adjustments accordingly. If the actual
cost of such claims and related expenses exceeds the amounts estimated,
additional reserves may be required. Since there are many estimates and
assumptions involved in recording insurance reserves, differences between actual
future events and prior estimates and assumptions could result in adjustments to
these reserves.

Goodwill and Intangible Assets

The Company accounts for goodwill and intangible assets
pursuant to SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS
142, intangibles with definite lives continue to be amortized on a straight-line
basis over the lesser of their estimated useful lives or contractual terms.
Goodwill and intangibles with indefinite lives are evaluated at least annually
for impairment by comparing the assets estimated fair values with its carrying
value, based on cash flow methodology.

Stock-based Compensation

Through December 31, 2005, the Company accounted for
stock-based employee compensation in accordance with the provisions of
Accounting Principles Board (APB) Opinion No. 25 and FASB Interpretation No.
44 Accounting for Certain Transactions Involving Stock Compensation and
complied with the disclosure requirements of SFAS No. 123 (as modified by SFAS
No.48), Accounting for Stock-Based Compensation, Under APB No. 25 compensation
expense was recorded based on difference, if any, between the fair value of the
Companys stock and the exercise price on the measurement date. The Company
accounted for stock issued to non-employees in accordance with SFAS No. 123,
which required entities to recognize as expense over the service period the fair
value of all stock based awards on the date of grant and EITF No. 96-18
Accounting for Equity Investments that are issued to Other Than Employees for
Acquiring, or in conjunction with Selling, Goods or Services, which addressed
the measurement date and recognition approach for such transactions.

On January 1, 2006, the Company adopted SFAS No. 123 (revised
2004), Share-based Payment (SFAS No. 123R) a revision of SFAS No. 123,
Accounting for Stock Based Compensation, SFAS No. 123R superseded APB Opinion
No. 25 Accounting for Stock Issued to Employees and amended SFAS 95 Statement
of Cash Flows SFAS No. 123R requires that the Company measure the cost of
employee services received in exchange for equity awards based on the grant date
fair-value of the awards. The cost will be recognized as compensation expense
over the vesting period of the awards.

Under this method, the Company began recognizing compensation
cost for equity-based compensation for all new or modified grants after the date
of adoption. The pro-forma disclosures previously permitted under SFAS No. 123
are no longer an alternative to financial statement recognition. In addition,
the Company now recognizes the unvested portion of the grant date fair value of
awards issued prior to adoption based on the fair values previously calculated
for disclosure purposes over the remaining vesting period of the outstanding
options and warrants. Accordingly, the Company recognizes compensation cost for
equity-based compensation for all new or modified grants issued after December
31, 2005.

The Company had two partially vested stock options outstanding
at December 31, 2005 pursuant to employment agreements entered into between the
Companys and its president and vice-president. Under these agreements, the
Company issued options to purchase up to 650,000 shares of its common stock at a
purchase price of $0.15 per share that vest in equal quarterly installments over
a three (3) year period. The Company calculated the fair value of the options to
be 195,000 using our option pricing model, of which $195,000 was recognized as
expense during the nine months ended March 31, 2010. In addition, commencing
January 1, 2006, the Company is required to recognize the unvested portion of
the grant date fair value of awards issued prior to the adoption of SFAS No.
123R based on the fair values previously calculated for disclosure purposes over
the remaining vesting period of the outstanding stock options and warrants. At
March 31, 2010, the value of the unvested options was $Nil.

-14-

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

-15-

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FINANCIAL STATEMENTSREPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To:  The Board of Directors and
Shareholders        Smart-tek Solutions,
Inc. (formerly Royce Biomedical Inc.)

I have audited the accompanying consolidated balance sheet of
Smart-tek Solutions, Inc. and subsidiary (the Company) as of June 30, 2010 and
2009 and the related consolidated statements of operations and cash flows for
the year then ended, and for the period since inception (March 22, 1995) to June
30, 2010. These consolidated financial statements are the responsibility of the
Companys management. My responsibility is to express an opinion on these
consolidated financial statements based on my audit.

I conducted my audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that I plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor was I engaged to perform, an audit of its internal
control over financial reporting. My audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but do not for the purpose of expressing
an opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, I express no such opinion. 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. I believe that my audit provides a
reasonable basis for my opinion.

In my opinion the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Smart-tek Solutions, Inc. and its subsidiaries as of June 30, 2010 and 2009, and
the results of their operations and cash flows for years then ended, and for the
period from inception (March 22, 1995) to June 30, 2010 in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company has
suffered recurring losses until the latest fiscal year. As discussed in Note 1
to the financial statements, the Company generated a net income of $203,080 and
a cash flow from operations of $738,665 during the year ended June 30, 2010,
however a working capital deficiency of $994,278 and a stockholders deficiency
of $438,164 at June 30, 2010. It remains to be seen whether this improvement in
operating results can continue. There is still substantive doubt about the
Companys ability to continue as a going concern. Managements plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

/ s / John Kinross-Kennedy

John Kinross-Kennedy Certified Public Accountant
Irvine, California October 15, 2010

-1-

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|Smart-tek Solutions Inc.    
|----------------------------
|Consolidated Balance Sheets 
|As of June 30, 2010 and 2009

|                                                                                                                                                                                                                                                       |   | 2010       |   |   | 2009       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ---------- | - | - | ---------- | -
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Assets                                                                                                                                                                                                                                                 |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Current assets                                                                                                                                                                                                                                         |   |            |   |   |            |  
|Cash and cash
      equivalents                                                                                                                                                                                                                        | $ | 416,389    |   | $ | 73,272     |  
|Accounts receivable                                                                                                                                                                                                                                    |   | 1,041,593  |   |   | 639,284    |  
|Contract retention
      receivable                                                                                                                                                                                                                    |   | 118,804    |   |   | 235,196    |  
|Cost of uncompleted contracts in excess
      of billings                                                                                                                                                                                              |   | 11,713     |   |   | 37,097     |  
|Prepaid expenses and
      deposits                                                                                                                                                                                                                    |   | 1,526,094  |   |   | 1,376      |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Total current assets                                                                                                                                                                                                                                   |   | 3,114,593  |   |   | 986,225    |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Equipment, net of accumulated depreciation                                                                                                                                                                                                             |   | 104,803    |   |   | 15,122     |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Goodwill                                                                                                                                                                                                                                               |   | 451,311    |   |   | 451,311    |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       | $ | 3,670,707  |   | $ | 1,452,658  |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Liabilities                                                                                                                                                                                                                                            |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Current liabilities                                                                                                                                                                                                                                    |   |            |   |   |            |  
|Accounts payable and accrued
      liabilities                                                                                                                                                                                                         | $ | 2,287,493  |   | $ | 715,622    |  
|Accounts payable to
      related parties                                                                                                                                                                                                              |   | 1,227,210  |   |   | 640,916    |  
|Billings on uncompleted contracts
      in excess of costs and estimated revenues                                                                                                                                                                      |   | 73,117     |   |   | 297,600    |  
|Deferred revenue                                                                                                                                                                                                                                       |   | 21,027     |   |   | 12,389     |  
|Loans payable                                                                                                                                                                                                                                          |   | -          |   |   | 310,265    |  
|Shareholder loans                                                                                                                                                                                                                                      |   | 500,024    |   |   | 318,134    |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Total current liabilities                                                                                                                                                                                                                              |   | 4,108,871  |   |   | 2,294,926  |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Stockholders Deficiency                                                                                                                                                                                                                               |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Preferred stock, $0.001 par value, 5,000,000
      shares 
           authorized, zero shares of
      Class A preferred      issued and
      outstanding at June 30, 2010 and one
      (1)      share issued and outstanding at
      June 30, 2009 |   | -          |   |   | -          |  
|Common stock: $0.001 par value,
      500,000,000, shares 
           authorized,
      69,314,124 issued and outstanding at June 30, 2010
      and      447,589 issued and outstanding
      at June 30, 2009 respectively                           |   | 69,315     |   |   | 448        |  
|Additional paid in capital                                                                                                                                                                                                                             |   | 6,852,863  |   |   | 6,566,465  |  
|Accumulated other comprehensive loss                                                                                                                                                                                                                   |   | (221,963   | ) |   | (67,722    | )
|Accumulated deficit                                                                                                                                                                                                                                    |   | (7,138,379 | ) |   | (7,341,459 | )
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|Total stockholders deficiency                                                                                                                                                                                                                         |   | (438,164   | ) |   | (842,268   | )
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  
|                                                                                                                                                                                                                                                       | $ | 3,670,707  |   | $ | 1,452,658  |  
|                                                                                                                                                                                                                                                       |   |            |   |   |            |  

See accompanying notes to the consolidated financial
statements.

