UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008


                        Commission File Number 001-32300


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

            Delaware                                       13-4100476
            ---------                                      ----------
   (State or other jurisdiction                         (I.R.S. Employer
 of incorporation or organization)                     Identification No.)

                   12 Skyline Drive, Hawthorne, New York 10532
                   -------------------------------------------
                     (Address of principal executive office)

                                 (914) 345-2620
                (Issuer's telephone number, including area code)

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

                               Yes |x|    No | |

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

         Large accelerated filer  | |      Accelerated filer          | |

         Non-accelerated filer    | |      Smaller reporting company  |x|

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

                               Yes | |    No |x|

Number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: As of May 1, 2008, there were 4,978,050
shares of common stock outstanding.

<PAGE>

                                 SMARTPROS LTD.
                                FORM 10-Q REPORT

                                 MARCH 31, 2008

                                TABLE OF CONTENTS

<TABLE>
                                                                                                             PAGE

<S>      <C>      <C>                                                                                         <C>
PART I - FINANCIAL INFORMATION

         Item 1.  Condensed Consolidated Financial Statements (Unaudited)

                  Balance Sheets - March 31, 2008 and December 31, 2007 (Audited)                             3

                  Statements of Operations for the three-month periods ended March 31, 2008 and 2007          4

                  Statements of Cash Flows for the three-month periods ended March 31, 2008 and 2007          5

                  Notes to Condensed Consolidated Financial Statements                                        6

         Item 2.  Management's Discussion and Analysis or Plan of Operation                                   9

         Item 3.  Quantitative and Qualitative Risk Disclosures About Market Risk                             16

         Item 4.  Controls and Procedures                                                                     16

PART II - OTHER INFORMATION

         Item 1.  Legal Proceedings                                                                           16

         Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                 16

         Item 3.  Defaults Upon Senior Securities                                                             17

         Item 4.  Submission of Matters to a Vote of Security Holders                                         17

         Item 5.  Other Information                                                                           17

         Item 6.  Exhibits                                                                                    18

SIGNATURES                                                                                                    19
</TABLE>

                           FORWARD-LOOKING STATEMENTS

         Certain statements made in this Quarterly Report on Form 10-Q are
"forward-looking statements" within the meaning of Section 21E of the Securities
and Exchange Act of 1934. These statements relate to the plans and objectives of
management for future operations as well as to market trends and expectations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The forward-looking statements
included herein are based on current expectations, plans and assumptions
relating to the future operation of our business. These expectations, plans and
assumptions involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond our control. Although we believe that our expectations, plans and
assumptions underlying the forward-looking statements are reasonable, they could
prove inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this report will prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation by us or any other person that our objectives and
plans will be achieved. We undertake no obligation to revise or update publicly
any forward-looking statements for any reason.

         The terms "we", "our", "us", or any derivative thereof, as used herein
refer to SmartPros Ltd., a Delaware corporation, its subsidiaries and its
predecessors.

                                       2
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SMARTPROS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                               MARCH 31,      DECEMBER 31,
                                                                                  2008            2007
                                                                               UNAUDITED)       (AUDITED)
                                                                              ------------    ------------
<S>                                                                           <C>             <C>
ASSETS
Current Assets:
   Cash and cash equivalents                                                  $  9,789,001    $ 10,072,338
   Accounts receivable, net of allowance for doubtful accounts
     of $39,677 at March 31, 2008 and $39,842 at December 31, 2007               2,004,411       1,964,483
   Prepaid expenses and other current assets                                       210,777         237,097
                                                                              ------------    ------------
Total Current Assets                                                            12,004,189      12,273,918
                                                                              ------------    ------------

Property and equipment, net                                                        637,812         630,857
Goodwill                                                                           145,684         145,684
Other intangibles, net                                                           3,422,309       3,296,538
Other assets, including restricted cash of $150,000                                154,673         154,673
Deferred tax asset                                                                 978,000         978,000
                                                                              ------------    ------------
                                                                                 5,338,478       5,205,752
                                                                              ------------    ------------
Total Assets                                                                  $ 17,342,667    $ 17,479,670
                                                                              ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                                                           $    679,228    $    786,781
   Accrued expenses                                                                146,829         419,886
   Other liabilities                                                                40,040          40,040
   Deferred revenue                                                              5,731,595       5,318,382
                                                                              ------------    ------------
Total Current Liabilities                                                        6,597,692       6,565,089
                                                                              ------------    ------------
Long-Term Liabilities:
   Other liabilities-net of current portion                                         30,027          40,041
                                                                              ------------    ------------
Total Long-Term Liabilities                                                         30,027          40,041
                                                                              ------------    ------------

COMMITMENTS AND CONTINGENCIES
Stockholders' Equity:
   Convertible preferred stock, $.001 par value, authorized 1,000,000                   --              --
     shares, 0 shares issued and outstanding
   Common stock, $.0001 par value, authorized 30,000,000 shares,                       532             530
     5,314,081 issued and 4,978,050 outstanding at March 31,
     2008; and 5,304,698 issued and 4,993,967 outstanding at December 31,
     2007
   Additional paid-in capital                                                   17,000,804      16,925,314
   Accumulated (deficit)                                                        (5,227,492)     (5,106,459)
   Common stock in treasury, at cost - 336,031 and 310,731 shares               (1,042,231)       (922,625)
   Deferred compensation                                                           (16,665)        (22,220)
                                                                              ------------    ------------
Total Stockholders' Equity                                                      10,714,948      10,874,540
                                                                              ------------    ------------
Total Liabilities and Stockholders' Equity                                    $ 17,342,667    $ 17,479,670
                                                                              ============    ============
</TABLE>


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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                       3
<PAGE>

SMARTPROS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                    THREE MONTHS ENDED
                                                         MARCH 31,
                                                --------------------------
                                                    2008           2007
---------------------------------------------   -----------    -----------

Net Revenues                                    $ 3,875,663    $ 3,723,631
Cost of Revenues                                  1,924,773      1,468,913
                                                -----------    -----------
Gross Profit                                      1,950,890      2,254,718
                                                -----------    -----------

