**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB/A**





(Mark
      One)





x  QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      quarterly period ended June 30, 2007





o  TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For
      the
      transition period from _______ to _______





Commission
      file number 0-27842





**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


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


Delaware
              52-1988677(State
                  or other jurisdiction of incorporation or organization)
              (I.R.S.
                  Employer Identification No.)





Garrett
      Information Enterprise Center


685
      Mosser Road, Suite 11, McHenry, Maryland 21541


(Address
      of principal executive offices)





(301)
      387-6900


(Issuer’s
      telephone number)





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





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


Yes
o
      No x





There
      were 89,236,104 shares of common stock outstanding as of August 13,
      2007.





Transitional
      Small Business Disclosure Format (check one): Yes o No x








**Solution
      Technology International, Inc.**


**Quarterly
      Report on Form 10-QSB**


**for
      the Quarterly Period Ended**


**June
      30, 2007**




**-
      INDEX -**




Page**PART
                  I- FINANCIAL INFORMATION:**Item
                  1. Financial Statements:Condensed
                  Consolidated Balance Sheet as of June 30, 2007 (Unaudited)
              1Condensed
                  Consolidated Statements of Operations for the six and three months
                  endedJune
                  30, 2007 and 2006 (Unaudited)
              2Condensed
                  Consolidated Statements of Cash Flows for the six months
                  endedJune
                  30, 2007 and 2006 (Unaudited)
              3Notes
                  to Condensed Consolidated Financial Statements (Unaudited)
              4Item
                  2. Management’s Discussion and Analysis or Plan of
                  Operation
              30Item
                  3. Controls and Procedures
              43**PART
                  II - OTHER INFORMATION:**Item
                  1. Legal Proceedings
              45Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              45Item
                  3. Defaults Upon Senior Securities
              45Item
                  4. Submission of Matters to a Vote of Security Holders
              45Item
                  5. Other Information
              46Item
                  6. Exhibits
              46





i


**PART
      I — FINANCIAL INFORMATION**




**Item
      1. Financial Statements.**




**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**CONDENSED
      CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006**


**(UNAUDITED)**










**INDEX
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





Balance
                Sheet as of June 30, 2007 (Unaudited)Statements
                of Operations for the Six and Three Months Ended June 30, 2007 and
                2006
                (Unaudited)Statements
                of Cash Flows for the Six Months Ended June 30, 2007 and 2006
                (Unaudited)Notes
                to Condensed Consolidated Financial Statements (Unaudited)








**SOLUTION
        TECHNOLOGY INTERNATIONAL, INC.**
 **(FORMERLY
        NETWORTH TECHNOLOGIES, INC.)**
 **CONDENSED
        CONSOLIDATED BALANCE SHEET**
 **JUNE
        30, 2007 (UNAUDITED)**


**ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              
              $
              171,614Total
                  Current Assets
              
              
              171,614Fixed
                  Assets, Net of Depreciation
              
              
              21,538Other
                  Assets:Intangible
                  assets, net
              
              
              336,430Deferred
                  financing fees, net
              
              
              41,250Security
                  deposits
              
              
              2,828Total
                  Other Assets
              
              
              380,508**TOTAL
                  ASSETS**
              
              $
              573,660**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****LIABILITIES**Current
                  Liabilities:Current
                  portion of notes payable
              
              $
              1,400,000Notes
                  payable - related parties
              
              
              694,742Liability
                  for stock to be issued
              
              
              175,000Derivative
                  liability
              
              
              1,578,365Accrued
                  compensation
              
              
              723,340Accounts
                  payable and accrued expenses
              
              
              939,391Total
                  Current Liabilities
              
              
              5,510,838Long-term
                  Liabilities:Convertible
                  debentures, net of disount of $819,247
              
              
              1,971,636Total
                  Long-term Liabilities
              
              
              1,971,636**Total
                  Liabilities**
              
              
              7,482,474**STOCKHOLDERS'
                  DEFICIT**Preferred
                  stock, $.01 Par Value; 8,000,000 shares authorizedand
                  0 shares issued and outstanding
              
              
              -Class
                  A Preferred stock, $.01 Par Value; 2,000,000 sharesauthorized
                  and 801,831 shares issued and outstanding
              
              
              8,018Common
                  stock, $.01 Par Value; 650,000,000 shares authorizedand
                  65,274,702 shares issued and 65,273,449 shares outstanding
              
              
              652,747Additional
                  paid-in capital
              
              
              18,555,931Accumulated
                  deficit
              
              
              (26,106,713
              )(6,890,017
              )Treasury
                  stock, 187,971 shares, at cost
              
              
              (18,797
              )**Total
                  Stockholders' Deficit**
              
              
              (6,908,814
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              573,660




The
        accompanying notes are an integral part of the
 condensed
        consolidated financial statements.




