**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**





**Washington,
      D.C. 20549**





**FORM
      10-QSB/A**


(Amendment
      No. 1)





(Mark
      One)





ý
            Quarterly
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934





For
      the
      quarterly period ended March 31, 2007





or





 ̈
            Transition
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934





For
      the
      transition period from _______ to _______





Commission
      file number: 000-50532





**S****OLOMON** **T****ECHNOLOGIES,** **I****NC.**


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




**Delaware**
            
            **52-1812208**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)





**1400
      L&R Industrial Blvd.**


**Tarpon
      Springs, Florida 34689**


(Address
      of principal executive offices)





**(727)
      934-8778**


Issuer’s
      telephone number





Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90
      days.


Yes ý No  ̈





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


Yes  ̈ No ý





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: As of May 11, 2007, there were 36,055,693
      shares of common stock outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes  ̈ No ý .







**EXPLANATORY
      NOTE**




We
      filed
      our Quarterly Report on Form 10-QSB for the three months ended March 31,
      2007 with the Securities and Exchange Commission (the “SEC”) on May 15, 2007. We
      are filing this Amendment No. 1 on Form 10-QSB/A on August 13, 2007 to
      amend and restate our unaudited financial statements for the three months ended
      March 31, 2007 and related footnote disclosures to reflect the correction of
      an
      error in the application of accounting for the Company’s convertible debentures.




This
      Amendment No. 1 to our Quarterly Report on Form 10-QSB for the three months
      ended March 31, 2007 amends only the following items:




Part
      I,
      Item 1   -   Financial Statements












**INDEX**





Page
              Number**PART
                I. FINANCIAL INFORMATION**Item
                1. Financial Statements
            3Condensed
                Consolidated Balance Sheet at March 31, 2007 (Unaudited)
            3Condensed
                Consolidated Statements of Operations - Three months ended March
                31, 2007
                and 2006 (Unaudited)
            4Condensed
                Consolidated Statements of Cash Flows - Three months ended March
                31, 2007
                and 2006 (Unaudited)
            5Condensed
                Consolidated Statement of Deficiency in Assets at March 31, 2007
                (Unaudited)
            6Notes
                to Condensed Consolidated Financial Statements (Unaudited)
            7Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of  Operations
            19Item
                3. Controls and Procedures
            29**PART
                II. OTHER INFORMATION**
            30Item
                1. Legal Proceedings
            30Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            30Item
                6. Exhibits
            32**SIGNATURE
                PAGE**
            33





**Introductory
      Comment**





Throughout
      this Quarterly Report on Form 10-QSB as amended, the terms “we,” “us,” “our,”
“Solomon” and “our company” refer to Solomon Technologies, Inc., a Delaware
      corporation, and, unless the context indicates otherwise, includes our
      wholly-owned subsidiary, Town Creek Industries, Inc.





2


**PART
      I**  **FINANCIAL
      INFORMATION**





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




**Solomon
                Technologies, Inc.**Condensed
                Consolidated Balance SheetMarch
                31, 2007
              (Restated)(Unaudited)




**Assets**Current
                assetsCash
            
            $
            1,106,014Accounts
                receivable, net
            
            
            870,306Inventories
            
            
            1,462,112Due
                from related parties
            
            
            22,826Deferred
                debt costs
            
            
            937,337Prepaid
                expenses and other current assets
            
            
            124,2924,522,887Noncurrent
                assetsProperty
                and equipment, net
            
            
            116,407Goodwill
            
            
            2,873,576Intangible
                assets
            
            
            1,823,8684,813,851$
            9,336,738**Liabilities
                and Stockholders’ Equity**Current
                liabilitiesRevolving
                note payable to bank
            
            $
            950,000Accounts
                payable
            
            
            823,085Accrued
                compensation
            
            
            2,466,182Other
                accrued expenses
            
            
            608,357Capital
                lease obligations
            
            
            6,972Notes
                payable
            
            
            187,000Notes
                payable to related parties
            
            
            1,837,085Convertible
                debentures payable
            
            
            1,430,5868,309,267**Stockholders’
                Equity**Common
                stock, par value $0.001 pershare;
                authorized 100,000,000 shares;36,089,533
                issued and outstanding
            
            
            36,089Additional
                paid-in capital
            
            
            44,243,529Accumulated
                deficit
            
            
            (43,252,147
            )1,027,471$
            9,336,738




See
                accompanying notes.




3


**Solomon
                Technologies, Inc.**Condensed
                Consolidated Statements of Operations(Restated)
              (Unaudited)




**Three
                Months Ended**
              **March
                31,****2007**
            
            **2006****As
                Restated**
            
            **As
                Restated**Net
                sales
            
            $
            1,431,597
            
            $
            5,365Cost
                of goods sold
            
            
            779,287
            
            
            2,569Gross
                profit
            
            
            652,310
            
            
            2,796Operating
                expenses:Selling,
                general and administrative
            
            
            1,251,938
            
            
            1,098,755Research
                and development
            
            
            253,664
            
            
            -1,505,602
            
            
            1,098,755Operating
                loss
            
            
            (853,292
            )
            
            (1,095,959
            )Other
                expensesInterest
                expense
            
            
            (2,193,940
            )
            
            (727,965
            )Loss
                on extinguishment of redeemablepreferred
                stock and other debt
            
            
            -
            
            
            (5,667,569
            )(2,193,940
            )
            
            (6,395,534
            )Net
                loss
            
            
            (3,047,232
            )
            
            (7,491,493
            )Preferred
                stock dividends
            
            
            (1,413,031
            )
            
            (60,000
            )Loss
                applicable to commonstockholders
            
            $
            (4,460,263
            )
            $
            (7,551,493
            )Basic
                and diluted net loss percommon
                share
            
            $
            (0.13
            )
            $
            (0.43
            )Weighted
                average common sharesoutstanding
                - basic and diluted
            
            
            35,465,709
            
            
            17,740,475




See
                accompanying notes.




4




**Solomon
                Technologies, Inc.**Condensed
                Consolidated Statement of Cash Flows(Restated)
              (Unaudited)




**Three
                Months Ended**
              **March
                31,****2007**
            
            **2006****As
                Restated**
            
            **As
                Restated****Operating
                activities**Net
                loss
            
            $
            (3,047,232
            )
            $
            (7,491,493
            )Adjustments
                to reconcile net loss to cash used by operationsLoss
                on extinguishment of redeemable preferred stockand
                other debt
            
            
            -
            
            
            5,667,569Stock
                based compensation to employees and directors
            
            
            204,629
            
            
            -Common
                stock and warrants issued for services
            
            
            156,765
            
            
            394,399Accretion,
                dividends, and amortization of debt costs included ininterest
                expense
            
            
            1,931,660
            
            
            698,257Depreciation
            
            
            10,328
            
            
            1,824Amortization
            
            
            98,581
            
            
            20,692Change
                in operating assets and liabilitiesAccounts
                receivable
            
            
            6,135
            
            
            -Inventories
            
            
            (32,863
            )
            
            2,569Prepaid
                expenses and other current assets
            
            
            (101,515
            )
            
            -Accounts
                payable and accrued expenses
            
            
            301,834
            
            
            515,237Net
                cash used by operating activities
            
            
            (471,678
            )
            
            (190,946
            )**Investing
                Activities**Purchase
                of equipment
            
            
            (21,533
            )
            
            (1,962
            )Net
                cash used by investing activities
            
            
            (21,533
            )
            
            (1,962
            )**Financing
                Activities**Proceeds
                from issuance of notes payable to related parties
            
            
            -
            
            
            197,000Repayments
                of notes payable to related parties
            
            
            (40,000
            )
            
            -Proceeds
                from revolving note payable
            
            
            200,000
            
            
            -Proceeds
                from issuance of converible promissory notes
            
            
            5,135,913
            
            
            -Repayments
                of notes payable
            
            
            (526,150
            )
            
            -Redemption
                of preferred stock
            
            
            (3,350,020
            )
            
            -Proceeds
                from Rule 16B
            
            
            32,950
            
            
            -Repayments
                from related parties
            
            
            52,489
            
            
            -Repayment
                of capital lease obligations
            
            
            (3,734
            )
            
            -Net
                cash provided by financing activities
            
            
            1,501,448
            
            
            197,000**Change
                in cash**
            
            
            1,008,237
            
            
            4,092**Cash
                at beginning of period**
            
            
            97,777
            
            
            3,693**Cash
                at end of period**
            
            $
            1,106,014
            
            $
            7,785




See
                accompanying notes.





5




**Solomon
                Technologies, Inc.**Condensed
                Consolidated Statement Deficiency in Assets(Restated)
              (Unaudited)




**Series
                C****Convertible**
            
            
            
            
            
            **Additional****Preferred
                Stock**
            
            **Common
                Stock**
            
            **Paid-In**
            
            **Accumulated****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Total****Balance
                at December 31, 2006**
            
            
            4,615,381
            
            $
            3,111,164
            
            
            33,789,827
            
            $
            33,789
            
            $
            36,522,146
            
            $
            (38,791,881
            )
            $
            875,218Common
                share adjustment for prior issuances
            
            
            
            
            
            
            
            
            98,384
            
            
            98
            
            
            (98
            )
            
            
            
            
            -Detachable
                warrants issued with convertible debt
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,571,771
            
            
            
            
            
            2,571,771Beneficial
                conversion feature associated with convertible debt
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,778,229
            
            
            
            
            
            2,778,229Common
                shares issued for debt issuance costs
            
            
            
            
            
            
            
            
            290,000
            
            
            290
            
            
            791,410
            
            
            
            
            
            791,700Redemption
                of Series C Preferred Stock
            
            
            (2,873,500
            )
            
            (1,936,986
            )
            
            
            
            
            
            
            
            
            
            
            (1,413,034
            )
            
            (3,350,020
            )Conversion
                of Series C Preferred Stock
            
            
            (1,741,881
            )
            
            (1,174,178
            )
            
            1,741,881
            
            
            1,742
            
            
            1,172,436
            
            
            
            
            
            -Common
                shares issued for fees and services
            
            
            
            
            
            
            
            
            59,441
            
            
            60
            
            
            157,054
            
            
            
            
            
            157,114Restricted
                common shares issued to employees
            
            
            
            
            
            
            
            
            110,000
            
            
            110
            
            
            22,930
            
            
            
            
            
            23,040Stock
                option grants
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            194,701
            
            
            
            
            
            194,701Payment
                related to Rule 16B
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            32,950
            
            
            
            
            
            32,950Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,047,232
            )
            
            (3,047,232
            )**Balance
                at March 31, 2007 (restated)**
            
            
            -
            
            $
            -
            
            
            36,089,533
            
            $
            36,089
            
            $
            44,243,529
            
            $
            (43,252,147
            )
            $
            (1,027,471
            )




See
                accompanying notes.





6


**Notes
      to Condensed Consolidated Financial Statements
      (unaudited)**





**NOTE
      1  - NATURE OF OPERATIONS AND BASIS OF PRESENTATION**





The
      historical business of Solomon Technologies, Inc. (“STI” or the “Company”) has
      been the development, engineering, manufacturing, licensing and sale of electric
      power drive systems. In August 2006, the Company acquired Technipower LLC (See
      Note 5), a manufacturer of power supplies and related equipment for the defense,
      aerospace and commercial markets. As a result of this acquisition, the Company
      now operates in two segments, the Motive Power Division, which encompasses
      the
      historical business of STI, and the Power Electronics Division which encompasses
      the business of Technipower LLC.





The
      Company is presently pursuing direct sales opportunities for its products and
      technologies in the marine, industrial and automotive markets. The Company
      is
      identifying licensing opportunities that it anticipates will leverage its
      existing or acquired knowledge and provide substantial positive current
      financial impact while it also aggressively pursues infringers of its existing
      patents. The Company is also identifying acquisition targets that it expects
      will augment its existing intellectual property, marketing channels and human
      resources and provide strong cash flow.





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared assuming that the Company will continue as a going concern. The Company
      has incurred significant operating losses and used cash in its operating
      activities for several years. For the three-months ended March 31, 2007, the
      Company had a net loss of $3,047,232 and used cash of $471,678 **** in
      operating activities. As of March 31, 2007, the Company has a working capital
      deficiency of $3,786,380. These conditions raise substantial doubts about the
      Company’s ability to continue as a going concern.