Operating Expenses:
   Selling, general and administrative            1,989,060      1,726,181
   Depreciation and amortization                    202,888        165,469
                                                -----------    -----------
                                                  2,191,948      1,891,650
                                                -----------    -----------
Operating (Loss) Income                            (241,058)       363,068
                                                -----------    -----------

Other Income (Expense):
   Interest income                                  120,079         89,313
   Interest expense                                     (54)          (601)
                                                -----------    -----------
                                                    120,025         88,712
                                                -----------    -----------

(Loss) income before benefit for income taxes      (121,033)       451,780

Add: income tax benefit                                  --        135,000
                                                -----------    -----------
Net (Loss) income                               $  (121,033)   $   586,780
                                                ===========    ===========

Net (Loss) income Per Common Share:
   Basic net (loss) income per common share     $      (.02)   $       .12
                                                ===========    ===========

   Diluted net (loss) income per common share   $      (.02)   $       .12
                                                ===========    ===========

Weighted Average Number of Shares
  Outstanding
   Basic                                          4,993,896      4,875,774
                                                ===========    ===========

   Diluted                                        4,993,896      4,919,940
                                                ===========    ===========


-------------------------------------------------------------------------------
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                       4
<PAGE>

SMARTPROS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       THREE MONTHS ENDED
                                                                                            MARCH 31,
                                                                                  ---------------------------
                                                                                      2008           2007
                                                                                  ---------------------------
<S>                                                                               <C>             <C>
Cash Flows from Operating Activities:
Net (loss) income                                                                 $   (121,033)   $   586,780
                                                                                  ---------------------------
   Adjustments to reconcile net (loss) income to net cash provided by operating
      activities:
      Depreciation and amortization                                                    202,888        165,469
      Decrease in deferred compensation                                                  5,555         16,056
      Stock compensation expense                                                        54,960          9,000
      Deferred income tax benefit                                                            -       (135,000)
   Changes in operating assets and liabilities:
      (Increase) decrease in operating assets:
         Accounts receivable                                                           (39,928)      (188,063)
         Prepaid expenses and other current assets                                      26,320        (76,167)
      (Decrease) increase in operating liabilities:
         Accounts payable and accrued expenses                                        (380,610)      (302,798)
         Deferred revenue                                                              413,213        593,039
         Other liabilities                                                             (10,014)       (10,014)
                                                                                  ---------------------------
   Total adjustments                                                                   272,384         71,522
                                                                                  ---------------------------
Net Cash Provided by Operating Activities                                              151,351        658,302
                                                                                  ---------------------------

Cash Flows from Investing Activities:
   Acquisition of property and equipment                                               (57,898)       (51,813)
    Acquisition of course content                                                      (25,000)             -
   Capitalized software development                                                   (252,717)             -
   Property and equipment acquired from acquisitions                                         -         (2,201)
   Intangible assets acquired from acquisitions                                              -       (154,099)
   Cash paid for acquisitions                                                                -         (6,715)
                                                                                  ---------------------------
Net Cash (Used in) Investing Activities                                               (335,615)      (214,828)
                                                                                  ---------------------------

Cash Flows from Financing Activities:
   Exercise of stock options                                                            20,533              -
   Purchase of treasury stock                                                         (119,606)             -
   Payments under capital lease obligations                                                  -         (6,906)
                                                                                  ---------------------------
Net Cash (Used in) Financing Activities                                                (99,073)        (6,906)
                                                                                  ---------------------------

Net  (Decrease) increase in Cash and Cash equivalents                                 (283,337)       436,568
Cash and Cash Equivalents, beginning of period                                      10,072,338      7,393,789
                                                                                  ---------------------------
Cash and Cash equivalents, end of period                                             9,789,001    $ 7,830,357
                                                                                  ===========================

Supplemental Disclosure:

Cash paid for interest                                                            $         54    $       601
                                                                                  ===========================
</TABLE>


--------------------------------------------------------------------------------
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                       5
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1.  BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
of SmartPros Ltd. ("SmartPros" or the "Company") included herein have been
prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
However, in the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited consolidated financial
statements for the year ended December 31, 2007, and the notes thereto included
in the Company's Annual Report on Form 10-KSB filed with the United States
Securities and Exchange Commission on March 25, 2008. Results of consolidated
operations for the interim periods are not necessarily indicative of a full
year's operating results. The unaudited condensed consolidated financial
statements herein include the accounts of the Company and its wholly owned
subsidiaries, Working Values, Ltd. and Skye Multimedia Ltd. (Skye). All material
inter-company accounts and transactions have been eliminated.

NOTE 2.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The Company, a Delaware corporation, was organized in 1981 as Center
for Video Education, Inc. for the purpose of producing educational videos
primarily directed to the accounting profession. SmartPros' primary products
today are periodic video and Internet subscription services directed to
corporate accountants, financial managers and accountants in public practice. In
addition, the Company produces a series of continuing education courses directed
to the engineering profession, as well as a series of courses designed for
candidates for the professional engineering exam. Through its Working Values
subsidiary, the Company develops programs on governance, compliance and ethics
for corporations. As a result of acquisitions made during 2006 and 2007, the
Company now also offers educational products for the banking, legal, financial
services, insurance, pharmaceutical industry and information technology
professionals. SmartPros also produces custom videos and rents out its studios.

         While the Company's management monitors the revenue streams of the
various products and services, operations are managed and financial performance
is evaluated on a company-wide basis. Accordingly, all of the Company's
operations are considered by management to be aggregated in one reportable
segment.

         SmartPros is located in Hawthorne, New York, where it maintains its
corporate offices, new media lab, video production studios and tape duplication
facilities.

         USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

         REVENUE RECOGNITION

         The Company recognizes revenues from its subscription services as
earned. Video and online subscriptions are generally billed on an annual basis,
while individual online subscriptions predominately are paid by credit card at
point of sale. Both of these types of sales are deferred at the time of billing
or payment and amortized into revenue on a monthly basis over the term of the
subscription, generally one year. Engineering products are non-subscription
based and revenue is recognized upon shipment or, in the case of individual
online sales, payment. Revenues from non-subscription services provided to
customers, such as website design, video production, consulting services and
custom projects are generally recognized on a proportional performance basis
where sufficient information relating to project status and other supporting
documentation is available. Contracts may have different billing arrangements
resulting in

                                       6
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
(CONT'D)

either unbilled or deferred revenue. The Company obtains either signed
agreements or purchase orders from its non-subscription customers outlining the
terms and conditions of the sale or service to be provided. Otherwise, such
services are recognized as revenues after completion and delivery to the
customer. Duplication and related services are generally recognized upon
shipment or, if later, when the Company's obligations are complete and
realization of receivable amounts is assured.

         CAPITALIZED COURSE COSTS

         Capitalized course costs include the direct cost of internally
developing proprietary educational products and materials that have extended
useful lives. Amortization of these capitalized course costs commences when the
courses are available for sale from the Company's catalog. The amortization
period is five years, except for the Sarbanes-Oxley courses, which have a
three-year amortization period. Other course costs incurred in connection with
any of the Company's monthly subscription products or custom work is charged to
expense as incurred. As a result of recent acquisitions, the Company acquired
$350,000 of course costs that are being amortized over a five-year period.
Included in other intangible assets at March 31, 2008, are capitalized course
costs of $128,044 (exclusive of Sarbanes-Oxley courses), net of accumulated
amortization of $18,745.

         DEFERRED REVENUE

         Deferred revenue related to subscription services represents the
portion of unearned subscription revenue amortized on a straight-line basis as
earned. Deferred revenue related to website design, video production or
technology services represents that portion of amounts billed by the Company, or
cash collected by the Company for which services have not yet been provided or
earned in accordance with the Company's revenue recognition policy. The
Cognistar legal division, the Financial Campus division and the Information
Technology division recognize revenue either immediately from the direct sale of
courses or on a deferred basis as earned, from the sale of prepaid courses.

         EARNINGS PER SHARE

         Basic earnings or loss per common share is net income or loss, as the
case may be, divided by the weighted average number of outstanding shares
outstanding of the Company's common stock, par value $.0001 per share (the
"Common Stock") during the period. Basic earnings or loss per share exclude any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per common share include the dilutive effect of shares of Common Stock
issuable under stock options and warrants. Diluted earnings per share are
computed using the weighted average number of Common Stock and Common Stock
equivalent shares outstanding during the period. Common Stock equivalent shares
of 337,726 for the three months period ended March 31, 2008 are not included
because they are anti-dilutive, and 44,166 common stock equivalents for the
three months ended March 31, 2007, include the Company's stock options, warrants
and grants that are dilutive.

         STOCK-BASED COMPENSATION

         The Company's 1999 Stock Option Plan (the "Plan") permits the grant of
options and restricted stock to employees, directors and consultants. The total
number of shares currently reserved for grants under the Plan is 752,003,
provided that restricted stock grants may not exceed 200,000 shares of which
133,228 are still available. As of March 31, 2008, there were 410,924 options
outstanding, of which 313,242 are currently exercisable, and 341, 079 options
are available for future grants. All stock options and grants under the Plan are
granted at the fair market value of the Common Stock at the grant date. Employee
stock options generally vest ratably over a four-year period and generally
expire 10 years from the grant date. Stock options granted to non-employee
directors vest in the same manner. Restricted stock awards are subject to
forfeiture unless certain time and/or performance requirements are satisfied.

         Effective January 1, 2006, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123 (revised 2004), SHARE-BASED PAYMENT ("SFAS
No.123R"), which addresses the accounting for stock-based payment transactions
in which an enterprise receives director and employee

                                       7
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
(CONT'D)

services in exchange for (a) equity instruments of the enterprise or (b)
liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
In March 2005, the SEC issued Staff Accounting Bulletin ("SAB") No. 107, which
provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R
eliminates the ability to account for stock-based compensation transactions
using the intrinsic value method under Accounting Principles Board ("APB")
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and instead generally
requires that such transactions be accounted for using a fair-value-based
method. The Company uses the Black-Scholes-Merton ("BSM") option-pricing model
to determine the fair value of stock-based awards under SFAS No. 123R,
consistent with that used for pro forma disclosures under SFAS No. 123,
ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS No. 123"). The Company has
elected the modified prospective transition method permitted by SFAS No. 123R.
The modified prospective transition method requires that stock-based
compensation expense be recorded for all new and unvested stock options that are
ultimately expected to vest as the requisite service is rendered beginning on
January 1, 2006. Stock-based compensation expense for awards granted prior to
January 1, 2006, is based on the grant date fair value as determined under the
pro forma provisions of SFAS No.123. The Company has recorded an incremental
stock-based compensation expense of $ 54,960 and $9,000 for the three months
periods ending March 31, 2008 and 2007, respectively, as a result of the
adoption of SFAS No. 123R.

         SFAS No. 123R requires the use of a valuation model to calculate the
fair value of stock-based awards. The Company has elected to use the BSM
option-pricing model, which incorporates various assumptions including
volatility, expected life, interest rates and dividend yields. The expected
volatility is based on the historic volatility of the Company's Common Stock
over the most recent period commensurate with the estimated expected life of the
Company's stock options, adjusted for the impact of unusual fluctuations not
reasonably expected to recur. The expected life of an award is based on
historical experience and on the terms and conditions of the stock awards
granted to employees and directors.

         The assumptions used for the three-month periods ended March 31, 2008
and 2007, and the resulting estimates of weighted-average fair value of options
granted during those periods are as follows:


<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED MARCH 31,
                                                                      2008                  2007
                                                              --------------------    ---------------
<S>                                                            <C>                     <C>
Expected life (years)                                                  5.5                   5.5
Risk-free interest rate                                            2.8  -   3.0%             4.51%
Volatility                                                            45.0%                35.0  %
Dividend yields                                                        --                     --
Weighted-average fair value of options during the period       $     2.29              $    1.91
</TABLE>

         The Company granted 34,075 options under the Plan during the three
months ended March 31, 2008 at exercise prices ranging from $5.10 per share to
$5.16 per share and 9,383 shares were exercised at a price of $2.15 per share.