2

---

|Smart-tek Solutions Inc.                                                   
|---------------------------------------------------------------------------
|Consolidated Statements of Operations and Comprehensive
      Income (Loss)
|For the years ended June 30, 2010 and 2009                                 

|                                                             |   | 2010       |   |   | 2009      |  
|------------------------------------------------------------ | - | ---------- | - | - | --------- | -
|Revenue                                                      |   |            |   |   |           |  
|Contract revenue                                             | $ | 12,038,390 |   | $ | 3,184,401 |  
|Services revenue                                             |   | 91,159     |   |   | 88,310    |  
|Other revenue                                                |   | (7,644     | ) |   | 1,428     |  
|Total revenue                                                |   | 12,121,905 |   |   | 3,274,139 |  
|Cost of revenue and service delivery                         |   | 8,607,646  |   |   | 2,558,706 |  
|Gross profit                                                 |   | 3,514,259  |   |   | 715,433   |  
|Selling, general and administrative
      expenses           |   | 3,301,563  |   |   | 807,250   |  
|Operating income (loss)                                      |   | 212,696    |   |   | (91,817   | )
|Other expense                                                |   |            |   |   |           |  
|Interest                                                     |   | (9,616     | ) |   | (44,550   | )
|Net income (loss)                                            |   | 203,080    |   |   | (136,367  | )
|Currency translation adjustment                              |   | (154,241   | ) |   | 53,846    |  
|Comprehensive income (loss)                                  | $ | 48,839     |   | $ | (82,521   | )
|Earnings (loss) per share, basic and diluted                 | $ | 0.01       |   | $ | (0.18     | )
|Weighted average shares outstanding, basic
      and diluted |   | 53,863,199 |   |   | 447,589   |  

See accompanying notes to the consolidated financial
statements.

3

---

|Smart-tek Solutions Inc.                                           
|-------------------------------------------------------------------
|Consolidated Statement of Changes in Stockholders
      Deficiency
|For the years ended June 30, 2010 and 2009                         
|                                                                   

|                                              |  | Common Stock |  |   |        |  |   |            |  |   |               |   |   |             |  
|--------------------------------------------- |  | ------------ |  | - | ------ |  | - | ---------- |  | - | ------------- | - | - | ----------- | -
|                                              |  |              |  |   |        |  |   |            |  |   | Accumulated   |   |   |             |  
|                                              |  |              |  |   |        |  |   | Additional |  |   | Other         |   |   |             |  
|                                              |  |              |  |   |        |  |   | Paid in    |  |   | Comprehensive |   |   | Accumulated |  
|                                              |  | Shares       |  |   | Amount |  |   | Capital    |  |   | Income        |   |   | Deficit     |  
|Balance  June 30, 2008                       |  | 447,589      |  | $ | 448    |  | $ | 6,533,965  |  | $ | (121,568      | ) | $ | (7,205,092  | )
|Fair Value Options issued to employees        |  | -            |  |   | -      |  |   | 32,500     |  |   | -             |   |   | -           |  
|Net Loss                                      |  | -            |  |   | -      |  |   | -          |  |   | -             |   |   | (136,367    | )
|Currency translation adjustment               |  | -            |  |   | -      |  |   | -          |  |   | 53,846        |   |   | -           |  
|Balance  June 30, 2009                       |  | 447,589      |  | $ | 448    |  | $ | 6,566,465  |  | $ | (67,722       | ) | $ | (7,341,459  | )
|Shares issued for Marketing Partner Agreement |  | 45,000,000   |  |   | 45,000 |  |   | -          |  |   | -             |   |   | -           |  
|Shares issued for settlement of debt          |  | 23,866,535   |  |   | 23,867 |  |   | 286,398    |  |   | -             |   |   | -           |  
|Net Income                                    |  | -            |  |   | -      |  |   | -          |  |   | -             |   |   | 203,080     |  
|Currency translation adjustment               |  | -            |  |   | -      |  |   | -          |  |   | (154,241      | ) |   | -           |  
|Balance  June 30, 2010                       |  | 69,314,124   |  | $ | 69,315 |  | $ | 6,852,863  |  | $ | (221,963      | ) | $ | (7,138,379  | )

See accompanying notes to the consolidated financial
statements.

4

---

|Smart-tek Solutions Inc.                  
|------------------------------------------
|Consolidated Statements of Cash Flows     
|For the years ended June 30, 2010 and 2009

|                                                                                                                                       |   | 2010       |   |   | 2009     |  
|-------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | -------- | -
|                                                                                                                                       |   |            |   |   |          |  
|Operating activities                                                                                                                   |   |            |   |   |          |  
|                                                                                                                                       |   |            |   |   |          |  
|Net income (loss)                                                                                                                      | $ | 203,080    |   | $ | (136,367 | )
|Adjustments to reconcile net loss to net cash used in                                                                                  |   |            |   |   |          |  
|operating activities                                                                                                                   |   |            |   |   |          |  
|Depreciation and amortization                                                                                                          |   | 23,251     |   |   | 2,258    |  
|Amortization of deferred compensation                                                                                                  |   | -          |   |   | 32,500   |  
|Shares issued for Marketing Partner agreement                                                                                          |   | 45,000     |   |   | -        |  
|Shares issued for settlement of debt                                                                                                   |   | 310,265    |   |   | -        |  
|                                                                                                                                       |   |            |   |   |          |  
|Changes in operating assets and liabilities                                                                                            |   |            |   |   |          |  
|Accounts receivable                                                                                                                    |   | (402,309   | ) |   | (41,745  | )
|Contract retention receivable                                                                                                          |   | 116,392    |   |   | (8,474   | )
|Costs of uncompleted contracts in excess of billings                                                                                   |   | 25,384     |   |   | 14,490   |  
|Prepaid expenses and deposits                                                                                                          |   | (1,524,718 | ) |   | 193      |  
|Accounts payable and accrued liabilities                                                                                               |   | 1,571,871  |   |   | 104,262  |  
|Accounts payable to related parties                                                                                                    |   | 586,294    |   |   | (12,277  | )
|Billings on uncompleted contracts in excess of costs 
                                                    and estimated
      revenues |   | (224,483   | ) |   | 43,346   |  
|Deferred revenue                                                                                                                       |   | 8,638      |   |   | (1,278   | )
|                                                                                                                                       |   |            |   |   |          |  
|Net cash provided by (used in) operating
      activities                                                                              |   | 738,665    |   |   | (3,092   | )
|                                                                                                                                       |   |            |   |   |          |  
|Investing activities                                                                                                                   |   |            |   |   |          |  
|Purchase of equipment                                                                                                                  |   | (112,932   | ) |   | (14,633  | )
|                                                                                                                                       |   |            |   |   |          |  
|Net cash used in investing activities                                                                                                  |   | (112,932   | ) |   | (14,633  | )
|                                                                                                                                       |   |            |   |   |          |  
|Financing activities                                                                                                                   |   |            |   |   |          |  
|(Decrease) Increase in bank overdraft, net                                                                                             |   | -          |   |   | (87,984  | )
|Proceeds
      from shareholders loan                                                                                                  |   | 181,890    |   |   | 79,288   |  
|Proceeds from officer and directors                                                                                                    |   | -          |   |   | (5,398   | )
|Repayment of loans payable                                                                                                             |   | (310,265   | ) |   | -        |  
|                                                                                                                                       |   |            |   |   |          |  
|Net cash used in financing activities                                                                                                  |   | (128,375   | ) |   | (14,094  | )
|                                                                                                                                       |   |            |   |   |          |  
|Effects of exchange rates on cash                                                                                                      |   | (154,241   | ) |   | 53,846   |  
|                                                                                                                                       |   |            |   |   |          |  
|Net increase in cash                                                                                                                   |   | 343,117    |   |   | 22,027   |  
|                                                                                                                                       |   |            |   |   |          |  
|Cash, beginning of year                                                                                                                |   | 73,272     |   |   | 51,245   |  
|                                                                                                                                       |   |            |   |   |          |  
|Cash, end of year                                                                                                                      | $ | 416,389    |   | $ | 73,272   |  
|                                                                                                                                       |   |            |   |   |          |  
|                                                                                                                                       |   |            |   |   |          |  
|Supplemental cash flow information                                                                                                     |   |            |   |   |          |  
|Interest
      paid                                                                                                                    | $ | 9,616      |   | $ | 44,550   |  
|                                                                                                                                       |   |            |   |   |          |  

See accompanying notes to the consolidated financial
statements.