Management
      is continuing to implement a plan to broaden its market and product base and
      exploit its intellectual property that it expects will generate substantial
      profits and cash flow. As part of this plan, management intends to grow its
      business through licensing of its proprietary and patented technologies and
      through the acquisition of businesses that fit its strategy. Management is
      identifying licensing opportunities that leverage its existing or acquired
      knowledge and provide substantial positive current financial impact while it
      also aggressively pursues infringers of its existing patents. Management is
      also
      identifying acquisition targets that augment its existing intellectual property,
      marketing channels and human resources and provide strong cash flow.
      Additionally, management is actively seeking additional sources of capital.
      There can be no assurance that management can successfully implement its
      business plan or raise sufficient capital. Without sufficient additional capital
      or long term debt and ultimately profitable operating results the Company will
      not be able to continue as a going concern. The accompanying condensed
      consolidated financial statements do not include any adjustments relating to
      the
      recoverability and classification of asset carrying amounts or the amounts
      and
      classification of liabilities that may result from the outcome of this
      uncertainty.





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with U.S. generally accepted accounting principles for
      interim financial information and pursuant to the rules and regulations of
      the
      Securities and Exchange Commission (“SEC”). The accompanying financial
      statements for the interim periods are unaudited. They reflect all adjustments
      (consisting only of normal recurring adjustments) which are, in the opinion
      of
      management, necessary for a fair presentation. These financial statements should
      be read in conjunction with the financial statements and related footnotes
      for
      the year ended December 31, 2006 contained in the annual report on Form 10-KSB
      as filed with the SEC. Operating results for interim periods are not necessarily
      indicative of the results for the full year.




7


**NOTE
      2 - PRINCIPLES OF CONSOLIDATION AND RESTATEMENT**





The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiary, Technipower LLC (“Technipower”), from the date of
      acquisition. All material intercompany accounts and transactions have been
      eliminated in consolidation.




The
      consolidated financial statements have been restated for the three months ended
      March 31, 2007 to reflect the correction of an error in the application of
      accounting for the Company’s convertible debentures. During the three months
      ended March 31, 2007, the Company had recorded non-cash interest expense
      associated with the value of imbedded conversion features in the amount of
      $2,255,929, which have been restated and recorded as a discount to the
      convertible debentures and amortized over the term of the convertible
      debentures, in accordance with EITF 00-27, “Application of Issue No. 98-5 to
      Certain Convertible Instruments”. In connection with this restatement, the
      Company has also reclassified deferred debt costs in the amount of $1,005,787
      related to the convertible debentures from a debt discount to an asset account.




The
      effects of the correction on the Company’s balance sheet as of March 31, 2007
      follow:




**March 31,**
            
            
            **March 31,**
            
            
            **March 31,****2007**
            
            
            **2007**
            
            
            **2007****(reported)**
            
            
            **(adjustments)**
            
            
            **(restated)**Deferred
                debt costs
            
            $
            139,754
            
            $
            797,583
            
            $
            937,337Total
                assets
            
            
            8,539,155
            
            
            797,583
            
            
            9,336,738Convertible
                debentures payable
            
            
            2,889,458
            
            
            (1,458,872
            )
            
            1,430,586Total
                liabilities
            
            
            9,768,139
            
            
            (1,458,872
            )
            
            8,309,267Additional
                paid-in capital
            
            
            43,237,742
            
            
            1,005,787
            
            
            44,243,529Accumulated
                deficit
            
            
            (44,502,815
            )
            
            (1,250,668
            )
            
            (43,252,147
            )Total
                deficiency in assets / stockholders’ equity
            
            
            (1,228,984
            )
            
            2,256,455
            
            
            1,027,471




The
      effects of the correction on the Company’s statement of operations and cash
      flows for the three months ended March 31, 2007 follow:





**For
                the three months ended March 31, 2007****(reported)**
            
            **(adjustments)**
            
            **(restated)**Interest
                expense
            
            $
            3,444,608
            
            $
            (1,250,668
            )
            $
            2,193,940Net
                loss
            
            
            (4,297,900
            )
            
            (1,250,668
            )
            
            (3,047,232,
            )Net
                loss per share:Net
                loss from continuing operations
            
            
            (0.16
            )
            
            (0.03
            )
            
            (0.13
            )Basic
                and diluted net loss per share
            
            
            (0.16
            )
            
            (0.03
            )
            
            (0.13
            )




**For
                the three months ended March 31, 2007****(reported)**
            
            **(adjustments)**
            
            **(restated)**Cash
                flows from operating activities:Net
                loss
            
            $
            (4,297,900
            )
            $
            (1,250,668
            )
            $
            (3,047,232
            )Accretion,
                dividends, and amortization of debt costs included in interest
                expense
            
            
            3,182,328
            
            
            (1,250,668
            )
            
            1,931,660




In
      connection with the preparation and filing of Amendment No. 1 to the Company’s
      Form 10-QSB for the quarter ended September 30, 2006, we noted certain
      errors related to our interim financial statements for the three months ended
      March 31, 2006 which were included in the Company’s Form 10-QSB for the period
      ended March 31, 2006. The errors principally related to the recognition of
      a
      liability associated with a compensation plan for two senior executives. To
      correct these errors we recorded a $129,123 accrual for compensation due to
      two
      senior executives related to an agreement and a $60,000 distribution paid
      to a Series B preferred stock holder in March 2006 related to common stock
      issued to induce the holder to convert the Series B preferred stock to
      common stock and reclassified the amortization of deferred debt costs to
      interest expense.


8




The
      effects of the correction on the Company’s statement of operations for the three
      months ended March 31, 2006 follow:


As
                PreviouslyLine
                Item Description
            
            Reported
            
            RestatedOperating
                expenses
            
            $
            969,632
            
            $
            1,098,755Operating
                loss
            
            
            966,836
            
            
            1,095,959Net
                loss
            
            
            7,362,370
            
            
            7,491,493Preferred
                stock dividends
            
            
            -
            
            
            60,000Loss
                attributable to common stockholders
            
            
            7,362,370
            
            
            7,551,493Basic
                and diluted net loss per common share
            
            
            0.42
            
            
            0.43




The
      effects of the correction on the Company’s statement of cash flows for the three
      months ended March 31, 2006 follow:





As
                PreviouslyLine
                Item Description
            
            Reported
            
            RestatedNet
                loss
            
            $
            7,362,370
            
            $
            7,491,493Accounts
                payable and accrued expenses
            
            
            372,891
            
            
            515,237Accrued
                payroll and payroll taxes
            
            
            13,223
            
            
            -








9


**NOTE
      3 - INCOME TAXES**





Deferred
      tax assets and liabilities are recognized for the expected future tax
      consequences attributed to differences between the financial statement carrying
      amounts of existing asset and liabilities and their respective tax basis.
      Deferred tax assets and liabilities are measured using the enacted tax rates
      expected to be applied to taxable income in the years in which those temporary
      differences are expected to reverse. Valuation allowances are recorded to reduce
      deferred tax assets when it is more likely than not that a tax benefit will
      not
      be realized. The Company  adopted the  provisions  of
      Financial  Standards  Accounting  Board Interpretation  No.
      48 "Accounting  for Uncertainty in Income Taxes" ("FIN 48"), an
      interpretation of FASB Statement No. 109 ("SFAS 109"), on January 1, 2007.
      The
      Company had no adjustment as a result of FIN 48.




**NOTE
      4  - STOCK BASED COMPENSATION**





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting Standards
      No. 123(R), “Share-Based Payment” (SFAS No. 123(R)), using the modified
      prospective method. Under this method, compensation cost is recognized for
      all
      share-based payments granted, modified, or settled after January 1, 2006, as
      well as for any unvested awards that were granted prior thereto. Compensation
      cost for unvested awards granted prior to January 1, 2006 is recognized using
      the same estimate of the grant-date fair value and the same attribution method
      used to determine the pro forma disclosures under SFAS No. 123 “Accounting for
      Stock-Based Compensation.” Compensation costs for awards granted after January
      1, 2006 is based on the estimated fair value of the awards on their grant date
      and is generally recognized over the required services period.





Prior
      to
      January 1, 2006, the Company accounted for its stock options under the
      recognition and measurement principles of Accounting Principles Board (APB)
      Opinion No. 25 “Accounting for Stock Issued to Employees.” and related
      interpretations. No stock-based compensation expense was recognized in
      operations as all options granted had an exercise price equal to the market
      value of the underlying common stock on the date of grant. All stock options
      outstanding at December 31, 2005 and 2004 were fully vested.




Total
      stock-based compensation was $204,629 for the three month period ended March
      31,
      2007. There was no expense in the three month period ended March 31, 2006.
      In
      calculating compensation expense related to stock option grants, the fair value
      of each stock option is estimated on the date of grant using the Black-Scholes
      option-pricing model and the following weighted average
      assumptions:




**Three-Months**
              **Ended**
              **March
                31, 2007**Expected
                term
            
            
            6.63
                YearsExpected
                volatility
            
            
            168
            %Dividend
                yield
            
            
            0.0
            %Risk-free
                interest rate
            
            
            4.74
            %Forfeiture
                rate
            
            
            0
            %




The
      computation of expected volatility used in the Black-Scholes pricing model
      is
      based on the historical volatility of the Company’s share price. The expected
      term is based on a review of historical employee exercise behavior with respect
      to option grants.





A
      summary
      of the changes in stock options outstanding for the three-months ended March
      31,
      2007 follows:





10




WeightedAverageShares
            
            Exercise
                PriceOutstanding
                at January 1, 2007
            
            
            870,335
            
            $
            1.39Granted
            
            
            750,000
            
            
            2.80Outstanding
                at March 31, 2007
            
            
            1,620,335
            
            $
            2.04




The
      following table summarizes the Company's stock options at March 31, 2007:




Options
                Outstanding
            
            Options
                ExercisableWeighted
            
            Weighted
            
            
            
            WeightedAverage
            
            Average
            
            
            
            AverageRange
                of Exercise Prices
            
            Number
            
            Remaining
                Life
            
            Exercise
                Price
            
            Number
            
            Exercise
                Price$.055
                to $1.00
            
            
            355,335
            
            
            3.56
            
            $
            0.87
            
            
            355,335
            
            $
            0.87$1.45
                to $2.09
            
            
            515,000
            
            
            2.31
            
            $
            1.75
            
            
            213,333
            
            $
            2.03$2.80
                to $3.00
            
            
            750,000
            
            
            9.80
            
            $
            2.80
            
            
            0
            
            $
            2.801,620,335
            
            
            
            
            
            
            
            
            568,668





**NOTE
      5  - BUSINESS ACQUISITION**





On
      August
      17, 2006, the Company completed the acquisition of Technipower LLC
      (Technipower), a privately-held company based in Danbury, Connecticut. Certain
      shareholders of the Company are holders of warrants and capital
      appreciation units of Technipower. The purchase price of $9,655,607, which
      includes acquisition related costs of approximately $420,000 consisted of the
      issuance 4,615,381 shares of the Company’s Series C preferred stock
      with a fair value of $3,000,000 and 4,461,537 shares of common stock with a
      fair
      value of $6,242,000. The fair value of the Series C preferred stock was based
      upon the expected cash redemption amount of $3,000,000. The fair value of
      the common stock was based upon the closing market price of $1.40 on August
      17,
      2006, the date the acquisition was completed.




This
      acquisition was recorded under the purchase method of accounting with the total
      consideration allocated to the assets acquired and liabilities assumed based
      on
      estimates of fair value. The allocation process requires an analysis of acquired
      tangible assets, customer relationship, trade-names and non-compete agreements
      to identify and record the fair value of all assets acquired and liabilities
      assumed. Management considered various factors in determining fair value,
      including but not limited to future expected discounted cash flows, third-party
      valuations, and appropriate discount rates. The excess of the purchase price
      over the fair value of the net assets acquired was allocated to
      goodwill.





The
      Company must issue additional shares to the sellers at the one year anniversary
      if the 30-day average trading price is more than 5% less than $0.65 per share.
      Such amounts, if any, will not affect purchase consideration.