1


**SOLUTION
                  TECHNOLOGY INTERNATIONAL, INC.****(FORMERLY
                  NETWORTH TECHNOLOGIES, INC.)****CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS****FOR
                  THE SIX AND THREE MONTHS ENDED JUNE 30, 2007 AND 2006
                  (UNAUDITED)**
  **SIX
                    MONTHS ENDED**
                
                **THREE
                    MONTHS ENDED****JUNE
                    30,**
                
                **JUNE
                    30,****2007**
                
                **2006**
                
                **2007**
                
                **2006****OPERATING
                    REVENUES**Sales
                
                $
                19,275
                
                $
                -
                
                $
                19,275
                
                $
                -**COST
                    OF SALES**Amortization
                    of intangible assets
                
                
                48,061
                
                
                48,061
                
                
                24,030
                
                
                24,030**Total
                    Cost of Sales**
                
                
                48,061
                
                
                48,061
                
                
                24,030
                
                
                24,030**GROSS
                    LOSS**
                
                
                (28,786
                )
                
                (48,061
                )
                
                (4,755
                )
                
                (24,030
                )**OPERATING
                    EXPENSES**Compensation
                    expense
                
                
                193,941
                
                
                72,493
                
                
                97,941
                
                
                72,493Professional
                    and consulting fees
                
                
                60,300
                
                
                123,870
                
                
                23,235
                
                
                79,815Rent
                    expense
                
                
                10,570
                
                
                47,776
                
                
                6,292
                
                
                10,361Other
                    general and administrative expenses
                
                
                54,862
                
                
                142,165
                
                
                23,324
                
                
                102,597Depreciation
                
                
                5,019
                
                
                5,576
                
                
                2,510
                
                
                2,671**Total
                    Operating Expenses**
                
                
                324,692
                
                
                391,880
                
                
                153,302
                
                
                267,937**LOSS
                    BEFORE OTHER INCOME (EXPENSE)**
                
                
                (353,478
                )
                
                (439,941
                )
                
                (158,057
                )
                
                (291,967
                )**OTHER
                    INCOME (EXPENSE)**Forgiveness
                    of debt
                
                
                -
                
                
                449,991
                
                
                -
                
                
                449,991Gain
                    (loss) on fair value of derivative liability
                
                
                315,161
                
                
                772
                
                
                316,493
                
                
                772Gain
                    on conversion of convertible debentures
                
                
                116,563
                
                
                -
                
                
                69,794
                
                
                -Accretion
                    of discount on convertible debentures
                
                
                (510,775
                )
                
                (243,396
                )
                
                (254,183
                )
                
                (243,396
                )Interest
                    expense
                
                
                (189,734
                )
                
                (152,187
                )
                
                (95,990
                )
                
                (77,364
                )**Total
                    Other Income (Expense)**
                
                
                (268,785
                )
                
                55,180
                
                
                36,114
                
                
                130,003**NET
                    LOSS BEFORE PROVISION FOR INCOME TAXES**
                
                
                (622,263
                )
                
                (384,761
                )
                
                (121,943
                )
                
                (161,964
                )**Provision
                    for Income Taxes**
                
                
                -
                
                
                -
                
                
                -
                
                
                -**NET
                    LOSS APPLICABLE TO COMMON SHARES**
                
                $
                (622,263
                )
                $
                (384,761
                )
                $
                (121,943
                )
                $
                (161,964
                )**NET
                    LOSS PER BASIC AND DILUTED SHARES**
                
                $
                (0.01
                )
                $
                (0.17
                )
                $
                (0.00
                )
                $
                (0.07
                )**WEIGHTED
                    AVERAGE NUMBER OF COMMON****SHARES
                    OUTSTANDING**
                
                
                55,312,350
                
                
                2,247,367
                
                
                59,208,005
                
                
                2,268,781




The
        accompanying notes are an integral part of the condensed
        consolidated financial statements.
  2
 
 **SOLUTION
                  TECHNOLOGY INTERNATIONAL, INC.****(FORMERLY
                  NETWORTH TECHNOLOGIES, INC.)****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS****FOR
                  THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED)**




**2007**
              
              **2006****CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  loss
              
              $
              (622,263
              )
              $
              (384,761
              )**Adjustments
                  to reconcile net loss to net cash****used
                  in operating activities:**Depreciation
                  and amortization
              
              
              53,080
              
              
              67,387Amortization
                  of deferred financing fees
              
              
              27,500
              
              
              243,396(Gain)
                  on conversion of convertible debenture
              
              
              (116,563
              )
              
              -(Gain)
                  loss on fair value of derivative liability
              
              
              (315,161
              )
              
              (772
              )Accretion
                  of discount on convertible debentures
              
              
              510,775
              
              
              -**Changes
                  in assets and liabilities**Decrease
                  in prepaid expenses and other assets
              
              
              -
              
              
              4,237Increase
                  (decrease) in accrued compensation
              
              
              222,091
              
              
              (203,231
              )Increase
                  in liability for stock to be issued
              