5

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

1. Summary of significant accounting policies

Nature of operations, basis of financial statement
presentation

Smart-tek Solutions Inc. (the Company) was incorporated in
the State of Nevada on March 22, 1995.

Smart-tek Communications Inc. (SCI) was incorporated on
October 29, 1996 in the Province of British Columbia, Canada. The Company
specializes in the design, sale, installation and service of security technology
with electronic hardware and software products. Projects range from residential
and commercial developments to system upgrades and monitoring contracts.
Customers include major developers, general and electrical contractors,
hospitals, Crown Corporations, law enforcement agencies and retail facilities.
Currently, 100% of the Companys operations are in Canada.

In March 2005, the Company entered into a Letter of Intent to
acquire Smart-tek Communications, Inc. (SCI) a British Columbia based security
design and installation contractor. Pursuant to a Share Exchange Agreement
executed in April 2005. SCI became a wholly-owned subsidiary of the Company. As
a result of this acquisition, the Company has ceased all ongoing business
relationships with Xili and will direct its efforts to effectively operate and
expand in the security sector.

On February 11, 2009, Smart-tek Automated Services Inc., a
wholly owned subsidiary of the Company was incorporated in the State of Nevada
for the purpose of adding a yet to be determined new business line. On June 17,
2010, Brian Bonar was contracted to use his expertise and contacts in the PEO
area for the benefit of Smart-tek Automated Services, Inc. Smart-tek Automated
Services Inc. provides integrated and cost-effective management solutions in the
area of human resources for public and private companies. Though Smart-tek
Automated Services Inc., provides mainly professional employer organization
(PEO) services, it is equipped to provide temporary staffing services as well.
In a PEO co-employment contract, the Company becomes the employer of record for
client company employees for tax and insurance purposes. The client company
continues to direct the employees day-to-day activities, and Allegiant charges
a service fee for providing services.

The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America and include the following significant accounting policies:

Principles of consolidation

The consolidated financial statements include the accounts of
Smart-tek Solutions Inc., and its wholly-owned subsidiaries Smart-tek
Communications Inc. and Smart-tek Automated Services Inc. Significant
inter-company transactions have been eliminated in consolidation.

Use of estimates

The preparation of these financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported
amounts and related disclosures. Specific areas, among others, requiring the
application of managements estimates and judgment includes assumptions
pertaining to credit. Worthiness of customers, percentage of completion and
related costs for contracts in progress, interest rates, useful lives of assets,
future cost trends, tax strategies, and other external market and economic
conditions. Actual results could differ from estimates and assumptions made.

Cash and equivalents

Cash and cash equivalents consist of cash on hand and bank
deposits. For financial reporting purposes, the Company considers all highly
liquid debt instruments with original maturities of three months or less to be
cash equivalents. The Company maintains its cash in bank deposit accounts, which
at times, may exceed federally insured limits. The Company has not experienced
any losses related to this concentration of risk. At June 30, 2010 and 2009, the
Company did not have any deposits in excess of federally insured limits.

6

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

Accounts Receivable

Accounts receivables are recorded at net realizable value
consisting of the carrying amount less an allowance for uncollectible accounts,
as needed. The Company uses the allowance method to account for uncollectible
accounts receivable balances. Under the allowance method, if needed, an estimate
of uncollectible customer balances is made based upon specific account balances
that are considered uncollectible. Factors used to establish an allowance
include the credit quality and payment history of the customer. There is an
allowance for doubtful accounts as of June 30, 2010 of $11,628 (2009 
$3,871).

Concentration of credit risk

Credit risk arises from the potential that a counterpart will
fail to perform its obligations. The Company is exposed to credit risk related
to its account receivable and contract retention receivable. The Companys
receivables are comprised of a number of debtors which minimizes the
concentration of credit risk. It is managements opinion that the Company is not
exposed to significant credit risk associated with its accounts receivable and
contract retention receivable.

Equipment

Equipment, including computer equipment under capital lease
agreements, is recorded at cost and depreciated using accelerated methods over
the estimated useful lives of the related assets ranging from 3 to 5 years. The
Company reviews the carrying value of long-term assets to be held and used when
events and circumstances warrant such a review. If the carrying value of a
long-lived asset is considered impaired, a loss is recognized based on the
amount by which the carrying value exceeds the fair market value. Fair market
value is determined primarily using the anticipated cash flows discounted at a
rate commensurate with the risk involved. The cost of normal maintenance and
repairs is charged to operations as incurred. Major overhaul that extends the
useful life of existing assets is capitalized. When equipment is retired or
disposed, the costs and related accumulated depreciation are eliminated and the
resulting profit or loss is recognized in income.

Goodwill and intangible assets

The Company accounts for goodwill and intangible assets
pursuant to SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS
142, intangibles with definite lives continue to be amortized on a straight-line
basis over the lesser of their estimated useful lives or contractual terms.
Goodwill and intangibles with indefinite lives are evaluated at least annually
for impairment by comparing the assets estimated fair values with its carrying
value, based on cash flow methodology.

Income taxes

In accordance with SFAS No. 109, Accounting for Income Taxes,
the Company uses the asset and liability method to account for income taxes,
including recognition of deferred tax assets for the anticipated future tax
consequences attributable to differences between financial statement amounts and
their respective tax bases. The Company reviews its deferred tax asset for
recovery and a valuation allowance is established when the Company believes that
it is more likely than not that some portion of its deferred tax asset will not
be realized. Changes in valuation allowances from period to period are included
in the Companys tax provision in the period of change.

7

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

Revenue recognition

The Company accounts for its construction projects using the
percentage of completion method, measured using the cost-to-cost method. This
method of accounting requires a calculation of job profit to be recognized in
each reporting period for each contract abased upon estimates of future
outcomes, which include:

- Estimates of total cost to complete the contract;
- Estimates of contract schedule and completion date;
- Estimates of the percentage the contract is complete; and
- Amounts of any probable unapproved claims and change orders included in
  revenue.

At the outset of each contract, a detailed analysis of
estimated cost to complete the contract is prepared. Periodically, evaluation of
the estimated cost, claims, change orders and percentage of completion at the
project level will be performed. The recording of profits and losses on
long-term contracts requires an estimate of the total profit and loss over the
life of each contract. This estimate requires consideration of contract
revenues, change orders and claims, less cost incurred and estimated costs to
complete. Anticipated losses on contracts are recorded in full in the period in
which they become evident. Profits are recorded based upon the total estimated
contract profit times the current percentage of completion for the contract.

When calculating the amount of total profit or loss on a
long-term contract, unapproved claims are recorded as revenue when collection is
deemed probable based upon the four criteria for recognizing unapproved claims
under the AICPA Statement of Position 81-1 (SOP 81-1) Accounting for
Performance of Construction Type and Certain Production Type Contracts. The
Company is actively engaged in claims negotiations with customers and the
success of the claims negotiations have a direct impact on the profit or loss
recorded for any long-term contract. On a quarterly basis, significant contracts
are reviewed. However, there are many factors that impact future costs,
including but not limited to, weather, inflation, labor and community
disruptions, timely availability of materials, productivity and other factors.
These factors can affect the accuracy of our estimates and materially impact our
future earnings.

The company also provides various other services to customers
not covered under construction contracts such as equipment repairs. The revenue
from the provision of these types of services is recorded once the specific job
is complete.

The Company recognizes professional employment organizations
(PEO) revenues when each periodic payroll is delivered to the client. Revenues
are reported in accordance with the requirements of Financial Accounting
Standards Board (FASB) Emerging Issues Task Force Issue No. 99-19,
Reporting Revenues Gross as a Principal Versus Net as an Agent.(EITF
99-19). Consistent with its revenue recognition policy, the Companys net PEO
revenues and cost of PEO revenues do not include the payroll cost of its
worksite employees. Instead, PEO revenues and cost of PEO revenues are comprised
of all other costs related to its worksite employees, such as payroll taxes,
employee benefit plan premiums and workers compensation insurance. PEO revenues
also include professional service fees, which are primarily computed as a
percentage of client payroll or on a per check basis.

In determining the pricing of the markup component of its
billings, the Company takes into consideration its estimates of the costs
directly associated with its worksite employees, including payroll taxes,
benefits and workers compensation costs, plus an acceptable gross profit
margin. As a result, the Companys operating results are significantly impacted
by the Companys ability to accurately estimate, control and manage its direct
costs relative to the revenues derived from the markup component of the
Companys gross billings.

