**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**


(Mark
      One)





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





For
      the
      quarterly period ended September 30, 2008


or





 ̈
            Transition
                Report pursuant to 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 registrant as specified in its charter)




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





**14
      Commerce Drive**


**Danbury,
      CT 06810**


(Address
      of principal executive offices)





**(203)
      748-7001**


Issuer’s
      telephone number





Indicate
      by check mark whether the registrant: (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes ý No  ̈





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company. *See* the
      definitions of "large accelerated filer," "accelerated filer" and "smaller
      reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934.




Large
                accelerated filero
            
            Accelerated
                filero
            
            Non-accelerated
                filero
              (Do
                not check if a smaller
              reporting
                company)
            
            Smaller
                reporting companyý





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





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date: Common
      Stock, $.001 Par Value, 216,302,263 shares outstanding at November 19,
      2008.











**INDEX**





**Page**
              **Number****PART
                I. FINANCIAL INFORMATION**Item
                1. Financial Statements
            
            
            3Condensed
                Consolidated Balance Sheets at September 30, 2008 (Unaudited) and
                December
                31, 2007
            
            
            3Condensed
                Consolidated Statements of Operations - Three months and nine months
                ended
                September 30, 2008 and 2007 (Unaudited)
            
            
            4Condensed
                Consolidated Statements of Cash Flows - Nine months ended September
                30,
                2008 and 2007 (Unaudited)
            
            
            5Condensed
                Consolidated Statement of Changes in Capital Deficiency at September
                30,
                2008 (Unaudited)
            
            
            6Notes
                to Condensed Consolidated Financial Statements (Unaudited)
            
            
            7Item
                2.Management’s
                Discussion and Analysis of Financial Condition and Results of 
                Operations
            
            
            25Item
                4T. Controls
                and Procedures
            
            
            32**PART
                II. OTHER INFORMATION**
            
            
            36Item
                1. Legal Proceedings
            
            
            36Item
                1A. Risk Factors
            
            
            36Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            
            36Item
                3. Defaults Upon Senior Securities
            
            
            36Item
                4. Submission of Matters to a Vote of Security Holders
            
            
            37Item
                5. Other Information
            
            
            37Item
                6. Exhibits
            
            
            37**SIGNATURE
                PAGE**
            
            
            40





2


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




**ITEM
      1****.
      Financial Statements**


**Solomon
        Technologies, Inc.**
 Condensed
        Consolidated Balance Sheets
  **September
                  30,**
              
              **December
                  31,****2008**
              
              **2007**(Unaudited)AssetsCurrent
                  assetsCash
              
              $
              1,050,040
              
              $
              425,401Accounts
                  receivable, net of allowance for doubtful accounts
              
              
              952,277
              
              
              1,435,754Inventories,
                  net
              
              
              1,516,158
              
              
              1,962,817Due
                  from related parties
              
              
              112,595
              
              
              54,041Prepaid
                  expenses and other current assets
              
              
              315,638
              
              
              134,933Total
                  current assets
              
              
              3,946,708
              
              
              4,012,946Noncurrent
                  assetsProperty
                  and equipment, net
              
              
              1,664,383
              
              
              1,712,618Goodwill
              
              
              1,625,576
              
              
              1,625,576Intangible
                  assets, net
              
              
              1,353,764
              
              
              1,717,011Deferred
                  debt costs, net
              
              
              22,108
              
              
              453,2254,665,831
              
              
              5,508,430Total
                  Assets
              
              $
              8,612,539
              
              $
              9,521,376Liabilities
                  and Capital DeficiencyCurrent
                  liabilitiesRevolving
                  note payable to bank
              
              $
              1,106,811
              
              $
              1,100,000Accounts
                  payable
              
              
              1,369,192
              
              
              1,402,546Accrued
                  compensation (including $2,002,775 and $2,137,851 past
                  due)
              
              
              2,192,550
              
              
              2,442,150Other
                  accrued expenses
              
              
              1,785,184
              
              
              1,304,203Notes
                  payable (including $738,986 and $0 past due)
              
              
              738,986
              
              
              564,566Notes
                  payable to related parties (including $4,531,931 and $125,000 past
                  due)
              
              
              4,531,931
              
              
              4,706,931Convertible
                  debentures payable (net of debt discount of $575,815 and
                  $168,506)
              
              
              2,163,331
              
              
              4,815,278Total
                  current liabilities
              
              
              13,887,985
              
              
              16,335,674Capital
                  DeficiencyPreferred
                  stock, par value $0.001 per share;authorized
                  20,000,000 shares; 7,450,000 sharesavailable;
                  2,400 shares designated as series D convertiblepreferred
                  stock; 1,500 and zero shares issued and outstanding
              
              
              2
              
              
              -at
                  September 30, 2008 amd December 31, 2007 respectivelyCommon
                  stock, par value $0.001 pershare;
                  authorized 500,000,000 shares;173,610,622
                  and 48,492,569 shares issued and outstanding
              
              
              173,611
              
              
              48,492at
                  September 30, 2008 and December 31, 2007 respectivelyAdditional
                  paid-in capital
              
              
              55,037,774
              
              
              48,503,156Accumulated
                  deficit
              
              
              (60,486,833
              )
              
              (55,365,946
              )Capital
                  Deficiency
              
              
              (5,275,446
              )
              
              (6,814,298
              )Total
                  Liabilities and Capital Deficiency
              
              $
              8,612,539
              
              $
              9,521,376
 
 See
        accompanying notes to condensed consolidated financial statements.
 
  3
  **Solomon
        Technologies, Inc.**
 Condensed
        Consolidated Statements of Operations
 (Unaudited)
  **Three
                  Months Ended**
                **September
                  30,**
              
              **Nine
                  Months Ended**
                **September
                  30,****2008**
              
              **2007**
              
              **2008**
              
              **2007**Net
                  sales
              
              $
              2,376,527
              
              $
              2,134,093
              
              $
              7,421,953
              
              $
              5,204,103Cost
                  of goods sold
              
              
              1,464,800
              
              
              1,161,920
              
              
              4,687,211
              
              
              2,777,865Gross
                  profit
              
              
              911,727
              
              
              972,173
              
              
              2,734,742
              
              
              2,426,238Operating
                  expenses:Selling,
                  general and administrative
              
              
              1,522,565
              
              
              1,980,367
              
              
              3,749,454
              
              
              4,527,105Research
                  and development
              
              
              310,808
              
              
              310,108
              
              
              1,009,225
              
              
              869,2341,833,373
              
              
              2,290,475
              
              
              4,758,679
              
              
              5,396,339Operating
                  loss
              
              
              (921,646
              )
              
              (1,318,302
              )
              
              (2,023,937
              )
              
              (2,970,101
              )Other
                  income (expenses)Interest
                  expense
              
              
              (865,626
              )
              
              (1,566,812
              )
              
              (3,063,137
              )
              
              (6,442,812
              )Other
                  income (expenses)
              
              
              2,142
              
              
              15,111
              
              
              (33,813
              )
              
              33,795Loss
                  on extinguishment of redeemablepreferred
                  stock and other debt
              
              
              -
              
              
              (2,496,544
              )
              
              -
              
              
              (2,496,544
              )(863,484
              )
              
              (4,048,245
              )
              
              (3,096,950
              )
              
              (8,905,561
              )Net
                  loss
              
              
              (1,785,130
              )
              
              (5,366,547
              )
              
              (5,120,887
              )
              
              (11,875,662
              )Preferred
                  stock dividends
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,413,031
              )Loss
                  applicable to commonstockholders
              
              $
              (1,785,130
              )
              $
              (5,366,547
              )
              $
              (5,120,887
              )
              $
              (13,288,693
              )Basic
                  and diluted net loss percommon
                  share
              
              $
              (0.01
              )
              $
              (0.13
              )
              $
              (0.05
              )
              $
              (0.35
              )Weighted
                  average common sharesoutstanding
                  - basic and diluted
              
              
              147,821,899
              
              
              42,518,577
              
              
              99,351,261
              
              
              38,418,550
 
 See
        accompanying notes to condensed consolidated financial statements.
 
  4
  **Solomon
        Technologies, Inc.**
 Condensed
        Consolidated Statement of Changes in Capital Deficiency
 (Unaudited)
  **Series
                  D****Convertible**
              
              
              
              
              
              **Additional****Preferred
                  Stock**
              
              **Common
                  Stock**
              
              **Paid-In**
              
              **Accumulated****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Total****Balance
                  at January 1, 2008**
              
              
              **-**
              
              **$**
              **-**
              
              
              **48,492,569**
              
              **$**
              **48,492**
              
              **$**
              **48,503,156**
              
              
              **($55,365,946**
              **)**
              
              **($6,814,298**
              **)**Issuance
                  of Series D convertible preferred stock
              
              
              300
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              250,000
              
              
              **-**
              
              
              250,000Issuance
                    of Series D convertible preferred stock associated with issuance
                    of
                    convertible debentures
              
              
              1,200
              
              
              2
              
              
              **-**
              
              
              **-**
              
              
              489,737
              
              
              **-**
              
              
              489,739Repricing
                  of common stock warrants
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              28,288
              
              
              **-**
              
              
              28,288Cashless
                  exercise of common stock warrants
              
              
              **-**
              
              
              **-**
              
              
              2,877,189
              
              
              2,877
              
              
              (2,877
              )
              
              **-**
              
              
              -Common
                  shares issued as inducement to exercise common stock
                  warrants
              
              
              **-**
              
              
              **-**
              
              
              3,900,001
              
              
              3,900
              
              
              113,719
              
              
              **-**
              
              
              117,619Common
                  shares issued as payment for convertible debt and interest
              
              
              **-**
              
              
              **-**
              
              
              103,183,265
              
              
              103,184
              
              
              4,868,972
              
              
              **-**
              
              
              4,972,156Common
                  shares issued as incentive for debenture amendment and
                  waivers
              
              
              **-**
              
              
              **-**
              
              
              432,533
              
              
              433
              
              
              51,217
              
              
              **-**
              
              
              51,650Common
                  shares issued for fees and services
              
              
              **-**
              
              
              **-**
              
              
              7,195,065
              
              
              7,195
              
              
              300,669
              
              
              **-**
              
              
              307,864Common
                  shares issued to employees and directors as compensation
              
              
              **-**
              
              
              **-**
              
              
              7,600,000
              
              
              7,600
              
              
              502,302
              
              
              **-**
              
              
              509,902Stock
                  grants to employees
              
              
              **-**
              
              
              **-**
              
              
              40,000
              
              
              40
              
              
              53,368
              
              
              **-**
              
              
              53,408Forfeitures
                  of stock grant to employee
              
              
              **-**
              
              
              **-**
              
              
              (110,000
              )
              
              (110
              )
              
              (138,128
              )
              
              **-**
              
              
              (138,238
              )Stock
                  option grants and forfeitures
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              17,351
              
              
              **-**
              
              
              17,351Net
                  loss
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              (5,120,887
              )
              
              (5,120,887
              )**Balance
                  at September 30, 2008**
              
              
              1,500
              
              $
              2
              
              
              173,610,622
              
              $
              173,611
              
              $
              55,037,774
              
              $
              (60,486,833
              )
              $
              (5,275,446
              )
 
 See
        accompanying notes to condensed consolidated financial statements.
 
  5
  **Solomon
        Technologies, Inc.**
 Condensed
        Consolidated Statements of Cash Flows
 (Unaudited)
  **Nine
                  Months Ended September 30,****2008**
              
              **2007****Operating
                  activities**Net
                  loss
              
              $
              (5,120,887
              )
              $
              (11,875,662
              )Adjustments
                  to reconcile net loss to cash used in operating activitiesLoss
                  on extinguishment of redeemable preferred stockand
                  other debt
              
              
              -
              
              
              2,496,544Common
                  shares issued to employees and directors as compensation
              
              
              425,072
              
              
              1,142,783Stock
                  option grants
              
              
              17,351
              
              
              -Common
                  stock and warrants issued for services
              
              
              307,864
              
              
              207,614Accretion
                  and amortization of debt costs included ininterest
                  expense
              
              
              2,436,665
              
              
              5,833,671Loss
                  on disposal of assets
              
              
              -
              
              
              1,226Depreciation
              
              
              118,429
              
              
              43,389Amortization
              
              
              363,247
              
              
              308,940Change
                  in operating assets and liabilitiesAccounts
                  receivable, net
              
              
              483,477
              
              
              (52,854
              )Inventories,
                  net
              
              
              446,659
              
              
              (55,593
              )Prepaid
                  expenses and other current assets
              
              
              (180,704
              )
              
              (72,011
              )Accounts
                  payable and accrued expenses
              
              
              417,446
              
              
              959,578Net
                  cash used in operating activities
              
              
              (285,381
              )
              
              (1,062,375
              )**Investing
                  Activities**Purchase
                  of certain assets and liabilities of Deltron Inc. andsubsidiary,
                  net of cash received
              
              
              -
              
              
              (2,508,874
              )Deferred
                  acquisition costs
              
              
              -
              
              
              (132,109
              )Purchase
                  of equipment
              
              
              (70,194
              )
              
              (104,924
              )Proceeds
                  from sale of equipment
              
              
              -
              
              
              300Net
                  cash used in investing activities
              
              
              (70,194
              )
              
              (2,745,607
              )**Financing
                  Activities**Proceeds
                  from issuance of notes payable to related parties
              
              
              -
              
              
              2,750,000Repayments
                  of notes payable to related parties
              
              
              (75,000
              )
              
              (40,000
              )Proceeds
                  from revolving note payable
              
              
              6,811
              
              
              250,000Proceeds
                  from issuance of converible debentures
              
              
              965,000
              
              
              5,635,913Repayments
                  of notes payable
              
              
              (45,000
              )
              
              (526,150
              )Proceeds
                  from issuance of preferred stock
              
              
              250,000
              
              
              -Redemption
                  of preferred stock
              
              
              -
              
              
              (3,350,020
              )Proceeds
                  from Rule 16B
              
              
              -
              
              
              32,950Repayments
                  from related parties
              
              
              -
              
              
              27,754Advances
                  to related parties
              
              
              (58,554
              )
              
              -Debt
                  issuance costs
              
              
              (63,043
              )
              
              (187,638
              )Repayment
                  of capital lease obligations
              
              
              -
              
              
              (9,903
              )Net
                  cash provided by financing activities
              
              
              980,214
              
              
              4,582,906**Change
                  in cash**
              
              
              624,639
              
              
              774,924**Cash
                  at beginning of period**
              
              
              425,401
              
              
              97,777**Cash
                  at end of period**
              
              $
              1,050,040
              
              $
              872,701Supplemental
                  disclosure:Cash
                  paid for interest
              
              **$**
              **81,580**
              
              **$**
              **152,260**
 
 
 See
        accompanying notes to condensed consolidated financial statements.
 