         The following table represents our stock options granted, exercised and
forfeited for the three months ended March 31, 2008:

<TABLE>
<CAPTION>
                                                      WEIGHTED AVERAGE         WEIGHTED AVERAGE
                                      NUMBER OF      EXERCISE PRICE PER      REMAINING CONTRACTUAL
         STOCK OPTIONS                 SHARES              SHARE                     TERM
---------------------------------    -----------    --------------------    -----------------------

<S>                                   <C>                  <C>                       <C>
Outstanding at January 1, 2008        386,282              $4.62                     5.5
Granted                                34,025              $5.11
Exercised                             (9,383)              $2.15
Forfeited/expired                        -
                                     -----------
Outstanding at March 31,
  2008                                410,924              $4.72                     8.1
                                     ===========    ====================    =======================
Exercisable at March 31,
  2008                                313,242              $4.67                     5.2
                                     ===========    ====================    =======================
</TABLE>

                                       8
<PAGE>

NOTE 2. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
(CONT'D)

         INCOME TAX BENEFIT

         Since January 1, 2006, the Company recognizes the benefit of its
deferred income tax asset available from its net operating loss carryforwards,
which expire in 2023. This benefit is offset by any corporate alternative
minimum income tax. This resulted in a cumulative net income tax benefit of
$978,000 through March 31, 2008. The Company does not believe that it takes any
aggressive income tax positions that would require disclosure under Financial
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes." We have
taken a full valuation allowance for any benefit that may be derived from the
current period loss.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS REPORT.

         We provide learning solutions and/or training materials for: (a)
accounting and finance professionals; (b) engineering professionals; (c) legal
professionals; (d) the financial services industry, including, banking,
securities and insurance personnel; (e) pharmaceutical industry employees; and
(f) information technology professionals. We also provide ethics and compliance
training materials for the general corporate community. Our learning solutions
for the accounting, engineering and legal professions are designed to meet the
continuing professional education requirements of the various state licensing
agencies and professional associations. In addition, we provide value-added
services through our learning management system, marketed under the name
SmartPros' Professional Education Center(TM), which we believe is key to our
revenue growth and future success.

         Our learning and training solutions are delivered in multiple formats
including videotape, CD-ROM, DVD and other formats available for distribution
over the Internet and corporate intranets. Online subscription sales and
delivery are the fastest growing part of our business.

         Since February 2006, we have made a number of acquisitions that have
enabled us to expand into new markets and enhance our offerings to the markets
we historically served.

         In 2004, we raised approximately $6 million of net proceeds in an
initial public offering. Through March 31, 2008, we have used approximately $2.1
million of those proceeds; $500,000 to repay debt and $1.6 million in connection
with the acquisitions made in 2006 and 2007 described above. We intend to use
the remaining $3.9 million net proceeds from the offering, cash flow from
operations and our publicly-traded common stock to execute our growth strategy,
which contemplates acquiring or investing in other companies. We will also
consider acquisitions that will give us access to new markets. We prefer
acquisitions that are accretive, as opposed to those that are dilutive, but
ultimately the decision will be based on maximizing stockholder value rather
than short-term profits. The size of the acquisitions will be determined, in
part, by our size, the capital available to us and the liquidity and price of
our stock. We may use debt to enhance or augment our ability to consummate
larger transactions.

         There are many risks involved with acquisitions. These risks include
integrating the acquired business into our existing operations and corporate
structure, retaining key employees and minimizing disruptions to our existing
business. We cannot assure you that we will be able to identify appropriate
acquisitions opportunities or negotiate reasonable terms or that any acquired
business or assets will deliver the stockholder value that we anticipated at the
outset.

         We have retained a consultant to assist management in connection with
their obligation under the Sarbanes-Oxley Act of 2002 to prepare a report on our
internal controls and reporting systems. Management has prepared a list of
internal controls and testing of those controls began in the fourth quarter of
2007.

                                       9
<PAGE>

         On April 22, 2008, our stock and warrants began trading on the Nasdaq
Capital Market under the symbols SPRO and SPROW, respectively.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The discussion and analysis of our financial condition and results of
operations is based on our consolidated financial statements that have been
prepared according to accounting principles generally accepted in the United
States. In preparing these financial statements, we are required to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses and related disclosures of contingent assets and
liabilities. We evaluate these estimates on an ongoing basis. We base these
estimates on historical experience and on various other assumptions that we
believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities.
Actual results may differ from these estimates under different assumptions or
conditions. We consider the following accounting policies to be the most
important to the portrayal of our financial condition.

     REVENUES

         Most of our revenue is in the form of subscription fees for our monthly
accounting update programs or our course library. Other sources of revenue
include direct sales of programs on a non-subscription basis, fees for various
services, including website design, software development, tape duplication,
video production, video conversion, course design and development, ongoing
maintenance of our clients' online learning content management system and
licensing fees. Subscriptions are billed on an annual basis, payable in advance
and deferred at the time of billing. Individual sales made over the Internet are
by credit card only. Renewals are usually sent out 60 days before the
subscription period ends. We usually obtain either a signed agreement or
purchase orders from our non-subscription customers outlining the terms and
conditions of the sale or service to be provided. Larger transactions are
usually dealt with by contract, the financial terms of which depend on the
services being provided. The contracts may have different billing arrangements
resulting in either unbilled or deferred revenue. Contracts for development and
production services typically provide for a significant upfront payment and a
series of payments based on deliverables specifically identified in the
contract.

         Revenues from subscription services are recognized as earned, deferred
at the time of billing or payment and amortized into revenue on a monthly basis
over the term of the subscription. Engineering products are non-subscription
based and revenue is recognized upon shipment of the product or, in the case of
online sales, payment. Revenues from the sale of legal courses, through Working
Values' Cognistar legal division are either through direct sales, which are
recognized immediately, or through prepaid course usage, in which case revenue
is recognized as courses are taken. Unused course usage is treated as deferred
revenue. Revenues from non-subscription services provided to customers, such as
website design, video production, consulting services and custom projects, are
generally recognized on a proportional performance basis where sufficient
information relating to project status and other supporting documentation is
available. Otherwise, these services are recognized as revenues after completion
and delivery to the customer. Duplication and related services are generally
recognized upon shipment or, if later, when our obligations are complete and
realization of receivable amounts is assured. Both Working Values and Skye
recognize revenue either on a proportional performance basis or on a time and
material billing basis. The cost of fulfilling our monthly subscription
obligation does not exceed this revenue and is booked to expense as incurred.
For of our most of our subscriptions products, there are no significant
additional costs, other than shipping costs, required to complete our
obligations, as the material already exists. We use the term "revenue" to be
differentiated from sales because a majority of our sales are recognized on a
deferred basis.