              
              -
              
              
              -Increase
                  in accounts payable and accrued expenses
              
              
              169,531
              
              
              (351,709
              )Total
                  adjustments
              
              
              551,253
              
              
              (240,692
              )**Net
                  cash used in operating activities**
              
              
              (71,010
              )
              
              (625,453
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Acquisitions
                  of fixed assets
              
              
              -
              
              
              (22,409
              )**Net
                  cash used in investing activities**
              
              
              -
              
              
              (22,409
              )**CASH
                  FLOWS FROM FINANCING ACTIVITES**Proceeds
                  (repayments) on note payable - bank
              
              
              -
              
              
              (16,500
              )Increase
                  (decrease) in bank overdraft
              
              
              -
              
              
              (422
              )Proceeds
                  from notes payable - related parties
              
              
              3,581
              
              
              34,525Proceeds
                  from sale of common stock
              
              
              175,000
              
              
              -Proceeds
                  from convertible debentures, net of deferred financing
                  fees
              
              
              -
              
              
              890,000Payments
                  of obligations under capital lease
              
              
              -
              
              
              (1,527
              )**Net
                  cash provided by financing activities**
              
              
              178,581
              
              
              906,076**NET
                  INCREASE (DECREASE) IN****CASH
                  AND CASH EQUIVALENTS**
              
              
              107,571
              
              
              258,214**CASH
                  AND CASH EQUIVALENTS -****BEGINNING
                  OF PERIOD**
              
              
              64,043
              
              
              -**CASH
                  AND CASH EQUIVALENTS - END OF PERIOD**
              
              $
              171,614
              
              $
              258,214**CASH
                  PAID DURING THE PERIOD FOR:**Interest
                  expense
              
              $
              46,312
              
              $
              64,158**SUPPLEMENTAL
                  DISCLOSURE OF NONCASH INFORMATION:**Reclassification
                  of notes payable - bank to notes payable - related parties
              
              $
              200,000
              
              $
              -Conversion
                  of note payable - related party and accrued interest for common
                  stock
              
              $
              11,704
              
              $
              -Common
                  stock issued in settlement of accrued compensation and accounts
                  payable
              
              $
              120,103
              
              $
              -Common
                  stock issued in conversion of convertible debentures
              
              $
              181,541
              
              $
              -




The
        accompanying notes are an integral part of the condensed
        consolidated financial statements.


3




**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      1-**  **ORGANIZATION
      AND BASIS OF PRESENTATION**





The
      unaudited condensed consolidated financial statements included herein have
      been
      prepared, without audit, pursuant to the rules and regulations of the Securities
      and Exchange Commission (“SEC”). The condensed consolidated financial statements
      and notes are presented as permitted on Form 10-QSB and do not contain
      information included in the Company’s annual consolidated statements and notes.
      Certain information and footnote disclosures normally included in financial
      statements prepared in accordance with accounting principles generally accepted
      in the United States of America have been condensed or omitted pursuant to
      such
      rules and regulations, although the Company believes that the disclosures are
      adequate to make the information presented not misleading. It is suggested
      that
      these condensed consolidated financial statements be read in conjunction with
      the December 31, 2006 audited financial statements and the accompanying notes
      thereto. While management believes the procedures followed in preparing these
      condensed consolidated financial statements are reasonable, the accuracy of
      the
      amounts are in some respects dependent upon the facts that will exist, and
      procedures that will be accomplished by the Company later in the
      year.





These
      condensed consolidated unaudited financial statements reflect all adjustments,
      including normal recurring adjustments which, in the opinion of management,
      are
      necessary to present fairly the consolidated operations and cash flows for
      the
      periods presented.





On
      May
      19, 2005, Networth Technologies, Inc. (the “Company”), Solution Technology
      International, Inc. (“STI”) and STI Acquisition Company Corp., a newly formed
      Delaware corporation, entered into an Agreement and Plan of Merger pursuant
      to
      which the Company was required to issue shares equal to 90% of its outstanding
      shares at the date of the merger for 100% of the outstanding shares of STI.
      As a
      result of the Agreement, the transaction will be treated for accounting purposes
      as a reverse merger by STI being the accounting acquirer. The merger was
      effective June 20, 2005 and the STI shares were deemed to be paid. In addition,
      STI cancelled all of its certificates and as of December 31, 2006 have received
      38,800,285 shares of common stock of the Company.





Solution
      Technology International, Inc. (the “Company”) incorporated in Delaware on April
      27, 1993, is a software product company based in McHenry, Maryland offering
      an
      enterprise solution for the global insurance and reinsurance industry. The
      Company has created complex reinsurance algorithms and methodologies to support
      automation of complex technical accounting methods and claims recovery
      processes. The Company has also developed sophisticated expert underwriting
      methods and trend analysis tools that support the insurance and reinsurance
      industries.





