SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549


----------





FORM
      10-QSB





Quarterly
      Report of Small Business Issuers under Section 13 or 15(d) of the


Securities
      Exchange Act of 1934 for the quarterly period ended September 30,
      2007





Commission
      File No. 333-45210





SYSTEMS
      MANAGEMENT SOLUTIONS, INC.


(Name
      of
      Small Business Issuer in Its Charter)





----------




Nevada
            
            88-0460457(State
                or other jurisdiction of
            
            (IRS
                Employer Identification No.)incorporation)





4703
                Shavano Oak, Suite 104
            
            78249San
                Antonio, Texas(Address
                of Principal Executive Offices)
            
            (Zip
                Code)








Issuer's
      telephone number, including area code: (210) 541-9100





----------





The
      issuer has (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
      registrant was required to file such reports), and (2) been subject to such
      filing requirements for the past 90 days.





Number
      of
      shares outstanding of each of the issuer's classes of common
      equity:







Class
            Outstanding
                as of November 09, 2007Common
                stock, $0.0001 par value
            20,690,386





The
      issuer is not using the Transitional Small Business Disclosure
      format.








TABLE
      OF
      CONTENTS







PagePART
                I. FINANCIAL INFORMATION
            1ITEM
                1. CONSOLIDATED FINANCIAL STATEMENTS
            1ITEM
                2. MANAGEMENT'S PLAN OF OPERATIONS
            9ITEM
                3. CONTROLS AND PROCEDURES
            10PART
                II - OTHER INFORMATION
            11ITEM
                1. LEGAL PROCEEDINGS
            11ITEM
                2. EXHIBITS AND REPORTS ON FORM 8-K
            12SIGNATURES
            13




CERTIFICATIONS
      (attached as exhibits)





EXHIBIT
      NO, 31.1 - CERTIFICATION PRESIDENT AND CHIEF EXECUTIVE OFFICER





EXHIBIT
      NO. 31.2 - CERTIFICATION CHIEF FINANCIAL OFFICER





EXHIBIT
      NO. 32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT -
      PRESIDENT


AND
      CHIEF
      EXECUTIVE OFFICER





EXHIBIT
      NO. 32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT - CHIEF


FINANCIAL
      OFFICER







PART
        1.
        FINANCIAL INFORMATION


ITEM
        1.
        CONSOLIDATED FINANCIAL STATEMENTS
  SYSTEMS
        MANAGEMENT SOLUTIONS, INC.
 CONSOLIDATED
        BALANCE SHEETS
 (unaudited)
  September
                  30,
              
              
              December
                  31,2007
              
              
              2006ASSETSCurrent
                  AssetsCash
              
              $
              6,428
              
              $
              33,077Accounts
                  receivable
              
              
              48,650
              
              
              78,586Other
              
              
              12,865
              
              
              12,686Total
                  Current Assets
              
              
              67,943
              
              
              124,349Property
                  and equipment, net of accumulated depreciation of$68,935
                  & $448,932 respectively
              
              
              3,293
              
              
              7,202Assets
                  held for sale, net of accumulated depreciation of$74,014
                        & $74,014 respectively
              
              
              574,619
              
              
              574,619Deposits
              
              
              85,000
              
              
              255,000Total
                  Assets
              
              $
              730,855
              
              $
              961,170LIABILIITES
                  AND STOCKHOLDERS' DEFICITCurrent
                  LiabilitiesAccounts
                  payable
              
              $
              317,216
              
              $
              438,705Accounts
                  payable - related parties
              
              
              136,716
              
              
              81,000Accrued
                  interest and expense
              
              
              277,509
              
              
              191,635Accrued
                  interest and expense - related parties
              
              
              694,897
              
              
              517,036Deferred
                  liability
              
              
              70,000
              
              
              -Litigation
                  settlement liability
              
              
              90,000
              
              
              90,000Notes
                  payable - other
              
              
              610,000
              
              
              850,000Notes
                  payable - shareholder
              
              
              4,787,636
              
              
              4,058,477Total
                  Current Liabilities
              
              
              6,983,974
              
              
              6,226,853Long-Term
                  LiabilitiesLitigation
                  settlement liability
              
              
              225,000
              
              
              292,500Total
                  Liabilities
              
              
              7,208,974
              
              
              6,519,353Commitments
                  and ContigenciesStockholders'
                  DeficitPreferred
                  stock, $.0001 par value, 5,000,000 shares authorized, noshares
                  issued and outstanding
              
              
              -
              
              
              -Common
                  stock, $.0001 par value, 100,000,000 shares authorized,20,690,386
                  shares issued and outstanding
              