     EQUIPMENT, INTANGIBLE ASSETS AND LEASEHOLD IMPROVEMENTS

         Fixed and intangible assets are carried at cost less their respective
accumulated depreciation/amortization and are depreciated/amortized using the
straight-line method over their estimated useful lives, which range from three
to ten years. Leasehold improvements are amortized over the lesser of their
estimated lives or the life of the lease. Major expenditures for renewals and
improvements are capitalized and amortized over their useful lives.

                                       10
<PAGE>

     IMPAIRMENT OF LONG-LIVED ASSETS

         We review long-lived assets and certain intangible assets annually for
impairment whenever circumstances and situations change such that there is an
indication that the carrying amounts may not be recovered.

     STOCK-BASED COMPENSATION

         Effective January 1, 2006, we adopted SFAS No. 123R. As a result,
compensation expense includes the cost of compensatory stock option grants and
stock awards, restricted and unrestricted, granted to employees, directors and
consultants. Options and warrants granted to employees and non-employees are
recorded as an expense at the date of grant based on the then estimated fair
value of the security in question.

         SFAS No. 123R requires the use of a valuation model to calculate the
fair value of stock-based awards. We use the Black-Scholes-Merton ("BSM")
option-pricing model, which incorporates various assumptions including
volatility, expected life, interest rates and dividend yields, to determine the
fair value of stock-based awards under SFAS No. 123R. We have elected the
modified prospective transition method permitted by SFAS No. 123R.. The modified
prospective transition method requires that stock-based compensation expense be
recorded for all new and unvested stock options that are ultimately expected to
vest as the requisite service is rendered beginning on January 1, 2006.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2008 AND 2007

         The first quarter of 2008 was our first quarterly loss in four years
and our first since we became a reporting company. We believe that this loss was
due to additional operating expenses we incurred in the first quarter as a
result of a number of acquisitions and to the cost of developing new products,
such as iReflect, and retooling existing products, which were expensed rather
than capitalized.

         The following table compares our statement of operations data for the
three months ended March 31, 2008 and 2007. The trends suggested by this table
may not be indicative of future operating results, which will depend on various
factors including the relative mix of products sold (accounting/finance, law,
engineering, financial services, sales training - product, technology or
compliance and ethics) and the method of sale (video or online) as well as the
timing of custom project work, which can vary from quarter to quarter. In
addition, our operating results in future periods may also be affected by
acquisitions.

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED MARCH 31,
                                        ----------------------------------------------------------------------------
                                                    2008                            2007
                                        -----------------------------    ----------------------------
                                            AMOUNT        PERCENTAGE        AMOUNT        PERCENTAGE       CHANGE
                                        -------------   -------------    ------------   -------------   -------------

<S>                                      <C>                 <C>          <C>              <C>               <C>
Net revenues                             $ 3,875,663         100.0%       $3,723,631       100.0%            4.1%
Cost of revenues                           1,924,773          49.7%        1,468,913        39.4%           31.0%
                                        -------------   -------------    ------------   -------------
Gross profit                               1,950,890          50.3%        2,254,718        60.6%          (13.5%)
                                        -------------   -------------    ------------   -------------
Selling, general and administrative        1,989,060          51.3%        1,726,181        46.4%           15.2%
Depreciation and amortization                202,888           5.2%          165,469         4.4%           22.6%
                                        -------------   -------------    ------------   -------------
Total operating expenses                   2,191,948          56.5%        1,891,650        50.8%           15.9%
                                        -------------   -------------    ------------   -------------
Operating (Loss) income                     (241,058)         (6.2%)         363,068         9.8%         (166.4%)
Other income, net                            120,025           3.1%           88,712         2.4%           35.3%
                                        -------------   -------------    ------------   -------------
Net (Loss) income before income tax
  benefit                                   (121,033)         (3.1%)         451,780        12.2%         (126.8%)
Income tax benefit                                 -                         135,000         3.7%         (100.0%)
                                        -------------   -------------    ------------   -------------
Net (Loss) income                        $  (121,033)         (3.1%)      $  586,780        15.9%         (120.6%)
                                        =============   =============    ============   =============
</TABLE>

                                       11
<PAGE>

     NET REVENUES

         Net revenues for the three months ended March 31, 2008, increased
approximately $152,000, or 4.1%, compared to net revenues for the three months
ended March 31, 2007. This increase was primarily due to: (i) the Financial
Services Training division, whose net revenues increased $320,000 primarily as a
result of acquisitions made during the third quarter of 2007; (ii) the
Engineering division whose net revenues increased $69,000; and (iii) our
Technology Training division, which we also acquired in the third quarter of
2007, whose revenues were $30,000. These increases were offset by: (i) a $23,000
reduction in net revenues from the Accounting/Finance division; (ii) a $148,000
reduction in net revenues from our Skye Multimedia subsidiary; (iii) a $24,000
reduction in net revenues from our video production and duplication division;
(iv) a $19,000 reduction in net revenues from our Ethics and Compliance
division; and (v) a $53,000 reduction in revenues from the Cognistar legal
division. Under our long-standing policy, revenue is credited to the originating
department regardless of the type of service that is performed. For example, a
contract to convert videotapes to digital format is credited to the accounting
education department if that is where the sale originated, even if the project
has nothing to do with accounting.