11


The
      results of operations of Technipower have been included in the Company’s
      consolidated financial statements subsequent to the date of acquisition. The
      financial information in the table below summarizes the unaudited combined
      results of operations of the Company and Technipower, on a pro forma basis,
      as
      though the companies had been combined as of the beginning of the period
      presented:





Three
                Months Ended
              March
                31,
              2006Net
                sales
            
            $
            1,220,425Net
                loss
            
            $
            (7,653,975
            )Net
                loss applicable to common stockholders
            
            $
            (7,788,975
            )Basic
                and diluted net loss per share
            
            $
            (0.35
            )





The
      pro
      forma financial information is presented for informational purposes only and
      is
      not indicative of the results of operations that would have been achieved if
      the
      merger had taken place at the beginning of each of the periods
      presented.





**NOTE
      6  - INTANGIBLE ASSETS**





The
      following table presents the details of the Company’s intangible assets at March
      31, 2007:





Cost
            
            Accumulated
              Amortization
            
            Net
                Book
              ValueAmortizable:Customer
                relationship
            
            $
            1,210,000
            
            $
            (150,274
            )
            $
            1,059,726Trade
                name
            
            
            367,000
            
            
            (22,790
            )
            
            344,210Non-compete
                agreement
            
            
            160,000
            
            
            (19,871
            )
            
            140,129Patents
            
            
            814,162
            
            
            (534,359
            )
            
            279,803$
            2,551,162
            
            $
            (727,294
            )
            $
            1,823,868




Total
      amortization expense was $98,581 and $20,692 for the three month periods ended
      March 31, 2007 and 2006, respectively.




**NOTE
      7  - INVENTORIES**





Inventories
      at March 31, 2007 consist of the following:





Raw
                materials
            
            $
            847,400Work-in-process
            
            
            568,486Finished
                goods
            
            
            46,226$
            1,462,112





**NOTE
      8  - STOCK ISSUANCES AND OTHER EQUITY EVENTS**





As
      discussed in Note 9, on January 17, 2007 the Company sold an aggregate of
      $5,350,000 principal amount of Variable Rate Self-Liquidating Senior Secured
      Convertible Debentures (the Debentures) due March 17, 2008. As further described
      in Note 9, the intrinsic value of the beneficial conversion feature associated
      with the Debentures, which was determined to be approximately $2,778,229, was
      recorded as additional debt discount with a corresponding increase to additional
      paid in capital. As part of the sale of the Debentures, the Company issued
      common stock purchase warrants to the purchasers of the Debentures giving them
      the right to purchase up to an aggregate of 2,006,250 shares of common stock
      at
      an exercise price of $2.00 per share. The relative fair value of the warrants,
      which was determined to be approximately $2,571,771, was recorded as a discount
      to the underlying debt and a corresponding increase to additional paid in
      capital. In connection with the sale of the Debentures, the Company also issued
      290,000 shares of common stock with a fair value on the date of issuance of
      $791,700 to its financial advisor for the transaction.





12


On
      January 22, 2007, approximately $3,350,000 of the proceeds from the sale of
      the
      Debentures was used to redeem approximately 2,873,500 shares of the Company’s
      Series C convertible preferred stock. The liquidation preference amount at
      the
      time of the redemption was 175% of the stated value of the redeemed shares
      and
      was recorded as a preferred stock dividend of approximately $1,413,000. Also
      on
      January 22, 2007, the remaining 1,741,881 shares of Series C preferred stock
      were converted into 1,741,881 shares of common stock based on the original
      conversion rights set forth in the Certificate of Designation of Series and
      Determination of Rights and Preferences of the Series C preferred
      stock.





During
      the three months ended March 31, 2007, the Company issued 59,441 share of
      commons stock, with a fair value of $157,114 at the time of issuance, for fees
      and services.





In
      February 2007, the Company awarded and issued 110,000 shares of restricted
      common stock to its CEO, Gary Brandt, pursuant to Mr. Brandt’s employment
      agreement. The shares vest over a three year period according to a schedule
      in
      the agreement. The fair value of the shares at the time of issuance was
      approximately $306,000. This amount will be recorded as compensation expense
      over the vesting period . Compensation expense recognized related to these
      shares was approximately $23,000 for the three months ended March 31,
      2007.





**NOTE
      9  - DEBT**





**Notes
      Payable to Related Parties**





On
      December 31, 2006, the Company entered into an agreement with holders of notes
      payable with a principal amount of $1,712,085 to extend the maturity dates
      of
      the notes to September 30, 2007. To induce the noteholders to extend the notes,
      the Company agreed to issue at the noteholders’ option either shares of common
      stock or cash equal to five percent of the principal amounts of the notes.
      Noteholders with notes aggregating $790,085 of principal agreed to receive
      a
      total of 79,009 shares of common stock with a fair value of $179,363 at December
      31, 2006. This amount has been included in deferred debt costs and is being
      amortized to interest expense through September 30, 2007. The shares were issued
      in March 2007. During the first quarter of 2007, the Company has recorded
      additional deferred costs and interest expense through March 31, 2007 of $48,100
      and $17,506 respectively for the noteholders that selected cash
      payments.





The
      Company’s board of directors has authorized additional borrowings of up to
      $287,915 from the current noteholders and others on the same terms as the notes
      issued to the noteholders.





The
      Company also borrows amounts from related parties on a short-term basis. During
      2006, the Company borrowed $444,611 of which all but $40,000 was repaid in
      2006.
      The remaining $40,000 balance was repaid during the first quarter of
      2007.




**Revolving
      Note Payable to Bank**





Pursuant
      to Technipower LLC’s revolving note payable (the “Note”) with a bank,
      Technipower LLC can borrow up to $1,500,000 based on a collateral formula
      inclusive of accounts receivable and certain classes of inventory. The Note
      bears interest at the prime rate (8.25% at March 31, 2007), requires no
      principal amortization, and has a maturity date of June 1, 2007. Amounts
      outstanding under the Note were $950,000 at March 31, 2007 with an additional
      availability of $103,652.





Substantially
      all of Technipower LLC’s assets have been pledged as collateral for the
      Note.




13


**Notes
      Payable to Davis & Gilbert LLP**





On
      November 17, 2006, the Company converted $526,149 of trade accounts payable
      to
      Davis & Gilbert LLP (“D&G”), the Company’s general counsel, to a
      promissory note payable (the “Promissory Note”) with an original principal of
      $529,149. The Promissory Note and accrued and unpaid interest at 12% was payable
      the earlier of the Company’s receipt of any proceeds from litigation, or
      receipts from an equity financing of at least $5 million, or March 31, 2007.
      To
      induce D&G to enter into this agreement, the Company issued a warrant to
      purchase 200,000 shares of the Company’s common stock at $1.73 a share. The
      exercise price is subject to downward adjustment, but not below $1.00, if the
      market price on the day that the underlying shares are registered for resale
      is
      below $1.73. The fair value of the warrant of $320,000 was recorded as deferred
      debt costs and is being amortized over the Promissory Note’s term. The Company
      repaid substantially all of the Promissory Note in 2007 with proceeds from
      the
      January 22, 2007 debenture transaction described below.





On
      January 19, 2007, the Company converted approximately $163,000 of trade accounts
      payable and the remaining balance and unpaid interest on the Promissory Note
      to
      D & G to a new promissory note payable (the “New Promissory Note”) with an
      original principal of $182,000. The New Promissory Note and accrued and unpaid
      interest at 12% is payable the earlier of the Company’s receipt of any proceeds
      from litigation, or receipts from an equity financing of at least $3 million,
      or
      September 30, 2007.





**Issuance
      of Variable Rate Self-Liquidating Senior Secured Convertible Debentures and
      Common Stock Purchase Warrants**





On
      January 17, 2007, the Company sold an aggregate of $5,350,000 principal amount
      of Variable Rate Self-Liquidating Senior Secured Convertible Debentures (the
      Debentures) due March 17, 2008. The Company used approximately $3,350,000 of
      the
      net proceeds of the Debentures to redeem 2,873,492 shares of Series C preferred
      stock, approximately $768,250 of the net proceeds to pay down a promissory
      note
      and other obligations and retained approximately $1,018,000 of the net proceeds
      as working capital.





The
      Debentures are convertible at any time at the option of the holder into shares
      of common stock at $2.00 per share, subject to adjustment for stock splits,
      stock dividends, and the like. In the event that the Company issues or grants
      any rights to purchase any of its common stock, or other securities convertible
      into its common stock, for an effective per share price less than the conversion
      price then in effect, the conversion price of all unconverted Debentures will
      be
      decreased to equal such lower price. The conversion price adjustment will not
      apply to certain exempt issuances, including stock issuances to officers,
      directors and employees, stock issuances pursuant to acquisitions or strategic
      transactions, and stock issuances of up to an aggregate of $200,000 of common
      stock that may be issued in any six-month period. In accordance with EITF 98-5,
      “Accounting for Convertible Securities with Beneficial Conversion Features or
      Contingently Adjustable Conversion Ratios” the intrinsic value of the imbedded
      conversion feature within the Debentures, which was determined by the Company
      to
      be approximately $2,778,229, was recorded as an additional discount to the
      debt.
      In accordance with EITF 00-27, “Application of Issue No. 98-5 to Certain
      Convertible Instruments”, the debt discount will be amortized over the term of
      the Debentures.





Prior
      to
      maturity, the Debentures will bear interest at the higher of (i) 8% per annum
      or
      (ii) the six-month London Interbank Offered Rate plus 2%, payable quarterly
      in
      arrears in cash, or, at the Company’s option, in shares of common stock. The
      Company’s ability to pay interest with shares of common stock will be subject to
      specified conditions, including the existence of an effective registration
      statement covering the resale of the shares issued in payment of interest and
      certain minimum trading volumes in the common stock. All overdue and accrued
      interest will accrue a late fee equal to the lesser of 15% per annum or the
      maximum rate permitted by applicable law. From and after an event of default
      under the Debentures and for so long as the event of default is continuing,
      the
      Debentures will bear default interest at a rate of the lesser of 15% per annum
      or the maximum rate permitted by applicable law. Accrued interest, related
      to
      the Debentures, which is included in accrued expenses, amounted to $87,978
      as of
      March 31, 2007.





14


Beginning
      on the earlier of the first day of the first month immediately following the
      effectiveness of a registration statement covering the resale of the shares
      of
      common stock issuable upon conversion of the Debentures and May 17, 2007, and
      on
      the first day of each month thereafter, the Company will be required to redeem
      1/10th of the face value of the Debentures in cash or, at the Company’s
      election, with shares of common stock. The Company’s ability to pay the
      redemption price in shares of common stock will be subject to specified
      conditions, including the existence of an effective registration statement
      covering the resale of the shares issued in payment of the redemption amount
      and
      certain minimum trading volumes in common stock. Any common stock delivered
      in
      satisfaction of an amortization payment will be valued at 82.5% of the average
      of the daily volume weighted average price of the applicable shares for the
      10
      trading days prior to the amortization payment. As of March 31, 2007, no
      Debentures have been redeemed. Any unconverted Debentures will become due on
      March 17, 2008.




At
      any
      time after the effectiveness of a registration statement covering the resale
      of
      the shares of common stock issuable upon conversion of the Debentures, the
      Company may redeem, subject to specified conditions and upon 12 trading days’
written notice, any or all of the outstanding Debentures for a redemption price
      of cash in the amount of 120% of the principal amount plus accrued and unpaid
      interest on the Debentures to be redeemed.




The
      Company’s obligations under the Debentures are secured by a security interest in
      substantially all of the Company’s assets pursuant to a Security Agreement dated
      as of January 17, 2007 between the Company and the purchasers of the Debentures.
      The Company has agreed that in the event that it forms any new subsidiaries
      and
      moves assets to those subsidiaries, those subsidiaries will become guarantors
      of
      the Debentures.




As
      a part
      of the sale of the Debentures, the Company issued common stock purchase warrants
      to the purchasers of the Debentures giving them the right to purchase up to
      an
      aggregate of 2,006,250 shares of common stock at an exercise price of $2.00
      per
      share. The warrant exercise price is subject to adjustment for stock splits,
      stock dividends, and the like. In the event that the Company issues or grants
      any rights to purchase any common stock, or other security convertible into
      common stock, for a per share price less than the exercise price then in effect,
      the exercise price of the warrants with respect to shares of common stock will
      be reduced to equal such lower price and the number of shares of common stock
      for which the warrants may be exercised will be increased so that the total
      aggregate exercise price remains constant. The foregoing adjustment to the
      exercise price for common stock will not apply to certain exempt issuances,
      including issuances to officers, directors and employees and in strategic
      transactions and up to an aggregate of $200,000 of common stock that may be
      issued in any six month period. All of the warrants will expire on January
      17,
      2012, unless sooner exercised. As of March 31, 2006, none of the warrants issued
      in connection with the Debentures have been exercised.