              
              2,069
              
              
              2,069Additional
                  paid-in capital
              
              
              19,756,183
              
              
              19,602,968Accumulated
                  deficit
              
              
              (26,236,371
              )
              
              (25,163,220
              )Total
                  Stockholders' Deficit
              
              
              (6,478,119
              )
              
              (5,558,183
              )Total
                  Liabilities and Stockholders' Deficit
              
              $
              730,855
              
              $
              961,170






**Page
            1**




SYSTEMS
        MANAGEMENT SOLUTIONS, INC.
 CONSOLIDATED
        STATEMENTS OF OPERATIONS
 Three
        and
        Nine Months Ended September 30, 2007 and 2006
 (unaudited)
  Three
                  Months Ended
              
              Nine
                  Months Ended2007
              
              2006
              
              2007
              
              2006Revenue
              
              $
              76,616
              
              $
              109,006
              
              $
              408,959
              
              $
              274,556Cost
                  of sales
              
              
              7,321
              
              
              21,754
              
              
              69,164
              
              
              99,869Gross
                  margin
              
              
              69,295
              
              
              87,252
              
              
              339,795
              
              
              174,687General
                  and administrative
              
              
              197,588
              
              
              279,993
              
              
              730,688
              
              
              850,055Depreciation
              
              
              1,523
              
              
              2,174
              
              
              5,251
              
              
              7,713Amortization
              
              
              -
              
              
              5,917
              
              
              -
              
              
              35,500(Gain)/Loss
                  on disposal of equipment
              
              
              -
              
              
              -
              
              
              (3,216
              )
              
              -Total
                  operating expenses
              
              
              199,111
              
              
              288,084
              
              
              732,723
              
              
              893,268Net
                  operating loss from continuingoperations
              
              
              (129,816
              )
              
              (200,832
              )
              
              (392,928
              )
              
              (718,581
              )Interest
                  expense
              
              
              (154,381
              )
              
              (118,339
              )
              
              (429,657
              )
              
              (335,759
              )Net
                  loss from continuingoperations
              
              
              (284,197
              )
              
              (319,171
              )
              
              (822,585
              )
              
              (1,054,340
              )Discontinued
                  operations (Note 8)Loss
                  from discontinued operations ofalternative
                  fuels segment
              
              
              (101,676
              )
              
              6,063
              
              
              (250,566
              )
              
              51,285Net
                  loss
              
              $
              (385,873
              )
              $
              (313,108
              )
              $
              (1,073,151
              )
              $
              (1,003,055
              )Basic
                  and diluted loss per share
              
              $
              (0.01
              )
              $
              (0.02
              )
              $
              (0.04
              )
              $
              (0.05
              )Basic
                  and diluted loss per sharefor
                  discontinued operations
              
              $
              (0.00
              )
              $
              0.00
              
              $
              (0.01
              )
              $
              0.00Total
                  basic and diluted loss per share
              
              $
              (0.02
              )
              $
              (0.02
              )
              $
              (0.05
              )
              $
              (0.05
              )Weighted
                  average shares outstanding
              
              
              20,690,386
              
              
              20,690,386
              
              
              20,690,386
              
              
              20,684,708






**Page
            2**




SYSTEMS
        MANAGEMENT SOLUTIONS, INC.
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 Nine
        Months Ended September 30, 2007 and 2006
 (unaudited)
  2007
              
              2006Cash
                  Flows From Operating ActivitiesNet
                  loss
              
              $
              (1,073,151
              )
              $
              (1,003,055
              )Loss/(Income)
                  from discontinued operations
              
              
              250,566
              
              
              (51,285
              )Loss
                  from continuing operations
              
              
              (822,585
              )
              
              (1,054,340
              )Adjustments
                  to reconcile net loss to net cash used inoperating
                  activities:Imputed
                  Interest
              
              
              153,216
              
              
              122,684Depreciation
              
              
              5,251
              
              
              7,713Amortization
              
              
              -
              
              
              35,500(Gain)/Loss
                  on disposal of equipment
              
              
              (3,216
              )
              
              -Changes
                  in:Accounts
                  receivable
              
              
              29,936
              
              
              (18,070
              )Accounts
                  receivable - related parties
              
              
              (176,001
              )
              
              (45,250
              )Inventory
              
              
              -
              
              
              -Other
                  current assets
              
              
              (55
              )
              
              (283,574
              )Accounts
                  payable
              
              
              (35,221
              )
              
              4,494Accounts
                  payable - related parties
              
              
              (95,899
              )
              