  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”, “Solomon” or the
“Company”) has been the development, engineering, manufacturing, licensing and
        sale of electric power drive systems in the marine, industrial and automotive
        markets. In August 2006, the Company acquired Technipower LLC, a manufacturer
        of
        power supplies and related equipment for the defense, aerospace and commercial
        markets. On September 5, 2007, the Company, through its wholly-owned subsidiary,
        Deltron LLC (formerly known as Del-Inc Acquisition LLC), acquired substantially
        all of the assets and liabilities of Deltron Inc., a North Wales, Pennsylvania
        based manufacturer of power supplies and related equipment with manufacturing
        operations in Reynosa, Mexico (See Note 4). As a result of these acquisitions,
        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 and Deltron LLC.
 
 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 has not generated cash from
        its
        operating activities for several years. For the nine-months ended September
        30,
        2008, the Company had a net loss of $5,120,887 and used cash of $285,381
        in
        operating activities. As of September 30, 2008, the Company has a working
        capital deficiency of $9,941,277. In addition, the Company is delinquent
        for the
        payment of payroll taxes (Note 9), notes payable of $738,986, notes payable
        (Note 7) to related parties of $4,531,931 (Note 7) , and compensation
        to certain employees. These delinquencies have caused the Company to be in
        default of certain loan agreements for which the Company has not obtained
        waivers and therefore the related amounts are classified as current as of
        September 30, 2008 (Note 7).These conditions raise substantial doubt 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 cash flow
        from
        operations. 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 and is currently
        in
        discussion with certain of its lenders regarding the defaults and various
        note
        maturities. 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 condensed consolidated balance sheet as of September 30, 2008
        and
        the condensed consolidated condensed statements of operations for the three
        and
        nine month periods ended September 30, 2008 and 2007, cash flows for the
        nine
        month periods ended September 30, 2008 and 2007 and changes in capital
        deficiency for the nine month period ended September 30, 2008 have not been
        audited, but have been prepared in conformity with accounting principles
        generally accepted in the United States of America for interim financial
        information and with the instructions to Form 10-Q and Regulation S-X of
        the Securities and Exchange Commission (“SEC”). The Consolidated Condensed
        Balance Sheet as of December 31, 2007 has been derived from audited financial
        statements. Certain information and note disclosures normally included in
        annual
        financial statements prepared in accordance with generally accepted accounting
        principles in the United States of America have been condensed or omitted
        pursuant to those rules and regulations, although the company believes that
        the
        disclosures made are adequate to make the information not misleading. In
        the opinion of management, this interim information includes all material
        adjustments, which are of a normal and recurring nature, 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,
        2007 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 that may be expected for any other interim period or for the full
        year.
 
 7
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Principles
        of consolidation**
 
 The
        condensed consolidated financial statements include the accounts of the Company
        and its wholly-owned subsidiaries, Technipower LLC (“Technipower”) and Deltron
        LLC (“Deltron”), from their dates of acquisition. All material intercompany
        accounts and transactions have been eliminated in consolidation.
 
 **Use
        of Estimates**
 
 The
        preparation of the Company’s condensed consolidated financial statements in
        conformity with accounting principles generally accepted in the United States
        of
        America and pursuant to the rules and regulations of the SEC requires management
        to make estimates and assumptions that affect the reported amount of assets
        and
        liabilities at the date of the financial statements and the reported amount
        of
        net revenue and expenses during the reporting period. The Company bases
        estimates on historical experience and on various assumptions about the future
        that are believed to be reasonable based on available information. The Company’s
        reported financial position or results of operations may be materially different
        under different conditions or when using different estimates or assumptions,
        particularly with respect to significant accounting policies. In the event
        that
        estimates or assumptions prove to differ from actual results, adjustments
        are
        made in subsequent periods to reflect more current information.
  Estimates
        are primarily used in determining the valuation of goodwill and other intangible
        assets and their impairment, provisions for losses on accounts receivable,
        allowances for inventory obsolescence, useful lives of property, equipment
        and
        intangible assets, accounting for stock-based transactions and certain accrued
        liabilities.
 
 **Revenue
        Recognition**
 
 The
        Company recognizes revenue when it is realized or realizable and earned.
        The
        Company considers 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 the Company has
        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.
 
 **Stock-based
        Compensation**
 
 Commencing
        January 1, 2006, the Company adopted Statement of Financial Accounting Standards
        No. 123R, “Share Based Payment” (“SFAS 123R”), which requires all share based
        payments, including grants of stock options, to be recognized in the income
        statement as an operating expense, based on their fair values which are
        estimated on the date of grant using the Black-Scholes option-pricing
        model.
 
 8
 **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  Accounting Standards  Board Interpretation  No. 48
        "Accounting  for Uncertainty in Income Taxes" ("FIN 48"), an interpretation
        of SFAS No. 109 ("SFAS 109"), effective January 1, 2007. The Company has
        not
        completed its evaluation of net operating loss carryforwards and the related
        full valuation allowance. Additionally the Company may be subject to Section
        382
        limitations of the Internal Revenue Code in connection with a change in
        ownership. The management of the Company believes these factors will not
        have a
        significant impact on the financial position of the Company since the Company
        has provided a full valuation allowance. As the Federal income tax returns
        remain subject to normal review and adjustment for up to three years from
        the
        filing date, the Company's, 2004, 2005, 2006 and 2007 returns remain open
        and
        available to the Internal Revenue Service for the purpose of review and possible
        adjustment. Management believes that an audit or review of the prior years,
        would result in no material tax liability and therefore no income tax penalties
        or interest accruals have been recognized.
  **Loss
        per Share**
 
 Loss
        per
        share is computed by dividing the loss applicable to common shareholders
        by the
        weighted average number of common shares outstanding. At September 30, 2008
        and
        2007, the following securities were not included in the computation of diluted
        net loss per share, on an as converted / exercised basis as their effect
        would
        have been anti-dilutive:
  *2008*
              
              *2007*Options
                  to purchase common stock
              
              
              29,770,000
              
              
              2,132,000Warrants
                  to purchase common stock
              
              
              386,000
              
              
              3,392,000Series
                  D Convertible Preferred Stock
              
              
              30,000,000
              
              
              -Convertible
                  debentures (a)
              
              
              7,826,000
              
              
              14,339,000Notes
                  payable (convertible)
              
              
              7,060,000
              
              
              5,234,00075,042,000
              
              
              25,097,000
 
 The
        convertible debentures are reflected above at the conversion price of $0.35
        per
        share under the terms of the debentures. The Company may make monthly
        redemptions in cash or shares of common stock at its option (Note 7). During
        the
        first and second quarters of 2008 the Company has made the required monthly
        redemptions in common stock shares.
 
 (a)
              Based
                  on the September 30, 2008 market price of the Company’s common stock
                  shares, the Company would need to issue approximately 449 million
                  shares
                  to redeem the entire outstanding principal balance of the convertible
                  debentures at September 30, 2008. As of September 30, 2008, the
                  Company
                  had approximately 326 million shares available to be issued. Subsequent
                  to
                  September 30, 2008, the Company has made additional redemptions
                  by issuing
                  shares of common stock .
  **Recent
        Accounting Pronouncements Adopted**
 
 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 became effective
        January 1, 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 accounting principles generally accepted
        in the United States of America. The fair value measurement election is
        irrevocable and subsequent changes in fair value must be recorded in earnings.
        The Company has not elected to fair value its financial assets and liabilities
        under SFAS No. 159 and therefore the adoption of this Statement did not have
        a
        material effect on the condensed consolidated financial statements.
  9
 In
        September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”
which became effective January 1, 2008 except as amended by FSP FAS 157-1
        and FSP FAS 157-2 as described below. This Statement defines fair value,
        establishes a framework for measuring fair value and expands disclosures
        about
        fair value measurements; however, it does not require any new fair value
        measurements. The provisions of SFAS No. 157 were applied prospectively to
        fair value measurements and disclosures for financial assets and financial
        liabilities and nonfinancial assets and nonfinancial liabilities recognized
        or
        disclosed at fair value in the financial statements on at least an annual
        basis
        beginning in the first quarter of 2008. In February 2008, the FASB issued
        FASB Staff Position (FSP) Financial Accounting Standard (FAS) 157-1,
“Application of FASB Statement No. 157 to FASB Statement No. 13 and
        Its Related Interpretive Accounting Pronouncements That Address Leasing
        Transactions,” and FSP FAS 157-2, “Effective Date of FASB Statement
        No. 157.” FSP FAS 157-1 removes leasing from the scope of SFAS
        No. 157, “Fair Value Measurements.” FSP FAS 157-2 delays the effective date
        of SFAS No. 157 from 2008 to 2009 for all nonfinancial assets and
        nonfinancial liabilities, except those that are recognized or disclosed at
        fair
        value in the financial statements on a recurring basis (at least annually).
        The
        adoption of this SFAS No. 157 did not have a material effect on the condensed
        consolidated financial statements.
  **Recently
        Issued Accounting Pronouncements**
 
 In
        March 2008, the FASB issued SFAS No. 161, “Disclosures about
        Derivative Instruments and Hedging Activities-an amendment of FASB Statement
        No. 133.” SFAS No. 161 expands the current disclosure requirements of
        SFAS No. 133, “Accounting for Derivative Instruments and Hedging
        Activities,” such that entities must now provide enhanced disclosures on a
        quarterly basis regarding how and why the entity uses derivatives; how
        derivatives and related hedged items are accounted for under SFAS No. 133
        and how derivatives and related hedged items affect the entity’s financial
        position, performance and cash flow. Pursuant to the transition provisions
        of
        the Statement, the company will adopt SFAS No. 161 in fiscal year 2009 and
        will present the required disclosures in the prescribed format on a prospective
        basis. This Statement is not expected to have a material effect on the
        Consolidated Financial Statements.
  In
        December 2007, the FASB issued SFAS No. 141(R), “Business
        Combinations,” which will become effective in 2009 via prospective application
        to new business combinations. This Statement requires that the acquisition
        method of accounting be applied to a broader set of business combinations,
        amends the definition of a business combination, provides a definition of
        a
        business, requires an acquirer to recognize an acquired business at its fair
        value at the acquisition date and requires the assets and liabilities assumed
        in
        a business combination to be measured and recognized at their fair values
        as of
        the acquisition date (with limited exceptions). The company will adopt this
        Statement in fiscal year 2009 and its effects on future periods will depend
        on
        the nature and significance of any acquisitions subject to this
        statement.
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
        in Consolidated Financial Statements — an amendment of ARB No. 51.” This
        Statement requires that the noncontrolling interest in the equity of a
        subsidiary be accounted for and reported as equity, provides revised guidance
        on
        the treatment of net income and losses attributable to the noncontrolling
        interest and changes in ownership interests in a subsidiary and requires
        additional disclosures that identify and distinguish between the interests
        of
        the controlling and noncontrolling owners. Pursuant to the transition provisions
        of SFAS No. 160, the company will adopt the Statement in fiscal year 2009
        via retrospective application of the presentation and disclosure requirements.
        The company does not expect the adoption of this Statement to have a material
        effect on the Consolidated Financial Statements.
   10
 **NOTE
        3 - STOCK BASED COMPENSATION**
 
 **Stock
        Options**
 
 Stock-based
        compensation expense related to options to purchase the Company’s common shares
        granted to employees for the nine month period ended September 30, 2008 and
        2007
        was $17,351 and $1,142,783 respectively. Such compensation expense for the
        nine
        months ended September 30, 2008 was affected by a forfeiture of 500,000 options
        granted to the Company’s former CEO (Note 6), which amounted to
        ($370,920).
 
 A
        summary
        of the changes in stock options outstanding for the nine months ended September
        30, 2008 is as follows:
  WeightedAverageShares
              
              Exercise
                  PriceOutstanding
                  at January 1, 2008
              
              
              1,770,335
              
              $
              1.43Granted
                  (all to officers, directors and advisory board members)
              
              
              28,750,000
              
              
              .03Forfeited
              
              
              (750,000
              )
              
              1.95Outstanding
                  at September 30, 2008
              
              
              29,770,335
              
              
              .06
  The
        intrinsic value of outstanding and exercisable options was $0 at September
        30,
        2008. Total compensation expense related to non-vested awards not yet recognized
        is $75,332 and the weighted average period over which it is expected to be
        recognized is 0.89 years. Management expects that all non-vested awards will
        vest.
 
 The
        following table summarizes the Company's stock options at September 30, 2008:
  Options
                  Outstanding
              
              Options
                  ExercisableWeighted
              
              Weighted
              
              
              
              WeightedAverage
              
              Average
              
              
              
              AverageRange of
              
              
              
              Remaining
              
              Exercise
              
              
              
              ExerciseExercise
                  Prices
              
              Number
              
              Life
              
              Price
              
              Number
              
              Price$.01
                  to$.20
              
              
              28,750,000
              
              
              4.04
              
              $
              .03
              
              
              24,250,000
              
              $
              .03$.22
                  to $1.00
              
              
              615,335
              
              
              2.98
              
              
              .60
              
              
              455,335
              
              
              0.73$1.45
                  to $2.09
              
              
              405,000
              
              
              3.00
              
              
              1.74
              
              
              405,000
              
              
              1.7429,770,335
              
              
              
              
              
              
              
              
              25,110,335
 
 11
 **Stock
        Warrants**
 
 A
        summary of the changes in warrants outstanding for the nine-months ended
        September 30, 2008 follows:
  **Number
                  of**
              
              **Weighted**
                **Average**
                **Exercise****Warrants**
              
              **Price**Outstanding
                  and exercisable at January 1, 2008
              
              
              3,292,250
              
              $
              0.50Issued
              
              
              -
              
              
              -Cashless
                  exercise (Note 6)
              
              
              (2,906,250
              )
              
              0.001Outstanding
                  and exercisable at September 30, 2008
              
              
              386,000
              
              
              1.67
 
 As
        further discussed in Note 6, in May 2008, the amended January 2007
        Debentures and August 2007 Debentures holders agreed to exercise all of
        their warrants at a reduced exercise price of $.001 per share from $0.35
        per share. As an inducement to so exercise the warrants, the Company agreed
        to
        issue to each debenture holder one restricted share of common stock for each
        share acquired upon the warrant exercise. In addition, each warrant holder
        that
        continues to hold debentures agreed to fix permanently the conversion price
        of
        the debentures at $.35 per share (subject to customary adjustments resulting
        from stock dividends, stock splits and the like). As an inducement for this
        agreement, the holders who continued to hold debentures after July 1, 2008,
        received an aggregate 993,751 additional common shares.
 
 **Stock
        Grants**
 
 For
        the
        nine months ended September 30, 2008 and 2007, the Company recognized (income)
        expenses related to grants of the Company’s common stock of ($84,830) and
        $180,234 respectively. Stock grants compensation expense for the nine months
        ended September 30, 2008 was affected by forfeiture of 110,000 the Company’s
        restricted common shares granted in 2007 to a former CEO, which resulted
        in
        reduction of $138,238.
 
