UNITED STATES

Securities and Exchange Commission

Washington, D.C. 20549



Form 10-QSB

(Mark One)



(X)      QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2006



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 000-29895



SMART-TEK SOLUTIONS, INC.

(Formerly ROYCE BIOMEDICAL, INC.)



Nevada
      98-0206542State or other jurisdiction of incorporation
      (I.R.S.) Employer Identification No.




Smart-tek Solutions, Inc.

433 Towne Center Suite 316

Corte Madera, CA 94925

Address of principal executive offices



(415) 738-8887

-----------------------

Registrant's telephone number, including area code



1100-1200 West 73rd Avenue

Vancouver, British Columbia V6P 6G5

Former address of principal executive offices



Indicate by check mark whether the Registrant (1) has files 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) had been  subject to



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such  filing requirements for the past 90 days.

Yes   X                  No    _____



As of May 10, 2006 the Company had 73,253,016 shares of common stock outstanding.



Transitional Small Business Disclosure Format (Check one)    Yes ____   No  X





PART I -- FINANCIAL INFORMATION



Item 1. Financial Statements.









2





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|-------- | ------------------------------- | ----------------------------------------------------------------------- | ---- | - |  |  | ---- |  |  |  |  |  |  |  | 
|Contents |                                 |                                                                         |      |   |  |  |     
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 |                                                                         |      |   |  |  | Page
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 |                                                                         |      |   |  |  |     
|         | Unaudited Financial Statements: |                                                                         |      |  
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 | Condensed Consolidated Balance Sheets                                   |      | 4
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 | Condensed Consolidated Statements of Operations                         | 5-6 
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 | Condensed Consolidated Statement of Changes in Shareholders' Deficiency | 7   
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 | Condensed Consolidated Statements of Cash Flows                         | 8   
|         |                                 |                                                                         |      |   |  |  |     
|         |                                 | Notes to the Condensed Consolidated Financial Statements                | 9-16
|         |                                 |                                                                         |      |   |  |  |     



3





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4





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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Condensed Consolidated Balance Sheets

As at March 31, 2006 (Unaudited) and June 30, 2005



|                                                              |   | March 31    |        | June 30    
|------------------------------------------------------------- | - | ----------- | ------ | -----------
|                                                              |   |             | 2006   |            
|                                                              |   | (Unaudited) |        |            
|Assets                                                        |   |             |        |            
|Current assets                                                |   |             |        |            
|Cash                                                          | $ |             | 85,501 | $          
|Accounts receivable                                           |   | 238,139     |        | 351,656    
|Contract retention receivable                                 |   | 118,359     |        | 68,803     
|Cost of uncompleted contracts in excess of billings           |   | 197,451     |        | 2,202      
|Prepaid expenses and deposits                                 |   |             | 10,685 |            
|Total current assets                                          |   | 650,135     |        | 438,334    
|Equipment, net of accumulated depreciation                    |   |             | 16,872 |            
|Goodwill                                                      |   | 451,311     |        | 451,311    
|                                                              | $ | 1,118,318   | $      | 911,536    
|Liabilities                                                   |   |             |        |            
|Current liabilities                                           |   |             |        |            
|Bank overdraft                                                | $ | 122,588     | $      | 110,311    
|Accounts payable and accrued liabilities                      |   | 235,480     |        | 218,237    
|Bonus payable                                                 |   | 239,926     |        | 195,580    
|Billings on uncompleted contracts                             |   |             |        |            
|in excess of costs and estimated revenues                     |   | 145,054     |        | 255,605    
|Deferred revenue                                              |   |             | 11,329 |            
|Shareholder loans                                             |   | 281,061     |        | 81,076     
|Amounts due to officers and directors                         |   | 371,833     |        | 176,077    
|Obligations under capital leases                              |   |             | 274    |            
|Current portion of related party debt                         |   |             | 27,740 |            
|Total current liabilities                                     |   | 1,435,285   |        | 1,077,487  
|Related party debt, net of current portion                    |   | 173,632     |        | 175,005    
|Total liabilities                                             |   | 1,608,917   |        | 1,252,492  
|Shareholders Deficiency                                      |   |             |        |            
|Preferred stock, $0.001 par value, 5,000,000 shares           |   |             |        |            
|authorized, one (1) shares of Class A preferred               |   |             |        |            
|issued and outstanding at December 31, 2005 and June 30, 2005 | - |             | -     
|Common stock: $0.001 par value, 500,000,000, shares           |   |             |        |            
|authorized, 73,253,016 and 106,219,683 issued                 |   |             |        |            
|and outstanding at December 31, 2005 and June 30, 2005        |   |             |        |            
|respectively                                                  |   |             | 73,253 |            
|Additional paid in capital                                    |   | 2,911,561   |        | 2,865,261  
|Deferred compensation                                         |   | (131,250)   |        | (180,000)  
|Accumulated other comprehensive loss                          |   | (33,986)    |        | (8,496)    
|Accumulated deficit                                           |   | (3,310,177) |        | (3,123,941)
|Total shareholders deficiency                                |   | (490,599)   |        | (340,956)  
|                                                              | $ | 1,118,318   | $      | 911,536    





See accompanying notes to the condensed consolidated financial statements.