              310,602Accrued
                  expenses
              
              
              93,914
              
              
              (123,948
              )Accrued
                  expenses - related parties
              
              
              177,860
              
              
              174,814Litigation
                  settlement
              
              
              (67,500
              )
              
              (65,000
              )Net
                  Cash Used in Operating Activities
              
              
              (740,300
              )
              
              (934,375
              )Cash
                  Flows From Investing ActivitiesPurchase
                  of fixed assets
              
              
              (1,726
              )
              
              -Proceeds
                  from sale of equipment
              
              
              3,600
              
              
              -Net
                  Cash Provided by Investing Activities
              
              
              1,874
              
              
              -




**Page
            3**


SYSTEMS
        MANAGEMENT SOLUTIONS, INC.
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS - CONTINUED
 Nine
        Months Ended September 30, 2007 and 2006
 (unaudited)
  2007
              
              2006Cash
                  Flows From Financing ActivitiesProceeds
                  from notes payable - shareholder
              
              
              729,159
              
              
              404,600Proceeds
                  from notes payable - other
              
              
              -
              
              
              500,000Net
                  Cash Provided by Financing Activities
              
              
              729,159
              
              
              904,600Discontinued
                  OperationsDiscontinued
                  operating activities
              
              
              (17,382
              )
              
              235,606Discontinued
                  investing activities
              
              
              -
              
              
              (203,839
              )Discontinued
                  financing activities
              
              
              
              
              
              -Net
                  Cash Provided by (Used In) Discontinued Operations
              
              
              (17,382
              )
              
              31,767Net
                  change in cash
              
              
              (26,649
              )
              
              1,992CashBeginning
                  of Period - Continuing Operations
              
              
              15,380
              
              
              44,776Beginning
                  of Period - Discontinued Operations
              
              
              17,697
              
              
              53,692End
                  of Period - Continuing Operations
              
              $
              6,113
              
              $
              15,001End
                  of Period - Discontinued Operations
              
              $
              315
              
              $
              85,459Supplemental
                  disclosures:Income
                  Tax Paid
              
              $
              -
              
              $
              -Interest
                  Paid
              
              
              -
              
              
              9,775Non-cash
                  operating and financing activities:Transfer
                  of deposit rights for partial release of notes payable
              
              
              170,000
              
              
              -Common
                  Stock issued as loan discount for Note Payable
              
              
              -
              
              
              5,500




**Page
            4**




SYSTEMS
      MANAGEMENT SOLUTIONS, INC.


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)








NOTE
      1 -
      BASIS OF PRESENTATION





The
      accompanying unaudited interim financial statements of Systems Management
      Solutions, Inc. (“SMS”) have been prepared in accordance with accounting
      principles generally accepted in the United States of America and the rules
      of
      the Securities and Exchange Commission ("SEC"), and should be read in
      conjunction with the audited financial statements and notes thereto contained
      in
      SMS's financial statements filed with the SEC on Form 10-KSB for the year ended
      December 31, 2006. In the opinion of management, all adjustments, consisting
      of
      normal recurring adjustments, necessary for a fair presentation of financial
      position and the results of operations for the interim periods presented have
      been reflected herein. The results of operations for interim periods are not
      necessarily indicative of the results to be expected for the full year. Notes
      to
      the financial statements which would substantially duplicate the disclosure
      contained in the audited financial statements for the most recent fiscal year
      2006 as reported in Form 10-KSB have been omitted.





NOTE
      2 -
      GOING CONCERN





SMS
      incurred a net loss of $385,873 and $1,073,151 for the three and nine months
      ended September 30, 2007 and has a working capital deficit of $6,916,031 as
      of
      September 30, 2007. These conditions create an uncertainty as to SMS’ ability to
      continue as a going concern. Management is trying to raise additional capital
      through sales of common stock and assets. The financial statements do not
      include any adjustments that might be necessary if SMS is unable to continue
      as
      a going concern.





NOTE
      3 -
      ASSETS HELD FOR SALE





In
      an
      effort to secure additional capital for operations, the Company began actively
      seeking a purchaser for the assets located at its subsidiary’s, SMSE, production
      plant located in Poteet, Texas. On October 5, 2006, SMSE received a letter
      of
      intent (“LOI”) from Earth Biofuels, Inc. (“EBOF”) for the acquisition of these
      assets. The terms of the LOI created a tiered consideration payment based on
      SMSE’s ability to meet two levels of production; the minimum consideration was
      $2.7 million and the maximum was $4.7 million. EBOF did not meet the terms
      of
      the LOI and it expired with no sale transaction occurring. The Company will
      continue to pursue buyers for these assets.