         In the first quarter of 2008, net revenues from our Accounting/Finance
division were $2.15 million, or 55% of revenue, compared to $2.17 million, or
58% of revenue, in the comparable 2007 period. Net revenues from
subscription-based products that include both subscription-based revenue and
direct sales of course material on a non-subscription basis, decreased from
$2.03 million in the 2007 period to $1.96 million in the corresponding 2008
period. Net revenues derived from other projects in our Accounting/Finance
division that are not subscription based increased from $148,000 in 2007 to
$196,000 in 2008. These revenues fluctuate from period to period, and are not
indicative of any trends. Online revenues, which previously were primarily
derived from the sales of accounting/finance products, continue to be an
important factor contributing to our overall revenue growth. However, many of
our other products including our Cognistar law library, our Financial Campus and
banking courses and our technology training products are also delivered online.
In the 2008 period, net revenues from online sales of accounting products
accounted for approximately $815,000, or 21% of net revenues, compared to
$883,000, or 24% of net revenues in the comparable 2007 period. This represents
an 8% decrease in absolute dollars. However, with the acquisitions made in 2007
and prior total online sales were $1.3 million in the 2008 period or 34% of
sales as compared to $1.1 million in the comparable 2007 period, an increase of
18%.

         For the three months ended March 31, 2008, Skye generated net revenues
of $619,000 compared to $767,000 in the first quarter of 2007. Skye's income is
derived primarily from consulting projects that vary from quarter to quarter.
Therefore, quarterly results will vary and revenues are not necessarily
indicative of long-term trends. In addition, Skye made its first sale of its new
iReflect product. iReflect is a joint venture and revenues from the sales of
this product will vary depending on a number of factors.

         Our Financial Services Training division that includes Sage, Selbst,
and Financial Campus (acquired in August 2007) generated $401,000 of net
revenues in the quarter ended March 31, 2008. For the quarter ended March 31,
2007, this division generated only $81,000 of net revenues. However, Selbst was
acquired in March 1, 2007, Financial Campus was acquired in the third quarter
2007 and Sage was acquired in March 2006.

         Our Technology Training Group, acquired in August 2007, generated
$30,000 of net revenues in the current quarter.

         In the quarter ended March 31, 2008, Working Values had net revenues of
$331,000 compared to net revenues of $403,000 for the quarter ended March 31,
2007. For the 2008 period, $156,000 of Working Values' net revenues was
generated by the Ethics and Compliance division, and $175,000 was generated by
the Cognistar legal division. Net revenues generated by the Ethics and
Compliance division are derived primarily from custom consulting work. Custom
work is non-repetitive and subject to market conditions and can vary from
quarter to quarter. The Cognistar legal division derives its revenue primarily
from prepaid usage and direct sales of its courses.

         Our Engineering division generated $300,000 of net revenues in the
first quarter of 2008 compared to $231,000 in the first quarter of 2007. This
increase is not necessarily indicative of any trends, but is a result of timing
differences, in the placement of orders from customers and greater marketing
efforts. Sales of our engineering products are not subscription based.

                                       12
<PAGE>

         Net revenues from video production and duplication services were
$40,000 and from consulting services were $4,000 for the first quarter of 2008
compared to $64,000 and $4,000 respectively for the first quarter of 2007. We
believe the decline in video production and duplication net revenues reflects an
overall trend in the business.

     COST OF REVENUES

         Cost of revenues includes: (i) production costs - i.e., the salaries,
benefits and other costs related to personnel, whether our employees or
independent contractors, who are used directly in production, including
producing our educational programs and/or upgrading our technology; (ii)
royalties paid to third parties; (iii) the cost of materials, such as videotape
and packaging supplies; and (iv) shipping and other costs. There are many
different types of expenses that are characterized as production costs and many
of them vary from period to period depending on many factors. Generally,
subscription based products have higher profit margins than non-subscription
based products and online sales, which includes electronic delivery of the
product, have higher profit margins than sales involving physically delivery of
tapes, disks and written materials.

         Our gross profit margin decreased for the three months ended March 31,
2008 to 50.3% compared to 60.6% for the three months ended March 31, 2007. This
decrease is attributable, in part, to our recent acquisitions, as we add
additional personnel in our technology areas and changes in our product mix. In
addition, we capitalized approximately $252,000 of costs relating to the
development of our new learning management system. On the other hand, we have
devoted a significant amount of internal resources in developing new products,
re-tooling existing products and technology and integrating our recently
acquired subsidiaries into our various platforms. These costs have not been
capitalized and are therefore included in our cost of revenues.

         Cost of revenues increased by $456,000 in the current quarter from the
comparable period last year. The increase is attributable to a number of
factors, including increased salaries and related costs associated with
acquisitions, and increased costs of producing various custom projects for
clients. We have increased our labor costs as a result of these acquisitions in
order to integrate these products into our various delivery platforms. We have
also expended internal labor for the development of the iReflect product, which
costs have not been capitalized. We outsource a substantial amount of technology
projects to firms where labor costs are lower than they are in the United
States. Our outsourcing strategy has been driven, in part, by increased business
generated from Skye and internal projects. We have determined that it is cheaper
to outsource certain projects rather than hire additional personnel. In
addition, royalty expense increased by $33,000. We are currently seeking to
engage technology providers at more competitive rates.

     o    OUTSIDE LABOR AND DIRECT PRODUCTION COSTS. Outside labor includes the
          cost of hiring actors and production personnel such as directors,
          producers and cameramen and the outsourcing of non-video technology.
          The cost of such outside labor, which is primarily video production
          and technology personnel, increased $12,000, after capitalizing a
          portion of these costs. This increase is directly related to the
          completion of a number of custom projects. Direct production costs,
          which are costs related to producing videos, courses or custom
          projects other than labor costs, such as the cost of renting equipment
          and locations and the use of outsourced labor in the technology area
          increased $150,000. The variation in direct production costs are
          related to the type of production and other projects and do not
          reflect any trends in our business. As our business grows we may be
          required to hire additional production personnel, increasing our cost
          of revenues.

     o    ROYALTIES. Royalty expense increased in the three months ended March
          31, 2008, compared to the comparable 2007 period by $33,000. This is a
          result of timing differences in payments to our partners in our
          engineering courses and to our organizational partners in the
          accounting education area for which we often have to make estimates,
          as the information may not be available.

     o    SALARIES. Overall, payroll and related costs attributable to
          production personnel increased by $203,000, after capitalizing a
          portion of these costs during the current quarter. We have reduced
          salaries and related costs in our video production department as a
          result of decreased business. This is offset by increased salaries and
          related costs as a result of normal salary increases and additional
          personnel acquired as a result of our recent acquisitions.