In
      accordance with APB 14, “Accounting for Convertible Debt and Debt Issued with
      Stock Purchase Warrants”, the relative fair value of these warrants on their
      date of grant, which was determined to be approximately $2,571,771, was recorded
      as a discount to the underlying debt and as an addition to additional paid-in
      capital. The discount is being amortized to interest expense over the term
      of
      the underlying debt. The fair value of the warrants was computed using the
      Black-Scholes option pricing model. The Company assumed a risk-free interest
      rate of 4.78%, no dividends, expected volatility of approximately 179% and
      an
      expected warrant life of approximately 3 years. As of March 31, 2007, the
      unamortized discount on the Debentures, including the unamortized portion
      related to the beneficial conversion feature, amounted to approximately
      $3,919,000.





In
      connection with the sale of the Debentures and warrants, the Company entered
      into a Registration Rights Agreement with the purchasers of the Debentures
      and
      warrants under which the Company is required, on or before February 16, 2007,
      to
      file a registration statement with the Securities and Exchange Commission
      covering the resale of the shares of common stock issuable pursuant to the
      Debentures and warrants and to use the Company’s best efforts to have the
      registration statement declared effective as promptly as possible thereafter
      but
      in any event, by May 17, 2007. The Company filed the registration statement
      on
      February 12, 2007. The Company will be subject to certain monetary penalties
      if
      the registration statement does not become effective on a timely
      basis.





In
      accordance with FASB Staff Position No. EITF 00-19-2, “Accounting for
      Registration Payment Arrangements”, the Company measured their contingent
      obligation under the Registration Rights Agreement in accordance with FASB
      Statement No. 5, “Accounting for Contingencies”. It was determined by management
      that as of March 31, 2007, it was not probable that the Company would incur
      any
      expense under the Registration Rights Agreements, and as such, no such liability
      has been recorded as of March 31, 2007.




15


**NOTE
      10  - PATENT INFRINGEMENT**





The
      Company is involved in litigation against Toyota Motor Corporation and certain
      of its affiliates (collectively, “Toyota”) for infringement of its Electric
      Wheel patent. On September 12, 2005, the Company filed a lawsuit against Toyota
      in the United States District Court for the Middle District of Florida, Tampa
      Division, in which it claims that the hybrid transmission drive in the Toyota
      Prius and Highlander infringes a number of claims in our U.S. Patent No.
      5,067,932. On January 10, 2006, the Company filed a complaint with the United
      States International Trade Commission (“ITC”) in Washington D.C. seeking an
      exclusion order prohibiting the importation of infringing
      technology.





The
      ITC
      held a hearing on the complaint and on February 13, 2007, the ITC Administrative
      Law Judge who conducted the hearing issued a final initial determination in
      favor of Toyota, finding no infringement of Claim 7 in the U.S. Patent No.
      5,067,932 and that the Company had not satisfied certain other legal
      requirements that would support an exclusion order against Toyota. On review,
      the full ITC decided to take no position on the Administrative Law Judge’s
      findings concerning the economic prong of the domestic industry requirement.
      The
      remainder of the initial determination became the ITC final
      determination.





On
      April
      30, 2007, the ITC terminated the investigation with a finding of no violation
      of
      Section 337 of the Tariff Act of 1930. The Company is entitled to appeal the
      decision to the Court of Appeals for the Federal Circuit. Until the ITC case
      is
      completed, the patent infringement action brought in the United States District
      Court for the Middle District of Florida, Tampa Division, is
      stayed.





The
      Company has an agreement with Oliver Street Finance LLC (“Oliver Street”). Under
      this agreement Oliver Street provides funding to the Company to prosecute the
      Company’s patent infringement action against Toyota Motor Corporation, Toyota
      Motor Sales U.S.A., Inc. and Toyota Manufacturing North America (collectively,
      “Toyota”). Oliver Street pays all legal fees and out of pocket expenses billed
      by the Company’s special patent counsel in connection with the litigation
      against Toyota and approved by the Company in exchange for a portion of any
      recovery that the Company may receive from the litigation equal to the greater
      of 40% of the recovery or the actual amount of legal fees and expenses Oliver
      Street pays on the Company’s behalf. Michael A. D’Amelio, a director and
      shareholder of the Company, is a principal of Oliver Street. Through February
      15, 2006, Mr. D’Amelio was the beneficial owner of more than 10% of the
      Company’s common stock. During this period, expenses paid on behalf of the
      Company by Oliver Street totaling $236,620 in 2005 and $129,949 in 2006 were
      recorded as professional fee expense as well as an increase to additional
      paid-in capital. In connection with the extinguishment of the Redeemable Series
      A preferred stock for common stock on February 15, 2006, Mr. D’Amelio’s
      beneficial ownership of the Company's common stock decreased to below 10%.
      As
      such, expenses paid by Oliver Street on behalf of the Company since February
      15,
      2006 are no longer reflected in the financial statements.




**NOTE
      11 - ACCRUED AND UNPAID PAYROLL TAXES**





At
      March
      31, 2007, the Company has accrued interest and penalties of $237,000 related
      to
      payroll and payroll related taxes. This amount includes additional interest
      of
      approximately $80,000 charged to operations in the first quarter of 2007. The
      interest and penalties were the subject of a delinquency proceeding with the
      U.S. Internal Revenue Service. During the first quarter of 2007, the Company
      signed an agreement with the IRS to settle the outstanding interest and
      penalties. The agreement provides for the Company’s payment of the accrued
      interest and penalties in monthly installments of $10,000.




**NOTE
      12 - POTENTIAL ACQUISITION**





In
      December 2006, the Company entered into a letter of intent to acquire Deltron,
      Inc., a North Wales, Pennsylvania based manufacturer of power supplies and
      related equipment with manufacturing operations in Reynosa, Mexico. Deltron
      provides precision linear and switching power supplies and power supply systems
      for applications where power density and functionality are critical. The letter
      of intent contemplates that the Company will purchase the assets and certain
      selected liabilities of Deltron through the Technipower subsidiary for an
      undisclosed amount. The purchase price will be subject to increase or decrease
      based on changes in Deltron’s working capital between October 31, 2006 and the
      closing date. The Company will also assume Deltron’s trade payables and its
      accrued expenses as part of the transaction. The transaction is subject to
      the
      negotiation and execution of a definitive purchase agreement and the
      satisfaction of various closing conditions including a due diligence
      investigation and the negotiation and execution of agreements with certain
      Deltron personnel. Management currently anticipates that it will close during
      the second quarter of 2007.





16


**NOTE
      13 - CREDIT FACILITY**





In
      December 2006 the Company signed a financing term sheet for a credit facility
      to
      be used exclusively for acquisitions. The term sheet contemplates a facility
      of
      up to $10 million on a standby basis secured by the acquired assets and
      guaranteed by the Company. The Company intends to use the facility to strike
      more quickly at unique smaller acquisition opportunities that are consistent
      with its growth plans. The credit facility will have a one year term
      that will be renewable at the option of the lender. The standby credit
      facility will carry an interest rate of 13% per annum plus monitoring fees
      of 1% of the amounts outstanding under the credit facility and investment fees
      of 5% of the amounts outstanding under the facility. The Company will also
      pay a
      commitment fee of 2% of the full amount of the facility upon execution of
      definitive documents. The investment fees and the commitment fees will be
      payable in shares of common stock. Any lending under the facility will be
      conditioned on the approval of the proposed acquisition by the lender’s
      investment committee and will be subject to the lender’s normal due diligence.
      The facility is subject to normal documentation requirements. The Company
      anticipates that the required documentation will be completed in the first
      half
      of 2007. The lender, JMC Venture Partners, LLC, is an affiliate of Michael
      D’Amelio, a director and executive officer of the Company.





**NOTE
      14  - TRANSACTIONS WITH RELATED PARTIES**





During
      the quarter ended December 31, 2006 the Company issued a total of 79,009 shares
      of common stock to certain note holders to extend the terms of payment to
      September 30, 2007. The estimated fair market value was $179,363. During the
      quarter ended March 31, 2007 the Company accrued $48,100 in cash incentives
      to
      certain note holders to extend the terms of payment to September 30, 2007.
      Interest expense on notes to related parties was approximately $140,000 for
      the
      three months ended March 31, 2007.





In
      February 2007, the Company awarded and issued 110,000 shares of restricted
      common stock to its CEO, Gary Brandt, pursuant to Mr. Brandt’s employment
      agreement. The shares vest over a three-year period according to a schedule
      in
      the agreement. The fair value of the shares at the time of issuance was
      approximately $306,000. This amount will be recorded as compensation expense
      over the vesting period . Compensation expense recognized related to these
      shares was approximately $23,000 for the three months ended March 31,
      2007.





In
      2007
      and 2006, Bril Corporation provided bookkeeping services for $5,000 a month.
      Two
      principals of Bril Corporation are also directors and stockholders of
      the Company. Total expense for the three months ended March 31, 2007 and 2006
      was $15,000 for each three-month period.





**NOTE
      15  - SEGMENTS**





The
      major
      segments the Company serves are the Motive Power Division which encompasses
      the
      electric power drive technologies and the Power Electronics Division which
      represents the business of Technipower and specializes in the design,
      development and production of customer power systems, chassis and power supply
      products for defense related markets.





17


Segment
      financial information follows:




THREE
                MONTH ENDEDMarch
                31,
              2007
              (restated)
            
            March
                31,
              2006Revenues:Sales
                to unaffiliated customers:Power
                Electronics
            
            $
            1,399,919
            
            $
            0Motive
                Power
            
            
            31,678
            
            
            5,365$
            1,431,597
            
            $
            5,365Net
                Profit (Loss):Power
                Electronics
            
            $
            48,800
            
            $
            0Motive
                Power
            
            
            (902,092
            )
            
            (1,095,959
            )Operating
                Loss
            
            
            (853,292
            )
            
            (1,095,959
            )Interest
                expense
            
            
            (2,193,940
            )
            
            (727,965
            )Loss
                on extinguishments of redeemable preferred stock and other
                debt
            
            
            (0
            )
            
            (5,667,569
            )Net
                Loss
            
            
            (3,047,232
            )
            
            (7,491,493
            )Preferred
                stock dividends
            
            
            (1,413,031
            )
            
            (60,000
            )Loss
                applicable to common stockholders
            
            $
            (4,460,263
            )
            $
            (7,551,493
            )




**NOTE
      16 - NEW ACCOUNTING STANDARDS**





In
      February 2007, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standards (SFAS) No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities, Including an Amendment of FASB
      Statement No. 115,” which will become effective in 2008. SFAS No. 159 permits
      entities to measure eligible financial assets, financial liabilities and firm
      commitments at fair value, on an instrument-by-instrument basis, that are
      otherwise not permitted to be accounted for at fair value under other generally
      accepted accounting principles. The fair value measurement election is
      irrevocable and subsequent changes in fair value must be recorded in
      earnings.  The Company will adopt this Statement in fiscal year 2008 and is
      currently evaluating if it will elect the fair value option for any of its
      eligible financial instruments and other items.




In
      September 2006, the FASB issued Financial Accounting Standard No. 157, ‘‘Fair
      Value Measurements’’ (‘‘SFAS 157’’). SFAS 157 is effective for financial
      statements issued for fiscal years beginning after November 15, 2007 as well
      as
      interim periods within such fiscal years. SFAS 157 provides a common fair value
      hierarchy for companies to follow in determining fair value measurements in
      the
      preparation of financial statements and expands disclosure requirements relating
      to how such fair value measurements were developed. SFAS 157 clarifies the
      principle that fair value should be based on the assumptions that the
      marketplace would use when pricing an asset or liability, rather than company
      specific data. The Company is currently assessing the impact that SFAS 157
      will
      have on its results of operations and financial position.