On
      August
      15, 2006, the Company approved a 1 for 150 share reverse stock split. The result
      of the reverse stock split brought the issued and outstanding shares to
      2,375,448 from 356,317,160 shares. The share amounts have been reflected
      retrospective of the stock split.





4


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      1-**  **ORGANIZATION
      AND BASIS OF PRESENTATION** **(CONTINUED)**





The
      Company on June 23, 2006, changed its name to Solution Technology International,
      Inc.





**Going
      Concern**





As
      shown
      in the accompanying condensed consolidated financial statements the Company
      had
      recurring losses of $622,263 and $384,761 for the six months ended June 30,
      2007
      and 2006, respectively, and has a working capital deficiency of $5,339,224
      as of
      June 30, 2007. The Company is overdue on their debt obligations, and has
      generated very little revenue. There is no guarantee that the Company will
      be
      able to raise enough capital or generate revenues to sustain its operations.
      These conditions raise substantial doubt about the Company’s ability to continue
      as a going concern for a reasonable period.





Management
      believes that the Company’s capital requirements will depend on many factors
      including the success of the Company’s stock, as well as its sales efforts. The
      Company has borrowed additional amounts from lending sources as well as related
      parties to fund its operations. The Company continues to pursue additional
      sources of capital to carry out its business plan. The Company’s ability to
      continue as a going concern for a reasonable period is dependent upon
      management’s ability to raise additional interim capital and, ultimately,
      achieve profitable operations. There can be no assurance that management will
      be
      able to raise sufficient capital, under terms satisfactory to the Company,
      if at
      all.





The
      condensed consolidated financial statements do not include any adjustments
      relating to the carrying amounts of recorded assets or the carrying amounts
      and
      classification of recorded liabilities that may be required should the Company
      be unable to continue as a going concern.





**NOTE
      2-**   **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**




**Principles
      of Consolidation**





The
      condensed consolidated financial statements include the accounts of the Company
      and its wholly owned subsidiary. All significant intercompany accounts and
      transactions have been eliminated in consolidation.





5


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**   **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and 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. On an on-going basis, the Company evaluates its
      estimates, including, but not limited to, those related to bad debts, income
      taxes and contingencies. The Company bases its estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying value of assets and liabilities that are not
      readily apparent from other sources. Actual results could differ from those
      estimates.





**Cash
      and Cash Equivalents**





The
      Company considers all highly liquid debt instruments and other short-term
      investments with an initial maturity of three months or less to be cash
      equivalents.





**Intangible
      Assets**





Intangible
      assets consist of software and related technology and are carried at cost and
      are amortized over the period of benefit, ten years, generally on a
      straight-line basis. These intangible assets are also used as security under
      the
      Loan and Security Agreement and an Intellectual Property Agreement entered
      into
      with Crosshill (see Note 4).





Costs
      incurred in creating products are charged to expense when incurred as research
      and development until technological feasibility is established upon completion
      of a working model. Thereafter, all software production costs are capitalized
      and carried at cost. Capitalized costs are amortized based on straight-line
      amortization over the remaining estimated economic life of the product - ten
      years. Amortization included in cost of sales is $48,061 and $48,061 for the
      six
      months ended June 30, 2007 and 2006, respectively.





In
      accordance with SFAS No. 2, *“Accounting
      for Research and Development Costs”* ,
      SFAS
      No. 68, *“Research
      and Development Arrangements”* ,
      and
      SFAS No. 86, *“Accounting
      for the Costs of Computer Software to be Sold, Leased, or Otherwise
      Marketed”* ,
      technological feasibility for the product was established on January 1, 2001
      with completion of the working model.





All
      costs
      subsequent to this date have been capitalized. Management on an annual basis
      determines if there is further impairment on their intangible assets. All costs
      capitalized occurred from 2001 through 2002. At that point the software and
      related technology was deemed completed.




6





**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Intangible
      Assets** **(Continued)**





Identified
      intangible assets are regularly reviewed to determine whether facts and
      circumstances exist which indicate that the useful life is shorter than
      originally estimated or the carrying amount of assets may not be recoverable.
      The Company assesses the recoverability of its identifiable intangible assets
      by
      comparing the projected discounted net cash flows associated with the related
      asset or group of assets over their remaining lives against their respective
      carrying amounts. Impairment, if any, is based on the excess of the carrying
      amount over the fair value of those assets.