Foreign currency translation

The functional currency of the Company is the United States
dollar. The Companys Canadian subsidiarys financial statements are translated
into United States dollars at the exchange rates in effect at the balance sheet
date for assets and liabilities and at average rates for the period for revenues
and expenses. Resulting exchange differences are accumulated as a component of
accumulated other comprehensive loss.

8

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

Comprehensive (loss) income

Comprehensive income or loss encompasses net income or loss and
other comprehensive income or loss, which includes all other non-owner
transactions and events that change shareholders deficiency. The Companys
other comprehensive loss reflects the effect of foreign currency translation
adjustments on the translation of the financial statements from the functional
currency of Canadian dollars into the reporting currency of U.S. dollars.

Stock-based compensation

Through December 31, 2005, the Company accounted for
stock-based employee compensation in accordance with the provisions of
Accounting Principles Board (APB) Opinion No. 25 and FASB Interpretation No.
44 Accounting for Certain Transactions Involving Stock Compensation and
complied with the disclosure requirements of SFAS No. 123 (as modified by SFAS
No.48), Accounting for Stock-Based Compensation, Under APB No.25 compensation
expense was recorded based on difference, if any, between the fair value of the
Companys stock and the exercise price on the measurement date. The Company
accounted for stock issued to non-employees in accordance with SFAS No.123,
which required entities to recognize as expense over the service period the fair
value of all stock based awards on the date of grant and EITF No. 96-18
Accounting for Equity Investments that are issued to Other Than Employees for
Acquiring, or in conjunction with Selling, Goods or Services, which addressed
the measurement date and recognition approach for such transactions.

On January 1, 2006, the Company adopted SFAS No. 123 (revised
2004), Share-based Payment (SFAS No.123R) a revision of SFAS No. 123,
Accounting for Stock Based Compensation, SFAS No.123R superseded APB Opinion
No.25 Accounting for Stock Issued to Employees and amended SFAS 95 Statement
of Cash Flows SFAS No 123R requires that the Company measure the cost of
employee services received in exchange for equity awards based on the grant date
fair-value of the awards. The cost will be recognized as compensation expense
over the vesting period of the awards.

Under this method, the Company began recognizing compensation
cost for equity-based compensation for all new or modified grants after the date
of adoption. The pro-forma disclosures previously permitted under SFAS No. 123
are no longer an alternative to financial statement recognition.

Recovery of long-lived assets

The Company adopted SFAS Statement 144, Accounting for the
Impairment and Disposal of Long-Lived Assets (SFAS 144). SFAS 144 requires
recognition of impairment losses on long-lived assets when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets carrying amounts.

Advertising expenses

The Company expenses advertising costs as incurred which was$2,497 for the year ended June 30, 2010 (2009 -$1,110).

Earnings (loss) per share

The Company computes net earnings (loss) per common share in
accordance with SFAS No. 128 Earnings per Share (SFAS 128) and SAB No. 98
(SAB 98). Under the provisions of SFAS 128 and SAB 98, the basic net earnings
(loss) per common share is computed by dividing the net earnings (loss)
available to common stock outstanding during the period. Net earnings (loss) per
share on a diluted basis is computed by dividing the net earnings (loss) for the
period by the weighted average number of common and dilutive common stock
equivalent shares outstanding during the period.

9

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

Fair Value of Financial Instruments

Effective January 1, 2008, fair value measurements are
determined by the Company's adoption of authoritative guidance issued by the
FASB, with the exception of the application of the statement to non-recurring,
non-financial assets and liabilities as permitted. The adoption of the
authoritative guidance did not have a material impact on the Company's fair
value measurements. Fair value is defined in the authoritative guidance as the
price that would be received to sell an asset or paid to transfer a liability in
the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants at the measurement date. A fair
value hierarchy was established, which prioritizes the inputs used in measuring
fair value into three broad levels as follows:

Level 1Quoted prices in active markets for
identical assets or liabilities.

Level 2Inputs, other than the quoted prices in
active markets, are observable either directly or indirectly.

Level 3Unobservable inputs based on the Company's
assumptions.

The Company is required to use of observable market data if
such data is available without undue cost and effort.

At December 31, 2008 and September 30, 2008, the carrying
amounts of financial instruments, including cash, accounts and other
receivables, accounts payable and accrued liabilities, and notes payable
approximate fair value because of their short maturity.

Recent Accounting Pronouncements

In October 2009, the FASB issued authoritative guidance on
revenue recognition that will become effective in fiscal years beginning on or
after June 15, 2010, with earlier adoption permitted. Under the new guidance on
arrangements that include software elements, tangible products that have
software components that are essential to the functionality of the tangible
product will no longer be within the scope of the software revenue recognition
guidance, and software-enabled products will now be subject to other relevant
revenue recognition guidance. Additionally, the FASB issued authoritative
guidance on revenue arrangements with multiple deliverables that are outside the
scope of the software revenue recognition guidance. Under the new guidance, when
vendor specific objective evidence or third party evidence for deliverables in
an arrangement cannot be determined, a best estimate of the selling price is
required to separate deliverables and allocate arrangement consideration using
the relative selling price method. The new guidance includes new disclosure
requirements on how the application of the relative selling price method affects
the timing and amount of revenue recognition. We believe the adoption of this
new guidance will not have a material impact on our financial statements.

In January 2010, the FASB issued guidance on improving
disclosures about fair value measurements to add new disclosure requirements for
significant transfers in and out of Level 1 and 2 measurements and to provide a
gross presentation of the activities within the Level 3 rollforward. The
guidance also clarifies existing fair value disclosures about the level of
disaggregation and about inputs and valuation techniques used to measure fair
value. The disclosure requirements are effective for interim and annual
reporting periods beginning after December 15, 2009, except for the requirement
to present the Level 3 rollforward on a gross basis, which is effective for
fiscal years beginning after December 15, 2010. The adoption of this guidance
was limited to the form and content of disclosures, and will not have a material
impact on our consolidated results of operations and financial condition.

Other recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the AICPA, and the SEC did not or
are not believed by management to have a material impact on the Company's
present or future consolidated financial statements.

10

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

2. Acquisitions

On April 15, 2005, the Company entered into a Share Exchange
Agreement with Smart-tek Communications, Inc. (SCI) and with the sole
shareholder of SCI to acquire all of the outstanding shares of SCI.

In exchange for the SCI shares, the Company issued to SCIs
shareholder, 1,000 common shares and 1 Class A Preferred Share of the Company.
The preferred share will enable the holder to exercise the voting control over
40% of the Company upon issuance. The remaining 60% voting control is to be
assigned to the outstanding common shares of the Company. Such preferred shares
shall not be convertible, exchangeable, transferable or otherwise purchased,
conveyed or redeemed at any time while outstanding during a two-year period. In
addition, the voting power of such preferred share shall decrease over a two
year period so as to have 20% voting control 12 months after issuance, 10%
voting control over 18 months after issuance and zero voting control 24 months
after issuance at which time the preferred shares will be redeemed for no
consideration.

The acquisition was accounted for as a purchase and the results
of SCIs operations beginning April 16, 2005 are included in the accompanying
consolidated statement of operations. The acquisition of assets and liabilities
has been recorded at their fair market value at the date of purchase. The
Company determined that the historical cost of the assets and liabilities
acquired approximated their fair market values given the nature of the assets
and liabilities acquired. Purchase price allocation was as follows:

Valuation of shares of common stock and
      preferred stock
    $
    1Assets acquired
    
    276,012Liabilities assumed
    
    (727,324
    )451,312Goodwill
    $
    451,311


3. Contract Retention Receivable

Under the Builders Lien Act (British Columbia), under which
the subsidiary SCI operates, for each contract or subcontract a holdback amount
is retained by the customer equal to 10% of the greater of:

| | (a) | The value of the work or materials as they are actually
      provided under contract or subcontract, and
| | --- | ---------------------------------------------------------------------------------------------------------
| | (b) | The amount of any payment made on account of the contract
      or subcontract price.                    

On the request of a contractor or subcontractor, the payment
certifier must, within 10 days after the date of the request, determine whether
the contract or subcontract has been completed and, if the payment certifier
determines that it has been completed, the payment certifier must issue a
certificate of completion.

If a certificate of completion is issued with respect to a
contract or subcontract, the holdback period expires at the end of 55 days after
the certificate of completion is issued.

As of June 30, 2010 and June 30 2009, contract retention
receivables were $118,804 and $235,196 respectively.