In
      September 2006, the U.S. Securities and Exchange Commission staff issued Staff
      Accounting Bulletin No. 108 (“SAB 108”), Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements. SAB 108 eliminates the diversity of practice surrounding how public
      companies quantify financial statement misstatements. It establishes an approach
      that requires quantification of financial statement misstatements based on
      the
      effects of the misstatements on each of the company's financial statements
      and
      the related financial statement disclosures. We do not expect SAB 108 to have
      a
      material impact on our financial condition or results of operations. SAB 108
      must be applied to annual financial statements for their first fiscal year
      ending after November 15, 2006.




18


**ITEM
                2.****Management’s
                Discussion And Analysis Of Financial Condition And Results Of
                Operations**





*The
      following discussion and analysis of our consolidated financial condition and
      results of operations for the quarters ended March 31, 2007 and 2006 should
      be
      read in conjunction with our consolidated financial statements included
      elsewhere in this Quarterly Report.*





**Overview**




Our
      historical business has been the development, engineering, manufacturing,
      licensing and sale of electric power drive systems. We intend to expand the
      licensing, manufacturing, and sale of electric power drive systems, including
      those incorporating hybrid and regenerative technologies, and the licensing
      and
      manufacture of our Electric Wheel TM and
      Electric Transaxle TM for
      automotive, hybrid and all-electric vehicle applications. Our goal is to become
      a leader in the manufacture, licensing and sale of electric power drive systems
      for specialized high value original equipment manufacturers.





We
      have
      historically generated limited operating revenues. In order for us to market
      our
      existing products successfully on a national and international level, we will
      likely be required to complete public or private offerings of our equity
      securities successfully. If we are unable to obtain necessary financing, we
      will
      expand our operations only as cash flow from operations allows.





We
      are
      presently pursuing direct sales opportunities for our products and technologies
      in the marine, industrial and automotive markets. We are also implementing
      a
      plan to broaden our market and product base and exploit our intellectual
      property that we expect will generate substantial profits and cash flow. As
      part
      of this plan, we intend to grow our business through licensing of our
      proprietary and patented technologies and through the acquisition of businesses
      that fit our strategy. We are identifying licensing opportunities that we
      anticipate will leverage our existing or acquired knowledge and provide
      substantial positive current financial impact while we also aggressively pursue
      infringers of our existing patents. We are also identifying acquisition targets
      that we expect will augment our existing intellectual property, marketing
      channels and human resources and provide positive cash flow. We cannot assure
      you, however, that we will be able to identify licensing opportunities and
      acquisition targets that meet these goals, or if we identify such opportunities
      or targets that we will be able to take full advantage of them.





On
      August
      17, 2006, we entered into a Securities Purchase Agreement with Integrated Power
      Systems LLC, Power Designs Inc., The Vantage Partners LLC, certain other persons
      and Technipower LLC, a Danbury, Connecticut based manufacturer of power supplies
      and related equipment for the defense, aerospace and commercial sectors, and
      simultaneously closed on the acquisition of all of the outstanding membership
      units and warrants to purchase membership units of Technipower. We purchased
      Technipower for 4,615,381 shares of Series C convertible redeemable preferred
      stock, 4,461,537 shares of common stock and the assumption of certain
      liabilities totaling approximately $850,000, including approximately $700,000
      outstanding under Technipower’s $1.5 million revolving credit facility.
      Twenty-five percent of the common stock was deposited in escrow to support
      the
      sellers’ indemnity obligations under the purchase agreement. The escrowed shares
      will also fund any required working capital adjustment in our favor. The share
      amounts were calculated using an agreed $.65 per share price, which was based
      on
      the average of the average closing bid prices of the common stock over two
      30-day periods, one ending three days before the closing and one ending two
      days
      before the closing. We must issue additional shares to the sellers at the one
      year anniversary of the closing if the 30-day average trading price at that
      time
      is more than 5% less than $.65 per share. At our option, we may instead pay
      the
      adjustment in cash. We agreed to register the shares of common stock we issued
      to the sellers and the shares of common stock issuable upon conversion of the
      Series C preferred stock we issued to the sellers. The common share value in
      our
      financial statements was calculated based on the closing market price on the
      date of the closing of the transaction, August 17, 2006, of $1.40 per
      share.




Under
      the
      Certificate of Designations for our Series C preferred stock, the holders of
      the
      Series C preferred stock were entitled to dividends at the rate of 10% of the
      stated value of the Series C preferred stock and a liquidation preference that
      was initially equal to the stated value of the Series C preferred stock plus
      accrued dividends but rose to 175% of the stated value of the Series C preferred
      stock plus accrued dividends after December 15, 2006. The “stated value” per
      share of Series C Preferred Stock was $0.65. The holders of Series C preferred
      stock also had redemption rights. On January 22, 2007, we redeemed approximately
      2,873,492 shares of the Series C preferred stock for an aggregate of
      approximately $3,350,000. We recorded the liquidation preference on the shares
      redeemed as a preferred stock dividend of approximately $1,400,000. Also on
      January 22, 2007, we converted the remaining 1,741,889 shares of Series C
      preferred stock into 1,741,881 shares of common stock and fractional shares
      were
      converted into cash based on the market price of our common stock on the date
      of
      the transaction. There are presently no shares of Series C preferred stock
      outstanding and we have filed a certificate of elimination removing the Series
      C
      preferred stock from our certificate of incorporation.





19


As
      a
      result of the acquisition of Technipower, our operations now comprise two
      divisions: a Motive Power Division, which encompasses our electric power drive
      technologies, and a Power Electronics Division, which encompasses the business
      of Technipower. With this new structure, we intend to exploit opportunities
      for
      market consolidation, cross marketing and core business growth in separate
      but
      compatible niche markets for specialized high value original equipment
      manufacturer (“OEM”) power applications and electric power drive systems. While
      our operating assets are divisionalized, we expect and encourage a formal
      exchange of engineering and sales talent across the business units.





Our
      Power
      Electronics Division focuses its efforts in engineered power systems while
      also
      providing both technical and sales augmentation to our Motive Power Division.
      Our Power Electronics Division specializes in the design, development and
      production of custom power ready systems, chassis and power supply products
      for
      defense related markets. The Division also provides advanced legacy support
      and
      specialized defense-related build-to-print capabilities.





On
      December 6, 2006, we entered into a letter of intent to acquire Deltron, Inc.,
      a
      North Wales, Pennsylvania based manufacturer of power supplies and related
      equipment with manufacturing operations in Reynosa, Mexico. Deltron provides
      precision linear and switching power supplies and power supply systems for
      applications where power density and functionality are critical. The letter
      of
      intent contemplates that we will purchase the assets and certain selected
      liabilities of Deltron through our Technipower subsidiary for an undisclosed
      amount. The purchase price will be subject to increase or decrease based on
      changes in Deltron’s working capital between October 31, 2006 and the closing
      date. We will also assume Deltron’s trade payables and its accrued expenses as
      part of the transaction. The transaction is subject to the negotiation and
      execution of a definitive purchase agreement and the satisfaction of various
      closing conditions including a due diligence investigation and the negotiation
      and execution of agreements with certain Deltron personnel. While no assurances
      can be given as to when the acquisition may close, we currently anticipate
      that
      it will close during the second quarter of 2007.





In
      order
      to fund future acquisitions we may effect one or more private sales of equity
      or
      debt securities. We have not yet determined the terms or amount of the
      securities to be sold. However, any such securities will be offered and sold
      without registration under the Securities Act of 1933, as amended, and may
      not
      be reoffered or resold by the purchasers in the United States absent
      registration or an applicable exemption from the registration requirements
      of
      the Securities Act.





In
      December 2006 we signed a financing term sheet for a credit facility to be
      used
      exclusively for acquisitions. The term sheet contemplates a facility of up
      to
      $10 million on a standby basis secured by the acquired assets and guaranteed
      by
      Solomon. We intend to use the facility to strike more quickly at unique smaller
      acquisition opportunities that are consistent with our growth plans. The credit
      facility will have a one year term that will be renewable at the option of
      the
      lender. The standby credit facility will carry an interest rate of 13% per
      annum
      plus monitoring fees of 1% of the amounts outstanding under the credit facility
      and investment fees of 5% of the amounts outstanding under the facility. We
      will
      also pay a commitment fee of 2% of the full amount of the facility upon
      execution of definitive documents. The investment fees and the commitment fees
      will be payable in shares of our common stock. Any lending under the facility
      will be conditioned on the approval of the proposed acquisition by the lender’s
      investment committee and will be subject to the lender’s normal due diligence.
      The facility is subject to normal documentation requirements. While no assurance
      can be given as to when the facility will be put in place, we anticipate that
      the required documentation will be completed in the second quarter of 2007.
      The
      lender, JMC Venture Partners, LLC, is an affiliate of Michael D’Amelio, a
      director and executive officer of our company.




20


Our
      goal
      is to increase revenue significantly, generate enough cash to finance our
      operations and growth and, eventually, become profitable. We currently do not
      generate enough cash from operations to continue operations indefinitely. Our
      ability to continue is dependent on either raising significant capital or
      increasing revenue, or both. If we are unable to raise such capital and unable
      to increase revenue significantly, we will likely not be able to generate enough
      cash to continue operations. In that event, we would have to seek alternative
      opportunities, such as selling our assets or seeking a merger partner or other
      business combination; otherwise we may default on our debt obligations and
      lose
      our assets to our creditors.





We
      borrowed $1,877,085 in short-term debt financing from certain of our principal
      stockholders and other investors from March 2005 through December 2006. These
      notes are secured by a lien on all of our tangible and intangible assets. On
      March 15, 2006, we issued and sold an aggregate of 235,856 shares of common
      stock to the noteholders. Of these shares, 93,356 shares of common stock were
      issued upon conversion of accrued and unpaid interest on the promissory notes
      through February 28, 2006 at a price per share equal to a 20% discount from
      the
      market price per share of our common stock as of March 14, 2006. The remaining
      142,500 shares were issued to certain of the noteholders as an inducement to
      each noteholder agreeing to extend the maturity date of the notes from March
      15,
      2006 to April 30, 2006. On May 3, 2006, we issued and sold an additional
      aggregate of 124,700 shares of common stock to certain of the noteholders as
      an
      inducement to such noteholders agreeing to extend the maturity date of their
      notes from April 30, 2006 to June 30, 2006. On June 5, 2006, we issued and
      sold
      an aggregate of 63,750 shares of common stock to the holders of certain of
      the
      promissory notes. These shares were issued as an inducement to each noteholder
      agreeing to purchase the notes. On August 11, 2006, we entered into an agreement
      dated as of June 30, 2006 with certain of our noteholders pursuant to which
      the
      maturity date of their notes was extended from June 30, 2006 to January 15,
      2007. As an inducement to such noteholders agreeing to extend their notes,
      we
      issued to each of the noteholders 35,000 shares for each $100,000 of principal
      amount of notes, or fraction thereof, held by each holder.





In
      January 2007 we entered into an agreement dated as of December 31, 2006 with
      certain of our noteholders pursuant to which the maturity date of their notes
      was extended from January 15, 2007 to September 30, 2007. As an inducement
      to
      such noteholders agreeing to extend their notes, at the noteholder's option,
      we
      agreed to either (i) issue shares of common stock in an amount equal to 10,000
      shares for each $100,000 of principal amount of notes, or fraction thereof,
      held
      by such noteholder or (ii) pay such noteholder an amount in cash equal to 5%
      of
      the principal amount of the notes, or fraction thereof, held by such noteholder
      in lieu of shares. In connection with this extension agreement, on March 8,
      2007, we issued 79,009 shares of common stock to those noteholders who elected
      to receive shares as consideration for the extension agreement.





On
      July
      28, 2006 we borrowed $125,000 from Jezebel Management Corporation and issued
      a
      promissory note in the principal amount of $125,000 to Jezebel. The note bore
      interest at a rate of 15% per annum and matured on August 28, 2006. As an
      incentive to purchase the note we issued 25,000 shares of common stock to
      Jezebel. This note is now past due and is accruing interest at the rate of
      18%
      per annum. In January 2007 we paid the interest that had accrued though the
      date
      of payment. Jezebel is an affiliate of Michael D’Amelio, a director and
      executive officer of our company.





In
      August
      2005, we issued 1,754 shares of our common stock and an aggregate of 518,016
      shares of our Series B preferred stock in settlement of certain
      obligations.