5



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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Condensed Consolidated Statements of Operations and Comprehensive Loss-Unaudited

For the three months ended March 31, 2006 and 2005



|                                             |   | 2006       |   | 2005      
|-------------------------------------------- | - | ---------- | - | ----------
|Revenue                                      |   |            |   |           
|Contract revenue                             | $ | 462,401    | $ | -         
|Services revenue                             |   | 22,573     |   | -         
|Other revenue                                |   | 1,519      |   | -         
|Total revenue                                |   | 486,493    |   | -         
|Cost of revenue and service delivery         |   | 363,479    |   | -         
|Gross profit                                 |   | 123,014    |   | -         
|Selling, general and administrative expenses |   |            |   |           
|Management fees                              |   | 51,957     |   | -         
|Officers salaries                           |   | 30,000     |   | 44,000    
|Independent directors compensation          |   | -          |   | 12,000    
|Facilities expense                           |   | 16,498     |   | 1,524     
|Travel and transportation expense            |   | 26,128     |   | 6,945     
|Professional fees                            |   | 54,776     |   | 15,926    
|Advertising and marketing expense            |   | 75         |   | -         
|Insurance                                    |   | 3,677      |   | -         
|Depreciation and amortization expense        |   | 1,975      |   | -         
|Amortization of deferred compensation        |   | 16,250     |   | -         
|Other operating expenses                     |   | 1,064      |   | 1,000     
|                                             |   | 202,400    |   | 81,395    
|Operating loss                               |   | (79,386)   |   | (81,395)  
|Other expense                                |   |            |   |           
|Interest                                     |   | (2,848)    |   | (1,000)   
|Net loss                                     |   | (82,234)   |   | (82,395)  
|Currency translation adjustment              |   | (1,819)    |   | -         
|Comprehensive loss                           | $ | (84,053)   | $ | (82,395)  
|Weighted average shares outstanding,         |   |            |   |           
|basic and diluted                            |   | 73,253,016 |   | 61,485,016
|Loss per share, basic and diluted            | $ | 0.00       | $ | (0.00)    



See accompanying notes to the condensed consolidated financial statements.





6



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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Condensed Consolidated Statements of Operations and Comprehensive Loss-Unaudited

For the nine months ended March 31, 2006 and 2005



|                                             |   | 2006       |   | 2005      
|-------------------------------------------- | - | ---------- | - | ----------
|Revenue                                      |   |            |   |           
|Contract revenue                             | $ | 1,748,548  | $ | -         
|Services revenue                             |   | 91,046     |   | -         
|Other revenue                                |   | 6,670      |   | -         
|Total revenue                                |   | 1,846,264  |   | -         
|Cost of revenue and service delivery         |   | 1,358,482  |   | -         
|Gross profit                                 |   | 487,782    |   | -         
|Selling, general and administrative expenses |   |            |   |           
|Management fees                              |   | 176,009    |   | -         
|Officers salaries                           |   | 121,500    |   | 69,298    
|Independent directors compensation          |   | -          |   | 12,000    
|Facilities expense                           |   | 46,194     |   | 11,835    
|Travel and transportation expense            |   | 73,902     |   | 11,794    
|Professional fees                            |   | 176,243    |   | 59,450    
|Advertising and marketing expense            |   | 804        |   | -         
|Insurance                                    |   | 9,914      |   | -         
|Depreciation and amortization expense        |   | 5,817      |   | -         
|Amortization of deferred compensation        |   | 48,750     |   | -         
|Other operating expenses                     |   | 1,709      |   | 1,000     
|                                             |   | 660,842    |   | 165,377   
|Operating loss                               |   | (173,060)  |   | (165,377) 
|Other expense                                |   |            |   |           
|Interest                                     |   | (13,176)   |   | (1,000)   
|Net loss                                     |   | (186,236)  |   | (166,377) 
|Currency translation adjustment              |   | (25,490)   |   | -         
|Comprehensive loss                           | $ | (211,726)  | $ | (166,377) 
|Weighted average shares outstanding,         |   |            |   |           
|basic and diluted                            |   | 89,146,203 |   | 25,212,267
|Loss per share, basic and diluted            | $ | (0.00)     | $ | (0.00)    



See accompanying notes to the condensed consolidated financial statements.





7



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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Condensed Consolidated Statement of Changes in Shareholders' Deficiency-Unaudited

For the nine months ended March 31, 2006



|                                  |              |          |                 |               |              | Accumulated other |            
|--------------------------------- | ------------ | -------- | --------------- | ------------- | ------------ | ----------------- | -----------
|                                  | Common       |          | Additional      | Accumulated   | Deferred     | Comprehensive     |            
|                                  | Shares       | Amount   | Paid in capital | Deficit       | Compensation | loss              | Total      
|Balance  July 1, 2005            | 106,219,683  | $106,220 | $2,865,261      | $ (3,123,941) | $(180,000)   | $ (8,496)         | $ (340,956)
|Issuance of common stock          |              |          |                 |               |              |                   |            
|for settlement of accrued         |              |          |                 |               |              |                   |            
|liability                         | 33,333       |          | 33              | 13,300        | -            | -                 | -          
|Amortization of deferred          |              |          |                 |               |              |                   |            
|compensation                      | -            |          | -               | -             | -            | 48,750            | -          
|Share cancellation                | (33,000,000) |          | (33,000)        | 33,000        | -            | -                 | -          
|Net loss                          | -            |          | -               | -             | (186,236)    | -                 | -          
|Currency translation adjustment - |              | -        | -               | -             | -            | (25,490)          | (25,490)   
|Balance  March 31, 2006          | 73,253,016   | $73,253  | $2,911,561      | $(3,310,177)  | $ (131,250)  | $ (33,986)        | $(490,599) 





See accompanying notes to the condensed consolidated financial statements.



8



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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Condensed Consolidated Statements of Cash Flows-Unaudited