11

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

4. Equipment

|                                       |   |         |  |   |              |  |   | June 30  |  |   |        |  |   |              |  |   | June 30  | 
|-------------------------------------- | - | ------- |  | - | ------------ |  | - | -------- |  | - | ------ |  | - | ------------ |  | - | -------- | 
|                                       |   |         |  |   | Accumulated  |  |   | 2010     |  |   |        |  |   | Accumulated  |  |   | 2009     | 
|                                       |   | Cost    |  |   | Depreciation |  |   | Net Book |  |   | Cost   |  |   | Depreciation |  |   | Net Book | 
|                                       |   |         |  |   |              |  |   | Value    |  |   |        |  |   |              |  |   | Value    | 
|                                       |   |         |  |   |              |  |   |          |  |   |        |  |   |              |  |   |          | 
|Computer equipment & software          | $ | 29,781  |  | $ | 8,244        |  | $ | 21,537   |  | $ | 899    |  | $ | 762          |  | $ | 137      | 
|Office furniture & equipment           |   | 26,194  |  |   | 8,548        |  |   | 17,646   |  |   | 13,202 |  |   | 3,885        |  |   | 9,317    | 
|Computer equipment under capital lease |   | 2,140   |  |   | 1,896        |  |   | 244      |  |   | 2,140  |  |   | 1,791        |  |   | 349      | 
|Automobile                             |   | 77,216  |  |   | 11,840       |  |   | 65,376   |  |   | 6,158  |  |   | 839          |  |   | 5,319    | 
|                                       |   |         |  |   |              |  |   |          |  |   |        |  |   |              |  |   |          | 
|                                       | $ | 135,331 |  | $ | 30,528       |  | $ | 104,803  |  | $ | 22,399 |  | $ | 7,277        |  | $ | 15,122   | 

5. Bank Overdraft

At June 30, 2010, bank overdrafts covered by a revolving line
of credit were $Nil (2009 - $Nil). The revolving line of credit agreement is
between SCI, the Companys wholly owned subsidiary, and HSBC Bank of Canada. The
revolving line of credit facility bears interest at the rate of prime plus 4.50%
per annum, allows authorized bank overdrafts of up to $117,413 ($125,000 CDN)
and is secured by a shareholder guarantee and $49,591 ($52,796 CDN) in the form
of a term deposit.

Pursuant to the banking facility, the Companys wholly owned
subsidiary is required to maintain minimum equity of $93,930 (CDN$100,000). The
Companys wholly owned subsidiary is not in compliance with this condition at
June 30, 2010.

6. Shareholder loans

At June 30, 2010 the Company is indebted to a company
controlled by the Companys president in the amount of $500,024. The loan is
unsecured, bears 7.5% interest and has no fixed terms of repayment. The
Companys president has waived any interest earned in fiscal 2010.

7. Loans payable

At June 30, 2010, the Company has outstanding loans payable in
the amount of $Nil (2009 - $318,124). The loans are unsecured, bear no interest
and have no fixed terms of repayment.

12

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

8. Income taxes

The Company utilizes SFAS No. 109, Accounting for Income
Taxes, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based on the difference between the tax basis of
assets and liabilities and their financial reporting amounts based on enacted
tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Deferred income taxes are
reported using the liabilities method.

Deferred tax assets are recognized for deductible temporary
differences and for carry forwards. Deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized.

The Company generated a deferred tax credit through net
operating loss carry forwards. As of June 30, 2010 the company had federal and
state net operating loss carry forwards of approximately $ that can be used to
offset future federal income tax. The federal and state net operating losses are
reduced by a valuation allowance, when, in the opinion of management,
utilization is not reasonably assured. A valuation allowance of 100% has been
established; based on it is more likely than not that some portion or all of the
deferred tax credit will not be realized.

At June 30, 2010, STS had available federal net operating loss
(NOL) carry forwards of approximately $6,818,234. Under Section 382 of the
internal Revenue Code of 1986, as amended, the use of prior losses including
NOLs is subject to rules if a corporation undergoes an ownership change.
Future issuances of equity interests by us for acquisitions or the exercise of
outstanding options to purchase our capital stock may result in an ownership
change that is large enough for a limitation on the use of NOLs to apply. If the
limitation applies, we may be unable to use a material portion of its available
NOL carry forwards to reduce future taxable income. The income tax effect of
temporary differences between financial and tax reporting gives rise to the
deferred tax asset at June 30, 2010 and June 30, 2009 as follows:

|                                                                                |   | 2010       |   |   | 2009       |  
|------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                                |   |            |   |   |            |  
|Deferred tax asset, beginning                                                   | $ | 2,457,460  |   | $ | 2,409,732  |  
|Benefit (provision )of current years operating loss carry
      forward (gain) |   | (71,078    | ) |   | 47,728     |  
|Deferred tax asset, ending                                                      | $ | 2,386,382  |   | $ | 2,457,460  |  
|                                                                                |   |            |   |   |            |  
|Valuation allowance, beginning                                                  | $ | (2,457,460 | ) | $ | (2,409,732 | )
|Current years loss carry forward (provision)                                   |   | 71,078     |   |   | (47,728    | )
|Valuation allowance, ending                                                     | $ | (2,386,382 | ) | $ | (2,457,460 | )
|                                                                                |   |            |   |   |            |  
|Deferred tax asset, net                                                         | $ | -          |   | $ | -          |  
|                                                                                |   |            |   |   |            |  
|Tax at blended U.S./Canadian statutory
      rates                              |   | (35%       | ) |   | (35%       | )
|Loss carryover                                                                  |   | 35%        |   |   | 35%        |  
|                                                                                |   |            |   |   |            |  
|Tax expense                                                                     | $ | -          |   | $ | -          |  

13

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

9. Common Stock

At June 30, 2010, the Company is authorized to issue:

| | 1. | 5,000,000 shares of preferred stock, par value $0.001 per
      share
| | -- | ---------------------------------------------------------------------
| | 2. | 500,000,000 shares of common stock, par value $0.001 per
      share 

At June 30, 2010, there are 69,314,124 shares of common stock
outstanding.

Preferred Stock

Pursuant to the share exchange agreement dated April 15, 2005,
the Company agreed to issue one share of Class A preferred stock to the sole
shareholder of SCI, Perry Law. The preferred share will enable the holder to
exercise the voting control of 40% of the Company upon issuance. The remaining
60% voting control is to be assigned to the outstanding common shares of the
Company. Such preferred shares shall not be convertible, exchangeable,
transferable or otherwise purchased, conveyed or redeemed at any time while
outstanding during a two-year period. In addition, the voting power of such
preferred share shall decrease over such two-year period so as to have 20%
voting control 12 months after issuance, 10% voting control 18 months after
issuance and zero voting control 24 months after issuance, at which time the
preferred share will be redeemed by the Company for no consideration. This
preferred share had no voting rights since April 15, 2007 and was redeemed prior
to the June 30, 2010 fiscal year end.

10. Costs and Estimated Earnings on Uncompleted
Contracts

2010
    
    
    2009Costs incurred on uncompleted
      contracts
    $
    1,247,521
    
    $
    1,225,215Estimated earnings
    
    907,139
    
    
    746,0962,154,660
    
    
    1,971,311Less: Billings to Date
    
    (2,216,064
    )
    
    (2,231,814
    )$
    (61,404
    )
    $
    (260,503
    )


Included in accompanying balance sheets under the following
captions:

Costs of uncompleted contracts in excess of
      billings
    
    11,713
    
    
    37,097Billings on uncompleted contracts in excess of costs and
      estimated revenues
    $
    (73,117
    )
    $
    (297,600
    )$
    (61,404
    )
    $
    (260,503
    )


11. Related Party Transactions

During the year ended June 30, 2010, Smart-tek Communications
Inc. (a wholly owned subsidiary) paid $1,130,006 in management salaries to its
President and Vice president which included bonuses of $845,671 and consulting
fees of $83,445. Such costs have been reflected in the accompanying statement of
operations.

28

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

11. Related Party Transactions - continued

During the year ended June 30, 2010, Smart-tek Automated
Services Inc. (a wholly owned subsidiary) paid consulting fees of $73,430 to a
company controlled by an officer of the Company. Such costs have been reflected
in the accompanying statement of operations.

Amounts due to officers and directors were $1,227,210 as of
June 30, 2010.