On
      September 12, 2005, we filed a lawsuit against Toyota Motor Corporation, Toyota
      Motor Sales U.S.A., Inc. and Toyota Motor Manufacturing North America in the
      United States District Court for the Middle District of Florida, Tampa Division,
      Tampa, Florida for infringement of our Electric Wheel patent. In the lawsuit
      we
      allege that the hybrid transmission drive in the Toyota Prius and Highlander
      infringes a number of claims contained in our U.S. Patent No. 5,067,932 and
      we
      are asking for an injunction barring further infringement as well as damages
      for
      the unauthorized use of our patent by Toyota and its affiliates.





On
      January 10, 2006, we filed a complaint with the United States International
      Trade Commission (“ITC”) in Washington D.C. seeking an exclusion order
      prohibiting the importation of infringing technology. On or about February
      8,
      2006, the ITC instituted an investigation based on our complaint. The ITC acts
      as an administrative investigative body to determine, among other things,
      whether or not goods imported into the United States infringe U.S. patents.
      On
      September 19, 2006, we expanded this claim to include the Toyota Camry and
      Lexus
      hybrid models.





21


The
      ITC
      held a hearing on our complaint from October 30 through November 3, 2006. On
      February 13, 2007, the ITC Administrative Law Judge who conducted the hearing
      issued a final initial determination in favor of Toyota. In the order, the
      Administrative Law Judge decided that the hybrid transmission drive in the
      Toyota Prius and Highlander vehicles did not infringe Claim 7 in our U.S. Patent
      No. 5,067,932 and that we had not satisfied certain other legal requirements
      that would support an exclusion order against Toyota. On review of the final
      initial determination, the full ITC decided to take no position on the
      Administrative Law Judge’s findings concerning the economic prong of the
      domestic industry requirement. The remainder of the initial determination became
      the ITC final determination. On April 30, 2007, the ITC terminated the
      investigation with a finding of no violation of Section 337 of the Tariff Act
      of
      1930. We are entitled to appeal the decision to the Court of Appeals for the
      Federal Circuit. Until the ITC case is completed, the patent infringement action
      brought in the United States District Court for the Middle District of Florida,
      Tampa Division, is stayed.





Although
      the cost of litigation in these matters is often large, we have arranged
      financing from sources outside our company to fully fund the litigation to
      its
      conclusion. We provide more information about the arrangements we have made
      to
      fund this litigation in “Liquidity and Capital Resources” below.





On
      January 22, 2007, we sold an aggregate of $5,350,000 principal amount of
      Variable Rate Self-Liquidating Senior Secured Convertible Debentures due March
      18, 2008. We used approximately $3,350,000 of the net proceeds of the Debentures
      to redeem approximately 2,873,492 shares of our Series C preferred stock,
      approximately $768,250 of the net proceeds to pay down a promissory note and
      other obligations and retained approximately $1,128,000 of the net proceeds
      as
      working capital.





The
      Debentures are convertible at any time at the option of the holder into shares
      of our common stock at $2.00 per share, subject to adjustment for stock splits,
      stock dividends, and the like. In the event that we issue or grant in the future
      any rights to purchase any of our common stock, or other securities convertible
      into our common stock, for an effective per share price less than the conversion
      price then in effect, the conversion price of all unconverted Debentures will
      be
      decreased to equal such lower price. The conversion price adjustment will not
      apply to certain exempt issuances, including stock issuances to officers,
      directors and employees and in strategic transactions and up to an aggregate
      of
      $200,000 of common stock that may be issued in any six-month
      period.




Prior
      to
      maturity the Debentures will bear interest per annum at the higher of (i) 8%
      or
      (ii) the six-month London Interbank Offered Rate plus 2%, payable quarterly
      in
      arrears in cash, or, at our option, in shares of our common stock. Our ability
      to pay interest with shares of our common stock will be subject to specified
      conditions, including the existence of an effective registration statement
      covering the resale of the shares issued in payment of interest and certain
      minimum trading volumes in our common stock. All overdue and accrued interest
      will accrue a late fee equal to the lesser of 15% per annum or the maximum
      rate
      permitted by applicable law. From and after an event of default under the
      Debentures and for so long as the event of default is continuing, the Debentures
      will bear default interest at a rate of the lesser of 15% per annum or the
      maximum rate permitted by applicable law.





Beginning
      on the first day of the first month immediately following the earlier of the
      effectiveness of a registration statement covering the resale of the shares
      of
      common stock issuable upon conversion of the Debentures or May 17, 2007, and
      on
      the first day of each month thereafter, we will be required to redeem one tenth
      of the face value of the Debentures in cash or, at our election, with shares
      of
      our common stock. Our ability to pay the redemption price in shares of common
      stock will be subject to specified conditions, including the existence of an
      effective registration statement covering the resale of the shares issued in
      payment of the redemption amount and certain minimum trading volumes in our
      common stock. Any common stock delivered in satisfaction of an amortization
      payment will be valued at 82.5% of the average of the daily volume weighted
      average price of the applicable shares for the 10 trading days prior to the
      amortization payment. Any unconverted Debentures will become due on March 18,
      2008.




At
      any
      time after the effectiveness of a registration statement covering the resale
      of
      the shares of common stock issuable upon conversion of the Debentures, we may
      redeem, subject to specified conditions and upon 12 trading days’ written
      notice, any or all of the outstanding Debentures for a redemption price of
      cash
      in the amount of 120% of the principal amount plus accrued and unpaid interest
      on the Debentures to be redeemed.




22


Our
      obligations under the Debentures are secured by a security interest in
      substantially all of our assets pursuant to a Security Agreement dated as of
      January 17, 2007 between us and the purchasers of the Debentures. We have agreed
      that in the event that we form any new subsidiaries and move assets to those
      subsidiaries, those subsidiaries will become guarantors of the
      Debentures.




As
      a part
      of the sale of the Debentures, we issued common stock purchase warrants to
      the
      purchasers of the Debentures giving them the right to purchase up to an
      aggregate of 2,006,250 shares of our common stock at an exercise price of $2.00
      per share. The warrant exercise price is subject to adjustment for stock splits,
      stock dividends, and the like. In the event that we issue or grant any rights
      to
      purchase any of our common stock, or other security convertible into our common
      stock, for a per share price less than the exercise price then in effect, the
      exercise price of the warrants with respect to shares of our common stock will
      be reduced to equal such lower price and the number of shares of our common
      stock for which the warrants may be exercised will be increased so that the
      total aggregate exercise price remains constant. The foregoing adjustment to
      the
      exercise price for common stock will not apply to certain exempt issuances,
      including issuances to officers, directors and employees and in strategic
      transactions and up to an aggregate of $200,000 of common stock that may be
      issued in any six month period. All of the warrants will expire on January
      18,
      2012 unless sooner exercised.




In
      connection with the sale of the Debentures and warrants, we entered into a
      Registration Rights Agreement with the purchasers of the Debentures and warrants
      under which we are required, on or before February 16, 2007, to file a
      registration statement with the Securities and Exchange Commission covering
      the
      resale of the shares of common stock issuable pursuant to the Debentures and
      warrants and to use our best efforts to have the registration statement declared
      effective as promptly as possible thereafter but in any event, by May 17, 2007.
      We filed the registration statement on February 12, 2007, and it was declared
      effective by the Commission on May 14, 2007.





We
      may
      have to seek additional capital through the sale of debt and/or equity
      securities in 2007 in order to fund our operating capital needs.





**Results
      of Operations**





The
      following discussion should be read in conjunction with our financial statements
      and the related notes thereto included elsewhere herein.





*Three
      months ended March 31, 2007 compared with three months ended March 31,
      2006.*





For
      the
      three months ended March 31, 2007 we generated revenues of $1,431,597 as
      compared to $5,365 for the three months ended March 31, 2006, an increase of
      $1,426,232. Cost of products sold for the three months ended March 31, 2007
      was
      $779,287, generating a gross margin of $652,310. Cost of products sold for
      the
      three months ended March 31, 2006 was $2,569, generating a gross margin of
      $2,796. The increase in our revenues was due to the results of our Power
      Electronics Division, which was acquired on August 17, 2006. We believe that
      with this addition, revenue levels will continue to equal or exceed those of
      previous quarters.





Research
      and Development costs were $253,664 for the three months ended March 31, 2007
      as
      compared to $0 for the three months ended March 31, 2006. The increase was
      the
      result of continued R&D expenditures in our Power Electronics Division in
      the amount of $253,664 and $0 of R&D expenditures in our Motive Power
      Division.





Selling,
      general and administrative expenses were $1,251,938 for the three months ended
      March 31, 2007 as compared to $1,098,755 for the three months ended March 31,
      2006, an increase of $153,183 or 14%. This increase was primarily due to the
      additional expense of our Power Electronics Division, which was acquired on
      August 17, 2006, partially offset by the accrual of $129,123 of executive
      officer deferred compensation in 2006.





23


We
      incurred interest expense of $2,193,940 for the three months ended March 31,
      2007. Interest expense incurred for the three months ended March 31, 2006 was
      $727,965. The increase of $1,465,975 in interest expense was primarily due
      to an
      increase in accrued cash and non-cash interest charges related to the variable
      rate self-liquidating senior secured convertible debentures sold in January
      2007.





The
      elements of interest expense for the quarters ended March 31, 2007 (restated)
      and 2006 were as follows:





Three
                Months Ended March 31,2007
            
            2006Accretion
                and dividends, Series A preferred stock
            
            $
            -
            
            $
            698,080Interest
                on notes payable
            
            
            365,539
            
            
            29,885Interest
                on bank debt
            
            
            20,943
            
            
            -Interest
                on unpaid payroll taxes and penalties
            
            
            80,690
            
            
            -Interest
                on variable rate self-liquidating senior secured convertible
                debentures
            
            
            1,726,768
            
            
            -**Total
                interest expense**
            
            $
            2,193,940
            
            $
            727,965





We
      reported a net loss for the three months ended March 31, 2007 of $3,047,232.
      Our
      net loss for the three months ended March 31, 2006 was $7,491,493. We recorded
      a
      $5,667,569 loss related to the extinguishment of redeemable preferred stock
      and
      other debt in the three months ended March 31, 2006. Loss applicable to
      common stockholders for the three months ended March 31, 2007 was $4,460,263,
      reflecting dividends of $1,413,031 relating to the redemption of the Series
      C preferred stock issued in August 2006. Loss applicable to common stockholders
      for the three months ended March 31, 2006 was $7,551,493, reflecting dividends
      of $60,000 relating to Series B preferred stock recorded in March
      2006.





**Liquidity
      and Capital Resources**




Our
      available cash balance at March 31, 2007 was $1,106,014. We borrowed $1,877,085
      in short-term debt financing from certain of our principal stockholders and
      other investors from March 2005 through December 2006. These notes are secured
      by liens on all of our tangible and intangible assets.





During
      the three months ended March 31, 2007, we used net cash of $471,678 from
      operations. This consisted of a net loss of $3,047,232 augmented by net non-cash
      charges of $2,401,963. Additionally, we provided net cash in financing
      activities of $1,501,448 consisting primarily of proceeds from convertible
      promissory notes payable. The Power Electronics Division experienced positive
      cash flow from operating activities of $98,882.





On
      November 22, 2005, we entered into an agreement with Oliver Street Finance
      LLC
      in which Oliver Street agreed to provide funding to us to prosecute our
      litigation against Toyota Motor Corporation, Toyota Motor Sales U.S.A., Inc.
      and
      Toyota Motor Manufacturing North America. Oliver Street agreed to pay all legal
      fees and out-of pocket expenses billed by our special patent counsel, Mintz,
      Levin, Cohn, Ferris, Glovsky and Popeo, P.C., in connection with the litigation
      and approved by us in exchange for a portion of any recovery that we receive
      in
      the litigation equal to the greater of 40% of the recovery or the actual amount
      of legal fees and expenses Oliver Street pays on our behalf. Michael D’Amelio, a
      vice president, director and principal stockholder of our company, is also
      a
      principal owner of Oliver Street.