For the nine months ended March 31, 2006 (Consolidated) and 2005



|                                                                            |           | 2006      |   | 2005     
|--------------------------------------------------------------------------- | --------- | --------- | - | ---------
|Operating activities                                                        |           |           |   |          
|Net loss                                                                    | $         | (186,236) | $ | (166,377)
|Adjustments to reconcile net loss to net cash used in                       |           |           |   |          
|operating activities                                                        |           |           |   |          
|Depreciation and amortization                                               |           | 5,817     |   | -        
|Amortization of deferred compensation                                       |           | 48,750    |   | -        
|Issuance of shares of common stock for services                             |           | -         |   | 42,000   
|Issuance of shares of common stock for compensation                         |           | -         |   | 32,000   
|Issuance of shares of common stock for payment of interest                  |           | -         |   | 1,000    
|Issuance of shares of common stock for expense                              |           | -         |   | 1,000    
|Changes in operating assets and liabilities                                 |           |           |   |          
|Accounts receivable                                                         |           | 130,859   |   | 184      
|Contract retention receivable                                               |           | (46,164)  |   | -        
|Costs of uncompleted contracts in excess of billings                        |           | (195,140) |   | -        
|Prepaid expenses and deposits                                               |           | 5,052     |   | (21,096) 
|Accounts payable and accrued liabilities                                    |           | 11,097    |   | 70,110   
|Amounts due to officers and directors                                       |           | 190,420   |   | -        
|Bonus payable                                                               |           | 34,700    |   |          
|Deferred income                                                             |           | 1,528     |   |          
|Billings on uncompleted contracts in excess of costs and estimated revenues | (123,157) |           | -
|Net cash used in operating activities                                       |           | (122,474) |   | (41,179) 
|Financing activities                                                        |           |           |   |          
|Increase in bank overdraft, net                                             |           | 19,569    |   | -        
|Proceeds from shareholders loan                                             |           | 199,985   |   | 39,153   
|Repayment of related party loan                                             |           | (10,003)  |   | -        
|Net cash provided by financing activities                                   |           | 209,551   |   | 39,153   
|Effects of exchange rates on cash                                           |           | (1,576)   |   | -        
|Net increase (decrease) in cash and cash equivalents                        |           | 85,501    |   | (2,026)  
|Cash and cash equivalents, beginning of period                              |           | -         |   | 2,026    
|Cash and cash equivalents, end of period                                    | $         | 85,501    | $ | -        
|Supplemental cash flow information                                          |           |           |   |          
|Interest paid                                                               | $         | 13,175    | $ | -        





Non-cash Financing Activities



During the nine months ended March 31, 2006, the Company issued 33,333 restricted shares of its common stock in full settlement of a $13,333 amount owed to a
shareholder.



During the nine months ended March 31, 2006, the Company cancelled 33,000,000 shares of common stock that were returned for no cash consideration.







See accompanying notes to the condensed consolidated financial statements.



9





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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





1.

Summary of significant accounting policies



Nature of operations, basis of financial statement presentation



Royce Biomedical Inc. was incorporated in Nevada on March 22, 1995.

Between August 1995 and June 1998, the Company manufactured and sold diagnostic test kits used to detect pregnancy, thyroid disorders and other medical conditions. The Company assembled its diagnostic testing kits at its laboratory in Irvine, California. The Company closed this facility in April 1998. In order to penetrate the Chinese immunodiagnostic market quickly, the Company signed an agreement in April 1999 with Xili Pharmaceutical Group, Inc. ("Xili") of the People's Republic of China to market and distribute H. Pylori diagnostic test kits supplied by the Company. In addition to supplying H. Pylori test kits to Xili, the Company had provided clinical data and training to Xili personnel.

Xili Pharmaceutical Group, Inc., through its subsidiary Xili USA, Inc., owned approximately 44% of the outstanding common shares of the Company through December 5, 2004 and is controlled by Dr. Yan Xiao Wen, who is also the former Chairman of the Company's Board of Directors. At March 31, 2006, Xili USA, Inc. owns approximately 3% of the outstanding common shares of the Company.

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



Pursuant to the share exchange agreement, the Company issued 1,000 shares of its common stock and 1 share of Class A preferred stock in return for all outstanding shares of SCI.  The acquisition has been accounted for as a purchase (see Note 2).



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

In August 2005, the Company changed its name from Royce Biomedical Inc. to Smart-tek Solutions Inc. (STS or the "Company") to better reflect its new business activities.

The accompanying unaudited condensed interim consolidated financial statements, have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America and, in our opinion, reflects all adjustments, including normal recurring adjustments, necessary to make the financial position and results of operations for the interim periods a fair presentation of our operations and cash flows.  The financial information has not been audited and should not be relied on to the same extent as audited financial statements.











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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission.  These interim financial statements should be read in conjunction with the Companys audited financial statements, as well as other financial information, as contained in Form 10-KSB for the year ended June 30, 2005.  The results of operations for the three and nine months ended March 31, 2006 are not necessarily indicative of results of operations to be expected for the full year.



Use of estimates



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



Foreign currency translation



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



Comprehensive (loss) income



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



Stock-based compensation



The Company recognizes and measures the cost of services received in exchange for the issuance of common shares based upon the fair value of the services rendered and amortized over the period of time the services were performed or will be performed.  In December 2004, the Financial Accounting Standards Board issued a revised Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123R), which supercedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance.  This statement requires a public entity to recognize and measure the cost of employee services it receives in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions).  These costs will be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period).  This statement also establishes the standards for the accounting treatment of these share-based payment transactions in which an entity exchanges its equity instruments for goods or services.  It addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments.  This statement shall be effective the first interim or annual reporting period that begins after December 15, 2005.  The Company has adopted revised SFAS No. 123R effective December 31, 2004, the implementation of which did not have a significant effect on the Companys financial statement presentation or its disclosures.



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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





Loss per share



Statement of Financial Accounting Standards No.128 Earnings Per Share, requires presentation of basic earnings per share (Basic EPS) and diluted earnings per share (Diluted EPS).  Basic income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period.  These potential dilutive securities were not included in the calculation of loss per share for the three and nine months ended March 31, 2006 or 2005 because the Company incurred a loss during such periods and thus their effect would have been anti-dilutive.  Accordingly, basic and diluted loss per share is the same for the three and nine months ended March 31, 2006 and 2005.  At March 31, 2006, potentially dilutive securities consisted of 1,300,000 outstanding common stock purchase options.



Recent accounting pronouncements



In June 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position FSP FAS No. 143-1, Accounting for Electronic Equipment Waste Obligations, to address the accounting for obligations associated with the Directive on Waste Electrical and Electronic Equipment (the Directive) issued by the European Union (EU). The Directive was enacted on February 13, 2003, and directs EU-member countries to adopt legislation to regulate the collection, treatment, recovery, and environmentally sound disposal of electrical and electronic waste equipment. The Directive concludes that commercial users are obligated to retire, in an environmentally sound manner, specific assets that qualify as historical waste. FSP FAS No. 143-1 is effective for reporting periods ending after June 8, 2005, which is June 30, 2005 for us, or the date of adoption of the Directive by the applicable EU-member countries, if later. As we do not currently have any EU operations, the adoption of  SFP FAS No. 143-1 does not have any impact on our financial statements at March 31, 2006.