12. Commitments

Operating leasesThe Companys wholly owned
subsidiary Smart-tek Communications Inc. entered into a non-cancellable
operating lease for office space on March 1, 2008. Furthermore, the Companys
wholly-owned subsidiary is committed to operating leases for four company
vehicles up to April 2014. The minimum payments required under these operating
leases for each of the four years subsequent to June 30, 2010 are approximately
as follows:

Year endingJune
      302011
    
    22,4232012
    
    17,6592013
    
    8,4372014
    
    6,679


Employment agreementsThe Companys wholly owned
subsidiary Smart-tek Communications Inc. has annual employment agreements with
the president and vice-president and is committed to pay each of them annual
salaries of $140,895 (CDN$150,000) along with annual car allowances of $14,090
(CDN$15,000).

29

---

|Smart-tek Solutions Inc.                      
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|June 30, 2010                                 
|                                              

12. Commitments,continued

Marketing partner agreement

By agreement dated June 30, 2009, the Company entered into a
Marketing Partner Agreement with its wholly owned subsidiary, Smart-tek
Automated Services, Inc. (SASI), and Brian Bonar (Bonar), a director of the
Company.

Pursuant to the terms of the marketing agreement, Bonar agreed
to provide certain services to SASI to promote and market the business of SASI
to prospective clients, in consideration of which SASI agreed to pay Bonar a
commission consisting of the following: (i) for every US$1,000,000 in annualized
gross sales of SASI up to the first US$25,000,000 in annualized sales introduced
by Bonar, Bonar will receive 1,800,000 shares of common stock of the Company up
to a maximum of 45,000,000 shares of Companys common stock; and (ii) after an
aggregated US$25,000,000 in annualized gross sales by SASI resulting from sales
introduced by Bonar, Bonar will receive one percent of annualized gross revenues
of SASI for the amounts in excess of US$5,000,000 of annualized gross sales in
any given fiscal year payable in cash. The agreement is for an indefinite term
and may be terminated by either party without cause on 30 days written
notice.

Settlement agreement

In July, 2009 Smart-Tek negotiated a settlement with Richardson
& Patel LLP pursuant to the terms of which Smart-Tek would be required to
pay Richardson & Patel $10,000 per month, commencing August 1, 2009, until
payments in the aggregate of $200,000 were made in full and final settlement of
all claims that the firm had or may have had against Smart-Tek with respect to
certain outstanding accounts owed by Smart-Tek to the firm totaling
approximately $315,000 for legal services rendered. In connection with the
settlement, Richardson & Patel requested that the parties enter into a stock
pledge agreement pursuant to which Perry Law (1,829 shares pledged), P5 Holdings
Ltd (30,984 shares pledged), Agri-Tech Marketing (22,000 shares pledged), Donald
Gee (40,000 shares pledged) and Joe Law (21,795 shares pledged) would pledge an
aggregate of 116,608 (post-split) shares of Smart-Teks issued and outstanding
common stock as security for repayment of the amounts owed to Richardson &
Patel. As of the date of this Annual Report: there has been no settlement of all
amounts owed to Richardson & Patel, Richardson & Patel received and
continues to hold the pledged shares and Smart-Tek has not made any payments to
Richardson & Patel.

15. Subsequent events

On August 20, 2010, the Company filed a preliminary 14A proxy
to approve the sale of the Companys wholly owned subsidiary Smart-Tek
Communications Inc. to its president and founder Perry Law.

The aggregate purchase price of Smart-Tek Communications, Inc.
is $821,757 allocated as follows:

| | (a) | $821,756 of the purchase price shall be paid and
      satisfied by setting-off the Companys indebtedness to the Perry Law
      pursuant to a Loan, including all accrued and unpaid interest there under
      up to the date that the sale close; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                          
| | (b) | $1.00 of the purchase price shall be paid by Perry Law
      for transferring 32,817 shares owned by him to the
  Company.                                                                                                                               

30

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A(T). CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures at June 30, 2010, which is the end of the period covered
by this report. This evaluation was carried out by our principal executive
officer and our principal financial officer. Based on this evaluation, our
principal executive officer and our principal financial officer have concluded
that the design and operation of our disclosure controls and procedures are
effective as at the end of the period covered by this report.

There were no changes in our internal control over financial
reporting during the fiscal quarter ended March 31, 2010 that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by our company in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

ITEM 9B. OTHER INFORMATION.

None.

31

---

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Directors and Executive Officers, Promoters and Control
Persons

As at June 30, 2010, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position Held with our
      Company
    Age
    Date First Elected or
      AppointedPerry Law
    Chief Executive Officer and Chief
      Financial       Officer of Smart-Tek Communications Inc, and Director of
      Smart-Tek Solutions, Inc.
    47
    September 30, 2006Brian Bonar
    Secretary, Treasurer, Chief
      Executive Officer, Chief Financial Officer President and Director
    63
    May 29, 2009Owen Naccarato
    Director
    61
    September 29, 2009


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Perry Lawis the founder of our subsidiary, Smart-Tek
Communications Inc. and has been its Chief Executive officer since 1997. Mr. Law
has over sixteen years experience in the security/surveillance systems industry
and has played a central role in introducing and implementing technological
changes in the local/regional security industry. Mr. Law has held numerous
executive management positions in both private and public companies and is very
active in charitable causes.

Brian Bonaron March 12, 2010, was appointed as Chief
Executive Officer, Chief Financial Officer, Secretary, Treasurer of the issuer
and Chairman of the Board. Prior to this, Mr. Bonar was appointed to the STTN
Board on May 29, 2009 and named President of STTN on September 17, 2009. MR.
Bonar has over 18 years of experience with IBM in Europe, Asia and the USA and
an additional 20 years in high growth companies both private and public in
various locations in the USA and the United Kingdom. From 2003 until 2006, Mr.
Bonar was the Chairman and CEO of The Solvis Group, which provides staffing, PEO
and ASO services to mainly the medical and call centre market segments. From
2004 until 2009, Mr. Bonar was the Chairman and CEO of Dalrada Financial
Corporation, a California based financial service corporation providing workers
compensation, health insurance and various other insurance products directly to
the end consumer and marketed via various PEO and staffing companies. From
September 2007 until 2009, Mr. Bonar was the President and a member of the board
of directors of Allegiant Professional, a publicly traded company. Also from
September 2007 until 2009, Mr. Bonar founded AMS Outsourcing, a PEO focusing
mainly in the transport market place and also established an international
presence in the Czech Republic and Mexico. From 2004 to 2009, he was a member of
the board of directors of the following companies and organizations: The Solvis
Group, Warning Management Corporation, Dalrada Financial Corporation, American
Marine LLC, Alliance National Insurance Company and The Boys and Girls Club of
Greater San Diego. Mr. Bonar holds the Honorary title, Lord Bonar of Wilcrick,
Cardiff, Wales United Kingdom. He received a BSC in Mechanical Engineering from
the Strathclyde University, Glasgow Scotland and a MBA and a PHD in the field of
International Business Development Studies from the Stafford University, England
UK.

Owen Naccarato,was appointed as a Director on September
29, 2009. Mr. Naccarato has for the last fourteen years been a practicing
attorney specializing in corporate and securities law. Prior to practicing law,
Mr. Naccarato held various high level financial and operating positions with
fortune 500 firms. Mr. Naccarato is a member of the California State Bar
Association, the Orange County and the Los Angeles County Bar Associations and
their respective corporate law sections. Mr. Naccarato has a J.D.
from Western State University, an MBA from DePaul University and an
undergraduate degree in accounting from Northern Illinois University.

32

---

Term of Office

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

Committees of the Board Of Directors

At present, we do not have an audit committee, compensation
committee, nominating committee, an executive committee of our board of
directors, stock plan committee or any other committee.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not
been involved in any of the following events during the past five years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offenses);                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |    |                                                                                                                                                                                                                                                                                                                                
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.             

Audit Committee and Audit Committee Financial Expert

We have no audit committee financial expert. We believe that
the cost related to retaining a financial expert at this time is prohibitive.
Further, because of our stage of development, we believe the services of a
financial expert are not warranted.

Code Of Ethics

On October 14, 2008 we adopted an amended and restated code of
ethics applicable to all of our directors, officers, employees and consultants,
which is a code of ethics as defined by applicable rules of the SEC. Our Code
of Ethics is attached as an exhibit to this annual report. If we make any
amendments to our Code of Ethics other than technical, administrative, or other
non-substantive amendments, or grant any waivers, including implicit waivers,
from a provision of our Code of Ethics to our chief executive officer, chief
financial officer, or certain other finance executives, we will disclose the
nature of the amendment or waiver, its effective date and to whom it applies in
a Current Report on Form 8-K filed with the SEC.

33

---

Compensation of Directors

Directors do not receive compensation their duties as a
director.