 **NOTE
        4 - BUSINESS ACQUISITIONS**
 
 **Deltron
        LLC**
 
 On
        September 5, 2007, the Company, through its wholly-owned subsidiary Deltron
        LLC
        (formerly known as Del-Inc Acquisition LLC) completed the acquisition of
        substantially all of the assets of Deltron Inc., a privately-held corporation
        based in North Wales, Pennsylvania, as well as the stock of its wholly-owned
        subsidiary, Corporacion Delinc, S.A. de C.V., a Reynosa, Tamaulipas, Mexico
        corporation (Deltron). The purchase price of $2,930,000 consisted of $1,508,000
        in cash for Deltron’s assets, plus $600,000 in cash for the stock of Delinc,
        S.A., $495,000 in acquisition related costs, and the assumption of certain
        liabilities totaling approximately $327,000. Solomon also agreed to pay the
        sellers an earn-out payment equal to the excess of the product of net sales
        of
        the purchased business during the year following the closing multiplied by
        a
        profit margin determined by subtracting from net sales the cost of goods
        sold
        divided by net sales, over $1,570,000. On the one-year anniversary of the
        closing, the terms of the contingency were not met, and no liabilities related
        to the earn-out payment were realized.
 
 To
        fund
        the purchase price, Deltron LLC borrowed a total of $2,750,000 under a secured
        promissory note provided by an affiliate of Michael D’Amelio, a director of the
        Company and incurred approximately $219,000 in debt issuance costs. The Company
        issued 284,000 shares of common stock valued at $88,238 and the balance was
        paid
        in cash. The note bears interest at 12% annually, plus quarterly investment
        fees
        of 1% of the amounts then outstanding. The note matured on September 5, 2008
        and
        has not been repaid (Note 7).
 
 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 fair value of the customer list, trade name
        and
        customer backlog were determined by an independent appraisal firm based on
        estimates of future cash flows associated with those assets. In accordance
        with
        the provisions of paragraph 46 of SFAS No. 141 “Business Combinations” regarding
        accounting for contingent consideration in a business combination, an amount
        equal to the lesser of the maximum amount of contingent consideration or
        the
        excess of the net assets acquired over the purchase price has been recorded
        as a
        liability to the seller, which is included in accrued expenses, until such
        time
        as the contingency is resolved.
 
 12
 The
        purchase accounting for this acquisition is summarized as follows:
  **Amount**
              
              **Estimated**
                **Useful
                  Life**Net
                  tangible assets
              
              $
              2,680,000Identifiable
                  intangible assets:Customer
                  relationships
              
              
              115,000
              
              
              3
                  yearsTrade
                  name
              
              
              75,000
              
              
              3
                  yearsCustomer
                  backlog
              
              
              60,000
              
              
              6
                  monthsDue
                  to seller
              
              
              -Total
                  purchase price
              
              $
              2,930,000
  The
        results of operations of Deltron LLC have been included in the Company’s
        condensed consolidated financial statements from the date of
        acquisition.
 
 The
        financial information in the table below summarizes the combined results
        of
        operations of the Company and Deltron LLC, on a pro forma basis, as though
        Deltron LLC had been acquired as of the beginning of each of the periods
        presented:
 
 Three
                  Months
                Ended
                September
                  30, 2007
              
              Nine
                  Months Ended
                September
                  30, 2007Net
                  revenues
              
              $
              2,799,995
              
              $
              8,224,167Net
                  loss
              
              $
              (5,555,770
              )
              $
              (12,625,604
              )Net
                  loss applicable to common stockholders
              
              $
              (5,555,770
              )
              $
              (14,038,635
              )Basic
                  and diluted net loss per share
              
              $
              (0.13
              )
              $
              (0.36
              )
  The
        pro
        forma financial information is presented for informational purposes only
        and is
        not necessarily indicative of the results of operations that would have been
        achieved if the acquisitions had taken place at the beginning of each of
        the
        periods presented.
 
 **NOTE
        5 - INVENTORIES**
 
 Inventories
        at September 30, 2008 consist of the following:
 
 Raw
                  materials
              
              $
              832,811Work-in-process
              
              
              509,666Finished
                  goods
              
              
              173,681$
              1,516,158
  13
 **NOTE
        6 - CAPITAL TRANSACTIONS**
 
 **Common
        Stock**
 
 During
        the nine months ended September 30, 2008, the Company issued an aggregate
        of
        97,085,704 shares of common stock with an estimated fair value of $4,881,195 to
        the amended January 2007 Debentures and August 2007 Debentures holders
        (collectively “Debentures Holders”) (Note7) as redemption of principal and
        related accrued interest of $3,494,637 and $1,386,558, respectively. The
        Company
        recorded additional interest expense of approximately $1,012,839 for the
        difference between the principal and accrued interest redeemed and the fair
        market value of the common stock issued. The shares issued for redemption
        include 27,653,322 shares which were issued as full redemption of
        outstanding principal and interest of certain amended January 2007 Debentures
        with an outstanding principal balance of $1,253,898 under agreements to
        accelerate the maturity of such debentures (Note 7).
 
 During
        the nine months ended September 30, 2008, the Company issued an aggregate
        of
        82,533 shares of common stock with an estimated fair value of $16,650 to
        Debentures Holders to enter into agreements to waive the Company’s redemption
        defaults as well as certain provisions of the registration rights agreements
        and
        certain equity conditions covering the Company’s right to use shares of common
        stock rather than cash to make monthly redemptions. The Company also issued
        350,000 shares of common stock with an estimated fair value of $35,000 to
        certain Debentures Holders to induce the holders to enter into an Amendment
        and
        Waiver Agreement. As more fully described in Note 7, the agreements modified
        various terms of the Debentures including the deferment of certain monthly
        redemptions.
 
 In
        May
        2008, January 2007 Debentures and August 2007 Debentures holders agreed to
        exercise all of their warrants at a reduced exercise price of $.001 per
        share from $0.35 per share. As an inducement to exercise the warrants, we
        agreed
        to issue to each debenture holder one restricted share of common stock for
        each
        share acquired upon the warrant exercise. In addition, each Debentures holder
        that continues to hold debentures agreed to fix permanently the conversion
        price
        of the debentures at $.35 per share (subject to customary adjustments resulting
        from stock dividends, stock splits and the like). As an inducement for this
        agreement, each such holder, who continued to hold debentures after July
        1,
        2008, received an additional one-half restricted share for each share received
        upon exercise of its warrants. The Company issued 993,751 common shares with
        a
        fair value of $15,900 as an inducement. The value of these inducement shares
        has
        been recorded as interest expense.
 
 The
        Company recorded a charge of $28,288, as interest expense, related to the
        change
        in the estimated fair value of the warrants due to the reduction in the exercise
        price of the warrants. The fair value of the warrants was computed using
        the
        Black-Scholes option pricing model. The Company assumed a risk-free interest
        rate of 3.36%, no dividends, expected volatility of approximately 176% and
        an
        expected warrant life of approximately 3 years. The warrant holders received
        an
        aggregate 2,877,189 shares of common stock in cashless exercise transactions
        for
        2,906,250 warrants. In accordance with the terms of the agreements, the Company
        also issued 2,906,250 common stock shares with a fair value of $101,719 as
        an
        inducement to exercise the warrants. The value of these inducement shares
        has
        been recorded as interest expense.
 
 During
        the nine months ended September 30, 2008, the Company issued 6,097,561 shares
        of
        common stock, with a fair value of $91,463 at the time of issuance, to a
        holder
        of the Company’s notes payable to related parties for the conversion of
        principal of $100,000.
  During
        the nine months ended September 30, 2008, the Company issued 7,195,065 shares
        of
        common stock, with a fair value of $307,864 at the time of issuance, for
        fees
        and services.
 
 14
 The
        Company issued an aggregate 7,640,000 shares of common stock with an estimated
        fair value of $563,310 to employees and directors during the nine months
        ended
        September 30, 2008. Theses shares included 1,750,000 shares issued to two
        officers pursuant to employment agreements for current and past due
        compensation, 4,000,000 shares issued to directors as compensation for their
        service on the board, 495,000 shares issued to directors as compensation
        for
        service on Board Committees, 290,000 of restricted shares and 180,000
        unrestricted shares to the Company’s President, 300,000 restricted shares to the
        Company’s Chief Financial Officer, 500,000 to the Company’s former CEO (as
        discussed below) and 125,000 shares to a former employee in connection with
        his
        resignation.
  Gary
        G.
        Brandt, the Company's Chief Executive Officer, resigned effective at the
        close
        of business on January 3, 2008. Mr. Brandt agreed to serve as a consultant
        to
        the Company until March 31, 2008. During the nine months ended September
        30,
        2008 the Company issued to Mr. Brandt 167,000 shares of its common stock
        pursuant to the consulting agreement and 333,000 shares of its common stock
        to
        reimburse Mr. Brandt for expenses incurred on behalf of the Company. The
        110,000
        shares of restricted common stock previously issued to Mr. Brandt pursuant
        to
        his employment agreement were returned to the Company and cancelled and the
        Company reversed compensation expense of $138,238 during the nine months
        ended
        September 30, 2008 that it previously recognized for this award. Additionally,
        500,000 options to purchase the Company’s common stock were forfeited which
        resulted in reduction of expenses of $370,920 (Note 3).
 
 **Preferred
        Stock**
 
 In
        June
        2008, in connection with the sale of the June 2008 Debentures (Note 7), the
        Company issued 1,200 shares of its Series D 0% Convertible Preferred Stock
        $0.001 Par Value (Preferred Stock). Each share of Preferred Stock has a stated
        value of $1,000 and is convertible into shares of common stock at $0.05 per
        share based on the stated value with potential conversion price resets based
        on
        the daily volume weighted average price of the common stock for 20 consecutive
        trading days prior to the sixteenth, nineteenth and twenty-four month
        anniversaries of the original issue date. The shares of Preferred Stock are
        convertible by the holders at any time into shares of the Company’s common
        stock. On or after January 1, 2009, the Company may force the conversion
        of
        Preferred Stock into its common stock if the daily volume weighted average
        price
        of the common stock for any 20 consecutive trading days equals or exceeds
        $0.25
        per share, subject to certain conditions. The Company may redeem outstanding
        shares of Preferred Stock by paying 110% its stated value. Shares of Preferred
        Stock do not have separate voting rights as a class (but do vote on an
“as-converted” to common stock basis), do not pay a dividend and do not have a
        liquidation preference.
 
 Also
        in
        June 2008, the Company issued 300 shares of its Preferred Stock to a purchaser
        that did not also purchase June 2008 Debentures. The aggregate purchase price
        for these shares was $250,000. These shares of Preferred Stock were otherwise
        issued on substantially the same terms and conditions of the Preferred Stock
        issued to the purchasers of the June 2008 Debentures.
 
 **NOTE
        7 - DEBT**
 
 **Notes
        Payable to Related Parties**
 
 On
        July
        28, 2006, the Company borrowed $125,000 from an affiliate of Michael D’Amelio, a
        director of the Company and issued a promissory note in that amount. The
        note
        bears interest at a rate of 15% per annum and matured on August 28, 2006.
        At
        September 30, 2008, the note was in default and carried a default interest
        rate
        of 18% per annum, which amounted to $2,528 and $5,517 for the three months
        and $
        13,747 and $16,875 for the nine months ended September 30, 2008 and 2007,
        respectively. Effective through November 19, 2008, the Company obtained a
        waiver
        of default under this note from the lender. At September 30, 2008 and December
        31, 2007, the outstanding loan balance was $50,000 and $125,000, respectively
        and accrued interest was $35,341 and $21,594, respectively.
 
 15
 In
        2006,
        the Company issued various notes for $1,712,085 to parties, related to the
        Company through its executives and common management. The notes are
        collateralized by substantially all assets of Solomon. On December 31, 2006,
        the
        Company entered into an agreement with holders of these notes to extend their
        maturity dates until September 30, 2007. To induce the noteholders to so
        extend
        the notes, the Company agreed to issue at the noteholders’ option either shares
        of common stock at a rate of 10,000 shares for each $100,000 of note principal
        or cash equal to five percent of the principal amounts of the notes. Noteholders
        received 79,009 shares of common stock with a fair value of $179,363 and
        $48,100
        in cash which were included in deferred debt costs and amortized to interest
        expense through September 30, 2007.
  On
        September 28, 2007, the Company entered into an agreement with the noteholders
        pursuant to which the maturity date of the notes was extended to September
        7, 2008. To induce the holders to so extend the notes, the Company agreed
        to
        compensate the noteholders by an amount equal to 7% of the principal balance
        of
        the notes or $119,846, which was capitalized to the principal amount of the
        notes, included in deferred debt costs, and amortized to interest expense
        through September 7, 2008. The noteholders were also offered the opportunity
        to
        buy, for $100, the right (subject to certain restrictions) to convert their
        notes to common stock in the future at a conversion price of $0.35 per share
        of
        common stock. The notes are subject to further extension through April 17,
        2009
        based on the effective date of certain future registration statements related
        to
        the Company’s convertible debentures and accrual or payment of additional
        extension fees. The Company has offered to compensate the noteholders by
        an
        amount equal to 5% of the original principal balance of the notes to extend
        the
        maturity date to January 16, 2009. As of November 19, 2008, the noteholders
        have
        agreed to these terms. The principal balance outstanding under the notes
        was
        $1,731,931 and $1,831,931 at September 30, 2008 and December 31, 2007,
        respectively, and the Company incurred interest expense (including
        accretion of deferred debt cost) of $78,086 and $113,107 for the three months
        and $248,799 and $ 361,569 for the nine months ended September 30, 2008 and
        2007, respectively.
 
 **Note
        Payable to Related Party under Acquisition Credit Facility**
 
 On
        August
        24, 2007, the Company entered into an agreement with JMC Venture Partners
        LLC
        (“JMC”), an affiliate of Michael A. D'Amelio, a director and officer of Solomon,
        pursuant to which JMC agreed to provide the Company with a line of credit,
        the
        aggregate principal amount of which may not exceed $15,000,000 that is to
        be
        used exclusively for acquisitions (the “Acquisition Credit Facility”). The line
        of credit was available through August 24, 2008. Any amounts loaned under
        the
        line of credit will accrue interest at a rate of 12% per annum, plus quarterly
        investment fees of 1% of the amounts then outstanding and one-time monitoring
        fees of 2.5% of the amounts advanced under the line of credit. Upon execution
        of
        the line of credit agreement, the Company incurred a 2.5% commitment fee
        on the
        full amount of the line of credit. The monitoring fees and commitment fee
        are
        each payable in shares of common stock. The number of shares issued was
        calculated by dividing the dollar amount of the fee by the average closing
        price
        of a share of common stock for the 10 business days preceding the date of
        payment. The Company agreed to register the shares for resale under the
        Securities Act of 1933, as amended, but has not yet done so. In the event
        of a
        default, the interest rate will increase to 18% per annum. Loans made under
        the
        line of credit will be conditioned upon the approval of the proposed acquisition
        by the lender's investment committee and will be subject to the lender's
        normal
        due diligence and will mature on the last day of the twelfth month after
        they
        are made. The loans will be made to acquisition subsidiaries and unconditionally
        guaranteed by Solomon. The line of credit is subject to ordinary documentation
        requirements for each closing.
 