**As
                  of June 30, 2007****Gross****Carrying**
              
              **Accumulated****Amount**
              
              **Amortization**
              
              **Net****Amortized
                  Intangible Assets:**Software
                  and related technology
              
              $
              961,229
              
              $
              624,799
              
              $
              336,430**Amortization
                  Expense:**For
                  the six months ended June 30, 2007
              
              
              
              
              $
              48,061For
                  the six months ended June 30, 2006
              
              
              
              
              
              48,061**Estimated
                  Amortization Expense:**For
                  the six months ended December 31, 2007
              
              
              
              
              $
              48,061For
                  the year ended December 31, 2008
              
              
              
              
              
              96,123For
                  the year ended December 31, 2009
              
              
              
              
              
              96,123For
                  the year ended December 31, 2010
              
              
              
              
              
              96,123Total
              
              
              
              
              $
              336,430





7


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Revenue
      Recognition**




When
      a
      software license arrangement requires us to provide significant production,
      customization or modification of the software, or when the customer considers
      these services essential to the functionality of the software product, the
      fees
      for the product license, implementation services and maintenance and support
      are
      recognized using the percentage of completion method. Under percentage of
      completion accounting, these revenues are recognized as work progresses based
      upon cost incurred. Any expected losses on contracts in progress are expensed
      in
      the period in which the losses become probable and reasonably estimable.




If
      an
      arrangement includes acceptance criteria, revenue is not recognized until we
      can
      objectively demonstrate that the software or service can meet the acceptance
      criteria, or the acceptance period lapses, whichever occurs earlier.





Other
      elements of our software arrangements are services that do not involve
      significant production, modification or customization of the Company’s software
      as defined in SOP 97-2. These components do not constitute a significant amount
      of the revenue generated currently, and did not during the early years of the
      post technological feasibility period. These components are recognized as the
      services are performed based on the accrual method of accounting.





**Income
      Taxes**





The
      Company accounts for income taxes utilizing the liability method of accounting.
      Under the liability method, deferred taxes are determined based on differences
      between financial statement and tax bases of assets and liabilities at enacted
      tax rates in effect in years in which differences are expected to reverse.
      Valuation allowances are established, when necessary, to reduce deferred tax
      assets to amounts that are expected to be realized.





**Fair
      Value of Financial Instruments (other than Derivative Financial
      Instruments)**





The
      carrying amounts reported in the condensed consolidated balance sheet for cash
      and cash equivalents, and accounts payable approximate fair value because of
      the
      immediate or short-term maturity of these financial instruments. For the notes
      payable, the carrying amount reported is based upon the incremental borrowing
      rates otherwise available to the Company for similar borrowings. For the
      convertible debentures, fair values were calculated at net present value using
      the Company’s weighted average borrowing rate for debt instruments without
      conversion features applied to total future cash flows of the
      instruments.





8


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**




**Convertible
      Instruments**





The
      Company reviews the terms of convertible debt and equity securities for
      indications requiring bifurcation, and separate accounting, for the embedded
      conversion feature. Generally, embedded conversion features, where the ability
      to physical or net-share settle the conversion option is not within the control
      of the Company, are bifurcated and accounted for as a derivative financial
      instrument. (See Derivative Financial Instruments below). Bifurcation of the
      embedded derivative instrument requires allocation of the proceeds first to
      the
      fair value of the embedded derivative instrument with the residual allocated
      to
      the debt instrument. The resulting discount to the face value of the debt
      instrument is amortized through periodic charges to interest expense using
      the
      Effective Interest Method. During the six months ended June 30, 2007, the
      Company issued 10,461,335 shares of stock in the conversion of $181,541 of
      the
      convertible debentures issued to Advantage Capital Development Corp. and Cornell
      Capital Partners LLP. The Company recognized a gain of $116,563 on the
      extinguishment of these debentures.





**Derivative
      Financial Instruments**





The
      Company generally does not use derivative financial instruments to hedge
      exposures to cash-flow or market risks. However, certain other financial
      instruments, such as warrants or options to acquire common stock and the
      embedded conversion features of debt and preferred instruments that are indexed
      to the Company’s common stock, are classified as liabilities when either (a) the
      holder possesses rights to net-cash settlement or (b) physical or net share
      settlement is not within the control of the Company. In such instances, net-cash
      settlement is assumed for financial accounting and reporting, even when the
      terms of the underlying contracts do not provide for net-cash settlement. Such
      financial instruments are initially recorded at fair value and subsequently
      adjusted to fair value at the close of each reporting period. These derivative
      financial instruments are indexed to an aggregate of 542,451,400 shares of
      the
      Company’s common stock as of June 30, 2007 and are carried at fair value. The
      embedded conversion feature amounted to $1,577,714 at June 30, 2007. Accretion
      on the discount of the convertible debentures amounted to $1,255,044 through
      June 30, 2007, and $510,775 for the six months ended June 30, 2007. In addition,
      there is a derivative liability recognized on the 266,667 warrants issued in
      April 2006 to Cornell in the amount of $651.





9


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Fixed
      Assets**




Fixed
      assets are stated at cost. Depreciation is computed using the straight-line
      method over the estimated useful lives of the assets.





When
      assets are retired or otherwise disposed of, the costs and related accumulated
      depreciation are removed from the accounts, and any resulting gain or loss
      is
      recognized in income for the period. The cost of maintenance and repairs is
      charged to income as incurred; significant renewals and betterments are
      capitalized. Deduction is made for retirements resulting from renewals or
      betterments.