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Exchange Act requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their
ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that all Section 16(a) filing requirements applicable to our officers, directors
and greater than ten percent beneficial owners were complied with the exception
that Brian Bonar failed to file a Form 3.

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth all compensation received during
the two years ended June 30, 20010by our Chief Executive Officer, Chief
Financial Officer and each of the other most highly compensated executive
officers whose total compensation exceeded $100,000 in such fiscal year. These
officers are referred to as the Named Executive Officers in this Report.

SUMMARY COMPENSATION
      TABLEName and Principal
      Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non-Equity
      Incentive Plan Compensa- tion
      ($)
    Change in Pension
      Value and Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensa -tion ($)
    Total
      ($)Perry Law(1)Director
    2010 
      2009
    78,800 
      78,800
    132,040 
      132,040
    Nil 
      Nil
    Nil 
      Nil
    Nil Nil
    Nil Nil
    725,742 Nil
    936,582 
    210,920Stephen Platt(2)      Vice President of
      Smart-Tek
      Communications Inc.
    2010 
      2009
    85,311 
      85,311
    108,032 
      108,032
    Nil 
      Nil
    Nil 
      Nil
    Nil Nil
    Nil Nil
    Nil Nil
    193,343 
    193,343Brian Bonar(3)
      President,
      Secretary,
      Treasurer, Chief       Executive Officer and       Chief Financial
      Officer
    2010
    388,415
    
    
    
    
    
    
    388,415Kelly Mowrey       Chief Operating Officer
    2010
    280,000
    24,000
    
    
    
    
    
    304,000


| | (1) | Mr. Perry Law has been the President and CEO of Smart-tek
      Communications Inc. since its inception. Smart-tek Communications is the
      wholly-owned subsidiary of Smart-tek Solutions. Mr. Law resigned President
      and CEO of Smart-tek Solutions on March 5, 2010 effective March 5,
      2010.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                               
| | (2) | Stephen Platt is the Vice-President of Smart-tek
      Communications Inc., our wholly owned subsidiary.                                                                                                                                                                                                      

34

---

| | (3) | Mr. Brian has been the President and CEO of Smart-tek
      Automated Services, Inc, since May, 29, 2009 its inception. Smart-tek
      Automated Services, Inc. is a wholly-owned subsidiary of Smart-tek
      Solutions. Mr. Bonar became CEO of Smart-tek Solutions on March 5, 2010
      effective March 5, 2010.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors from time to time. We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control.

Securities Authorized for Issuance Under Equity Compensation
Plans

EQUITY COMPENSATION PLANS

OUTSTANDING EQUITY AWARDS AT
      FISCAL YEAR-ENDOPTION AWARDS
    STOCK AWARDSName
    Number of
      Securities Underlying Unexercised Options (#)
      Exercisable
    Number of
      Securities Underlying Unexercised Options (#)
      Unexercisable
    Equity Incentive
      Plan Awards: Number of Securities Underlying
      Unexercised Unearned Options (#)
    Option
      Exercise Price ($)
    Option
      Expiration Date
    Number of
      Shares or Units of Stock That Have Not Vested
      (#)
    Market Value of
      Shares or Units of Stock That Have Not
      Vested ($)
    Equity Incentive Plan
      Awards: Number of Unearned Shares, Units or Other
      Rights That Have Not Vested (#)
    Equity Incentive Plan Awards:
      Market or Payout Value of Unearned Shares, Units
      or Other Rights That Have Not Vested (#)Brian Bonar
    o
    o
    o
    o
    o
    o
    o
    o
    oPerry Law
    o
    o
    o
    o
    o
    o
    o
    o
    oStephen Platt
    o
    o
    o
    o
    o
    o
    o
    o
    o


35

---

Compensation of Directors

DIRECTOR COMPENSATIONName
    Fees Earned or Paid in Cash ($)
    Stock Awards ($)
    Option Awards ($)
    Non-Equity Incentive Plan
      Compensation ($)
    Non-Qualified Deferred Compensation
      Earnings ($)
    All Other Compensation ($)
    Total ($)Brian Bonar
    $0
    0
    0
    0
    0
    0
    $0Perry Law
    $0
    0
    0
    0
    0
    0
    $0Owen Naccarato
    $0
    0
    0
    0
    0
    0
    $0


Options/SAR Grants in the Last Fiscal Year:

None

Employment Contracts

Other than as described below, we presently do not have any
employment or compensation arrangements with our officers and directors.

On April 23, 2005, we entered into an employment agreement with
Perry Law, pursuant to which Mr. Law agreed to serve as President of the
Companys wholly-owned subsidiary, Smart-Tek Communications, Inc, effective
April 23, 2005. The Employment Agreement has an initial term of five (5) years
but provides for automatic extensions for additional one (1) year terms. The
agreement provides for a minimum base salary of CDN$150,000, plus such other
amounts, if any, as the Board of Directors of the Company may from time to time
determine. In addition, Mr. Law is eligible for an annual incentive bonus at the
discretion of the board. On July 31, 2009 we entered into an amendment to the
employment agreement with Mr. Law pursuant to which we agreed to amend the
employment agreement of Mr. Law with SCI to provide that in the event of a
change of control in SCI, Mr. Law would receive a lump sum payment of 2,000% of
his current salary and 250% of any bonus he would be entitled to as of the end
of the fiscal year in which the change of control occurs.

On April 23, 2005, we entered into an employment agreement with
Stephen Platt, pursuant to which Mr. Platt agreed to serve as Vice-President of
the Companys wholly-owned subsidiary, Smart-Tek Communications, Inc, effective
April 23, 2005. The Employment Agreement has an initial term of five (5) years
but provides for automatic extensions for additional one (1) year terms. The
agreement provides for a minimum base salary of CDN$150,000, plus such other
amounts, if any, as the Board of Directors of the Company may from time to time
determine. In addition, Mr. Platt is eligible for an annual incentive bonus in
the discretion of the board.

On June 17, 2009, our subsidiary, Smart-Tek Automated Services,
Inc. (Smart-Tek Automated), a private Nevada corporation entered into a
marketing partner agreement dated June 17, 2009 with Brian Bonar. Pursuant to
the terms of the marketing agreement, Brian Bonar agreed to provide certain
services to Smart-Tek Automated to promote and market the new business of
Smart-Tek to prospective clients, in consideration of which Smart-Tek agreed to
pay Mr. Bonar a commission consisting of the following: (i) for every
US$1,000,000 in annualized gross sales of Smart-Tek up to the first
US$25,000,000 in annualized sales introduced by Mr. Bonar, Mr. Bonar will
receive 1,800,000 shares of common stock of Smart-Tek up to a maximum of
45,000,000 shares of Smart-Teks common stock; and (ii) after an aggregated
US$25,000,000 in annualized gross sales by Smart-Tek resulting from sales
introduced by Mr. Bonar, Mr. Bonar will receive one percent of annualized gross
revenues of Smart-Tek for the amounts in excess of US$5,000,000 of annualized gross sales in any given fiscal year
payable in cash. The agreement is for an indefinite term and may be terminated
by either party without cause on 30 days written notice.

36

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HEALTH INSURANCE FOR EMPLOYEES

Smart-tek Automated Services  yes

Smart-tek Communications Inc - yes

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of September 30, 2010, there were 69,314,124 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock.

|Title of Class Directors and
      Officers: | Name and Address of Beneficial
      Owner                                       | Number of Shares Beneficially
      Owned(1) | Percentage of Class(1)
|-------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------
|Common Stock                                 | Perry Law 
      Unit 10  11720 Voyageur Way
      Richmond, BC V6X 3G9         | 32,817                                       | 0%                    
|Common Stock                                 | Brian Bonar 1100 Quail Street, Suite 100
      Newport Beach, CA 92660           | 45,000,000                                   | 64.9%                 
|Common Stock                                 | Owen Naccarato 
      1100 Quail Street, Suite 100
      Newport Beach, CA 92660 | -                                            | -                     
|Common Stock                                 | Directors and Officers as a group
      (1)                                      | 45,032,817                                   | 64.9%                 
|5% Stockholders                             
|Common Stock                                 | Brian Bonar 1100 Quail Street, Suite 100
      Newport Beach, CA 92660           | 45.000.000                                   | 64.9%                 

|Notes |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)   | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. The percentage of class is based on 64,314,124 shares of common
      stock issued and outstanding as of September 30, 2010.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(2)   | On June 23, 2008, the Company entered into Debt
      Settlement Agreements with Perry Law and P5 Holdings Ltd. Perry Law holds
      all of the voting securities of P5 Holdings Ltd. Pursuant to the terms of
      the Debt Settlement Agreements, the Company issued an aggregate of
      8,203,241 shares to Mr. Law and P5 Holdings Ltd. The shares were issued as consideration of the
settlement of unsecured loans in the amount of $287,113.45 owed to Mr. Law and
P5 Holdings Ltd. by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