 At
        September 30, 2008, Deltron, LLC had a note payable of $2,750,000 to JMC
        used to
        finance acquisition of Deltron Inc. (Note 4). The note bears interest at
        12% per
        annum plus a quarterly investment fee of 1%. Interest expense, including
        default
        interest of 18% and late fees, amounted to $273,737 for the three months
        and
        $603,114 for the nine months ended September 30, 2008. The note is
        collateralized by substantially all assets of Deltron, LLC and its subsidiary
        Delinc, and guaranteed by Solomon. The note matured on September 5, 2008,
        and
        has not been repaid. The loan agreement also contains certain financial
        covenants. JMC has waived defaults under this note through May 31, 2008 for
        certain covenants and through July 31, 2008 for certain other covenants.
        At
        September 30, 2008, the Company is in violation of certain covenants and
        is in
        default of this note. Although the Company does not have a formal written
        agreement in place, it has agreed in principal with JMC on the terms pursuant
        to
        which the loan will be restructured as part of the Company’s efforts to
        refinance the Revolving Note Payable. The Company believes that it will be
        successful in restructuring the terms of the JMC agreement. However, there
        can
        be no assurance that a formal agreement will be reached. If an agreement
        cannot
        be reached and the lender was to exercise its rights, it would have a material
        adverse effect on the Company.
  16
 **Revolving
        Note Payable to Bank**
 
 Pursuant
        to Technipower LLC’s revolving note payable with a bank, which was modified on
        September 29, 2008, Technipower LLC can borrow up to $750,000 based on a
        collateral formula inclusive of accounts receivable and certain classes of
        inventory. Amounts outstanding under the note were $1,106,811 at September
        30,
        2008 with no additional availability. A repayment of principal in the amount
        of
        $356,811 was made on October 2, 2008 reducing the outstanding balance of
        the
        note to $750,000. The note bears interest at the prime rate plus 3% (8% at
        September 30, 2008), requires no periodic principal amortization, and has
        a
        maturity date of November 30, 2008. Interest expense for the Note was $43,309
        and $13,802 for the three months and $88,012 and $50,375 for the nine months
        ended September 30, 2008 and 2007, respectively. Substantially all of
        Technipower LLC’s assets have been pledged as collateral for the
        Note.
 
 The
        Company is currently in discussion with the lender regarding the maturity
        of
        this note.
  **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 outside counsel, to a note
        payable (the “Note”). The 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 accept the note, the Company issued a warrant to purchase
        200,000 shares of the its common stock at $1.73 a share. The exercise price
        was
        adjusted on May 14, 2007 to $1.00, when the underlying shares were registered
        for resale in accordance with the provisions of the warrants. The fair value
        of
        the warrant of $320,000 was initially recorded as deferred debt costs and
        was
        amortized over the Promissory Note’s term. The Company repaid substantially all
        of the 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 Note to D & G
        to a new note payable (the “January 2007 Promissory Note”) with an original
        principal of $182,000. The January 2007 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.
  On
        October 12, 2007, the Company converted the balance of the January 2007 Note
        of
        $182,000 plus unpaid interest of approximately $16,000 and approximately
        $330,000 of additional trade accounts payable to a new note payable (the
        “October 2007 Note”) with an original principal of $564,566. The original
        principal also includes an additional 7% (approximately $36,000) of the
        above amounts as an inducement. The October 2007 Note bears interest at 12%
        and
        was payable on September 7, 2008 unless an event occured which required a
        mandatory prepayment as described in the October 2007 Note. Subject to certain
        restrictions, any of the unpaid principal and interest may be converted to
        shares of common stock at a conversion price of $0.35 per common stock share,
        at
        any time. The principal balance outstanding under the October 2007 Note
        was $564,566 at September 30, 2008 and December 31, 2007. The Company
        incurred interest expense of $17,075 and $5,460 for the three months and
        $
        50,857 and $232,678 for the nine months ended September 30, 2008 and 2007,
        respectively. The Company is in default of the terms of this Note since it
        was
        not repaid on the maturity date.
 
 17
 **Note
        Payable to UHY LLP**
 
 On
        April
        16, 2008, the Company converted $219,420 of trade accounts payable to UHY
        LLP
        (“UHY”), the Company’s former auditors, to a promissory note payable (the “UHY
        Note”) with an original principal of $219,420. The principal balance of the UHY
        Note was payable as follows: $15,000 simultaneously with the execution of
        the
        note, twelve bi-weekly installments of $10,000 commencing May 23, 2008 and
        concluding with a single final payment in the amount of $84,420 on October
        10,
        2008. No interest accrues on the principal balance unless an event of default
        occurs, in which case the principal balance will bear interest at 10% per
        annum
        from the date of default until a written waiver is obtained or the principal
        balance is paid in full. UHY may convert the unpaid principal amount at any
        time
        into shares of the Company’s common stock at a conversion price of $0.35 per
        share. The UHY Note also provided for a 25% discount for prepayment in full
        prior to September 1, 2008.
  The
        Company paid the initial $15,000 upon execution of the UHY Note but had not
        paid
        the subsequent bi-weekly installments. The Company also made aggregate payments
        of $30,000 during July and August 2008 but has not made any subsequent payments.
        UHY has waived all defaults through November 19, 2008.
 
 At
        September 30, 2008, the principal balance outstanding was $174,420. Interest
        expense for the three months and nine months ended September 30, 2008 was
        $4,586
        and $6,714, respectively.
  **January
        2007 Debentures**
 
 On
        January 22, 2007, the Company sold an aggregate of $5,350,000 principal amount
        of Variable Rate Self-Liquidating Senior Secured Convertible Debentures (the
        “January 2007 Debentures”) due March 17, 2008. The Company used approximately
        $3,350,000 of the net proceeds of the Debentures to redeem 2,873,500 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
        January 2007 Debentures bears 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. During
        the three and nine months ended September 30, 2008 and 2007, the Company
        incurred interest expense at 8% . The Company’s ability to pay interest with
        shares of common stock is 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 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 and for so long as the event of default is
        continuing, the January 2007 Debentures bears default interest at a rate
        of the
        lesser of 15% per annum or the maximum rate permitted by applicable
        law.
  Initially,
        the January 2007 Debentures were 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 January 2007 Debentures will be decreased to equal such lower
        price.
        The foregoing adjustment to the conversion price does not apply to certain
        exempt issuances. 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 January 2007 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 was amortized through the redemption
        date of the January 2007 Debentures. Additionally, as a part of the sale
        of the
        January 2007 Debentures, the Company issued common stock purchase warrants
        (the
        January 2007 Warrants) to the purchasers of the January 2007 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. In accordance with APB 14,
        “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants”,
        the relative fair value of these January 2007 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 was amortized to interest expense over the term of the January 2007
        Debenture. The fair value of the January 2007 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.
 
 18
 On
        August
        24, 2007, the Company entered into an Amendment Agreement to amend certain
        terms
        of the January 2007 Debentures, including conversion price and exercise price
        of
        the January Warrants, and to extend the maturity date until April 17, 2009.
        As a
        result of the amendment, the Company determined that a debt extinguishment
        had
        occurred in accordance with guidance in FASB’s Emerging Issues Task Force
        (“EITF”) Abstract, Issue No. 96-19, *“* Debtor’s
        Accounting for a Modification or Exchange of Debt Instruments *”* (EITF
        96-19) *.* In
        August 2007, the debt extinguishment was calculated by comparing the carrying
        value of the January 2007 Debentures to the carrying value of the amended
        January 2007 Debentures. The Company recognized a loss on debt extinguishment
        of
        approximately $2.5 million, which includes the value of the modified January
        Warrants of $97,000, the unamortized part of the debt issuance costs of
        $246,000, the unamortized part of the beneficial conversion feature and the
        modified January Warrants of $1,348,000, the intrinsic value of the modified
        imbedded conversion feature $646,000 and liquidated damages of $161,000,
        and
        recorded the modified debt at the fair value of approximately $5.2 million. **
  Prior
        to
        its amendment, the January 2007 Debentures and related accrued interest in
        the
        amount of $1,023,816 and $71,333, respectively were redeemed with shares
        of
        common stock. Upon redemption the Company recorded additional interest expense
        in the amount of approximately $429,000 for the difference between the principal
        and accrued interest redeemed and the fair market value of the common stock
        issued. In connection with the amended January 2007 Debentures, accrued interest
        of $32,100, as well as liquidated damages in the amount of $160,500, were
        added
        to the principal balance of the amended January 2007 Debentures.
 
 As
        part
        of the Amendment, the Company reduced the conversion price of the January
        2007
        Debenture from $2.00 per share to $0.35 per share. In accordance with EITF
        98-5
        the intrinsic value of the imbedded conversion feature within the amended
        January 2007 Debentures, which was determined by the Company to be approximately
        $646,000 was recorded as a discount to the fair value of the amended January
        2007 Debentures and was included in the loss on debt extinguishment. In November
        2007, $35,000 of the principal balance was converted into 100,000 shares
        of
        common stock based on the $0.35 per share conversion price.
  Also,
        as
        a part of the modification of the January 2007 Debentures, the exercise price
        of
        the January Warrants was reduced to $0.35 per share (the Amended Warrants).
        On
        August 24, 2007, the fair value of the Amended Warrants was determined to
        be
        approximately $97,000 using the Black-Scholes option pricing model and has
        been
        recorded as an additional fee and included in the loss on extinguishment
        of
        debt. The Company determined the fair value of the warrants using a risk-free
        interest rate of 4.31%, no dividends, expected volatility of approximately
        183%
        and an expected warrants life of approximately 3 years. The exercise price
        of
        the Amended Warrants 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 Amended 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 does not apply to certain exempt issuances. All of the Amended
        Warrants were to expire January 17, 2012. 100,000 of the warrants issued
        in
        connection with the amended January 2007 Debentures were exercised in 2007.
  Under
        the
        terms of amended January 2007 Debentures, 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 or January 1, 2008, and on the first day of each month thereafter,
        the Company was required to redeem 1/16th of the outstanding principal balance
        in cash or, at the Company’s options, with shares of common stock. In June 2008,
        the required monthly redemption amount was amended to be 1/15 of the principal
        balance outstanding at July 1, 2008, with respect to three of the January
        2007
        Debenture holders, (see below). The redemption in shares of common stock
        is
        subject to certain conditions, including the existence of an effective
        registration statement, unless waived. Any shares of common stock issued
        in
        connection with this redemption are valued at 82.5% of the average of the
        daily
        volume weighted average price for the 10 trading days prior to the
        redemption.
  19
 The
        Company’s obligations under the amended January 2007 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 amended January 2007 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 amended January
        2007 Debentures.
 
 At
        December 31, 2007 the Company was in default of the amended January 2007
        Debentures and the August 2007 Debentures (see below) for failure to make
        the
        redemption payments and to make effective a registration statement required
        with
        respect to those debentures. In the first quarter of 2008, all debenture
        holders
        waived the Company’s redemption defaults, requirements for filling and
        effectiveness of registration statement as well as certain provisions of
        the
        registration rights agreements and certain equity conditions governing the
        Company’s right to use shares of common stock rather than cash to make monthly
        redemptions.
 
 During
        the nine months ended September 30, 2008 and 2007, the Company redeemed
        $3,248,209 and $535,000 of the January 2007 Debentures plus the related accrued
        interest, respectively, through the issuance of common stock shares and recorded
        the difference between the fair value of the shares issued and the principal
        amount of January 2007 Debentures and related accrued interest as additional
        interest expense (Note 6). As of September 30, 2008 and December 31, 2007
        the
        outstanding principal of the amended January 2007 Debentures amounted to
        $1,235,575 and $4,483,784, respectively. At September 30, 2008 debt discount
        relating to the amended January 2007 Debentures has been fully
        expensed.
 
 Interest
        expense on the Company’s amended January 2007 Debentures and August 2007
        Debentures amounted to $155,562 and $1,349,317 for the three months and
        $1,623,752 and $ 5,596,339 for the nine months ended September 30, 2008 and
        2007, respectively.
 
 The
        Company’s tender of shares of its common stock to one of the holders of the
        Company’s January 2007 Debentures and August 2007 Debentures, with
        respect to the August 2008 monthly redemption was rejected by the
        holder based on its assertion that the Company failed to meet its
        minimum trading volume requirement of such Debentures. The holder has not
        declared a default, and has accepted subsequent monthly redemptions with
        respect
        to September 2008, October 2008 and November 2008.
 
 **August
        2007 Debentures**
 
 On
        August
        30, 2007, the Company sold an aggregate of $500,000 principal amount of Variable
        Rate Self-Liquidating Senior Secured Convertible Debentures (the “August 2007
        Debentures”) due April 17, 2009, under the same terms and conditions as the
        amended January 2007 Debentures. Additionally, the Company issued common
        stock
        purchase warrants to the purchasers of the August 2007 Debentures giving
        them
        the right to purchase up to an aggregate of 1,000,000 shares of common stock
        at
        exercise price of $0.35 per share. 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 $174,000, 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 August 2007 Debenture. The fair value
        of
        the warrants was computed using the Black-Scholes option pricing model. The
        Company assumed a risk-free interest rate of 4.30%, no dividends, expected
        volatility of approximately 184% and an expected warrant life of approximately
        3
        years. As of September 30, 2008 and December 31, 2007, the unamortized discount
        relating to the warrants on the August 2007 Debentures amounted to $25,534
        and
        $168,506, respectively.
 
 20
 The
        August 2007 Debentures are convertible at any time at the option of the holder
        into shares of common stock at $0.35 per share. In accordance with EITF 98-5
        the
        intrinsic value of the imbedded conversion feature within the August 2007
        Debentures, which was determined by the Company to be approximately $100,000,
        was recorded as a discount to the August 2007 Debentures and is amortized
        through the redemption date of the August 2007 Debentures in accordance with
        EITF 00-27.
  At
        December 31, 2007 the Company was in default of the August 2007 Debentures
        for
        failure to make the redemption payments and to make effective a
        registration statement required with respect to those debentures. In the
        first quarter of 2008, all debentures holders waived the Company’s redemption
        defaults, requirements for filling and effectiveness of registration statement
        as well as certain provisions of the registration rights agreements and certain
        equity conditions governing the Company’s right to use shares of common stock
        rather than cash to make monthly redemptions.
  During
        the nine months ended September 30, 2008, the Company redeemed $246,429 of
        the
        August 2007 Debentures plus the related accrued interest through the issuance
        of
        common stock shares and recorded the difference between fair value of shares
        issued and principal amount of August 2007 Debentures and accrued interest
        as
        additional interest expense (Note 6). As of September 30, 2008 and December
        31,
        2007 the outstanding principal of the August 2007 Debentures amounted to
        $253,571 and $500,000, respectively. Interest expense on the Company’s amended
        January 2007 Debentures and August 2007 Debentures amounted to $155,562 and
        $1,349,317 for the three months and $1,623,752 and $ 5,596,339 for the nine
        months ended September 30, 2008 and 2007, respectively.
 .
 The
        Company’s tender of shares of its common stock to one of the holders of the
        Company’s January 2007 Debentures and August 2007 Debentures, with
        respect to the August 2008 monthly redemption was rejected by the
        holder based on its assertion that the Company failed to meet its
        minimum trading volume requirement of such Debentures. The holder has not
        declared a default, and has accepted subsequent monthly redemptions with
        respect
        to September 2008, October 2008 and November 2008.
 