In May 2005, the FASB issued SFAS No. 154 that establishes new standards on accounting for changes in accounting principles.  Pursuant to the new rules, all such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so.  SFAS No. 154 completely replaces Accounting Principles Bulletin (APB) Opinion 20 and SFAS 3, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity, and the correction of errors.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

In March 2005, the FASB issued FASB Interpretation (FIN) 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143, Accounting for Asset Retirement Obligations. FIN 47 clarifies that the term conditional asset retirement obligation, as used in SFAS No. 143, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. FIN 47 requires an entity to recognize a liability for the fair value of the conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is effective for fiscal years ending after December 15, 2005, which is June 30, 2006 for us; however, earlier application is permitted. We are currently evaluating the impact of FIN 47 on our results of operations, financial position and cash flows.





In March 2005, the SEC published Staff Accounting Bulletin No. 107 (SAB 107) which provides the Staffs views on a variety of matters relating to stock-based payments.  SAB107 requires stock-basedcompensation be classified in the same expense lines as cash compensation is reported for the same employees.  Accordingly, the financials statements of the Company were prepared in conformity with this presentation requirement.









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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





Going Concern



The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  The Company incurred a net loss of $186,236 and a negative cash flow from operations of $122,474 during the nine months ended March 31, 2006, and had a working capital deficiency of $785,150 and a

shareholders deficiency of $490,599 at March 31, 2006.  These matters raise substantial doubt about its ability to continue as a going concern.  Management believes that actions are presently being taken to revise the Companys operating results.  Management believes that the Company will have adequate cash to fund anticipated needs through December 31, 2006 and beyond primarily as a result of our contract backlog at March 31, 2006 of $3,899,425 and contracts in the aggregate of $1,895,614 entered into subsequent to March 31, 2006.  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



The Company does not have any significant available credit, bank financing or other external sources of liquidity. Due to historical operating losses, the Companys operations have not been a source of liquidity and the Company had satisfied its cash requirements through shareholder loans and deferral of salary payments to its officers.  In order to obtain necessary capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders.  There is no assurance that the Company will be able to secure additional financing orthat it can be secured at rates acceptable to the Company.  In addition, should the Company be required to either issue stock for services or to secure equity funding, due to the lack of liquidity in the market for the Companys stock such financing would result in significant dilution to its existing shareholders.





2.

Acquisitions



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



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



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



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







13





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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





3.

Bank Overdraft



Included in Bank overdraft at
March 31, 2006, are certain bank overdrafts covered by a revolving line of credit,amountingto$79,895.  The revolving line of credit agreement is between SCI, the Companys wholly owned subsidiary, and HSBC Bank Canada.  The revolving line of credit facility bears interest at the rate of prime plus 4.50% per annum, allows authorized bank

overdrafts of up to $107,021 ($125,000 CDN) and is secured by a shareholder guarantee and $42,808 ($50,000 CDN) in the form of a term deposit.



4.

Related Party Debt

|                                                     | March 31  | June 30  
|---------------------------------------------------- | --------- | ---------
|                                                     | 2006      | 2005     
|(Unaudited)                                          |          
|Long-term, unsecured loan from related party,        |           |          
|Non-interest bearing, with no fixed repayment terms  |           |          
|The loan is from a family member of a shareholder.   | $ 173,632 | $ 175,005
|Various related party loans, unsecured, non-interest |           |          
|Bearing advances with no fixed terms of repayment,   |           |          
|due on demand.                                       | 27,740    | 31,523   
|                                                     | 201,372   | 231,573  
|less current portion                                 | 27,740    | 30,096   
|                                                     | $ 173,632 | $ 176,432



5.

Shareholder loans



Commencing in the second quarter of 2003, the Company borrowed funds from Xili USA, a shareholder, on a unsecured basis.  The loans are non-interest bearing and are payable on demand.  The total due Xili USA under these borrowings aggregated $81,076 as at March 31, 2006 and June 30, 2005 respectively.



In December 2005, the company borrowed $49,985 from a shareholder on an unsecured basis.  The loan is non-interest bearing and payable on demand.  In January 2006, the Company borrowed $150,000 from the same shareholder, also on an unsecured basis as well as non-interest bearing with no fixed repayment terms.







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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006







6.

Income Taxes



The income tax effect of temporary differences between financial and tax reporting gives rise to the deferred tax asset at March 31, 2006 and June 30, 2005 as follows:



|                                                      |   | March 31     | June 30     
|----------------------------------------------------- | - | ------------ | ------------
|                                                      |   | 2006         | 2005        
|                                                      |   | (Unaudited)  |             
|Deferred tax asset, beginning                         |   | $1,038,000   | $ 978,000   
|Benefit of current years operating loss carryforward |   | 22,658       | 60,000      
|Deferred tax asset, ending                            |   | $1,060,658   | $1,038,000  
|Valuation allowance, beginning                        |   | ($1,038,000) | ($978,000)  
|Current years provision                              |   | (22,658)     | ( 60,000)   
|Valuation allowance, ending                           |   | ($1,060,658) | ($1,038,000)
|Deferred tax asset, net                               | $ | -            | $ -         



The Company has provided a 100% valuation allowance as it cannot determine that it is more likely than not that it will realize the deferred tax assets.  As of March 31, 2006 for Federal income tax purposes, the Company has approximately $3,030,450 in net operating loss carryforwards expiring through 2020.