We
      have
      incurred significant operating losses and used cash in our operating activities
      for several consecutive years. As of March 31, 2007, we have deficiencies in
      both working capital and net assets. These conditions raise substantial doubt
      about our ability to continue as a going concern. In the past we have been
      able
      to obtain financing to fund our losses. We expect to seek additional capital
      through the sale of debt and/or equity in 2007 in order to fund our operating
      and capital needs, although there can be no assurance that we will be
      successful. Our ability to continue is dependent on obtaining additional
      long-term financing and ultimately achieving profitable operating results.
      To
      date we have not been able to establish acceptable sales levels. With the
      acquisition of Technipower, we believe our ability to achieve profitability
      has
      been enhanced.





In
      order
      to fund future acquisitions, we intend to effect one or more private sales
      of equity or debt securities. We have not yet determined the terms or amount
      of
      the securities to be sold. However, any such securities will be offered and
      sold
      without registration under the Securities Act of 1933, as amended, and may
      not
      be reoffered or resold by the purchasers in the United States absent
      registration or an applicable exemption from the registration requirements
      of
      the Securities Act.





24


In
      December 2006 we signed a financing term sheet for a credit facility to be
      used
      exclusively for acquisitions. The term sheet contemplates a facility of up
      to
      $10 million on a standby basis secured by the acquired assets and guaranteed
      by
      Solomon. We intend to use the facility to strike more quickly at unique smaller
      acquisition opportunities that are consistent with our growth plans. The credit
      facility will have a one year term that will be renewable at the option of
      the
      lender. The standby credit facility will carry an interest rate of 13% per
      annum
      plus monitoring fees of 1% of the amounts outstanding under the credit facility
      and investment fees of 5% of the amounts outstanding under the facility. We
      will
      also pay a commitment fee of 2% of the full amount of the facility upon
      execution of definitive documents. The investment fees and the commitment fees
      will be payable in shares of our common stock. Any lending under the facility
      will be conditioned on the approval of the proposed acquisition by the lender’s
      investment committee and will be subject to the lender’s normal due diligence.
      The facility is subject to normal documentation requirements. While no assurance
      can be given as to when the facility will be put in place, we anticipate that
      the required documentation will be completed in the second quarter of 2007.
      The
      lender, JMC Venture Partners, LLC, is an affiliate of Michael D’Amelio, a
      director and executive officer of our company.





On
      January 22, 2007, we sold an aggregate of $5,350,000 principal amount of
      Variable Rate Self-Liquidating Senior Secured Convertible Debentures due March
      18, 2008. We used approximately $3,350,000 of the net proceeds of the Debentures
      to redeem approximately 2,873,492 shares of our Series C preferred stock,
      approximately $768,250 of the net proceeds to pay down a promissory note and
      other obligations and retained approximately $1,128,000 of the net proceeds
      as
      working capital.





The
      Debentures are convertible at any time at the option of the holder into shares
      of our common stock at $2.00 per share, subject to adjustment for stock splits,
      stock dividends, and the like. In the event that we issue or grant in the future
      any rights to purchase any of our common stock, or other securities convertible
      into our common stock, for an effective per share price less than the conversion
      price then in effect, the conversion price of all unconverted Debentures will
      be
      decreased to equal such lower price. The conversion price adjustment will not
      apply to certain exempt issuances, including stock issuances to officers,
      directors and employees and in strategic transactions and up to an aggregate
      of
      $200,000 of common stock that may be issued in any six-month
      period.




Prior
      to
      maturity the Debentures will bear interest per annum at the higher of (i) 8%
      or
      (ii) the six-month London Interbank Offered Rate plus 2%, payable quarterly
      in
      arrears in cash, or, at our option, in shares of our common stock. Our ability
      to pay interest with shares of our common stock will be subject to specified
      conditions, including the existence of an effective registration statement
      covering the resale of the shares issued in payment of interest and certain
      minimum trading volumes in our common stock. All overdue and accrued interest
      will accrue a late fee equal to the lesser of 15% per annum or the maximum
      rate
      permitted by applicable law. From and after an event of default under the
      Debentures and for so long as the event of default is continuing, the Debentures
      will bear default interest at a rate of the lesser of 15% per annum or the
      maximum rate permitted by applicable law.





Beginning
      on the first day of the first month immediately following the earlier of the
      effectiveness of a registration statement covering the resale of the shares
      of
      common stock issuable upon conversion of the Debentures or May 17, 2007, and
      on
      the first day of each month thereafter, we will be required to redeem one tenth
      of the face value of the Debentures in cash or, at our election, with shares
      of
      our common stock. Our ability to pay the redemption price in shares of common
      stock will be subject to specified conditions, including the existence of an
      effective registration statement covering the resale of the shares issued in
      payment of the redemption amount and certain minimum trading volumes in our
      common stock. Any common stock delivered in satisfaction of an amortization
      payment will be valued at 82.5% of the average of the daily volume weighted
      average price of the applicable shares for the 10 trading days prior to the
      amortization payment. Any unconverted Debentures will become due on March 18,
      2008.




At
      any
      time after the effectiveness of a registration statement covering the resale
      of
      the shares of common stock issuable upon conversion of the Debentures, we may
      redeem, subject to specified conditions and upon 12 trading days’ written
      notice, any or all of the outstanding Debentures for a redemption price of
      cash
      in the amount of 120% of the principal amount plus accrued and unpaid interest
      on the Debentures to be redeemed.




25


Our
      obligations under the Debentures are secured by a security interest in
      substantially all of our assets pursuant to a Security Agreement dated as of
      January 17, 2007 between us and the purchasers of the Debentures. We have agreed
      that in the event that we form any new subsidiaries and move assets to those
      subsidiaries, those subsidiaries will become guarantors of the
      Debentures.




As
      a part
      of the sale of the Debentures, we issued common stock purchase warrants to
      the
      purchasers of the Debentures giving them the right to purchase up to an
      aggregate of 2,006,250 shares of our common stock at an exercise price of $2.00
      per share. The warrant exercise price is subject to adjustment for stock splits,
      stock dividends, and the like. In the event that we issue or grant any rights
      to
      purchase any of our common stock, or other security convertible into our common
      stock, for a per share price less than the exercise price then in effect, the
      exercise price of the warrants with respect to shares of our common stock will
      be reduced to equal such lower price and the number of shares of our common
      stock for which the warrants may be exercised will be increased so that the
      total aggregate exercise price remains constant. The foregoing adjustment to
      the
      exercise price for common stock will not apply to certain exempt issuances,
      including issuances to officers, directors and employees and in strategic
      transactions and up to an aggregate of $200,000 of common stock that may be
      issued in any six month period. All of the warrants will expire on January
      18,
      2012 unless sooner exercised.




In
      connection with the sale of the Debentures and warrants, we entered into a
      Registration Rights Agreement with the purchasers of the Debentures and warrants
      under which we are required, on or before February 16, 2007, to file a
      registration statement with the Securities and Exchange Commission covering
      the
      resale of the shares of common stock issuable pursuant to the Debentures and
      warrants and to use our best efforts to have the registration statement declared
      effective as promptly as possible thereafter but in any event, by May 17, 2007.
      We filed the registration statement on February 12, 2007, and it was declared
      effective by the Commission on May 14, 2007.





**Critical
      Accounting Policies and Estimates**





The
      preparation of our consolidated financial statements in conformity with
      accounting principles generally accepted in the United States requires us to
      make estimates and judgments that affect the reported amounts of assets and
      liabilities, net revenue and expenses, and the related disclosures. We base
      our
      estimates on historical experience, our knowledge of economic and market factors
      and various other assumptions that we believe to be reasonable under the
      circumstances. Estimates and judgments used in the preparation of our financial
      statements are, by their nature, uncertain and unpredictable, and depend upon,
      among other things, many factors outside of our control, such as demand for
      our
      products and economic conditions. Accordingly, our estimates and judgments
      may
      prove to be incorrect and actual results may differ, perhaps significantly,
      from
      these estimates under different estimates, assumptions or conditions. We believe
      the following critical accounting policies are affected by significant
      estimates, assumptions and judgments used in the preparation of our consolidated
      financial statements.





***Revenue
      Recognition***





We
      recognize revenue when it is realized or realizable and earned. We consider
      revenue realized or realizable and earned when it has persuasive evidence of
      an
      arrangement, delivery has occurred, the sales price is fixed or determinable,
      and collectibility is reasonably assured. Delivery does not occur until products
      have been shipped or services have been provided to the client, risk of loss
      has
      transferred to the client and client acceptance has been obtained, client
      acceptance provisions have lapsed, or we have objective evidence that the
      criteria specified in the client acceptance provisions have been satisfied.
      In
      situations where a formal acceptance is required but the acceptance only relates
      to whether the product meets its published specifications, revenue is generally
      recognized upon shipment provided all other revenue recognition criteria are
      met. The sales price is not considered to be fixed or determinable until all
      contingencies related to the sale have been resolved.





Revenue
      from service sales is recognized at the contractual rates as labor hours are
      delivered and direct expenses are incurred.





26


***Allowances
      for Doubtful Accounts***





We
      perform credit evaluations of our customers’ financial condition. We maintain
      allowances for doubtful accounts for estimated losses resulting from the
      inability of our customers to make required payments. We record our bad debt
      expenses as selling, general and administrative expenses. When we become aware
      that a specific customer is unable to meet its financial obligations to us,
      for
      example, as a result of bankruptcy or deterioration in the customer’s operating
      results or financial position, we record a specific allowance to reflect the
      level of credit risk in the customer’s outstanding receivable balance. In
      addition, we record additional allowances based on certain percentages of our
      aged receivable balances. These percentages are determined by a variety of
      factors including, but not limited to, current economic trends, historical
      payment and bad debt write-off experience. We are not able to predict changes
      in
      the financial condition of our customers, and if circumstances related to our
      customers deteriorate, our estimates of the recoverability of our trade
      receivables could be materially affected and we may be required to record
      additional allowances. Alternatively, if we provide more allowances than we
      need, we may reverse a portion of such provisions in future periods based on
      our
      actual collection experience.





***Inventory
      Valuation***





We
      assess
      the value of our inventory on a quarterly basis and write-down those inventories
      that are obsolete or in excess of our forecasted usage to their estimated
      realizable value. Our estimates of realizable value are based upon our analysis
      and assumptions including, but not limited to, forecasted sales levels by
      product, expected product lifecycle, product development plans and future demand
      requirements. Our marketing department plays a key role in our excess review
      process by providing updated sales forecasts, managing product rollovers and
      working with manufacturing to maximize recovery of excess inventory. If actual
      market conditions are less favorable than our forecasts or actual demand from
      our customers is lower than our estimates, we may be required to record
      additional inventory write downs. If actual market conditions are more favorable
      than anticipated, inventory previously written down may be sold, resulting
      in
      lower cost of sales and higher income from operations than expected in that
      period.





***Patents
      and Trademarks***





Our
      patents and trademarks are stated at cost. The recoverability of patents and
      trademarks is re-evaluated each year based upon management’s expectations
      relating to the life of the technology and current competitive market
      conditions. We are amortizing these costs over the life of the respective patent
      or trademark.





***Stock-Based
      Compensation***





Effective
      January 1, 2006, we adopted SFAS No. 123(R), “Share-Based Payment” using the
      modified-prospective method. Under this method, compensation cost is recognized
      for all share-based payments granted, modified, or settled after January 1,
      2006, as well as for any unvested awards that were granted prior thereto.
      Compensation cost for unvested awards granted prior to January 1, 2006 is
      recognized using the same estimate of the grant-date fair value and the same
      attribution method used to determine the pro forma disclosures under SFAS No.
      123, “Accounting for Stock-Based Compensation.” Compensation costs for awards
      granted after January 1, 2006 is based on the estimated fair value of the awards
      on their grant date and is generally recognized over the required service
      period.





No
      stock
      options were granted in the first two quarters of 2006 and all stock options
      outstanding at December 31, 2005 were fully vested. As such, the adoption of
      SFAS No. 123(R) had no impact on our financial statements.





Prior
      to
      January 1, 2006, we accounted for stock-based compensation using the intrinsic
      value method prescribed in Accounting Principles Board Opinion No. 25,
      Accounting for Stock Issued to Employees, and related interpretations.
      Accordingly, compensation cost for stock options was measured as the excess,
      if
      any, of the estimated fair market value of our stock at the date of the grant
      over the amount an employee must pay to acquire the stock.