 **June
        2008 Debentures**
 
 On
        June
        26, 2008, the Company sold an aggregate of $1,250,000 principal amount of
        Variable Rate Self-Liquidating Senior Secured Convertible Debentures (the
“June
        2008 Debentures”) due October 1, 2009 at a discount of $250,000. Additionally,
        the Company issued 1,200 shares of Series D 0% Convertible Preferred Stock
        $0.001 par value, $1,000 stated value (“Series D Preferred Shares”) to the
        purchasers of the June 2008 Debentures (Note 6). The Company received gross
        proceeds of $1,000,000 from the issuance of the June 2008 Debentures and
        1,200
        Series D Preferred Shares, which were allocated to the June 2008 Debentures
        and
        Series D Preferred Shares based on the relative fair value of each instrument.
        The fair value of the June 2008 Debentures was determined using the the present
        value of expected cash flows discounted at the effective interest rate. The
        fair
        value of the Series D Preferred Stock was based on share price realized in
        a
        separate transaction (Note 6). The relative fair value of the preferred shares
        of $489,739 was recorded as an additional debt discount along with the original
        issue discount of $250,000 and fees paid directly to the lender of $35,000
        for a
        total debt discount of $774,739. At September 30, 2008, the unamortized debt
        discount related to the June 2008 Debentures was $550,281.
 
 The
        June
        2008 Debentures were issued under similar terms and conditions as the amended
        January 2007 and August 2007 Debentures, except if the Company elects to
        make
        monthly principal redemptions in common shares, the conversion price is based
        on
        80% of the volume weighted average price for ten consecutive trading days
        prior
        to the redemption. Interest is payable at the higher of 8% or LIBOR plus
        2%.
        Principal redemptions, which may be made in cash or common stock shares,
        commences on January 1, 2009 at one-tenth of the outstanding principal balance
        and continues on the first of each month through October 1, 2009.
 
 21
 The
        June
        2008 Debentures are convertible at any time at the option of the holder into
        shares of common stock at $0.35 per share. Based and the conversion price
        and
        the closing market price for the Company’s common shares on the transaction
        date, the Company determined that the June 2008 Debentures did not contain
        a
        beneficial conversion feature.
 
 As
        of
        September 30, 2008 the outstanding principal of the June 2008 Debentures
        amounted to $1,250,000.
 Interest
        expense on the Company’s June 2008 Debentures amounted to $254,476 for both the
        three months and the nine months ended September 30, 2008
 
 **Modifications
        to the amended January 2007 Debentures and August 2007
        Debentures**
  During
        the nine months ended September 30, 2008, the Company had early redemptions
        of
        amended January 2007 Debenture with an aggregate face value of $1,253,898
        by
        issuance of 27,653,322 common shares to the holders, valued at $1,684,499
        and recorded the difference as additional interest expense.
  Additionally,
        during the nine months ended September 30, 2008 the Company agreed with two
        holders of both amended January 2007 Debentures and August 2007 Debentures
        and
        one holder of amended January 2007 Debentures to defer the monthly redemptions
        of $179,061 for January 2008 and March of 2008 until May and June of 2009,
        respectively. The Company granted an option to the holders to defer up to
        three
        additional monthly redemptions until July, August and September of 2009,
        respectively at the holders’ election. To induce each of the holders to enter
        into the Agreement, the Company issued an aggregate of 350,000 restricted
        shares
        of the Company’s common stock (see Note 6). The Company has accounted for this
        transaction as a debt modification and has recorded the fair value of the
        inducement shares of $35,000 as additional interest expense.
  In
        May
        2008, the amended January 2007 Debentures and August 2007 Debentures holders
        agreed to exercise all of their warrants at a reduced exercise price
        of $.001 per share from $0.35 per share. As an inducement to so exercise
        the
        warrants, the Company issued to each debenture holder one restricted share
        of
        common stock for each share acquired upon the warrant exercise. In addition,
        each warrant holder that continued to hold debentures agreed to fix permanently
        the conversion price of the debentures at $.35 per share (subject to customary
        adjustments resulting from stock dividends, stock splits and the like). As
        an
        inducement to fix permanently the conversion price of the debentures at $.35
        per
        share (subject to customary adjustments resulting from stock dividends, stock
        splits and the like), each such holder, who continued to hold debentures
        after
        July 1, 2008, received an additional one-half restricted share for each share
        received upon exercise of its warrants. See Note 6 for the financial impact
        of
        this modification. This modification is considered not to be an extinguishment
        of debt.
 
 In
        June
        2008, in connection with the sale of the June 2008 Debentures, the Company
        agreed with two holders of both amended January 2007 Debentures and August
        2007
        Debentures and one holder of amended January 2007 Debentures to amend and
        restate the maturity date of the amended January 2007 Debentures and August
        2007
        Debentures to September 1, 2009 and to adjust the Monthly Redemption Amount
        to
        1/15 of the outstanding principal amount as of July 1, 2008 plus accrued
        interest of the amended January 2007 Debentures and August 2007 Debentures.
        Certain Equity Conditions relating to the Company’s right to make monthly
        redemption payments in shares of common stock were also amended.
  **NOTE
        8 - PATENT LITIGATION**
 
 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 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.
 
 On
        April
        30, 2007, the ITC terminated the investigation with a finding of no violation
        of
        Section 337 of the Tariff Act of 1930. On September 19, 2007, the Company
        filed
        an appeal of the ITC’s decision with the Court of Appeals for the Federal
        Circuit (“CAFC”) which heard oral arguments on April 11, 2008. In May 2008, the
        CAFC generally affirmed the ITC’s decision. On July 18, 2008, the Company
        requested that the stay imposed on the patent infringement action the Company
        brought in the United States District Court in Florida be stayed and the
        case
        was reopened.
  22
 **NOTE
        9 - ACCRUED AND UNPAID PAYROLL TAXES**
 
 At
        September 30, 2008 and December 31, 2007, the Company has accrued interest
        and
        penalties of
 $77,806
        and $169,000, respectively related to payroll taxes. This amount includes
        additional interest of approximately $80,000 charged to operations during
        the nine month period ended September 30, 2007. The interest and
        penalties were the subject of a delinquency proceeding with the U.S. Internal
        Revenue Service for tax years ending December 31, 2003 and prior. 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. As of November 19, 2008, the Company has not paid the monthly
        installments due for September 2008 or October 2008.
 
 **NOTE
        10 - OTHER TRANSACTIONS WITH RELATED PARTIES**
 
 In
        2008
        and 2007, 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 nine months ended September 30, 2008 and
        2007
        was $45,000 for each nine-month period. Total expense for the three months
        ended
        September 30, 2008 and 2007 was $15,000 for each three-month
        period.
 
 During
        the first quarter of 2008, $150,000 was advanced by an affiliate of a Director.
        This amount was repaid in July 2008.
  **NOTE
        11 - SEGMENTS**
 
 The
        segments the Company operates are the Motive Power Division which encompasses
        the electric power drive technologies and the Power Electronics Division
        which
        represents the business of Technipower LLC and Deltron LLC and specializes
        in
        the design, development and production of customer power systems, chassis
        and
        power supply products for defense and commercial markets.
  Segment
        financial information follows:
  THREE
                  MONTHS ENDED
              
              NINE
                  MONTHS
                ENDEDSeptember
                  30, 2008
              
              September
                  30, 2007
              
              September
                  30, 2008
              
              September
                  30, 2007Revenues:Sales
                  to unaffiliated customers:Power
                  Electronics
              
              $
              2,376,527
              
              $
              2,134,093
              
              $
              7,318,696
              
              $
              5,172,425Motive
                  Power
              
              
              -
              
              
              -
              
              
              103,257
              
              
              31,678$
              2,376,527
              
              $
              2,134,093
              
              $
              7,421,953
              
              $
              5,204,103Net
                  Profit (Loss):Power
                  Electronics
              
              $
              13,378
              
              $
              196,746
              
              $
              (119,364
              )
              $
              445,067Motive
                  Power
              
              
              (935,024
              )
              
              (1,515,048
              )
              
              (1,904,573
              )
              
              (3,415,168
              )Operating
                  Loss
              
              
              (921,646
              )
              
              (1,318,302
              )
              
              (2,023,937
              )
              
              (2,970,101
              )Interest
                  expense
              
              
              (865,626
              )
              
              (1,566,812
              )
              
              (3,063,137
              )
              
              (6,442,812
              )Other
                  income (expense)
              
              
              2,142
              
              
              15,111
              
              
              (33,813
              )
              
              33,795Loss
                  on extinguishments ofredeemable
                  preferred stock andother
                  debt
              
              
              -
              
              
              (2,496,544
              )
              
              -
              
              
              (2,496,544
              )Net
                  Loss
              
              
              (1,785,130
              )
              
              (5,366,547
              )
              
              (5,120,887
              )
              
              (11,875,662
              )Preferred
                  stock dividends
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,413,031
              )Loss
                  applicable to common stockholders
              
              $
              (1,785,130
              )
              $
              (5,366,547
              )
              $
              (5,120,887
              )
              $
              (13,288,693
              )
 
 23
  **NOTE
        12 - COMMITMENTS AND CONTINGENCIES**
 
 The
        number of common shares issuable upon conversion of the amended January 2007
        Debentures, August 2007 Debentures, and June 2008 Debentures vary with the
        market price of the Company’s common stock. This condition requires the Company
        to evaluate at each reporting period whether the Company has sufficient number
        of authorized and unissued shares available to settle its obligations after
        considering all other potential equity commitments that may require the issuance
        of stock. If the Company does not have sufficient number of authorized and
        unissued shares, the Company will be in default under the amended January
        2007
        Debentures, August 2007 Debentures and June 2008 Debentures. During 2008,
        the
        Company’s stockholders approved an amendment to the Company’s Certificate of
        Incorporation to increase the number of authorized shares of common stock
        that
        may be issued to 500,000,000 from 100,000,000.


24





**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 three months and nine-month periods ended
      September 30, 2008 and 2007 should be read in conjunction with our consolidated
      financial statements included elsewhere in this Quarterly
      Report.*





**Introductory
      Comment**





Throughout
      this Quarterly Report on Form 10-Q 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 subsidiaries, Technipower LLC, Deltron Inc. and Town Creek
      Industries, Inc.





**Overview**




We
      operate our business in two divisions. Our Power Electronics Division makes
      products used to convert power from alternating current to direct current and
      adapt voltages to specific applications for use in telecommunications, defense,
      aerospace, marine and commercial applications. Our Motive Power Division
      develops electric motor/wheel/transaxle systems that regenerate and store power
      using kinetic energy. We have proprietary, patented technology in this area.





Our
      historical business has been the development, engineering, manufacturing,
      licensing and sale of electric power drive systems, which now constitutes our
      Motive Power Division. In August 2006, we acquired Technipower LLC, a
      manufacturer of power supplies and related equipment for the defense, aerospace
      and commercial markets. We further expanded our business in September 2007
      by
      acquiring Deltron Inc., a manufacturer of power supplies and related equipment
      with manufacturing operations in Pennsylvania and Mexico. Our Power Electronics
      Division encompasses the businesses of Technipower and Deltron.




We
      are
      working to combine our Motive Power Division’s patented technologies with the
      engineering and manufacturing capabilities of our Power Electronics Division.
      We
      believe that these synergies should allow the Motive Power Division to expand
      its application-specific technology development. We believe there are other
      synergies between our two divisions, including:





·
            The
                addition of the Power Electronics Division should enhance our ability
                to
                license our patented technology to a broader array of
                customers.·
            Technipower’s
                extensive military contacts should provide a natural outlet for the
                Motive
                Power Division’s proprietary electro/mechanical
                technologies.·
            The
                two divisions should achieve substantial operational and overhead
                cost
                savings by consolidating all finance and administrative functions
                in one
                location.





Our
      principal challenges in 2008 and into 2009 are the consolidation and growth
      of
      our Power Electronics Division, exploiting the synergies between our two
      divisions, generating revenue in our Motive Power Division and raising
      additional capital to implement our business plan. Without sufficient
      additional capital or and ultimately profitable operating results, we will
      not
      be able to continue as a going concern. *See* “Liquidity
      and Capital Resources”, below.





**Results
      of Operations**





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





25


*Three
      months ended September 30, 2008 compared with three months ended September
      30,
      2007.*





For
      the
      three months ended September 30, 2008 we generated revenues of $2,376,527 as
      compared to $2,134,093 for the three months ended September 30, 2007, an
      increase of $242,434, or 11.4%. Cost of products sold for the three months
      ended
      September 30, 2008 was $1,464,800, generating a gross margin of $911,727. Cost
      of products sold for the three months ended September 30, 2007 was $1,161,920,
      generating a gross margin of $972,173. The gross margin of the Power Electronics
      division is dependent on the mix of products sold during any given period.
      Such
      margins will continue to fluctuate in the future based primarily on the mix
      of
      products sold in any given period. The increase in our revenues is attributable
      principally to improved results of our Power Electronics Division, including
      the
      introduction by Technipower of its Cobalt15 line of power solutions to enhance
      its legacy product lines, and the addition to this Division of Deltron’s
      revenues. We believe that revenue of the Power Electronics Division will
      continue to equal or exceed those of previous quarters.





Research
      and Development costs were $310,808 for the three months ended September 30,
      2008 as compared to $310,108 for the three months ended September 30, 2007.





Selling,
      general and administrative expenses were $1,522,565 for the three months ended
      September 30, 2008 as compared to $1,980,367 for the three months ended
      September 30, 2007, a decrease of $457,802 or 23.1%. This decrease was primarily
      due to various corporate overhead and staffing reductions and cost savings
      from
      consolidation efforts within our Power Electronics Division, including
      reductions in overhead associated with the Company’s public company status.







We
      incurred interest expense of $865,626 for the three months ended September
      30,
      2008. Interest expense incurred for the three months ended September 30, 2007
      was $1,566,812. The decrease of $701,186 in interest expense was due in part
      to
      a decrease in the principal amount outstanding of variable rate self-liquidating
      senior secured convertible debentures sold in January and August 2007, with
      a
      corresponding reduction in accrued cash and non-cash interest charges related
      thereto.