At March 31, 2006, STS had available federal net operating loss (NOL) carry-forwards of approximately $3,030,450. Under Section 382 of the Internal Revenue Code of 1986, as amended, the use of prior losses, including NOLs, is limited if a corporation undergoes an ownership change. Future issuances of equity interests by us for acquisitions or the exercise of outstanding options to purchase our capital stock, may result in an ownership change that is large enough for this limitation to apply. If the limitation applies, we may be unable to use a material portion of its available NOL carry-forwards to reduce future taxable income.



|                                               | March 31 | June 30
|---------------------------------------------- | -------- | -------
|                                               | 2006     | 2005   
|Tax at blended U.S. / Canadian statutory rates | (35%)    | (35%)  
|Loss carryover                                 | 35%      | 35%    
|Tax recovery (expense)                         | -        | -      



7.

Common Stock



Stock Cancellation



On November 10, 2005, the Company received notification from its former Chief Financial Officer that he was rescinding receipt of ten million (10,000,000) shares issued to him in February 2005.  The Company has accepted the rescinding of shares and has the share certificate in its possession and will proceed with the cancellation.





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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





On November 10, 2005, the Company received notification from Palm Coast Funding, LLP, that they were cancelling the professional services contract that they have with the Company and rescinding receipt of twenty-three million (23,000,000) shares issued to them in February 2005.  The Company has accepted the rescinding of shares and has the share certificate in its possession and will proceed with the cancellation.



In connection with the rescinded agreements discussed above, the Company reversed the previous recorded value of the shares issued of $33,000.



8.

Costs and Estimated Earnings on Uncompleted Contracts



|                                        | 2006     
|--------------------------------------- | ---------
|Costs incurred on uncompleted contracts | $830,230 
|Estimated earnings                      | 593,211  
|                                        | 1,423,441
|Less: Billings to date                  | 1,371,044
|                                        | $ 52,397 



Included in accompanying balance sheets under the following captions:



|Costs of uncompleted contracts in excess of billings | $ 197,451 
|---------------------------------------------------- | ----------
|Billings on uncompleted contracts in excess of costs |           
|and estimated revenues                               | ( 145,054)
|                                                     | $ 52,397  



9.

Related Party Transactions



Management fees include $25,978 and $- for the three months ended March 31, 2006 and 2005, respectively, of management fees paid to the president of the Companys wholly owned subsidiary.  Management fees include $88,004 and $nil for the nine months ended March 31, 2006 and 2005, respectively, of management fees paid to the president of the Companys wholly owned subsidiary.



Officers salaries include $30,000 and $44,000 for the three months ended March 31, 2006 and 2005, respectively, of accrued salaries owed to the Companys chief executive and chief financial officers. Officers salaries include $121,500 and $69,298 for the nine months ended March 31, 2006 and 2005, respectively, of accrued salaries owed to the Companys chief executive and chief financial officers.



The Company issued 650,000 options to purchase shares of its common stock to each of SCIs president and vice-president in April 2005.  Under the terms of the stock option agreements, the Company recorded deferred compensation of $195,000 which is being amortized over its three year vesting period.  The Company recorded $16,250 in deferred compensation amortization for the three months ended March 31, 2006.  The Company recorded $48,750 in deferred compensation amortization for the nine months ended March 31, 2006.











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Smart-tek Solutions Inc. (formerly Royce Biomedical Inc.)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended March 31, 2006





During the nine months ended March 31, 2006, the Companys chief executive officer paid some expenses on behalf of the Company.  These advances are recognized as short term liabilities as there are no fixed repayment terms, but the funds are due on demand.  Amounts due to officers and directors as of March 31, 2006 and June 30, 2005 include $99,301 and $25,045, of these advances respectively.



As of March 31, 2006 and June 30, 2005, amounts due to officers and directors include $272,532 and $151,032 of unpaid salaries, respectively.





10.

Backlog



The following schedule shows a reconciliation of backlog representing the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress at March 31, 2006 and from contractual agreements on which work has not yet begun.

|Balance at December 31, 2005               |  | $ | 3,562,468  
|------------------------------------------ |  | - | -----------
|New contracts, January 1 to March 31, 2006 |  |   | 2,085,505  
|Less: Contract revenue earned from July 1  |  |  
|to March 31, 2006                          |  |   | (1,748,548)
|Balance, March 31, 2006                    |  |   | $          



In addition, between April 1, 2006 and May 10, 2006, the Company entered into additional contracts with anticipated revenues of approximately $1,895,614.



11.

Concentrations of risk



At March 31, 2006, no customers accounted for more than 10% of trade accounts receivable.



During the nine months ended March 31, 2006, three significant customers accounted for more than 38% of revenue and each of these three customers accounted for more than 10% of revenue.



During the nine months ended March 31, 2006, 100% of the Companys sales and accounts receivables arose from sales to Canadian customers.



During the nine months ended March 31, 2006, three significant suppliers accounted for 76% of purchases.





12.      Subsequent events



On April 28, 2006, the Company has filed a complaint in the Superior Court for the State of California, against RFID, Ltd., a publicly traded company on the Pink Sheets.  The Complaint alleges causes of action against RFID, Ltd., for 1) Defamation Per Se; 2) Intentional Interference with Contractual Relations; 3) Intentional Interference with Prospective Economic Advantage and 4) Unfair Competition (Violation of the California Business & Professions Code section 17200).  The Complaint alleges that RFID, Ltd., who described itself as a competitor of Smart-tek Solutions, Inc., made a series of false and misleading representations about Smart-tek Solutions, Inc. and its development of its RTAC-PM system.  The Complaint filed by Smart-tek Solutions, Inc. seeks monetary damages in excess of $10 million and equitable relief as a result of RFID, Ltd.s conduct.