Except as set forth below, none of the following parties has,
since commencement of our fiscal year ended June 30, 2010, had any material
interest, direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us, in which our company
is a participant and the amount involved exceeds the lesser of $120,000 or 1% of
the average of our companys total assets for the last three completed financial
years:

| | (i)   | Any of our directors or officers;                                                                                                                                          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                         
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | Any of our promoters; and                                                                                                                                                  
| | (v)   | Any member of the immediate family (including spouse,
      parents, children, siblings and in- laws) of any of the foregoing
      persons.                               

| | 1. | Smart-Tek entered into a marketing partner agreement
      dated June 17, 2009 with Smart-Tek Automated and Brian Bonar, a director
      of Smart-Tek. Pursuant to the terms of the marketing agreement, Brian
      Bonar agreed to provide certain services to Smart-Tek Automated to promote
      and market the new business of Smart-Tek to prospective clients, in
      consideration of which Smart- Tek agreed to pay Mr. Bonar a commission
      consisting of the following: (i) for every US$1,000,000 in annualized
      gross sales of Smart-Tek up to the first US$25,000,000 in annualized sales
      introduced by Mr. Bonar, Mr. Bonar will receive 1,800,000 shares of common
      stock of Smart-Tek up to a maximum of 45,000,000 shares of Smart-Teks
      common stock; and (ii) after an aggregated US$25,000,000 in annualized
      gross sales by Smart-Tek resulting from sales introduced by Mr. Bonar, Mr.
      Bonar will receive one percent of annualized gross revenues of Smart-Tek
      for the amounts in excess of US$5,000,000 of annualized gross sales in any
      given fiscal year payable in cash. The agreement is for an indefinite term
      and may be terminated by either party without cause on 30 days written
      notice.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | On September 14, 2009 Smart-Tek issued 45,000,000
      restricted shares of its common stock to Brian Bonar, a director of the
      Company. Mr. Bonar was issued the shares based on Mr. Bonar achieving
      certain milestone targets for annualized sales as set out in the Marketing
      Partner Agreement dated June 17, 2009 between the Company and Mr.
      Bonar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 3. | During the year ended June 30, 2010, the Companys wholly
      owned subsidiary, Smart-Tek Communications paid $1,130,005 management
      salaries and bonuses to its President and Vice president as of June 30,
      2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4. | At June 30, 2010 Smart-Tek is indebted to a company
      controlled by Perry Law in the amount of $838,795. The loan is unsecured,
      bears 7.5% interest and has no fixed terms of repayment. The interest for
      the fiscal year June 30, 2010 has been waived by Mr. Law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 5. | During the year ended June 30, 2010, the Companys wholly
      owned subsidiary, Smart-Tek Automated Services, Inc. paid $388,415 in
      management salaries to its President which included bonuses of $Nil and
      consulting fees of $Nil.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Brian Bonar is a controlling party of Dalrada Financial Corp.
who has a consulting arrangement with Smart-tek Automated Services, Inc. During
the fiscal year ended June 30, 2010, Dalrada invoiced Smart-tek Automated
Services Inc., $73,430 for services rendered.

38

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Corporate Governance

We do not have a standing audit committee at the present time.
Our board of directors has determined that we do not have a board member that
qualifies as an audit committee financial expert as defined in Item 401(e) of
Regulation S-B. We have determined that Mr. Perry Law is not an independent
director and that Brian Bonar is an independent director as defined in Nasdaq
Marketplace Rule 4200(a)(15).

We believe that our members of our board of directors are
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting. The board of directors
of our company does not believe that it is necessary to have an audit committee
because we believe that the functions of an audit committee can be adequately
performed by the board of directors. In addition, we believe that retaining an
independent director who would qualify as an audit committee financial expert
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not
generated any revenues from operations to date.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for the most recently completed
fiscal year ended June 30, 2009 and for fiscal year ended June 30, 2008 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

Year EndedJune 30, 2010
    June 30, 2009Audit Fees
    $12,000
    $10,000Audit Related Fees
    $-
    $-Tax Fees
    $-
    $-All Other Fees
    $-
    $-Total
    $12,000
    $10,000


Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by John Kinross-Kennedy, CPA and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
John Kinross-Kennedy, CPA as our independent auditor.

39

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Exhibit Number
    Description3.1
    Articles of Incorporation as
      amended(1)3.2
    Bylaws(1)3.3
    Certificate of Amendment to Certificate of
      Incorporation (2)4.1
    Incentive Stock Option Plan (1)4.2
    Non-Qualified Incentive Stock Option Plan
      (1)4.3
    Stock Bonus Plan (1)4.4
    2005 Incentive Stock Plan (2)10.1
    Letter of Intent between Smart-Tek
      Communications and Smart-Tek (3)10.2
    Share Exchange Agreement between Registrant and
      Smart-Tek Communication, Inc dated April 15, 2005 (4)10.3
    Employment Agreement with Perry Law dated April
      23, 2005 (5)10.4
    Employment Agreement with Stephen Platt dated
      April 23, 2005 (5)10.5
    Stock Option Grant to Perry Law dated April 23,
      2005 (6)10.6
    Stock Option Grant to Stephen Platt dated April
      23, 2005 (6)10.7
    Amendment to Employment Agreement between
      Smart-Tek Communications Inc. and Perry Law dated July 31, 200910.8
    Form of Debt Settlement and Subscription
      Agreement dated September 30, 200910.9
    Strategic Marketing Partner Agreement between
    Smart-Tek Automated Services Inc. and ACEO Inc. dated August 1, 200910.10
    Marketing Partner Agreement dated June 17, 200914.1
    Amended and Restated Code of Ethics21.1
    Subsidiaries31.1*
    CEO  Section 302 Certification under
      Sarbanes-Oxley Act of 200231.2*
    CFO Section 302 Certification under
      Sarbanes-Oxley Act of 200232.1*
    CEO Section 906 Certifications under
      Sarbanes-Oxley Act of 200232.2*
    CFO Section 906 Certifications under
      Sarbanes-Oxley Act of 2002


*Filed herewith

|(1) | Incorporated by reference to our Registration Statement
      on Form 10-SB, filed September 28, 1995.
|--- | ------------------------------------------------------------------------------------------------------
|(2) | Incorporated by reference to our Annual Report on Form
      10-KSB, filed October 26, 1995.          
|(3) | Incorporated by reference to our Current Report on Form
      8-K, filed March 8, 2005.               
|(4) | Incorporated by reference to our Current Report on Form
      8-K, filed April 19, 2005.              
|(5) | Incorporated by reference to our Current Report on
      Form8-K, filed April 27, 2005.               
|(6) | Incorporated by reference to our Current Report on Form
      8-K, filed on August 22, 2005.          

40

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

SMART-TEK SOLUTIONS INC.

|By    | /x/
      Brian Bonar                                            | 
|----- | ---------------------------------------------------------------- | 
|      |                                                                  | 
|      | Brian Bonar                                                      | 
|      | Chief Executive Officer, Chief Financial
      Officer           | 
|      | and Director                                                     | 
|      | (Principal Executive Officer, Principal
      Accounting Officer | 
|      | and Principal Financial Officer)                                 | 
|      |                                                                  | 
|      |                                                                  | 
|      |                                                                  | 
|Date: | October 15, 2010                                                 | 

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|By    | /s/
      Perry Law                                              | 
|----- | ---------------------------------------------------------------- | 
|      | Perry Law                                                        | 
|      | Director                                                         | 
|      |                                                                  | 
|Date: | October 15, 2010                                                 | 
|      |                                                                  | 
|      | /s/
      Brian Bonar                                            | 
|      | Brian Bonar                                                      | 
|      | Chief Executive Officer, Chief Financial
      Officer           | 
|      | and Director                                                     | 
|      | (Principal Executive Officer, Principal
      Accounting Officer | 
|      | and Principal Financial Officer)                                 | 
|      |                                                                  | 
|Date: | October 15, 2010                                                 | 
|      |                                                                  | 
|      | /s/
      Owen Naccarato                                         | 
|      | Owen Naccarato                                                   | 
|      | Director                                                         | 
|      |                                                                  | 
|Date: | October 15, 2010                                                 | 

41

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