                                       13
<PAGE>

     o    OTHER PRODUCTION RELATED COSTS. These are other costs directly related
          to the production of our products such as purchases of materials,
          travel, shipping and other. These costs increased by $57,000 from 2007
          to 2008. This is primarily a direct result of travel-related expenses
          incurred by Working Values and Skye Multimedia, most of which is
          reimbursed by the customer on whose behalf those expenses were
          incurred.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative expenses include corporate overhead, such as
compensation and benefits for administrative, sales and marketing and finance
personnel, rent, insurance, professional fees, travel and entertainment and
office expenses. General and administrative expenses for the three months ended
March 31, 2008 increased $263,000, or 15%, compared to the three months ended
March 31, 2007. The increase in general and administrative expenses is primarily
attributable to the various acquisitions we made and to an overall increase in
the costs of doing business.

         Compensation expense in the 2008 period increased $218,000 over
compensation expense for the 2007 period. Our total number of full time general
and administrative employees at March 31, 2008 was 49 compared to 40 at March
31, 2007. Compensation expense includes stock based compensation expense of
$54,960 for the 2008 period and $9,000 for the 2007 period.

         In February 2008 we granted 34,025 options to various employees. The
price of the stock on the dates of issuance was $5.10 and $5.16. Using the BSM
model we determined that these options had a cost of $78,000 that is being
recognized over a three- year period. The value of the options was determined by
using a volatility factor of 45%, a risk-free interest rate ranging between
2.81% and 2.98% % and expected life of 5.5 years.

         In September 2006 we began to outsource our customer service
operations. This function was formally performed internally. For the quarter
ended March 31, 2008 our customer service expense was approximately $48,000, as
we added additional service personnel to handle the Financial Campus products.
Our other general and administrative costs, exclusive of compensation costs,
increased $45,000. These costs consist of a number of expenses including
increased professional fees for Sarbanes-Oxley compliance of approximately
$12,000. On the other hand, by consolidating our Ethics and Compliance division
and our legal division into one office, we were able to reduce our rent expense.
We continue to look for other opportunities to reduce our overhead. Although, we
make every effort to control our costs, we anticipate that general and
administrative expenses will continue to increase as a result of acquisitions
and a general increase in such costs as health insurance and travel.

     DEPRECIATION and AMORTIZATION

         Depreciation and amortization expenses increased by $37,000 in the
first quarter of 2008 compared to the first quarter of 2007 as a result of
increased amortization expense from our capitalized course costs, intangibles
acquired through acquisitions and from the depreciation of fixed assets acquired
from our various acquisitions and/or purchased in 2007 and 2008. We expect our
depreciation and amortization expense on our fixed and intangible assets to
continue to increase as we replace computer equipment, capitalize internal costs
for the development of new courses and our learning management system and begin
to amortize intangibles acquired through acquisitions made in 2007. Although
many of our older assets are either fully or almost fully depreciated and we do
not anticipate replacing them at the same rate, this is offset by the
amortization of the intangibles acquired through acquisitions.

     OPERATING (LOSS) INCOME

         For the three months ended March 31, 2008, net loss from operations was
$241,000 compared to a net income of $363,000 in the comparable period of 2007.

                                       14
<PAGE>

     OTHER INCOME, NET

         Other income and expense items consist of interest paid on indebtedness
and interest earned on deposits. We have not yet used all of the net proceeds
from our initial public offering. We have no debt and, with larger cash balances
this has resulted in increased interest income. As a result, for the first
quarter of 2008 we had net interest income of $120,000 compared to net interest
income of $89,000 in the first quarter of 2007. Due to the general decrease in
interest rates we anticipate lower interest income in future periods.

     INCOME TAX BENEFIT

         We account for deferred tax benefits available from our net operating
loss carryforward pursuant to SFAS No. 109. To date we have recognized a total
of approximately $978,000 in such benefits. We have taken a full valuation
allowance for any benefit that may be derived from the current period loss.

     NET (LOSS) INCOME

         For the three months ended March 31, 2008, we recorded a net loss of
$121,000, or $0.02 per share, basic and diluted respectively, compared to net
income of $587,000 or $0.12 per share, basic and diluted, for the three months
ended March 31, 2007. Earnings per share for the 2007 period before the benefit
of the deferred tax asset would have been $.11 per share basic and $.10 per
share diluted.

LIQUIDITY AND CAPITAL RESOURCES

         Since becoming a public reporting company in October 2004, we have
financed our working capital requirements through internally generated funds. In
addition, our initial public offering yielded net proceeds of approximately $6.0
million. To date we have used approximately $1.6 million of the net proceeds
from the offering to make acquisitions and $500,000 to repay debt.

         Our working capital as of March 31, 2008 was approximately $5.4 million
compared to $5.7 million at December 31, 2007. Our current ratio at March 31,
2008 was 1.82 to 1 compared to 1.87 to 1 at December 31, 2007. The current ratio
is derived by dividing current assets by current liabilities and is a measure
used by lending sources to assess our ability to repay short-term liabilities.
The largest component of our current liabilities is deferred revenue, which was
$5.7 million at March 31, 2008 compared to $5.3 million at December 31, 2007.
This growth is from our subscription-based products and will be earned over the
next 12 months.

         At March 31, 2008, we had cash and cash equivalents of $9.8 million.
For the three months ended March 31, 2008, we reported a net decrease in cash of
$283,000, which includes $151,000 of cash provided by operating activities,
$335,000 of cash used by investing activities and $99,000 of cash used in
financing activities.

         The primary components of our operating cash flows are net income
adjusted for non-cash expenses, such as depreciation and amortization
stock-based compensation and deferred compensation, and the changes in our
operating assets and liabilities, such as accounts receivable, accounts payable
and deferred revenues.