The
      elements of interest expense including amortization of deferred costs for the
      three month ended September 30, 2008 and 2007 were as follows:


Three
                Months Ended September 30,2008
            
            2007Interest
                on notes payable
            
            $
            412,184
            
            $
            199,801Interest
                on bank debt
            
            
            43,404
            
            
            13,921Interest
                on unpaid payroll taxes and penalties
            
            
            0
            
            
            3,773Interest
                on variable rate self-liquidating senior secured convertible
                debentures
            
            
            410,038
            
            
            1,349,317**Total
                interest expense**
            
            $
            865,626
            
            $
            1,566,812





We
      reported a net loss and loss applicable to common stockholders for the three
      months ended September 30, 2008 of $1,785,130. We recorded a $2,496,544 loss
      related to the extinguishment of redeemable preferred stock and other debt
      in
      the three months ended September 30, 2007 related to the amendment of the
      January 2007 variable rate self-liquidating senior secured convertible
      debentures. As a result we reported a net loss and loss applicable to
      common stockholders for the three months ended September 30, 2007 of $5,366,547.
      The reduction in net loss and loss applicable to common stockholders was
      attributable principally to the reduction in interest expense and reduced
      selling, general and administrative expenses, as well as the loss related to
      the
      extinguishment of redeemable preferred stock and other debt incurred only in
      the
      prior period.





26


*Nine
      months ended September 30, 2008 compared with nine months ended September 30,
      2007.*





For
      the
      nine months ended September 30, 2008 we generated revenues of $7,421,953 as
      compared to $5,204,103 for the nine months ended September 30, 2007, an increase
      of $2,217,850, or 42.6%. Cost of products sold for the nine months ended
      September 30, 2008 was $4,687,211, generating a gross margin of $2,734,742.
      Cost
      of goods sold for the nine months ended September 30, 2007 was $2,777,865,
      generating a gross margin of $2,426,238. The gross margin of the Power
      Electronics division is dependent on the mix of products sold during any given
      period. Such margins will continue to fluctuate in the future based primarily
      on
      the mix of products sold in any given period. The increase in our revenues
      is
      attributable principally to improved results of our Power Electronics Division,
      including the introduction by Technipower of its Cobalt15 line of power
      solutions to enhance its legacy product lines, and the addition to this Division
      of Deltron’s revenues.





Research
      and Development costs were $1,009,225 for the nine months ended September 30,
      2008 as compared to $869,234 for the nine months ended September 30, 2007.
      The
      increase was the result of our continued focus on the development of new
      products in our Power Electronics Division.





Selling,
      general and administrative expenses were $3,749,454 for the nine months ended
      September 30, 2008 as compared to $4,527,105 for the nine months ended September
      30, 2007, a decrease of $777,651, or 17.2%. This decrease was primarily due
      various corporate overhead and staffing reductions and cost savings from
      consolidation efforts within our Power Electronics Division, including
      reductions in overhead associated with the Company’s public company status.




We
      incurred interest expense of $3,063,137 for the nine months ended September
      30,
      2008. Interest expense incurred for the nine months ended September 30, 2007
      was
      $6,442,812. The decrease of $3,379,675 in interest expense was due in part
      to a
      decrease in the principal amount outstanding of variable rate self-liquidating
      senior secured convertible debentures sold in January and August 2007, with
      a
      corresponding reduction in accrued cash and non-cash interest charges related
      thereto.




The
      elements of interest expense for the nine months ended September 30, 2008 and
      2007 were as follows:




Nine
                Months Ended September 30,2008
            
            2007Interest
                on notes payable
            
            $
            1,095,761
            
            $
            696,554Interest
                on bank debt
            
            
            89,148
            
            
            51,290Interest
                on unpaid payroll taxes and penalties
            
            
            0
            
            
            98,629Interest
                on variable rate self-liquidating senior secured convertible
                debentures
            
            
            1,878,228
            
            
            5,596,339**Total
                interest expense**
            
            $
            3,063,137
            
            $
            6,442,812





We
      reported a net loss and loss applicable to common stockholders for the nine
      months ended September 30, 2008 of $5,120,887. We recorded a $2,496,544 loss
      related to the extinguishment of redeemable preferred stock and other debt
      in
      the nine months ended September 30, 2007 related to the amendment of the January
      2007 variable rate self-liquidating senior secured convertible
      debentures. As a result we reported a net loss for the nine months ended
      September 30, 2007 of $11,875,662. Loss applicable to common stockholders for
      the nine months ended September 30, 2007 was $13,288,693, reflecting dividends
      of $1,413,031 relating to the redemption of the Series C preferred stock
      issued in August 2006.





Liquidity
      and Capital Resources





Our
      available cash balance at September 30, 2008 was $1,050,040. During the nine
      months ended September 30, 2008, we used net cash of $285,381 for operations.
      This consisted of a net loss of $5,120,887 including net non-cash charges of
      $3,668,690. Additionally, we used $70,194 of cash for investing activities.
      Financing activities provided net cash in the amount of $980,214 consisting
      principally of the issuance of convertible debentures and Series D Convertible
      Preferred Stock.





27


We
      have
      incurred significant operating losses and used cash in our operating activities
      for several consecutive years. As of September 30, 2008, we have negative
      working capital and a capital deficiency. In addition, we are in default on
      certain notes payable and on the payment of other liabilities. 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, including
      approximately $1,200,000 of debenture and equity financing in the quarter ended
      June 30, 2008. We expect to seek additional capital through the sale of debt
      and/or equity in 2008 or the first quarter of 2009 in order to fund our
      operating and capital needs and to refinance debt, although there can be no
      assurance that we will be successful. Our ability to continue as a going concern
      is dependent on obtaining additional long-term financing and ultimately
      achieving profitable operating results.





The
      prior
      experience of our Power Electronics Division may not accurately predict the
      results of future operations. Although Technipower has historically generated
      positive cash flow, we have not yet fully integrated Deltron Inc., acquired
      in
      September 2007, into Technipower’s operations. We are consolidating Deltron’s
      Pennsylvania operations into our headquarters in Connecticut, and in July 2008
      we reduced the Deltron workforce in our facility in Mexico by approximately
      44%
      (to 36 employees), which required that we pay 28 employees approximately
      $150,000 as required by Mexican employment laws. Our Motive Power Division
      has
      historically generated limited operating revenues. In order for us to market
      our
      existing products of both divisions successfully on a national and international
      level, we will be required to close public or private offerings of our equity
      or
      debt securities. If we are unable to obtain necessary financing, we will expand
      our operations only as and if cash flow from operations allows.




*Acquisitions* .
      We have
      used a combination of our securities and cash to acquire the two companies
      that
      comprise our Power Electronics Division.





·
            We
                purchased Technipower LLC in August 2006 for 4,615,381 shares of
                our
                Series C convertible redeemable preferred stock, 4,461,537 shares
                of our
                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. The share amounts
                were calculated using an agreed $.65 per share price, but we issued
                4,833,562 additional shares to the sellers of Technipower at the
                one year
                anniversary of the closing as a result of a required stock price
                adjustment. In January 2007, we redeemed 2,873,500 shares of our
                Series C
                preferred stock for an aggregate of $3,350,000 and converted the
                remaining
                1,741,881 shares of Series C preferred stock into 1,741,881 shares
                of
                common stock based on the market price of our common stock on the
                date of
                the transaction.





·
            On
                September 2007, we acquired the assets of Deltron, Inc for cash.
                The purchase price of $2,930,000 consisted of $1,508,000 in cash
                for
                Deltron’s assets, plus $600,000 in cash for the stock of Delinc, S.A.,
                $495,000 in acquisition related costs, and the assumption of certain
                liabilities in the amount of approximately $327,000. We also agreed
                to pay
                the sellers an earn-out payment equal to the product of net sales
                of the
                purchased business during the year following the closing multiplied
                by a
                profit margin determined by subtracting from net sales the cost of
                goods
                sold divided by net sales. The earn-out payment cannot exceed
                $300,000.





To
      fund
      the acquisition of Deltron, our subsidiary Deltron LLC (f/k/a Del-Inc
      Acquisition LLC) borrowed a total of $2,750,000 from JMC Venture Partners LLC
      (“JMC”) under an acquisition line of credit, discussed below. The loan was made
      pursuant to the terms of a Secured Promissory Note Loan Security and Pledge
      Agreement dated as of September 5, 2007, between Del-Inc and JMC and a related
      promissory note issued by Del-Inc to JMC on September 5, 2007. We guaranteed
      the
      loan fully and unconditionally pursuant to a Guaranty Agreement with JMC dated
      September 5, 2007. The loan matured on September 5, 2008. Our defaults under
      this note in the first and second quarters of 2008 for non-payment of interest
      and failure to comply with certain financial and negative debt covenants were
      waived by JMC. We are currently in default under this note but have agreed
      in
      principal with JMC on the terms pursuant to which the loan will be restructured
      as part of the refinancing of our senior line of credit for which we have
      received a formal commitment and expect to close in December.





28


*Acquisition
      Line of Credit.* On
      August 24, 2007, we entered into an agreement with JMC pursuant to which JMC
      agreed to provide Solomon with a line of credit for one year of up to
      $15,000,000 that is to be used exclusively for acquisitions .
      We used
      $2,750,000 of this line to purchase Deltron. As payment for the commitment
      fee
      on the full amount of the line of credit, we issued 974,026 shares of our common
      stock to JMC. We also issued 284,638 shares of common stock to JMC with respect
      to loan monitoring and perfection fees.JMC
      has
      not renewed the line of credit.




*Variable
      Rate Debentures* .
      On
      January 22, 2007, we sold $5,350,000 principal amount of Variable Rate
      Self-Liquidating Senior Secured Convertible Debentures originally due March
      17,
      2008. We used $3,350,000 of the net proceeds of the debentures to redeem
      approximately 2,873,492 shares of our Series C preferred stock issued to acquire
      Technipower LLC, $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.





We
      entered into a registration rights agreement with the purchasers of the
      debentures pursuant to which we filed a registration statement with the
      Securities and Exchange Commission covering the resale of the shares of common
      stock issuable pursuant to the conversion of the debentures and exercise of
      warrants. The registration statement was declared effective by the Commission
      on
      May 14, 2007.





On
      August
      24, 2007, we agreed with the holders of the debentures to amend the terms of
      the
      debentures and several related agreements. Under the terms of the amendment
      agreement,





·
            the
                maturity of all of the debentures was extended to April 17,
                2009;





·
            redemptions
                of principal of the debentures were temporarily
                suspended;





·
            once
                redemptions recommence, they will be required to continue on a monthly
                basis through the new maturity date of the debentures, at an amount
                equal
                to the principal amount of the debentures on the date the redemptions
                recommence divided by the number of months remaining to maturity
                of the
                debentures;





·
            the
                conversion price of the debentures and the exercise price of the
                related
                warrants were each reduced from $2.00 per share of common stock to
                $0.35
                per share of common stock;





·
            we
                agreed to file a new registration statement by October 1, 2007, and
                cause
                such registration statement to be declared effective by January 22,
                2008
                (which requirement was subsequently permanently
                waived);





·
            we
                are entitled to issue shares of common stock in payment of fees in
                connection with certain proposed transactions without such shares
                triggering an adjustment to the conversion price of the January debentures
                or the exercise price of the related
                warrants;





·
            we
                issued $160,500 in new debentures to the holders in satisfaction
                of
                liquidated damages incurred through the date of the amendment agreement
                under the registration rights
                agreement;





·
            we
                issued an aggregate of 1,747,267 shares of common stock in partial
                satisfaction of the redemption payment that was due on July 1, 2007,
                with
                the balance of the redemption payment carried forward and payable
                when
                redemption payments recommence; and





·
            the
                holders waived certain restrictions to enable us to raise up to $1
                million
                of additional financing through private placements of
                securities.





Separately,
      to induce the holders of the debentures to enter into the amendment agreement,
      we issued to the holders an aggregate of 401,250 restricted shares of common
      stock on August 27, 2007.





On
      August
      30, 2007, we sold an additional $500,000 principal amount of debentures. We
      used
      the net proceeds of the debentures to provide operating capital. The terms
      of
      these debentures are substantially the same as the terms of the debentures
      and
      warrants sold in January 2007, as amended by the amendment agreement dated
      August 24, 2007.





29


Pursuant
      to the terms of the debentures that we sold in January and August 2007, we
      agreed to redeem their face value plus accrued interest pro rata over their
      term
      each month in cash or, at our election, with shares of our common stock after
      the effectiveness of a registration statement covering the resale of the shares
      of common stock issuable upon conversion of the debentures. Shares used to
      make
      a monthly redemption are valued at 82.5% of the average of the daily volume
      weighted average price of the applicable shares for the 10 trading days before
      the amortization payment. We redeemed 10% of the principal amount of the
      debentures issued in January 2007 on June 1, 2007, but we failed to make the
      redemption payments due in July and thereafter in 2007 with respect to any
      of
      the debentures.





In
      the
      first quarter of 2008, all of the holders of the debentures waived our prior
      failures to redeem the debentures in accordance with their terms. They also
      permanently waived certain provisions of the registration rights agreement
      as
      well as several of the equity conditions that govern our right to use shares
      of
      our common stock rather than cash to make monthly debenture redemptions. Despite
      these waivers, it is still possible that, with respect to some debenture
      holders, we will not be able to redeem their debentures in the future with
      our
      common stock. Not all of the terms of the waivers by the debenture holders
      were
      identical. We issued a total of 432,533 shares of our common stock to induce
      the
      debentures holders to enter into waiver and amendment agreements.





In
      February 2008, we redeemed the entire principal amount and accrued interest
      of
      two of the debenture holders and accelerated the maturity date of a third
      holder’s debenture to June 2008 from April 2009. We also agreed with three
      debenture holders to allow them to defer monthly redemptions of their debentures
      until after the original maturity date. As of May 2008, each of these three
      holders had deferred three monthly redemptions, until May, June and July, 2009,
      respectively.





In
      the
      second quarter of 2008, we redeemed the entire principal amount and accrued
      interest of four of the debenture holders and accelerated the maturity date
      of a
      fifth holder’s debenture to July 2008 from April 2009. As of August 11, 2008,
      four investors (three of which are under common control) hold debentures that
      we
      issued in January and August 2007 with an approximate aggregate principal
      balance of $1,927,648.





As
      a part
      of the sale of the January and August 2007 debentures, we issued common stock
      purchase warrants to the purchasers giving them the right to purchase up to
      an
      aggregate of 2,006,250 shares of our common stock at an initial exercise price
      of $2.00 per share. In August 2007, the warrant exercise price was reduced
      to
      $.35 in connection with the issuance of $500,000 of additional debentures,
      at
      which time we also issued an additional 1,000,000 warrants, also exercisable
      at
      $.35 per share. Subsequently, one holder exercised 100,000
      warrants.