**Accounts
      Receivable**




The
      Company conducts business and extends credit based on an evaluation of the
      customers’ financial condition, generally without requiring collateral. Exposure
      to losses on receivables is expected to vary by customer due to the financial
      condition of each customer. The Company monitors exposure to credit losses
      and
      maintains allowances for anticipated losses considered necessary under the
      circumstances.





**Impairment
      of Long-Lived Assets**





Long-lived
      assets, primarily fixed assets and intangible assets, are reviewed for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of the assets might not be recoverable. The Company does not
      perform a periodic assessment of assets for impairment in the absence of such
      information or indicators. Conditions that would necessitate an impairment
      assessment include a significant decline in the observable market value of
      an
      asset, a significant change in the extent or manner in which an asset is used,
      or a significant adverse change that would indicate that the carrying amount
      of
      an asset or group of assets is not recoverable. For long-lived assets to be
      held
      and used, the Company recognizes an impairment loss only if its carrying amount
      is not recoverable through its undiscounted cash flows and measures the
      impairment loss based on the difference between the carrying amount and
      estimated fair value.





**Loss
      Per Share of Common Stock**





Basic
      net
      loss per common share is computed using the weighted average number of common
      shares outstanding. Diluted earnings per share (EPS) includes additional
      dilution from common stock equivalents, such as stock issuable pursuant to
      the
      exercise of stock options and warrants and conversion of convertible debentures.
      Common stock equivalents were not included in the computation of diluted
      earnings per share when the Company reported a loss because to do so would
      be
      antidilutive for periods presented.




10


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Loss
      Per Share of Common Stock** **(Continued)**





The
      following is a reconciliation of the computation for basic and diluted
      EPS:


**June
                  30,**
              
              **June
                  30,****2007**
              
              **2006**Net
                  loss
              
              $
              (622,263
              )
              $
              (384,761
              )Weighted-average
                  common sharesOutstanding
                  (Basic)
              
              
              55,312,350
              
              
              2,247,367Weighted-average
                  common stockEquivalentsConvertible
                  debentures
              
              
              542,451,400
              
              
              2,247,367Stock
                  options
              
              
              -
              
              
              -Warrants
              
              
              11,888,912
              
              
              266,667Weighted-average
                  common sharesOutstanding
                  (Diluted)
              
              
              609,652,662
              
              
              4,761,401





**Deferred
      Financing Fees**





The
      Company incurred $110,000 in commitment and structuring fees relating to the
      $1,000,000 convertible debenture agreement they entered into on April 4, 2006
      with Cornell Capital. These fees are being amortized over the life of the
      convertible debenture which is 24 months. Amortization expense for the six
      months ended June 30, 2007 and 2006 is $27,500 and $13,750, respectively. The
      net deferred financing fees at June 30, 2007 are $41.250.





**Stock-Based
      Compensation**





The
      Company measures compensation expense for its non-employee stock-based
      compensation under the Financial Accounting Standards Board (FASB) Emerging
      Issues Task Force (EITF) Issue No. 96-18, “ *Accounting
      for Equity Instruments that are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* ”.
      The
      fair value of the option issued is used to measure the transaction, as this
      is
      more reliable than the fair value of the services received. The fair value
      is
      measured at the value of the Company’s common stock on the date that the
      commitment for performance by the counterparty has been reached or the
      counterparty’s performance is complete. The fair value of the equity instrument
      is charged directly to compensation expense and additional paid-in
      capital.





11


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Stock
      Options**





The
      Company adopted SFAS No. 123 (Revised 2004), *Share Based Payment* (“SFAS
      No. 123R”), under the modified-prospective transition method on
      January 1, 2006. SFAS No. 123R requires companies to measure and
      recognize the cost of employee services received in exchange for an award of
      equity instruments based on the grant-date fair value. Share-based compensation
      recognized under the modified-prospective transition method of SFAS
      No. 123R includes share-based compensation based on the grant-date fair
      value determined in accordance with the original provisions of SFAS
      No. 123, *Accounting for Stock-Based Compensation,* for all
      share-based payments granted prior to and not yet vested as of January 1,
      2006 and share-based compensation based on the grant-date fair-value determined
      in accordance with SFAS No. 123R for all share-based payments granted after
      January 1, 2006. SFAS No. 123R eliminates the ability to account for
      the award of these instruments under the intrinsic value method prescribed
      by
      Accounting Principles Board (“APB”) Opinion No. 25, *Accounting for Stock Issued to Employees* , and
      allowed under the original provisions of SFAS No. 123. Prior to the
      adoption of SFAS No. 123R, the Company accounted for its stock option plans
      using the intrinsic value method in accordance with the provisions of APB
      Opinion No. 25 and related interpretations.