The
      assets held for sale have a net book value at September 30, 2007 of $574,619
      with no corresponding liabilities. Based on the LOI referenced above and
      communications with new interested purchasers, the Company believes that the
      fair value of this facility’s assets exceeds its net book value.





NOTE
      4 -
      NOTES PAYABLE TO OTHERS





On
      February 3, 2006, SMS borrowed $500,000 from an independent lender. The security
      pledged for this note is equipment recently purchased plus the deposit placed
      on
      equipment currently being prepared for delivery in


the
      future. The interest is 10% and the note matured on August 1, 2006. The interest
      rate on the unpaid balance is 18%. The Company is in default on this note.
      On
      February 8, 2007, an agreement to transfer deposit rights and partial release
      of
      promissory note was signed by the Company and the independent note holder.
      In
      the agreement, the Company has transferred the rights to the deposit placed
      by
      the Company on 4 pieces of equipment that were to be used by its subsidiary
      SMSE, a value of $170,000, in exchange for a release and





**Page
            5**





discharge
      of $240,000 of the promissory note. In addition, the Company has the right
      to
      further release of $15,000 for any future transfer to note holder of the rights
      in the deposits of 2 additional pieces of equipment, a value of $85,000.
      Interest expense for the nine months ended September 30, 2007 and 2006, is
      $51,561 and $40,418, respectively. Amortization expense for the same periods
      is
      $0 and $35,500, respectively. At September 30, 2007, the deferred liability
      is
      $70,000 and the principal balance on the note is $260,000 with interest accrued
      of $116,870.





On
      October 5, 2006, SMSE received a LOI, from EBOF, for the purchase of assets
      associated with its production facility in Poteet (See Note 3). The initial
      terms of the LOI enabled SMSE to sign a promissory note with EBOF for a line
      of
      credit not to exceed $788,000. The expiration date of this note was February
      2,
      2007. SMSE is in default on this note. The terms of the LOI were not met by
      the
      purchaser and the LOI expired with no sale. The interest rate on the unpaid
      balance is 18%. Interest expense for the nine months ended September 30, 2007
      and 2006, is $43,825 and $0, respectively. At September 30, 2007, the principal
      balance on the note is $350,000 and interest accrued is $43,825.





NOTE
      5 -
      NOTES PAYABLE TO SHAREHOLDERS





SMS
      and
      its subsidiaries have various promissory notes and advance agreements with
      its
      majority shareholder. The promissory notes bear a 10% interest rate. The
      advances bear no interest, however imputed interest at 10% is added as a
      contribution to capital each period. During the nine months ended September
      30,
      2007, SMS and its subsidiaries received proceeds of $729,159 from the
      shareholder under these agreements. Interest expense for the nine months ended
      September 30, 2007 and 2006, is $331,076 and $278,209, respectively. At
      September 30, 2007, the principal balances on the above instruments are
      $4,787,636 and the accrued interest balances at September 30, 2007 are
      $694,867.





NOTE
      6-
      EQUITY





On
      February 1, 2006, SMS issued 50,000 shares of common stock to an independent
      lender as additional incentive to make the $500,000 loan described in Note
      5.





NOTE
      7 -
      DISCONTINUED OPERATIONS





SMSE,
      a
      subsidiary of the Company, ceased production in Dec 2006 and its assets located
      in Poteet, Tx. were classified as Held for Sale at December 31, 2006 (see Note
      3). The Company sought out arrangements in which the assets would be purchased
      but SMSE would retain management of the facility. Therefore, SMSE maintained
      the
      current staff which consisted of managerial, operational and custodial
      personnel. This provided a “ready” management team which made the purchase more
      attractive to potential buyers. However, in September and October, key
      managerial personnel employed by SMSE have resigned. The Company is no longer
      able to provide management of the facility and has therefore recognized this
      segment of its operations as discontinued.