On May 9, 2006, the Company filed a Complaint in the District Court of Clark County, Nevada against the owners and operators of Stocklemon.com (Stocklemon).  The Complaint alleges causes of action for (1) Defamation; (2) Intentional Interference with Contractual Relations; (3) Intentional Interference with Prospective Economic Advantage and (4) Violation of State Securities Laws.  The Complaint alleges that Stocklemon made a series of provably false assertions of fact and other misleading statements concerning Smart-tek Solutions, Inc.s financial affairs and business activities.  The Complaint further alleges that Stocklemon intentionally sought to damage



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Plaintiffs value, contractual relationships and expectancies via the misrepresentations and misleading statements contained in a Stocklemon report issued on or about April 4, 2006.  The Complaint further alleges that Stocklemon utilized the Report and the untrue statements of material fact contained therein to deliberately manipulate the market for personal gain.  The Complaint filed by Smart-tek Solutions, Inc. seeks compensatory and punitive damages in excess of $100 million and equitable relief against Stocklemon.





ITEM 2                    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





Special Note Regarding Forward-Looking Statements



The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company.  The Company and its representatives may, from time to time, make written or verbal forward-looking statements, including statements contained in the Company's filings with the United States Securities and Exchange Commission, its press releases and in its reports to shareholders. Generally, the inclusion of the words "believe", "expect", "intend", "estimate", "anticipate", "will", and similar expressions or the converse thereof, identify statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, without limitation, our expectations regarding sales, earnings or other future financial performance and liquidity, entry into new geographic regions, and future operations or operating results. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, actual results may differ materially from our expectations. Factors that could cause actual results to differ from expectations include, without limitation:



These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements as a result of a number of risks and uncertainties including: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under Liquidity and Capital Resources.





OVERVIEW

Smart-tek Solutions, Inc. (STS or the "Company") was incorporated in Nevada on March 22, l995 and was formerly known as Royce Biomedical, Inc.

Between August 1995 and June 1998, the Company manufactured and sold diagnostic test kits used to detect pregnancy, thyroid disorders and other medical conditions. The Company assembled its diagnostic testing kits at its laboratory in Irvine, California. The Company closed this facility in April 1998. In order to penetrate the Chinese immunodiagnostic market quickly, the Company signed an agreement in April 1999 with Xili Pharmaceutical Group, Inc. ("Xili") of the People's Republic of China to market and distribute H. Pylori diagnostic test kits supplied by the Company. In addition to supplying H. Pylori test kits to Xili, the Company had provided clinical data and training to Xili personnel.



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





CRITICAL ACCOUNTING POLICIES



We have identified the policies below as critical to our understanding of our financial statements.  The application of these policies requires management to make estimates and assumptions that affect the valuation of assets and expenses during the reporting period.  There can be no assurances that actual results will not differ from these estimates.  The impact and any associated risks related to these policies on our business operations are discussed below.



(1)

Income Taxes

Significant judgment is required in determining our income tax provision.  Although we believe that our estimates are reasonable, no assurance can be given that the final outcome will not be different that that which is reflected in our historical income tax provisions and accruals.  Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.  We apply an asset and liability approach to accounting for income taxes.  Deferred tax liabilities and assets are recognized for the expected future tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The recoverability of deferred tax assets is dependent upon our assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax asset.  In the event we determine that the future taxable income will not be sufficient to utilize the deferred tax asset, a valuation allowance is recorded.



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



·

Estimates of total cost to complete the contract;

·

Estimates of contract schedule and completion date;

·

Estimates of the percentage the contract is complete; and

·

Amounts of any probable unapproved claims and change orders included in revenue



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



When calculating the amount of total profit or loss on a long-term contract, unapproved claims are recorded as revenue when collection is deemed probable based upon the four criteria for recognizing unapproved claims under the American Institute of Certified Public Accountants Statement of Position



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81-1 (SOP 81-1), Accounting for Performance of Construction Type and Certain Production Type Contracts.  Including probable unapproved claims in this calculation increases operating income (or reduces the operating loss) that would otherwise be recorded without consideration of the probable unapproved claims.  Probable unapproved claims are recorded to the extent of costs incurred and include no profit element.  In all cases, the probable unapproved claims included in determining contract profit or loss are less than the actual claim that will be or has been presented to the customer.  The Company is actively engaged in claims negotiations with customers and the success of the claims negotiations have a direct impact on the profit or loss recorded for any long-term contract.  Unsuccessful claims negotiations could result in decreases in estimated contract profits or additional contact losses, and successful claims negotiations could result in increases in estimated contract profits or recovery of previously recorded contract losses.  On a quarterly basis, significant contracts are reviewed.  However, there are many factors that impact future costs, including but not limited to weather, inflation, labor and community disruptions, timely availability of materials, productivity and other factors.  These factors can affect the accuracy of our estimates and materially impact our future earnings.



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



The Company is also currently marketing a new product that is being offered as a possible solution in the containment of the H5N1 virus.  The RTAC-PM system is an RFID based system that uses proprietary software developed by the Company to help users track the movements of livestock and alert users of movements or abnormalities of livestock movement.  The system uses already available hardware that is complemented with the software developed by the Company.



The Companys strategy is to sign licensee agreements with strategic organizations worldwide.  To date, the Company has signed such licensee agreements with representatives in China, Hong Kong and Singapore.  The Company is also in active discussions with potential licensees in Vietnam and Romania to help introduce its products to government officials in those countries.



To date, the Company has received a $5,000,000 initial order for its system from its licensee in the Peoples Republic of China.  The Company is currently waiting for the specifications in order to complete the customization process of the product.



RESULTS OF OPERATIONS



Three months ended March 31, 2006 and 2005

The results of operations reflected in this discussion include the operations of Smart-tek Communications, Inc., our recently acquired subsidiary as of April 15, 2005.

For the three months ended March 31, 2006 and 2005, revenues increased to $486,493.  There were no revenues reported for the three month period ended March 31, 2005.  All revenues reported are as a result of the operations of SCI which was acquired on April 15, 2005.

Cost of services increased by $363,479 for the three months ended March 31, 2006 as compared with the same period ending in 2005.  There were no costs reported for the three month period ending March 31, 2005.   All of the cost of services reported is as a result of the operations of SCI which was acquired on April 15, 2005.