As
      a
      result of adopting SFAS No. 123R, the Company recognized no share-based
      compensation expense for the three months ended March 31, 2006. All options
      granted to employees in 2006 were granted to employees in May 2006. The impact
      of this share-based compensation expense on the Company's basic and diluted
      earnings per share was $0.00 per share. The fair value of our stock options
      was
      estimated using the Black-Scholes option pricing model.





**Recent
      Accounting Pronouncements**





FASB
      Interpretation No 48, “Accounting for Uncertainty in Income Taxes — an
      interpretation of FASB Statement No. 109” (“FIN 48”), was issued In
      July 2006. This interpretation clarifies the accounting for uncertainty in
      income taxes recognized in an entity’s financial statements in accordance with
      SFAS No. 109, “Accounting for Income Taxes.” It prescribes a recognition
      threshold and measurement attribute for financial statement disclosure of tax
      positions taken, or expected to be taken, on a tax return. The Company will
      be
      required to adopt FIN 48 in the first quarter of fiscal 2008. Management is
      currently evaluating the requirements of FIN 48 and has not yet determined
      the
      impact on the condensed consolidated financial statements.





12


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      2-**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





**Recent
      Accounting Pronouncements (Continued)**





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement”
(“SFAS 157”), which defines fair value, establishes a framework for measuring
      fair value and expands disclosures about assets and liabilities measured at
      fair
      value. The Company will be required to adopt SFAS 157 in the first quarter
      of
      fiscal 2009. Management is currently evaluating the requirements of SFAS 157
      and
      has not yet determined the impact on the condensed consolidated financial
      statements.





In
      September 2006, the FASB issued SFAS No. 158 (“SFAS 158”), “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans — an
      amendment of FASB Statements No. 87, 88, 106, and 132(R).” SFAS 158
      requires an employer to recognize a plan’s funded status in its statement of
      financial position, measure a plan’s assets and obligations as of the end of the
      employer’s fiscal year and recognize the changes in a defined benefit
      postretirement plan’s funded status in comprehensive income in the year in which
      the changes occur. The Company will be required to recognize the funded status
      of benefit plans and adopt the new disclosure requirements effective
      August 31, 2007. The Company will be required to measure plan assets and
      benefit obligations as of the date of the fiscal year-end statement of financial
      position effective August 31, 2009. Management is currently evaluating the
      requirements of SFAS 158, but based on the current funded status of the plans,
      management does not anticipate SFAS 158 will have a material impact on the
      Company’s condensed consolidated financial statements.





In
      September 2006, the SEC issued SAB No. 108, which provides guidance on the
      process of quantifying financial statement misstatements. In SAB No. 108, the
      SEC staff establishes an approach that requires quantification of financial
      statement errors, under both the iron-curtain and the roll-over methods, based
      on the effects of the error on each of the Company’s financial statements and
      the related financial statement disclosures. SAB No.108 is generally effective
      for annual financial statements in the first fiscal year ending after November
      15, 2006. The transition provisions of SAB No. 108 permits existing public
      companies to record the cumulative effect in the first year ending after
      November 15, 2006, by recording correcting adjustments to the carrying values
      of
      assets and liabilities as of the beginning of that year with the offsetting
      adjustment recorded to the opening balance of retained earnings. Management
      does
      not expect that the adoption of SAB No.108 would have a material effect on
      the
      Company’s condensed consolidated financial statements.





13


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      3-**  **FIXED
      ASSETS**





Fixed
      assets as of June 30, 2007 were as follows:





Estimated
                UsefulLives
                (Years)Furniture
                and fixtures
            
            
            7
            
            $
            25,544Machinery
                and equipment
            
            
            3-7
            
            
            102,425Leasehold
                improvements
            
            
            6
            
            
            11,870Vehicles
            
            
            5
            
            
            26,908166,747Less:
                accumulated depreciation
            
            
            
            
            
            145,209Property
                and equipment, net
            
            
            
            
            $
            21,538





Included
      in machinery and equipment is $11,298 in equipment held under capital lease.
      The
      accumulated depreciation on this equipment as of June 30, 2007 is $10,720.
      There
      was $5,019 and $5,576 charged to operations for depreciation expense for the
      six
      months ended June 30, 2007 and 2006, respectively.





**NOTE
      4-**  **NOTES
      PAYABLE**





**SPL**





The
      Company entered into an agreement with the Swiss Pool for Aviation Insurance
      (“SPL”) whereby SPL advanced the Company under their Master SurSITE Agreement, a
      license/hosting fee and associated professional service fees. Advanced fees
      were
      recognized as both revenue to the Company for achieving certain benchmarks
      in
      accordance with the agreement, and certain fees were advances to be repaid
      due
      to contractual obligations to SPL. The original terms were for the advances
      to
      be repaid in a period not to exceed five years, no interest. In 2004, interest
      started accruing at 2.5% annually. The Company originally was advanced $700,000
      from June 2002 through October 2002, and credited one quarterly maintenance
      fee
      of $35,000 in 2002 and two quarterly maintenance fees totaling $70,000 in 2003.
      Additionally, SPL advanced another $200,000 in 2003 at 9% interest annually
      of
      which $45,000 was repaid in June 2004. Interest expense for the six months
      ended
      June 30, 2007 and 2006 were $9,375 and $9,375, respectively. The note payable
      balance due at June 30, 2007 was $750,000.