27


***Financial
      Instruments***





Financial
      instruments are initially recorded at their fair values at the time of issuance.
      Multiple financial instruments issued in a transaction are recorded at their
      relative fair values using Black Scholes and other valuation techniques. Those
      recorded as liabilities are remeasured at each reporting period with changes
      in
      fair value reported in operations. Financial instruments issued to settle
      obligations are valued at their fair value on the day of issuance. Differences
      between fair value and carrying value are recognized in operations.





**Off-Balance
      Sheet Arrangements**





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





28


**Special
      Note Regarding Forward-Looking Statements**





This
      Quarterly Report contains “forward-looking statements,” which include
      information relating to future events, future financial performance, strategies,
      expectations, competitive environment, regulation and availability of resources.
      These forward-looking statements include, without limitation, statements
      regarding





•
            expectations
                as to market acceptance of our
                products,





•
            expectations
                as to revenue growth and earnings,





•
            the
                time by which certain objectives will be
                achieved,





•
            proposed
                new products,





•
            our
                ability to protect our proprietary and intellectual property
                rights,





•
            statements
                concerning projections, predictions, expectations, estimates or forecasts
                as to our business, financial and operational results and future
                economic
                performance, and





•
            statements
                of management’s goals and objectives and other similar expressions
                concerning matters that are not historical
                facts.





Words
      such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates”
and similar expressions, as well as statements in future tense, identify
      forward-looking statements.





Forward-looking
      statements should not be read as a guarantee of future performance or results,
      and will not necessarily be accurate indications of the times at, or by which,
      such performance or results will be achieved. Forward-looking information is
      based on information available at the time and/or management’s good faith belief
      with respect to future events, and is subject to risks and uncertainties that
      could cause actual performance or results to differ materially from those
      expressed in the statements. Important factors that could cause such differences
      include, but are not limited to





•
            industry
                competition, conditions, performance and
                consolidation,





•
            legislative
                and/or regulatory developments,





•
            the
                effects of adverse general economic conditions, both within the United
                States and globally,





•
            any
                adverse economic or operational repercussions from recent terrorist
                activities, any government response thereto and any future terrorist
                activities, war or other armed conflicts,
                and





•
            other
                factors described in the “Risk Factors” contained in Exhibit 99.1 to our
                Annual Report on Form 10-KSB for the year ended December 31,
                2006.





Forward-looking
      statements speak only as of the date the statements are made. We assume no
      obligation to update forward-looking statements to reflect actual results,
      changes in assumptions or changes in other factors affecting forward-looking
      information except to the extent required by applicable securities laws. If
      we
      update one or more forward-looking statements, no inference should be drawn
      that
      we will make additional updates with respect thereto or with respect to other
      forward-looking statements.




**Item
      3. Controls and Procedures**





We
      performed an evaluation under the supervision and with the participation of
      our
      management, including our chief executive officer and chief financial officer,
      of the effectiveness of our disclosure controls and procedures (as defined
      in
      Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
      amended) as of March 31, 2007. A control system, no matter how well designed
      and
      operated, can provide only reasonable, not absolute, assurance that it will
      detect or uncover failures within our company to disclose material information
      otherwise required to be set forth in our periodic reports. Following the
      evaluation described above, our management, including our chief executive
      officer and chief financial officer, concluded that based on the evaluation
      our
      disclosure controls and procedures were effective at that time.





There
      has
      been no change in our internal control over financial reporting (as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
      amended) that occurred in the quarter ended March 31, 2007, that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting.





29


**PART
      II. OTHER INFORMATION**




**Item
      1. Legal Proceedings**





On
      September 12, 2005, we filed a lawsuit against Toyota Motor Corporation, Toyota
      Motor Sales U.S.A., Inc. and Toyota Motor Manufacturing North America in the
      United States District Court for the Middle District of Florida, Tampa Division,
      Tampa, Florida for infringement of our Electric Wheel patent. In the lawsuit
      we
      allege that the hybrid transmission drive in the Toyota Prius and Highlander
      infringes a number of claims contained in our U.S. Patent No. 5,067,932 and
      we
      are asking for an injunction barring further infringement as well as damages
      for
      the unauthorized use of our patent by Toyota and its affiliates.





On
      January 10, 2006, we filed a complaint with the ITC in Washington D.C. seeking
      an exclusion order prohibiting the importation of infringing technology. On
      or
      about February 8, 2006, the ITC instituted an investigation based on our
      complaint. The ITC acts as an administrative investigative body to determine,
      among other things, whether or not goods imported into the United States
      infringe U.S. patents. If we are successful in our ITC action, Toyota could
      be
      prohibited from importing into the United States infringing combination motor
      and transmission systems and those products containing such systems, including
      the Toyota Prius and Highlander models. On September 19, 2006, we expanded
      this
      claim to include the Toyota Camry and Lexus hybrid models.





The
      ITC
      held a hearing on our complaint from October 30 through November 3, 2006. On
      February 13, 2007, the ITC Administrative Law Judge who conducted the hearing
      issued a final initial determination in favor of Toyota. In the order, the
      Administrative Law Judge decided that the hybrid transmission drive in the
      Toyota Prius and Highlander vehicles did not infringe Claim 7 in our U.S. Patent
      No. 5,067,932 and that we had not satisfied certain other legal requirements
      that would support an exclusion order against Toyota. On review of the final
      initial determination, the full ITC decided to take no position on the
      Administrative Law Judge’s findings concerning the economic prong of the
      domestic industry requirement. The remainder of the initial determination became
      the ITC final determination. On April 30, 2007 the ITC terminated the
      investigation with a finding of no violation of Section 337 of the Tariff Act
      of
      1930. We are entitled to appeal the decision to the Court of Appeals for the
      Federal Circuit. Until the ITC case is completed, the patent infringement action
      brought in the United States District Court for the Middle District of Florida,
      Tampa Division, is stayed.





Although
      the cost of litigation in these matters is often large, we have arranged
      financing from sources outside our company to fully fund the litigation to
      its
      conclusion. We provide more information about the arrangements we have made
      to
      fund this litigation in “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations - Liquidity and Capital Resources”
above.




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





**(a)
      Recent Sales of Unregistered Securities**





On
      February 5, 2007, we issued an aggregate of 1,741,881 shares of common stock
      to
      the holders of our Series C preferred stock upon conversion of approximately
      1,741,889 shares of Series C preferred stock into common stock. The sale of
      these securities was determined to be exempt from registration under Section
      4(2) of the Securities Act of 1933 as transactions by an issuer not involving
      a
      public offering.




In
      connection with a consulting arrangement with David B. Stout Associates, LLC,
      Stout Associates has agreed to provide certain marketing consulting services
      to
      us in exchange for a consulting fee of $1,500 per day, subject to possible
      discounts for long term assignments. Stout Associates has agreed to accept
      payment for up to 1/3 of its chargeable time in the form of shares of common
      stock of the Company. On February 5, 2007, we issued 513 shares of common stock
      to David Stout in lieu of $1,437.50 in fees. On March 8, 2007, we issued 2,632
      shares of common stock to David Stout in lieu of $1,500 in fees. The sale of
      these securities was determined to be exempt from registration under Section
      4(2) of the Securities Act of 1933 as transactions by an issuer not involving
      a
      public offering.




30


On
      February 23, 2007, we issued 290,000 shares of common stock to Ardour Capital
      Investments, LLC in partial payment of fees for services rendered pursuant
      to a
      Financial Advisory Agreement dated September 28, 2006. On the same date, we
      issued 46,296 shares of common stock to Davis & Gilbert LLP, our counsel, in
      lieu of a $100,000 cash retainer. The sale of these securities was determined
      to
      be exempt from registration under Section 4(2) of the Securities Act of 1933
      as
      transactions by an issuer not involving a public offering.





On
      January 23, 2007, we sold an aggregate of $5,350,000 principal amount of
      Variable Rate Self-Liquidating Senior Secured Convertible Debentures due March
      18, 2008 to 11 institutional investors. As a part of the sale of the Debentures,
      we issued common stock purchase warrants to the purchasers of the Debentures
      giving them the right to purchase up to an aggregate of 2,006,250 shares of
      our
      common stock at an exercise price of $2.00 per share. The Debentures provide
      that while any of the Debentures are outstanding we may not, among other things,
      pay cash dividends or distributions on any of our equity securities or enter
      into any agreement to do so without the prior written consent of an agent for
      the holders of the Debentures. The sale of these securities was determined
      to be
      exempt from registration under Section 4(2) of the Securities Act of 1933 as
      transactions by an issuer not involving a public offering.





In
      December 2006, we entered into an agreement with the holders of our senior
      secured promissory notes having an aggregate principal amount of $1,712,085
      to
      extend the maturity date of the notes from January 15, 2007 to September 30,
      2007. In consideration of the noteholders agreeing to extend the maturity date
      of the notes, at the noteholder’s option, we agreed to either (i) issue shares
      of common stock in an amount equal to 10,000 shares for each $100,000 in
      principal amount of notes, or fraction thereof, held by such noteholder or
      (ii)
      pay such noteholder an amount in cash equal to 5% of the principal amount of
      the
      notes, or fraction thereof, held by such noteholder in lieu of such shares.
      On
      March 8, 2007, we issued 79,009 shares of common stock to those noteholders
      who
      elected to receive shares. These transactions were deemed to be exempt from
      registration under Section 4(2) of the Securities Act as transactions by an
      issuer not involving a public offering.





**(b)
      Use of Proceeds**





Not
      applicable.





**(c)
      Repurchase of Securities**





We
      did
      not repurchase any shares of our common stock during the first quarter of
      2007.





31




**Item
                6.****Exhibits****Exhibit
                No.**
            
            **Description**3.10
            
            Certificate
                of Elimination of Series C Preferred Stock. (1)10.1
            
            Securities
                Purchase Agreement dated as of January 17, 2007 among Solomon
                Technologies, Inc. and each purchaser identified on the signature
                pages
                thereto. (2)10.2
            
            Form
                of Variable Rate Self-Liquidating Senior Secured Convertible Debentures.
                (2)10.3
            
            Registration
                Rights Agreement, dated as of January 17, 2007, among Solomon
                Technologies, Inc. and each purchaser identified on the signature
                pages
                thereto. (2)10.4
            
            Form
                of Common Stock Warrant. (2)10.5
            
            Security
                Agreement dated as of January 17, 2007 among Solomon Technologies,
                Inc.
                and each purchaser identified on the signature pages thereto.
                (2)10.6
            
            Redemption
                and Conversion Agreement dated as of January 17, 2007 among Solomon
                Technologies, Inc. and the holders of Series C preferred stock.
                (2)10.7
            
            Employment
                Agreement, dated as of January 27, 2007, by and between Solomon
                Technologies, Inc. and Gary G. Brandt. (1)10.8
            
            Option
                Agreements, dated as of February 5, 2007, by and between Solomon
                Technologies, Inc. and Gary G. Brandt.(3)10.9
            
            Stock
                Restriction Agreement, dated as of February 5, 2007, by and between
                Solomon Technologies, Inc. and Gary G. Brandt. (3)31.1
            
            Certification
                by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            
            Certification
                by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.32.1
            
            Certification
                by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.32.2
            
            Certification
                by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.





(1)
            Incorporated
                by reference from Amendment No. 2 to the Registration Statement on
                Form
                SB-2, File No. 333-13820, filed on February 12, 2007.(2)
            Incorporated
                by reference from the Current Report on Form 8-K filed on January
                18,
                2007.(3)
            Incorporated
                by reference from Amendment No. 4 to the Registration Statement on
                Form
                SB-2, File No. 333-13820, filed on May 9,
                2007.




32


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities and Exchange Act of 1934,
      as amended, Solomon Technologies, Inc. has duly caused this report to be signed
      on its behalf by the undersigned thereunto duly authorized.





Dated:
      August 17, 2007





**SOLOMON
      TECHNOLOGIES, INC.**











By: /s/
      Gary G. Brandt


Gary
      G.
      Brandt


Chief
      Executive Officer


(principal
      executive officer)











By: /s/
      Samuel F. Occhipinti


Samuel
      F.
      Occhipinti


Chief
      Financial Officer


(principal
      financial and accounting officer)








33


**Exhibit
      Index**





**Exhibit
                No.**
            
            **Description**31.1
            
            Certification
                by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            
            Certification
                by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.32.1
            
            Certification
                by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.32.2
            
            Certification
                by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.





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