In
      May
      2008, each warrant holder agreed upon receipt from us of written notice to
      exercise all of its warrants at a reduced exercise price of $.001 per share.
      The
      total number of warrants exercised was 2,906,250. As an inducement to so
      exercise the warrants, we agreed to issue to each warrant holder one restricted
      share of common stock for each share acquired upon the warrant exercise. In
      addition, each warrant holder that continues to hold debentures after July
      1,
      2008 agreed to fix permanently the conversion price of the debentures at $.35
      per share (subject to customary adjustments resulting from stock dividends,
      stock splits and the like). As an inducement for this agreement, each such
      holder received one-half restricted share for each share received upon exercise
      of its warrants.





On
      June
      27, 2008, we entered into definitive agreements with the three prior debenture
      holders that are under common control relating to a private placement of
      $1,250,000 in principal amount of additional debentures due October 1, 2009.
      The
      placement generated gross proceeds of $948,611 after taking into an original
      issue discount of $250,000, legal fees and other expenses associated with the
      placement but before placement agent fees.




These
      debentures are required to be redeemed ratably over 10 months beginning January
      2009. In connection with this placement, the prior debentures issued to these
      investors were modified to extend the maturity date until September 2009, to
      modify the ratable monthly redemption schedule consistent therewith and to
      make
      other changes related to our ability to make monthly redemption payments in
      shares of our common stock. In other material respects, these debentures are
      substantially similar to the debentures we issued in January and August
      2007.




30


As
      a part
      of the June 2008 placement, we also issued to the purchasers of the debentures
      1,200 shares of our newly created Series D 0% Convertible Preferred Stock
      (“Preferred Stock”). Shares of Preferred Stock are restricted under the
      securities laws, do not pay a dividend, do not vote separately as a class (but
      do vote on an “as-converted” to common stock basis) and do not have a
      liquidation preference. Each share of Preferred Stock has a stated value of
      $1,000 and is convertible into shares of the our common stock at $.05 per share
      based on stated value with potential conversion price resets based on the
      average of the daily volume weighted average price of the applicable shares
      for
      the 20 consecutive trading days prior to the sixteenth, nineteenth and
      twenty-fourth month anniversaries of the original issue date. Shares of
      Preferred Stock are convertible by the holders at any time into shares of the
      our common stock. On or after January 1, 2009, we may force conversion of shares
      of Preferred Stock into its common stock if the average of the daily volume
      weighted average price of shares of common stock for any 20 consecutive trading
      days equals or exceeds $.25 per share, subject to certain other conditions
      being
      satisfied with respect to such period.





Separately,
      on June 30, 2008, we issued 300 shares of Preferred Stock to an unaffiliated
      purchaser that did not also purchase Debentures. The aggregate purchase price
      for these shares of Preferred Stock was $250,000. These shares of Preferred
      Stock were otherwise issued on substantially the same terms and conditions
      as
      the Preferred Stock issued to the purchasers of Debentures.





In
      the
      first two quarters of 2008, we issued a total of 57,827,604 shares of our common
      stock in redemption of $4,265,049 in principal amount of debentures plus accrued
      interest. 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.





Our
      obligations under the January and August 2007 and June 2008 debentures are
      secured by a security interest in substantially all of our assets pursuant
      to a
      security agreements dated January 17, 2007 and August 30, 2007, between us
      and
      the purchasers of the debentures. In the event that we form any new subsidiaries
      and move assets to those subsidiaries, those subsidiaries will become guarantors
      of the debentures.





*Other
      Financing* .
      Since
      March 2005, we have entered into various loan transactions with third parties
      as
      well as affiliates pursuant to which we raised capital to refinance debt, redeem
      preferred stock and provide working capital. We borrowed $1,712,085 in
      short-term debt financing from certain of our principal stockholders and other
      investors from March 2005 through December 2006, which amount was subsequently
      increased to $1,831,931 as an inducement for these stockholders and investors
      to
      extend the maturity of their notes until September 2008. The current balance
      of
      these loans, including accrued interest through September 30, 2008, is
      $1,896,133. These notes are secured by liens on all of our tangible and
      intangible assets. In consideration of the Company’s agreement to increase the
      original principal balance of these notes by 5%, all of the noteholders have
      agreed to extend the maturity of their notes until January 15, 2009.




Our
      Technipower subsidiary has a $750,000 revolving credit facility with a
      commercial bank which, after two extensions, expires on November 30, 2008.
      As of
      November 19, 2008, $750,000 is outstanding under the facility. In connection
      with the facility, the bank has a continuing security interest in all tangible
      and intangible personal property of Technipower. The Company is negotiating
      a
      new line of credit with a senior lender that has issued a commitment letter
      to
      the Company.





On
      October 12, 2007, we converted the $198,000 principal and interest balance
      of a
      prior promissory note and approximately $330,000 of trade accounts payable
      to a
      new promissory note payable to Davis & Gilbert LLP (“D&G” Note), our
      outside counsel, with an original principal balance of $564,566, which included
      7% additional principal as an inducement. The D&G Note bears interest at 12%
      and was payable on September 7, 2008. Subject to certain restrictions, D&G
      may convert any of the unpaid principal and interest at any time to shares
      of
      our common stock at a conversion price of $0.35 per share. The principal balance
      outstanding under the D&G note was $564,566 on September 30, 2008. We are
      currently in default under the D&G note.





On
      April
      16, 2008, we converted trade accounts payable in the amount of $219,420 due
      to
      UHY LLC, our former independent registered public accounting firm, to a
      non-interest bearing promissory note in that amount due on October 10, 2008.
      This note required an initial payment of $15,000 followed thereby bi-weekly
      installments of $10,000 commencing May 23, 2008 through October 24, 2008 with
      a
      balloon payment of $84,420 on October 10, 2008. Our defaults for failure to
      make
      weekly payments through November 19, 2008 have been waived by UHY LLC. The
      principal balance outstanding under this note was $174,420 on September 30,
      2008.





31


On
      August
      13, 2008, we agreed with one of the holders of our senior secured promissory
      notes to convert $100,000 principal amount in exchange for 6,097,561 shares
      of
      our common stock.





We
      have
      an outstanding balance due of $50,000 under a note issued on July 28, 2006
      to
      Jezebel Management Corporation, an affiliate of one of our directors. Our
      default under this note has been waived by Jezebel effective November 19, 2008,
      although the note continues to accrue interest at the default rate of 18% per
      annum.





*Acquisitions* .
      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.





*Funding
      of Toyota Litigation* .
      In
      November 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 is owned by Michael D’Amelio,
      one of our directors. Oliver Street agreed to pay all legal fees and out-of
      pocket expenses billed by our special patent counsel, Mintz, Levin, Cohn,
      Ferris, Glovsky & 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. We are paying,
      however, all of the legal fees incurred by us in connection with our appeal
      of
      the ITC’s adverse decision to the Court of Appeals for the Federal Circuit
      (“CAFC”) and any further litigation we may pursue as a result of the adverse
      decision of the CAFC on May 7, 2008. *See* Part II,
      Item 1, “Legal Proceedings.”





*Continuing
      Dilution.* We
      are
      required to redeem a pro rata portion of the debentures each month until their
      maturities in April and September 2009. We have been unable to redeem a minimal
      dollar amount of debentures in cash, and w e
      continue to issue a significant amount of our common stock to redeem the
      debentures. ** Because
      the price of our common stock has declined substantially since January 1, 2008,
      and because
      the number of shares issuable for monthly redemptions increases as our stock
      price declines, and because
      we have agreed to issue our common stock at a 17.5% (20% for the debentures
      issued in June 2008) discount to market over a rolling ten day period in
      redemption of the debentures, we have been required to issue a substantial
      number of shares each month to redeem the applicable portion of the debentures.
      Since January 1, 2008, we have issued nearly 97,085,704 shares
      of common stock to redeem $3,494,637 in principal amount of the debentures,
      plus
      interest, and the outstanding balance of the debentures on September 30, 2008
      (including the $1,250,000 of debentures issued on June 30, 2008) was $2,739,146.
      Accordingly, our stockholders have experienced substantial dilution to date
      in
      connection with these redemptions, and it is probable that they will experience
      substantial continuing dilution until the debentures after been fully
      redeemed.





**Critical
      Accounting Policies and Estimates**





There
      have been no material changes in the accounting policies and estimates that
      the
      Company considers to be "critical" from those disclosed in the Company's Annual
      Report on Form 10-KSB for the year ended December 31, 2007.





**Recently
      Issued Accounting Pronouncements**





*See* Note (2)
      to the consolidated financial statements for a summary of recently issued
      accounting pronouncements and their impact on the Company.





**ITEM
                4T.**
            **Controls
                and Procedures**




**Evaluation
      of Disclosure Controls and Procedures**





We
      maintain a system of disclosure controls and procedures that is designed to
      provide reasonable assurance that information we are required to disclose in
      the
      reports we file or submit under the Securities Exchange Act of 1934, is
      accumulated and communicated to management in a timely manner. Our Principal
      Executive Officer and Chief Financial Officer have evaluated this system of
      disclosure controls and procedures as of the end of the period covered by this
      quarterly report, and believe that the system is not operating effectively
      to
      ensure appropriate disclosure. This conclusion was based on the following:




32


Our
      Principal Executive Officer and Chief Financial Officer, together with the
      Chairman of our Audit Committee, conducted evaluations of our systems of
      internal control over financial reporting and disclosure control for the year
      ended December 31, 2007 and concluded at that time that our system of internal
      controls was not operating effectively primarily because we did not maintain
      a
      sufficient complement of personnel with the appropriate level of knowledge,
      experience and training in the application of accounting principles generally
      accepted in the United States (referred to as GAAP) and in internal control
      over
      financial reporting commensurate with our financial reporting obligations under
      the Exchange Act. We also did not maintain effective controls over the
      presentation of our consolidated financial statements and related disclosures
      as
      they related to the accounting for goodwill and general disclosures under
      GAAP.





There
      were no significant changes in our internal control over financial reporting
      between the aforementioned evaluation and the end of the most recent fiscal
      quarter that have materially affected, or are reasonably likely to materially
      affect, our internal control over financial reporting. Under the direction
      of
      our Principal Executive Officer and Chairman of the Audit Committee together
      with an outside consulting firm, we continue to develop a plan to remediate
      these weaknesses, which is likely to include additional employees who are
      trained in the preparation of financial statements in accordance with GAAP
      and
      who can supplement the experience of our current personnel that is necessary
      to
      ensure that we have in place appropriate internal control over financial
      reporting.





**Inherent
      Limitations on Effectiveness of Controls**




Our
      management does not expect that our Disclosure Controls or our internal control
      over financial reporting will prevent or detect all error and all fraud. A
      control system, no matter how well designed and operated, can provide only
      reasonable, not absolute, assurance that the control system’s objectives will be
      met. The design of a control system must reflect the fact that there are
      resource constraints, and the benefits of controls must be considered relative
      to their costs. Further, because of the inherent limitations in all control
      systems, no evaluation of controls can provide absolute assurance that
      misstatements due to error or fraud will not occur or that all control issues
      and instances of fraud, if any, within the company have been detected. These
      inherent limitations include the realities that judgments in decision-making
      can
      be faulty and that breakdowns can occur because of simple error or mistake.
      Controls can also be circumvented by the individual acts of some persons, by
      collusion of two or more people, or by management override of the controls.
      The
      design of any system of controls is based in part on certain assumptions about
      the likelihood of future events, and there can be no assurance that any design
      will succeed in achieving its stated goals under all potential future
      conditions. Projections of any evaluation of controls effectiveness to future
      periods are subject to risks. Over time, controls may become inadequate because
      of changes in conditions or deterioration in the degree of compliance with
      policies or procedures.





33


**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,
                2007.





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
      5. Other Information**





On
      November 7, 2008, the Company dismissed Eisner LLP (“Eisner”) as its independent
      registered public accounting firm ,
      effective immediately. The report of Eisner LLP on the Registrant’s financial
      statements for the year ended December 31, 2007 contained no adverse opinion
      or
      disclaimer of opinion and was not qualified or modified as to uncertainty,
      audit
      scope, or accounting principles, except that in its report for the year ended
      December 31, 2007, Eisner LLP included an explanatory paragraph expressing
      substantial doubt as to the Registrant’s ability to continue as a going
      concern.. Our Audit Committee participated in and approved the decision to
      change our independent registered public accounting firm. In connection with
      its
      audit for the most recent fiscal year and through November 7, 2008, there were
      no disagreements with Eisner on any matter of accounting principles or
      practices, financial statement disclosure, or auditing scope or procedure,
      which
      disagreements, if not resolved to the satisfaction of Eisner, would have caused
      them to make reference thereto in their report on the financial statements
      for
      such year. At our request, Eisner furnished us with a letter addressed to the
      Securities and Exchange Commission stating whether or not Eisner agreed with
      the
      above statements.




34


We
      engaged CCR LLP, of Glastonbury, Connecticut, as our new independent registered
      public accounting firm as of November 10, 2008. During the most recent fiscal
      year and through November 7, 2008, we had not consulted with CCR LLP regarding
      any of the following: the application of accounting principles to a specified
      transaction, either completed or contemplated; the type of audit opinion that
      might be rendered on the our consolidated financial statements, and none of
      the
      following was provided to us: (a) a written report, or (b) oral advice that
      was
      an important factor considered by us in reaching a decision as to an accounting,
      auditing or financial reporting issue; any matter that was the subject of a
      disagreement, as that term is used in Item 304(a)(1)(iv) of Regulation S-K
      and
      the related instructions to Item 304 of Regulation S-K; or an event of a type
      identified in Item 304(a)(1)(iv) of Regulation S-K.




35


**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,
      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. 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.





On
      September 19, 2007, we filed an appeal of the ITC’s decision with the Court of
      Appeals for the Federal Circuit (“CAFC”) which heard oral arguments on April 11,
      2008. In May 2008, the CAFC generally affirmed the ITC’s decision. On July 18,
      2008, we requested that the stay imposed on the patent infringement action
      we
      brought in the United States District Court in Florida be removed and the case
      reopened. The
      Court
      subsequently granted our request .





We
      do not
      believe there are any pending or threatened legal proceedings against us that,
      if adversely determined, would have a material adverse effect on
      us.





**Item
      1A. Risk Factors.**




There
      have been no material changes in our risk factors since the filing of our annual
      report for the year ended December 31, 2007 on Form 10-KSB.




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




On
      November 17, 2008,, the Company issued 11,851,163 shares of Common Stock to
      one
      holder of its Variable Rate Self-Liquidating Senior Secured Convertible
      Debentures due April 19, 2009 (the “Debentures”). These shares of Common Stock
      were issued pursuant to the pre-redemption provisions of the
      Debentures.