SMSE’s
      activity represents the entirety of the Company’s alternative fuels segment (see
      Note 9). SMSE’s sales, reported in discontinued operations, for the nine months
      ended September 30, 2007 and 2006 are $10,200 and $3,221,553, respectively.
      SMSE’s pretax (loss)/profit from operations, reported in discontinued
      operations, for the nine months ended September 2007 and 2006 were $(250,566)
      and $51,285 respectively. Prior year











**Page
            6**





financial
      statements have been restated to present the operations of SMSE as a
      discontinued operation. The fixed assets of the discontinued operation are
      listed as “Assets Held for Sale” in the accompanying Balance Sheets at September
      30, 2007 and December 31, 2006. Below is a table of all assets and liabilities
      for the discontinued operations:




At
              
              AtSeptember
                  30,
              
              December
                  31,2007
              
              2006Assets
                  of discontinued operations:Cash
              
              
              315
              
              
              17,697Accounts
                  Receivable
              
              
              11,448
              
              
              11,448Inventory
              
              
              -
              
              
              -Property
                  and equipment, net
              
              
              574,619
              
              
              574,619Other
                  Assets
              
              
              10,782
              
              
              10,657Total
                  Assets
              
              $
              597,164
              
              $
              614,421Liabilities
                  of discontinued operations:Accounts
                  payable
              
              
              298,338
              
              
              384,607Accounts
                  payable - related parties
              
              
              136,716
              
              
              81,000Accrued
                  expense
              
              
              44,974
              
              
              53,015Total
                  Liabilities
              
              $
              480,028
              
              $
              518,622


NOTE
      8 -
      INTERNAL REVENUE TAX LIEN





During
      the second and third quarters of 2005, ASPECT, one of the Company’s
      subsidiaries, did not have the funds necessary to cover all the payroll taxes.
      In January 2006, the Internal Revenue Service (“IRS”) placed a lien on ASPECT
      assets. A third party accounting firm which represented ASPECT, in the due
      process hearing, negotiated an installment plan to settle the outstanding
      liability. The payments were tendered from this third party firm on behalf
      of
      the Company’s largest shareholder and holder of a line of credit with ASPECT.
      The balance due at September 30, 2007 is $34,536.





**Page
            7**





NOTE
      9 -
      OPERATING SEGMENTS AND RELATED REPORTING


Software
                  Sales,
              
              (Discontinued)Programming,
                  Data
              
              AlternativeCapturing
                  & Storage
              
              Fuels
              
              All
                  Other
              
              Total9
                  Months Ended September 30, 2007Revenues
                  from external customers
              
              $
              408,959
              
              $
              -
              
              $
              -
              
              $
              408,959Net
                  operating loss from operations
              
              
              (53,883
              )
              
              -
              
              
              (339,045
              )
              
              (392,928
              )Income/(loss)
                  from discontinued operations
              
              
              
              
              
              (250,566
              )
              
              
              
              
              (250,566
              )Identifiable
                  assets
              
              
              3,293
              
              
              0
              
              
              -
              
              
              3,293Assets
                  held for sale
              
              
              
              
              
              574,619
              
              
              
              
              
              574,619Capital
                  Expenditures
              
              
              1,726
              
              
              -
              
              
              -
              
              
              1,726Depreciation
              
              
              5,251
              
              
              -
              
              
              -
              
              
              5,2519
                  Months Ended September 30, 2006Revenues
                  from external customers
              
              $
              274,556
              
              $
              -
              
              $
              -
              
              $
              274,556Net
                  operating income/(loss) from operations
              
              
              (438,849
              )
              
              -
              
              
              (279,732
              )
              
              (718,581
              )Income/(loss)
                  from discontinued operations
              
              
              
              
              
              51,285
              
              
              
              
              
              51,285Identifiable
                  assets
              
              
              7,304
              
              
              0
              
              
              -
              
              
              7,304Assets
                  held for sale
              
              
              
              
              
              546,079
              
              
              
              
              
              546,079Capital
                  Expenditures
              
              
              -
              
              
              478,339
              
              
              -
              
              
              478,339Depreciation
              
              
              7,713
              
              
              -
              
              
              -
              
              
              7,713




In
      the
      third quarter of 2007, due to the loss of key managerial personnel in the
      alternative fuels segment and the continued price increases in soy oil, the
      Company has determined to discontinue this segment (see Note 7). The assets
      of
      this segment are currently identified as “held for sale” on the balance sheet at
      September 30, 2007.





NOTE
      10 -
      RELATED PARTY





In
      July
      2007, Texian Land and Cattle, a related party to the Company, filed for Chapter
      11 bankruptcy protection. The Company cannot be certain of any effects this
      may
      have on its subsidiary’s SMSE production facility lease agreement with Texian.





NOTE
      11 -
      RECENT ACCOUNTING PRONOUNCEMENTS





In
      June 2006, the Financial Accounting Standards Board (FASB) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
      interpretation of FASB Statement No. 109” (FIN 48). This Interpretation
      provides guidance on recognition, classification and disclosure concerning
      uncertain tax liabilities. The evaluation of a tax position requires recognition
      of a tax benefit if it is more likely than not it will be sustained upon
      examination. We adopted this Interpretation effective January 1, 2007. The
      adoption did not have a material impact on our consolidated financial
      statements.