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Total operating expenses increased by $121,005 or 149% from $81,395 for the three months ended March 31, 2005 to $202,400 for the same period ending in 2006.  The increase in operating expenses was principally attributable to a $37,957 increase in personnel related costs primarily due to an increase in our headcount due to the acquisition of SCI and the employment agreements with the executive officers of the Company and a $38,850 increase in professional fees which was primarily due to consulting expenses incurred on the development of the Companys RTAC-PM system.  Additionally, travel and transportation expenses increased by $19,183 for the three months ended March 31, 2006 due to sales and marketing activities involving the Companys wholly owned subsidiary. Furthermore, during the three months ended March 31, 2006, the Company amortized $16,250 of deferred compensation relating to stock options that vested during the three months ended March 31, 2006.

Total other expenses, including interest expense and financing costs, increased $1,848 from $1,0000 for the three months ended March 31, 2006.

Net loss remained stable from a net loss of $82,395 for the three months ended March 31, 2005 to a net loss of $82,234 for the three months ended March 31, 2006.

Nine months ended March 31, 2006 and 2005

For the nine months ended March 31, 2006, revenues were $1,846,264.  There were no revenues reported for the nine month period ended March 31, 2005.  All revenues reported are as a result of the operations of SCI which was acquired on April 15, 2005.

Cost of services increased by $1,358,482 for the nine months ended March 31, 2006 as compared with the same period ending in 2005.  There were no costs reported for the nine month period ending December 31, 2005.   All of the cost of services reported is as a result of the operations of SCI which was acquired on April 15, 2005.

Total operating expenses increased by $495,465 or 300% from $165,377 for the nine months ended March 31, 2005 to $660,841 for the same period ending in 2006.  The increase in operating expenses was principally attributable to a $228,211 increase in personnel related costs primarily due to an increase in our headcount due to the acquisition of SCI and the employment agreements with the executive officers of the Company.  Additionally, travel and transportation expenses increased by $62,108 for the nine months ended March 31, 2006 due to sales and marketing activities involving the Companys wholly owned subsidiary. Furthermore, during the nine months ended March 31, 2006, the Company amortized $48,750 of deferred compensation relating to stock options that vested during the nine months ended March 31, 2006.  Professional fees increased by $116,793 during the nine months ended March 31, 2006, from $59,450 during the nine months ended March 31, 2005 to $176,243 during the nine months ended March 31, 2006.  This increase is directly attributed to increased activities in the execution of the Companys business plan and consulting fees incurred during the development of the Companys RTAC-PM poultry monitoring system.

Total other expenses, including interest expense and financing costs, increased by $12,176 from $1,000 for the nine months ended March 31, 2006. The increase was primarily due to the debt assumed in the acquisition of SCI.



Net loss increased by $19,859 or 12% from a net loss of $166,377 during the nine months ended March 31, 2005 to a net loss of $186,236 during the nine months ended March 31, 2006.



The Company has fully reserved its deferred tax asset in each period presented by the recording of a valuation reserve in that period.  Therefore, the Company has not reported an income tax benefit during the three months ended March 31, 2006 and 2005, respectively.



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LIQUIDITY AND CAPITAL RESOURCES



For the nine months ended March 31, 2006, net cash used in operating activities was $122,474 and net cash provided by financing activities was $209,551. There was no cash provided by investing activities.  The Company did not have any cash and cash equivalents at March 31, 2006.



The Company does not have any significant available credit, bank financing or other external sources of liquidity. Due to historical operating losses and other issues as described in the Companys going concern footnote included in its unaudited condensed consolidated financial statements as at and for the period ended March 31, 2006, the Company's operations have not been a source of liquidity and the Company had satisfied its cash requirements through shareholder loans and deferral of salary payments to its officers.  In order to obtain necessary capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders.  There is no assurance that the Company will be able to secure additional financing or that it can be secured at rates acceptable to the Company.  In addition, should the Company be required to either issue stock for services or to secure equity funding, due to the lack of liquidity in the market for the Companys stock such financing would result in significant dilution to its existing shareholders.



The Companys short term plan is to continue to ask its officers to defer payment of salaries, utilize its common stock where possible to pay for services and to seek further shareholder loans.  In the longer term, the Company is actively seeking additional merger, acquisition or venture relationships with operating enterprises in order to generate long-term growth opportunities for the Company, permit the Company to meet its financial obligations and to provide increased value to the Companys shareholders.



NEW ACCOUNTING PRONOUNCEMENTS



In June 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position FSP FAS No. 143-1, Accounting for Electronic Equipment Waste Obligations, to address the accounting for obligations associated with the Directive on Waste Electrical and Electronic Equipment (the Directive) issued by the European Union (EU). The Directive was enacted on February 13, 2003, and directs EU-member countries to adopt legislation to regulate the collection, treatment, recovery, and environmentally sound disposal of electrical and electronic waste equipment. The Directive concludes that commercial users are obligated to retire, in an environmentally sound manner, specific assets that qualify as historical waste. FSP FAS No. 143-1 is effective for reporting periods ending after June 8, 2005, which is June 30, 2005 for us, or the date of adoption of the Directive by the applicable EU-member countries, if later. As we do not currently have any EU operations, the adoption of  SFP FAS No. 143-1 does not have any impact on our financial statements at September 30, 2005.

In May 2005, the FASB issued SFAS No. 154 that establishes new standards on accounting for changes in accounting principles.  Pursuant to the new rules, all such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so.  SFAS No. 154 completely replaces Accounting Principles Bulletin (APB) Opinion 20 and SFAS 3, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity, and the correction of errors.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.



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In March 2005, the FASB issued FASB Interpretation (FIN) 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143, Accounting for Asset Retirement Obligations. FIN 47 clarifies that the termconditional asset retirement obligation, as used in SFAS No. 143, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. FIN 47 requires an entity to recognize a liability for the fair value of the conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is effective for fiscal years ending after December 15, 2005, which is December 31, 2005 for us; however, earlier application is permitted. We are currently evaluating the impact of FIN 47 on our results of operations, financial position and cash flows.