         For the 2008 period, cash used in investing activities included capital
expenditures of $58,000, which consisted primarily of computer equipment
purchases and $25,000 for the acquisition of engineering course content. We
expended $252,000 for software development costs relating to our learning
management system. We continually upgrade our technology hardware and we do not
anticipate any unusual capital expenditures relating to equipment purchases over
the next 12 months.

         For the 2008 period, cash used in financing activities included $20,000
received from the exercise of stock options and $120,000 expended for the
purchase of treasury shares under our share buy-back program.

                                       15
<PAGE>

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIES

         At March 31, 2008, we had no indebtedness.

         As of March 31, 2008, we had commitments under three operating leases:
(i) the leases for our executive offices in Hawthorne, New York; (ii) a lease in
Westborough, Massachusetts, where our Working Values subsidiary and its
Cognistar legal division are based; and (iii) a lease in Bridgewater, New Jersey
where Skye is based. Our financial commitment under all three leases aggregates
approximately $726,000 through February 2010.

         We believe that our current cash balances together with cash flow from
operations will be sufficient to meet our working capital and capital
expenditure requirements from the next 12 months.

         In the future, we may issue additional debt or equity securities to
satisfy our cash needs. Any debt incurred or issued may be secured or unsecured,
at a fixed or variable interest rate and may contain other terms and conditions
that our board of directors deems prudent. Any sales of equity securities may be
at or below current market prices. We cannot assure you that we will be
successful in generating sufficient capital to adequately fund our liquidity
needs.

ITEM 3.  QUANTITATIVE AND QUALITATIVE RISK DISCLOSURES ABOUT MARKET RISK

         A smaller reporting company is not required to provide the information
required by this Item.

ITEM 4.  CONTROLS AND PROCEDURES

         EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Management, with the
participation of our principal executive officer and principal financial
officer, carried out an evaluation of the effectiveness of our "disclosure
controls and procedures" (as defined in the Securities Exchange Act of 1934, as
amended (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of
the period covered by this quarterly report (the "Evaluation Date"). Based upon
that evaluation, our principal executive officer and principal financial officer
concluded that, as of the Evaluation Date, our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act (i) is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms and (ii) is accumulated and communicated to our
management, including our principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure.

         CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no
changes in our internal controls over financial reporting that occurred during
the period covered by this report that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         We are not a party to any material legal proceeding not in the ordinary
course of business at this time.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

RECENT SALES OF UNREGISTERED SECURITIES

         Except as otherwise set forth in this Item 2, there were no sales of
unregistered securities during the period covered by this Report.

                                       16
<PAGE>

USE OF PROCEEDS

         On October 19, 2004, our registration statement on Form SB-2,
commission file number 333-115454 (the "Registration Statement") registering the
offer and sale of units (each a "Unit" and collectively the "Units"), each Unit
consisting of three shares of our common stock, par value $.0001 per share, and
one and one-half common stock purchase warrants, was declared effective by the
U.S. Securities and Exchange Commission. The warrants included in the Units have
a term of five years and an exercise price of $7.125 per share. We sold all
600,000 Units covered by the Registration Statement. Paulson Investment Company,
Inc. was the representative of the underwriters of the offering. The gross
proceeds to us from the offering were $7.65 million and the net proceeds were
$6.0 million. As of the date hereof, we used approximately $0.5 million of the
net proceeds to repay indebtedness and approximately $1.6 million for
acquisitions. The remaining $3.8 million will be used for working capital and
general corporate purposes, including acquisitions.

COMPANY PURCHASES OF ITS EQUITY SECURITIES

         On November 6, 2007, the Board of Directors approved a stock buy back
program under which $750,000 of our funds was allocated to purchase shares of
our common stock on the American Stock Exchange. During the current quarter
$119,606 was expended for the purchase of 25,300 shares of our common stock. As
of April 22, 2008, our common stock is listed on the Nasdaq Capital Market.

                      ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE>
<CAPTION>
                                                                          (C)                    (D)
                                                                    TOTAL NUMBER OF      MAXIMUM NUMBER (OR
                                                                       SHARES (OR        APPROXIMATE DOLLAR
                                                                         UNITS)           VALUE) OF SHARES
                                   (A)                (B)             PURCHASED AS         (OR UNITS) THAT
                              TOTAL NUMBER          AVERAGE             PART OF              MAY YET BE
                                OF SHARES          PRICE PAID           PUBLICLY           PURCHASED UNDER
                               (OR UNITS)          PER SHARE        ANNOUNCED PLANS         THE PLANS OR
       PERIOD                   PURCHASED          (OR UNIT)          OR PROGRAMS             PROGRAMS
-------------------------    ----------------    ---------------    -----------------    --------------------

<S>                              <C>                 <C>                 <C>                  <C>
Month #1
(January 1-31, 2008)               --                  --                  --                 $ 750,000

Month #2
(February 1-29, 2008)              --                  --                  --                 $ 750,000

Month #3
(March 1-31, 2008)               25,300              $ 4.73              25,300               $ 630,394
                             ----------------    ---------------    -----------------    --------------------

Total                            25,300              $ 4.73              25,300               $ 630,394
                             ================    ===============    =================    ====================
</TABLE>


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION.

         None.

                                       17
<PAGE>

ITEM 6. EXHIBITS.

        Exhibits:

           Exhibit No.            Description
           -----------            -----------

              31.1           Certification of Chief Executive Officer pursuant
                             to Section 302 of the Sarbanes-Oxley Act of 2002.

              31.2           Certification of Chief Financial Officer pursuant
                             to Section 302 of the Sarbanes-Oxley Act of 2002.

              32.1           Certification of Chief Executive Officer and Chief
                             Financial Officer pursuant to Section 906 of the
                             Sarbanes-Oxley Act of 2002.



                                       18
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                             SMARTPROS LTD.
                                             --------------
                                             (Registrant)


Date:   May 6, 2008                          /s/ ALLEN S. GREENE
                                             -------------------
                                             Chief Executive Officer


Date:   May 6, 2008                          /s/ STANLEY P. WIRTHEIM
                                             -----------------------
                                             Chief Financial Officer
                                             (Principal Financial Officer)




                                       19