**Page
          8**




NOTE
      12 -
      RECLASSIFICATION





Certain
      accounts from prior periods have been reclassified to conform to current period
      presentations.





ITEM
      2.
      MANAGEMENT'S PLAN OF OPERATIONS





The
      following discussion and analysis should be read in connection with SMS's
      consolidated financial statements and related notes thereto, included elsewhere
      in this report.





**Overview**





SMS
      is
      comprised of two wholly owned subsidiaries, Aspect Business Solutions, Inc.
      (“ASPECT) and SMS Envirofuels, Inc. (“SMSE”).





ASPECT
      provides custom programming, support and Microsoft systems products to its
      customers. ASPECT is a Microsoft Certified Partner which enables it to remarket
      a specific line of software developed by Microsoft Corporation. For the nine
      month period ending September 30, 2007, 64% of ASPECT’s revenue was generated
      from one customer who has contracted with ASPECT to upgrade its corporate and
      remote locations to the Microsoft software. The customer has both domestic
      and
      international locations. ASPECT expects this


upgrade
      contract to continue the remainder of this year and carry into 2008. For the
      same period, 36% of revenue was generated from the maintenance and annual
      software license renewal sales of ASPECT’s remaining clients. ASPECT
      continuously seeks out new industries and customers that would be benefit from
      the Microsoft software.





SMS
      Envirofuels began processing biodiesel in April 2005. Since then, the
      manufacturing facility has experienced a steady demand for its product and
      has
      continued to perfect its process to achieve both consistency and efficiency.
      During 2006, SMSE was able to maintain its sales prices and levels of production
      and as a result was able to complete an expansion of its production
      capabilities. This has attracted potential buyers and in late 2006, the Company
      placed the assets located at SMSE’s production facility located in Poteet,
      Texas, up for sale. On October 5, 2006, SMSE, the Company’s subsidiary, received
      a letter of intent (“LOI”) from Earth Biofuels, Inc. (“EBOF”) for the
      acquisition of these assets. One of terms of the LOI created a tolling
      arrangement in which EBOF would provide the soybean oil and methanol in
      sufficient quantities to operate the plant at the levels stated in the LOI.
      SMSE
      relied on this agreement and began production in accordance with the LOI.
      However, due to the inconsistent and insufficient levels of soybean oil
      purchased by EBOF for SMSE, the production goal levels, as outlined in the
      LOI,
      were not attained. EBOF ceased communication with SMSE in early December 2006
      and the plant ceased the production of biodiesel. With the price of soybean
      oil
      continually on the rise, it remains difficult to resume operations at sufficient
      margins to sustain operations. SMSE resumed pursuing buyers for its assets
      located at the Poteet plant with the intent to remain in control of its
      operations as third party management for the facility, offering it’s
      administrative and production personnel.


In
      the
      third quarter of 2007, key personnel have left SMSE for other opportunities.
      With the lack of experienced employees, SMSE is no longer able to provide
      management of the Poteet facility to interested buyers. It was thus determined
      to discontinue the alternative fuels segment of the Company.








**Page
            9**





**Results
      of Operation**




The
      Company incurred a net loss of $385,873 and $1,073,151 for the three months
      and
      nine months ended September 30, 2007, respectively and had a working capital
      deficit of $6,916,031, as of September 30, 2007. These conditions create an
      uncertainty as to SMS’s ability to continue as a going concern. SMS has seen
      improvement in the operating results of ASPECT. However, it is not yet
      determined when SMS Envirofuels will resume production.





Cash
      used
      by continuing operations and provided by investing activities was $757,683
      and
      $1,874, respectively, for the nine month period ending September 30,
      2007. Cash used by discontinued operations was $17,382 for the same
      period. The funds to cover these uses of cash were received against the
      note payable and advance agreement the company maintains from its majority
      shareholder (see Note 6).





SMS
      continues to rely on loans and advances principally from its major stockholder,
      United Managers Group, Inc., to fund operating shortfalls and does not foresee
      a
      change in this situation in the immediate future. There can be no assurance
      that
      SMS will continue to have such loans and advances available. SMS will not be
      able to continue operations without them. SMS is pursuing alternate sources
      of
      financing. This is reflected in the Letter of Intent received in October 2006
      as
      discussed in Note 4 and Note 5 above and the continuing effort to sell the
      alternative fuels segment of the Company.