In December 2004, the Financial Accounting Standards Board issued a revised Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123R), which supercedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance.  This statement requires a public entity to recognize and measure the cost of employee services it receives in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions).  These costs will

be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period).  This statement also establishes the standards for the accounting treatment of these share-based payment transactions in which an entity exchanges its equity instruments for goods or services.  It addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments.  This statement shall be effective the first interim or annual reporting period that begins after December 15, 2005.  The Company has adopted revised SFAS No. 123R effective December 31, 2004, the implementation of which did not have a significant effect on the Companys financial statement presentation or its disclosures.



In March 2005, the SEC published Staff Accounting Bulletin No. 107 (SAB 107) which provides the Staffs views on a variety of matters relating to stock-based payments.  SAB107 requires stock-based compensation be classified in the same expense lines as cash compensation is reported for the same employees.  Accordingly, the financials statements of the Company were prepared in conformity with this presentation requirement.





ITEM 3 - CONTROLS AND PROCEDURES



(a) Evaluation of Disclosure Controls and Procedures



Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer and the Chief Financial Officer have reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) within the last ninety days and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect



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these controls subsequent to the last day they were evaluated by our Chief Executive Officer and Chief Financial Officer.







b) Changes in Internal Controls over Financial Reporting



There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this Quarterly Report on Form 10-QSB that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.







PART II.      OTHER INFORMATION



Item 1. Legal Proceedings



On April 28, 2006, the Company has filed a complaint in the Superior Court for the State of California, against RFID, Ltd., a publicly traded company on the Pink Sheets.  The Complaint alleges causes of action against RFID, Ltd., for 1) Defamation Per Se; 2) Intentional Interference with Contractual Relations; 3) Intentional Interference with Prospective Economic Advantage and 4) Unfair Competition (Violation of the California Business & Professions Code section 17200).  The Complaint alleges that RFID, Ltd., who described itself as a competitor of Smart-tek Solutions, Inc., made a series of false and misleading representations about Smart-tek Solutions, Inc. and its development of its RTAC-PM system.  The Complaint filed by Smart-tek Solutions, Inc. seeks monetary damages in excess of $10 million and equitable relief as a result of RFID, Ltd.s conduct.



On May 9, 2006, the Company filed a Complaint in the District Court of Clark County, Nevada against the owners and operators of Stocklemon.com (Stocklemon).  The Complaint alleges causes of action for (1) Defamation; (2) Intentional Interference with Contractual Relations; (3) Intentional Interference with Prospective Economic Advantage and (4) Violation of State Securities Laws.  The Complaint alleges that Stocklemon made a series of provably false assertions of fact and other misleading statements concerning Smart-tek Solutions, Inc.s financial affairs and business activities.  The Complaint further alleges that Stocklemon intentionally sought to damage Plaintiffs value, contractual relationships and expectancies via the misrepresentations and misleading statements contained in a Stocklemon report issued on or about April 4, 2006.  The Complaint further alleges that Stocklemon utilized the Report and the untrue statements of material fact contained therein to deliberately manipulate the market for personal gain.  The Complaint filed by Smart-tek Solutions, Inc. seeks compensatory and punitive damages in excess of $100 million and equitable relief against Stocklemon.



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





On August 12, 2005, the Company accepted a settlement agreement with  Mr. Richard Short (Short), a former Shareholder, whereby the Company would issue to Short 33,333 shares of the Companys common stock in lieu of a cash payment to Short of CDN $16,000(USD$13,333) for the 8,000 shares rescinded by Short in 1997. This settlement was inclusive of Short and the Company and did not include any of the former officers, directors or employees of the Company, as individuals.  On August 16, 2005 the Company issued Short 33,333 shares of its common stock, in full settlement of the CDN$16,000 (USD$13,333) owed Short as a former Shareholder.  These securities were issued



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pursuant to an exemption from registration provided under Section 4(2) and 4(6) of the Securities Act of 1933. The parties to whom the shares were issued received information concerning the Company. The shares were appropriately restricted. No underwriters were involved in the transactions and no commissions were paid.







Item 3. Defaults upon Senior Securities



None









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



None





Item 5. Other Information



On November 10, 2005, the Company received and accepted the resignation of Joseph C. Sienkiewicz as the Companys Chief Financial Officer, Secretary, Treasurer and Director.  As requested by Mr. Sienkiewicz, the Company will proceed with the cancellation of 10,000,000 restricted shares of common stock issued to Mr. Sienkiewicz in February 2005.



On November 10, 2005, the Company received notification from Palm Coast Funding LLP that it was voiding the contract entered into in February 2005.  Consequently, Palm Coast has requested that the 23,000,000 restricted shares issued to Palm Coast Funding LLP be cancelled by the Company.





Item 6. Exhibits and Reports on Form 8-K



(a)   Exhibits



31.1   Certification of Chief Executive Officer of Periodic ReportPursuant to Rule 13a-14(a) and Rule 15d-14(a).



31.2   Certification of Chief Financial Officer of Periodic ReportPursuant to Rule 13a-14(a) and Rule 15d-14(a).



32.1   Certification of Chief Executive Officer Pursuant to 18U.S.C. Section 1350.



32.2   Certification of Chief Financial Officer Pursuant to 18U.S.C. Section 1350.







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(b)   Reports on Form 8-K/A



Registrant filed the following reports on Form 8-K during the quarter covered by this Report:



Date of Report

Item Number                   Events Reported

--------------------

-----------------

------------------------------------



January 10, 2006

Item 8.01

Other Events

January 17, 2006

Item 8.01

Other Events

March 21, 2006

Item 8.01

Other Events

March 22, 2006

Item 8.01

Other Events

March 28, 2006

Item 8.01

Other Events

March 28, 2006

Item 8.01

Other Events

March 29, 2006

Item 8.01

Other Events

March 30, 2006

Item 8.01

Other Events

March 31, 2006

Item 8.01

Other Events











SIGNATURES



Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.









SMART-TEK SOLUTIONS INC.







Date:  May 12, 2006

By:/s/DenisGallant



-----------------------------------



Denis Gallant



Chief Financial Officer













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