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





Our
      subsidiary Deltron LLC is currently in default under a $2,750,000 original
      principal balance note from JMC Venture Partners LLC (“JMC”) , an affiliate of
      one of our directors. This loan is secured by all of the assets of Deltron
      LLC
      and is guaranteed by us. We have agreed in principal with JMC on the terms
      pursuant to which the loan will be restructured as part of the refinancing
      of
      our senior line of credit for which we have received a formal commitment and
      expect to close in December 2008.




36


We
      are
      currently in default under an unsecured promissory note issued to our outside
      legal counsel with a principal balance of $564,566 as of September 30, 2008.
      This note was payable on September 7, 2008.




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




None.




**Item
      5. Other Information.**




None.





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




**Exhibit
                    No.**
                
                **Description**3.10
                
                Certificate
                    of Elimination of Series C Preferred Stock. (1)3.11
                
                Certificate
                    of Designation of Preferences, Rights and Limitations of Series
                    D 0%
                    Convertible Preferred Stock (10)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. (3)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)10.10
                
                Incentive
                    Compensation Agreement dated May 1, 2007 by and between Solomon
                    Technologies, Inc. and Peter W. DeVecchis, Jr.(4)10.11
                
                Employment
                    Agreement, dated as of May 31, 2007, by and between Solomon Technologies,
                    Inc. and Jack Worthen. (4)10.12
                
                Asset
                    Purchase Agreement, dated as of June 1, 2007 by and among Solomon
                    Technologies, Inc. and DEL-INC Acquisition LLC and Deltron, Inc.
                    and its
                    subsidiaries and shareholders, and related
                    amendments.(4)10.13
                
                Option
                    Agreements, dated as of June 4, 2007, by and between Solomon
                    Technologies,
                    Inc. and Jack Worthen.(4)10.14
                
                Amendments
                    dated as of August 9, 2007, August 16, 2007, August 24, 2007,
                    August 31,
                    2007, and September 4, 2007 to the Asset Purchase Agreement,
                    dated as of
                    June 1, 2007, by and among Solomon Technologies, Inc. and DEL-INC
                    Acquisition LLC and Deltron, Inc. and its subsidiaries and shareholders.
                    (5)10.15
                
                Amendment
                    Agreement, dated as of August 24, 2007, between Solomon Technologies,
                    Inc.
                    and each debenture purchaser identified on the signature pages
                    thereto.
                    (5)10.16
                
                Acquisition
                    Line of Credit Agreement, dated as of August 24, 2007, between
                    Solomon
                    Technologies, Inc. and JMC Venture Partners LLC. (5)10.17
                
                Securities
                    Purchase Agreement dated as of August 30, 2007, between Solomon
                    Technologies, Inc. and each purchaser identified on the signature
                    pages
                    thereto. (5)10.18
                
                Form
                    of Variable Rate Self-Liquidating Senior Secured Convertible
                    Debentures.
                    (5)10.19
                
                Registration
                    Rights Agreement, dated as of August 30, 2007, between Solomon
                    Technologies, Inc. and each purchaser identified on the signature
                    pages
                    thereto. (5)10.20
                
                Form
                    of Common Stock Warrant. (5)10.21
                
                Form
                    of Legal Opinion. (5)
  37
  10.22
                
                Security
                    Agreement dated as of August 30, 2007, between Solomon Technologies,
                    Inc.
                    and each purchaser identified on the signature pages thereto.
                    (5)10.23
                
                Form
                    of Subsidiary Guarantee. (5)10.24
                
                Form
                    of Lock-Up Agreement. (5)10.25
                
                Escrow
                    Agreement dated as of August 30, 2007, among Solomon Technologies,
                    Inc.
                    and each purchaser identified on the signature pages thereto
                    and Davis
                    & Gilbert LLP. (5)10.26
                
                Secured
                    Promissory Note Loan, Security and Pledge Agreement dated as
                    of September
                    5, 2007, between Del-Inc Acquisition LLC and JMC Venture Partners
                    LLC.
                    (5)


10.27
            
            Secured
                Promissory Note dated September 5, 2007, issued to JMC Venture Partners
                LLC. (5)10.28
            
            Guaranty
                Agreement dated as of September 5, 2007, by Solomon Technologies,
                Inc. in
                favor of JMC Venture Partners LLC. (5)10.29
            
            Guaranty
                Agreement dated as of September 5, 2007, by Corporacion Delinc, S.A.
                de
                C.V. in favor of JMC Venture Partners LLC. (5)10.30
            
            Pledge
                and Security Agreement dated as of September 5, 2007, by Corporacion
                Delinc, S.A. de C.V. and JMC Venture Partners LLC. (5)10.31
            
            Agreement
                dated as of September 18, 2007, among Solomon Technologies, Inc.,
                Woodlaken LLC, Jezebel Management Corporation, Pinetree (Barbados),
                Inc.,
                Coady Family LLC, Jezebel Management Corporation, Pinetree (Barbados),
                Inc., Coady Family LLC, F. Jay Leonard, Peter and Barbara Carpenter,
                Pascal Partners, LLC, Steven Kilponen, Millennium Trust Company LLC
                Custodian FBO Joseph Cooper Rollover IRA 90M020013 and Millenium
                Trust
                Company LLC Custodian FBO Steven Kilponen, Millennium Company LLC
                Custodian FBO Steven Kilponen IRA Rollover Account #90N727012.
                (5)10.32
            
            Amendment
                Agreement by and among Solomon Technologies, Inc. dated as of October
                25,
                2007 and each debenture purchaser identified on the signature pages
                thereto. (6)10.33
            
            Amendment
                Agreement dated August 17, 2007 to Securities Purchase Agreement
                dated
                August 16, 2006 among Solomon Technologies, Inc. and each purchaser
                identified on the signature page thereto. (6)10.34
            
            Audited
                Financial Statements of Deltron Inc. as of and for the years ended
                December 31, 2006 and 2005 (7)10.35
            
            Unaudited
                Interim Financial Statements of Deltron Inc. as of and for the six
                months ended June 30, 2007 and 2006 (7)10.36
            
            Unaudited
                Pro Forma Condensed Combined Financial Statements of Solomon
                Technologies, Inc. and Deltron, Inc. (7)10.37
            
            Agreement
                and Mutual Release between Gary G. Brandt and Solomon Technologies,
                Inc.
                dated January 10, 2008 (8)10.38
            
            Gary
                G. Brandt 2008 Consulting Agreement and Plan between Gary G. Brandt
                and
                Solomon Technologies, Inc. dated January 10, 2008 (8)10.39
            
            2008
                Employment Agreement and Plan between Gary M. Laskowski and Solomon
                Technologies, Inc. dated January 15, 2008 (8)10.40
            
            2008
                Employment Agreement and Plan between Michael A. D’Amelio and Solomon
                Technologies, Inc. dated January 15, 2008 (8)10.41
            
            Waiver
                Agreement between Alpha Capital Anstalt and Solomon Technologies,
                Inc.
                dated January 2008 (8)10.42
            
            Waiver
                Agreement between Double U Master Fund, LP and Solomon Technologies,
                Inc.
                dated January 2008 (8)10.43
            
            Waiver
                Agreement between Cornix Management, LLC and Solomon Technologies,
                Inc.
                dated January 2008 (8)10.44
            
            Waiver
                Agreement between Harborview Master Fund LP and Solomon Technologies,
                Inc.
                dated January 2008 (8)10.45
            
            Waiver
                Agreement between Nite Capital LP and Solomon Technologies, Inc.
                dated
                January 2008 (8)10.46
            
            Waiver
                Agreement between Rockmore Investment Master Fund Ltd. and Solomon
                Technologies, Inc. dated January 2008 (8)10.47
            
            Waiver
                and Amendment Agreement between Bridgepoint Master Fund Ltd. and
                Solomon
                Technologies, Inc. dated February 4, 2008 (8)10.48
            
            Amendment
                Agreement between Harborview Master Fund LP as successor-in-interest
                to
                Nite Capital LP and Solomon Technologies, Inc. dated February 29,
                2008
                (8)10.49
            
            Amendment
                Agreement between Harborview Master Fund LP and Solomon Technologies,
                Inc.
                dated March 3, 2008 (8)10.50
            
            Second
                Amendment Agreement by and among Truk Opportunity Fund, LLC, Truk
                International Fund, LP and Shelter Island Opportunity Fund, Ltd.
                and
                Solomon Technologies, Inc. dated March 27, 2008 (8)10.51
            
            Amendment
                and Waiver Agreement between Iroquois Master Fund, Ltd. and Solomon
                Technologies, Inc. dated February 5, 2008 (8)10.52
            
            Amendment
                Agreement between Alpha Capital Anstalt and Solomon Technologies,
                Inc.
                dated April 15, 2008 (9)10.53
            
            Warrant
                Exercise Agreement between Alpha Capital Anstalt and Solomon Technologies,
                Inc. dated April 15, 2008 (9)10.54
            
            Amendment
                Agreement between Iroquois Master Fund, Ltd and Solomon Technologies,
                Inc.
                dated April 15, 2008 (9)10.55
            
            Reduction
                in Exercise Price of Warrants and Notice of Cashless Exercise between
                Shelter Island Opportunity Fund, LLC. and Solomon Technologies, Inc.
                dated
                May 2, 2008 (9)




38




10.56
            
            Reduction
                in Exercise Price of Warrants and Notice of Cashless Exercise between
                Truk
                Opportunity Fund, LLC. and Solomon Technologies, Inc. dated May 2,
                2008
                (9)10.57
            
            Reduction
                in Exercise Price of Warrants and Notice of Cashless Exercise between
                Truk
                International Fund, LLC. and Solomon Technologies, Inc. dated May
                2, 2008
                (9)10.58
            
            Amendment
                Agreement between Cornix Management LLC and Solomon Technologies,
                Inc.
                dated May 2, 2008 (9)10.59
            
            Amendment
                Agreement between Double U Master Fund, LP and Solomon Technologies,
                Inc.
                dated May 2, 2008 (9)10.60
            
            Amendment
                Agreement between Rockmore Investment Master Fund Ltd and Solomon
                Technologies, Inc. dated May 2, 2008 (9)10.61
            
            Warrant
                Exercise Agreements between Fort Mason Partners, L.P. and Fort Mason
                Master, L.P. and Solomon Technologies, Inc. May 2, 2008
                (9)10.62
            
            Warrant
                Exercise Agreement between Harborview Master Fund LP. and Solomon
                Technologies, Inc. May 2, 2008 (9)10.63
            
            Reduction
                in Exercise Price of Warrants and Notice of Cashless Exercise between
                BridgePointe Master Fund Ltd. and Solomon Technologies, Inc. dated
                May 13,
                2008 (9)10.64
            
            Professional
                Services Agreement between Bryan Delano and Solomon Technologies,
                Inc.
                dated May 15, 2008 (9)10.65
            
            Professional
                Services Agreement between Patrick Rowland and Solomon Technologies,
                Inc.
                dated May 15, 2008 (9)10.66
            
            Professional
                Services Agreement between John Iacobelli and Solomon Technologies,
                Inc.
                dated May 15, 2008 (9)10.67
            
            Supplemental
                Employment Agreement between and Peter W. DeVecchis, Jr. and Solomon
                Technologies, Inc. dated May 19, 2008 (9)10.68
            
            Consulting
                Project: Strategic and Marketing Analysis of Deltron and Technipower
                subsidiaries of Solomon Technologies, Inc. by Thomas Kell dated March
                24,
                2008 (9)10.69
            
            Form
                of Securities Purchase Agreement dated as of June 27, 2007 by and
                among
                Solomon Technologies, Inc. and each purchaser identified on the signature
                pages thereto (10)10.70
            
            Form
                of Variable Rate Self-Liquidating Senior Secured Convertible Debentures
                (10)10.71
            
            Form
                of Securities Purchase Agreement dated as of June 30, 2007 by and
                among
                Solomon Technologies, Inc. and each purchaser identified on the signature
                pages thereto (10)10.72
            
            Form
                of Legal Opinion (10)10.73
            
            Form
                of Stock Option Agreement issued to members of the Board of Directors
                and
                members of Advisory Board (11)10.74
            
            Form
                of Stock Option Agreement issued to members of the Advisory Board
                (11)10.75
            
            2008
                Amended Employment Agreement and Plan for Gary M. Laskowski
                (11)10.76
            
            2008
                Amended Employment Agreement and Plan for Michael A. D’Amelio
                (11)10.77
            
            Stock
                Option Agreement issued to Gary M. Laskowski in connection with the
                Gary
                M. Laskowski 2008 Amended Employment Agreement and Plan
                (11)10.78
            
            Stock
                Option Agreement issued to Michael A. D’Amelio in connection with the
                Michael A. D’Amelio 2008 Amended Employment Agreement and Plan
                (11)16.1
            
            Letter
                from UHY LLP to the Securities and Exchange Commission dated May
                31, 2007
                (5)16.2
            
            Letter
                from Eisner LLP to the Securities and Exchange Commission dated November
                13, 2008 (12)31.1
            
            Certification
                by Principal Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002( 13)31.2
            
            Certification
                by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 (13)32.1
            
            Certification
                by Principal Executive Officer pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (13)32.2
            
            Certification
                by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002 (13)





(1)
            Incorporated
                by reference from Amendment No. 4 to the Registration Statement on
                Form
                SB-2, File No. 333-13820, filed on May 9, 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.(4)
            Incorporated
                by reference from the Quarterly Report on Form 10-QSB dated August
                20,
                2007.(5)
            Incorporated
                by reference from the Registration Statement on Form SB-2, File No.
                333-146424, filed on October 1, 2007.(6)
            Incorporated
                by reference from the Quarterly Report on Form 10-QSB dated November
                15,
                2007.(7)
            Incorporated
                by reference from the Current Report on Form 8-K/A filed on November
                19,
                2007.(8)
            Incorporated
                by reference from the Annual Report on Form 10-KSB filed April 15,
                2008.(9)
            Incorporated
                by reference from the Quarterly Report on Form 10-Q dated May 20,
                2008.(10)
            Incorporated
                by reference from the Current Report on Form 8-K/A filed on July
                8,
                2008(11)
            Incorporated
                by reference from the Current Report on Form 8-K filed on August
                18,
                2008(12)
            Incorporated
                by reference from the Current Report on Form 8-K filed on November
                13,
                2008(13)
            Filed
                herewith.





39


**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:
      November 19, 2008





**SOLOMON
      TECHNOLOGIES, INC.**





By:
            /s/
                Peter W. DeVecchis, Jr.Peter
                W. DeVecchisPresident(principal
                executive officer)By:
            /s/
                Samuel F. OcchipintiSamuel
                F. OcchipintiChief
                Financial Officer(principal
                financial and accounting officer)





40


**Exhibit
      Index**





**Exhibit
                No.**
            
            **Description**




31.1
            
            Certification
                by Principal Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200231.2
            
            Certification
                by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200232.1
            
            Certification
                by Principal Executive Officer pursuant to Section 906 of the
                Sarbanes-Oxley Act of 200232.2
            
            Certification
                by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002