**Third
      Quarter and Year to Date 2007 Compared to Third Quarter and Year to Date
      2006**




***Total
      Revenue and Gross Profit*** .
      The
      comparative statements of operations for the three and nine month periods ending
      September 30, 2007 and 2006, reflects a decrease for the quarter but still
      maintains an increase year to date in revenue. ASPECT increased its revenue
      by
      $134,400 or 49% during the nine month period ending September 30, 2007, due
      to
      securing larger contracts for installations and customizations.





***General
      and Administrative costs.*** The
      general and administrative costs have decreased by 29% and 14%, respectively,
      when comparing 2007 to 2006 for the three and nine month period ending September
      30. The reduction is attributed to two major factors: 1) the lower rent in
      the
      new corporate office space. Aspect negotiated out of its $22,800 per month
      office lease and moved out in mid-March 2007. The new space is $2,700 per month
      resulting in a $20,100 reduction in monthly expenses and 2) reductions in
      personnel, sales and marketing. Aspect has been able to reduce its sales and
      marketing costs by 100% and rely on the Microsoft network and word of mouth
      for
      new customers. All companies have incurred small reductions in administrative
      and custodial personnel in the second and third quarters of 2007.





ITEM
      3.
      CONTROLS AND PROCEDURES





(a)
            Under
                the supervision and with the participation of our management, including
                our principal executive officer and principal financial officer,
                we
                conducted an evaluation of the design and operation of our disclosure
                controls and procedures, as such term is defined under Rules 13a-14(c)
                and
                15d-14(c) promulgated
                under the Securities Exchange Act of 1934, as amended (the "Exchange
                Act"), within 90 days of the filing date of this report. Based on
                that
                evaluation, our principal executive officer and our principal financial
                officer concluded that the design and operation of our disclosure
                controls
                and procedures were effective as of the end of the period covered
                by this
                report in timely alerting them to material information required to
                be
                included in SMS's periodic reports and filed with the SEC under the
                Securities Exchange Act of 1934, as amended. The design of any system
                of
                controls is based in part upon certain assumptions about the likelihood
                of
                future events, and there can be no assurance that any design will
                succeed
                in achieving its stated goals under all potential future conditions,
                regardless of how remote.








**Page
            10**





(b)
            In
                addition, there were no significant changes in our internal control
                over
                financial reporting identified in connection
                with the evaluation that occurred during the last fiscal quarter
                that have
                materially affected or that are reasonably likely to materially affect
                our
                internal control over financial
                reporting.





PART
      II -
      OTHER INFORMATION





ITEM
      1.
      LEGAL PROCEEDINGS




In
      early
      2005, the landlord for the offices occupied by YCO Holdings, Inc. and its
      subsidiaries filed suit in the 295 th District
      Court of Harris County, Texas Cause No. 2005-04423 captioned WKB Value Partners,
      LP vs. Systems Management Solutions, Inc., alleging that SMS was obligated
      on
      the lease even though no authorized officer of SMS had signed the same. This
      lawsuit was dismissed in February, 2006 pursuant to a Comprehensive Settlement
      Agreement which required SMS to make payments to WKB Value Partners, LP in
      the
      amount of $470,000. The payment schedule called for $20,000 initial payment,
      followed by monthly payments of $7,500 for 60 months. The final payment will
      be
      due in March 2011. The balance due at September 30, 2007 is
      $315,000.





In
      December of 2006, Cargill Incorporated (“Cargill”), a Delaware corporation,
      filed suit in the Judicial District Court of Bexar County, Texas Cause No.
      2006-CI-19096, against subsidiary SMS Envirofuels, Inc., and certain related
      and
      unrelated companies and individuals, claiming non payment for amounts due
      Cargill by SMSE. The SMSE payable to Cargill as of October 5, 2006 is
      $608,387, which included $528,387 for material received and $80,000 for the
      hedge loss incurred by cancellation of the open physical contracts. On that
      same
      date, SMSE entered into an agreement to sell certain assets located at its
      production plant in Poteet, Texas. The purchaser, Earth Biofuels, Inc. (“EBOF”),
      as part of the agreement, expressly agreed to assume this debt to Cargill and
      provide additional working capital to SMSE. In return, SMSE signed a promissory
      note to EBOF for a line of credit not to exceed $788,000. Cargill agreed to
      this
      arrangement with EBOF but reserved the right to pursue any and all claims
      against SMSE upon failure of EBOF to adhere to the terms outlined in the
      agreement between EBOF and Cargill. EBOF subsequently made partial payments
      totaling $250,000 to Cargill, leaving a balance of $358,387. As of this filing,
      the purchase of the certain assets by EBOF has not occurred and there is not
      an
      expectation that a sale will occur in the future. Cargill was awarded a
      declaratory judgment in its favor. In July of 2007, Cargill reached a payout
      agreement with SMSE and certain related individuals. The balance, which includes
      interest and legal fees, totaled $380,000. The agreement required one payment
      of
      $75,000 due July 27, 2007 and monthly payments of $25,000 due the 1 st of
      every
      month until the balance is paid in full, beginning with September 1, 2007.
      The
      balance due at September 30, 2007 is $280,000. As of this filing, all payments
      have been made in a timely manner. If in the event that SMSE or its certain
      related individual defaults on this agreement, Cargill will file and execute
      its
      judgment as it was awarded.





In
      June
      of 2007, Earthbiofuels, Inc (“EBOF”), posted in the Atascosa County Public Deed
      Records, a Notice of Substitute Trustee’s Foreclosure Sale on the property
      located at 8275 FM 476 West, Poteet, Texas in effort to collect on the
      promissory note made by SMS Envirofuels, Inc. (“SMSE”) as part of the agreement
      entered into in October 2006 (see Note 5). SMSE is currently in default on
      this
      promissory note. The promissory note was secured by this property which is
      owned
      by Texian Land and Cattle (“Texian”), a related party to the Company, and leased
      to SMSE. In July of 2007, as previously discussed in Note 10, Texian filed
      for
      Chapter 11 bankruptcy protection.




**Page
            11**




ITEM
      2.
      EXHIBITS AND REPORTS ON FORM 8-K





(a)
      Exhibits





31.1
      Rule
      13a-14(a)/15d-14(a) Certification of Principal Executive Officer


31.2
      Rule
      13a-14(a)/15d-14(a) Certification of Principal Financial Officer


32.1
      Section 1350 Certification of Principal Executive Officer


32.2
      Section 1350 Certification of Principal Financial Officer





(b)
      Reports on Form 8-K:





1.
            On
                August 20, 2004, SMS filed a Current Report on Form 8-K announcing
                the
                change of SMS's name to Systems Management Solutions,
                Inc.





2.
            On
                February 8, 2005, the Board of Directors of SMS voted to change its
                fiscal
                year end from June 30 to December 31. SMS last changed its fiscal
                year to
                correspond to the fiscal year of a subsidiary that has since discontinued
                operations.





3.
            On
                March 22, 2005, the Board of Directors of SMS voted to reduce the
                number
                of shares outstanding of SMS’s $0.0001 par value common stock by reverse
                split to exchange one (1) new share for each two and one half (2
1⁄2) old
                shares. Any fractional shares created by this reverse split were
                truncated
                to the nearest whole share and no cash was paid for any such fractional
                share.





4.
            On
                April 6, 2005, the Registrant established a wholly owned subsidiary
                named
                SMSN Merger Sub, Inc., a Texas corporation which such corporation
                then
                entered into an Agreement and Plan of Merger between itself, SMS
                Envirofuels, Inc., a Texas corporation, and the Registrant. Under
                the
                terms of such Plan of Merger, SMS Envirofuels, Inc. was merged into
                SMSN
                Merger Sub, Inc., the name of SMSN Merger Sub, Inc. was changed to
                SMS
                Envirofuels, Inc., and the shares of SMS Envirofuels, Inc. were exchanged
                for 1,444,444 shares of the $0.0001 common stock of registrant. SMS
                Envirofuels, Inc. has developed a plant to produce bio-diesel from
                soybean
                oil and markets such bio-diesel to distributors and retailers. The
                Registrant plans to continue this business with the operating assets
                of
                SMS Envirofuels, Inc. and to expand the production and marketing
                of the
                bio-diesel product.





5.
            On
                August 19, SMS filed the results of the audit of the Years Ended
                December
                31, 2003 and 2004 and the review of the Quarter Ended March 31, 2005
                for
                SMS Envirofuels, Inc.





6.
            On
                February 20, 2006, SMS filed Item 4.02 Non-Reliance on Previously
                Issued
                Financial Statements or a Related Audit Report or Completed Interim
                Review
                on Form 8-K, as a result of the restatement of the financial statements
                for the Year Ending December 31,
                2002








**Page
            12**




SIGNATURES





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





Dated:
      November 13, 2007

















**SYSTEMS
        MANAGEMENT SOLUTIONS, INC.,**




By:
      /s/ Jim
      Karlak


James
      Karlak, President and Chief Executive Officer








By:
      /s/ Morris
      Kunofsky


Morris
      Kunofsky, Chief Financial Officer














**Page
            13**