14




**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      4-**  **NOTES
      PAYABLE** **(CONTINUED)**





**Crosshill**





The
      Company entered into a revolving promissory note agreement (the “Agreement”)
      with Crosshill Georgetown Capital, L.P. (“Crosshill”) on January 10, 2003.
      Pursuant to the Agreement, Crosshill loaned the Company $750,000 which matures
      upon the earlier of the Company closing on an equity raise of not less than
      $2,000,000 or July 10, 2003, which has been amended on various occasions through
      December 31, 2004. The note accrued interest at 12% annually. This note was
      converted to long-term debt on July 1, 2004.





The
      Company has $650,000 outstanding at June 30, 2007. Interest expense for the
      six
      months ended June 30, 2007 and 2006 was $24,375 and $24,375,
      respectively





The
      amounts are secured by a Loan and Security Agreement and an Intellectual
      Property Security Agreement which includes the Company’s software and related
      technology. In addition, the Company issued 10,122,245 warrants to CrossHill
      (and have issued them a replacement warrant for these warrants on November
      3,
      2006) for inducement to enter into the Agreement. In accordance with the third
      amendment, the value of the warrants utilizing the relative fair value of the
      instrument amounted to $37,752 and was reflected upon issuance of the
      warrants.


Notes
        payable at June 30, 2007 consists of the following:


Installment
                  note payable to SPL throughSeptember
                  2008, principal payment of $50,000 due quarterly commencing January
                  1,
                  2005 for 15 quarters with an annual interest rate of 2.5%.
              
              $
              750,000Installment
                  note payable to Crosshill due through April 2007, principal payments
                  of
                  $65,000 payable quarterly commencing October 1, 2004 (extended
                  to January
                  1, 2007) interest at 7.5% (with an effectiveinterest
                  rate of 12%) due monthly
              
              
              650,000Total
                  notes payable
              
              
              1,400,000Less
                  current maturities
              
              
              1,400,000Notes
                  payable - net of current maturities
              
              $
              -





15


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**




**NOTE
      4-**  **NOTES
      PAYABLE** **(CONTINUED)**





**Crosshill** **(Continued)**




The
        approximate aggregate amount of all note payable maturities for the period
        ending after June 30, 2007 is as follows:


All
              
              $
              1,400,000




**NOTE
      5-**  **NOTES
      PAYABLE - BANK**





On
      September 29, 2005, the Company increased their lines of credit to $216,500
      from
      $200,000, with two banks. The Company would borrow funds from time to time
      for
      working capital needs. The lines of credit were assigned to an officer of the
      Company in February 2007. The Company no longer as of June 30, 2007 has any
      amounts outstanding with a bank. Interest on the lines of credit were variable
      at prime rate plus 2.5%. Interest for the six months ended June 30, 2007 and
      2006 was $2,315 and $5,526, respectively.





**NOTE
      6-**  **NOTES
      PAYABLE - RELATED PARTIES**





The
      Company has notes payable due to related parties:





Five
      unsecured notes payable in the aggregate amount of $65,000 to a director of
      the
      Company due between June 2005 and February 2007 or upon obtaining an equity
      line
      of credit whichever is earlier, with interest payable at rates ranging between
      8% and 10%. One of the notes for $20,000 along with $3,332 of accrued interest
      was converted into 392,129 shares of common stock in 2006. Interest expense
      for
      the six months ended June 30, 2007 and 2006 was $2,750 and $3,688, respectively.
      Accrued interest as of June 30, 2007 for this director is $15,312. As of June
      2007, the Company provided the director an update on the status of the repayment
      of the note.





An
      unsecured note payable in the amount of $50,000 to an officer of the Company,
      due December 31, 2004, which has been extended until the Company obtains an
      equity line of credit, with interest payable at 6.5% and increased to amounts
      up
      to $100,000. In February 2007, the officer increased this amount to $300,000
      due
      to the fact that the officer entered into an assignment agreement with a bank
      on
      the $200,000 line of credit. The balance outstanding at June 30, 2007 is
      $255,043. Interest expense for the six months ended June 30, 2007 and 2006
      was
      $6,310 and $1,631, respectively. The Company has $2,833 in accrued interest
      as
      of June 30, 2007. As of June 2007, the Company provides the director an update
      on the status of the repayment of the note.





16


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      6-**  **NOTES
      PAYABLE - RELATED PARTIES** **(CONTINUED)**





The
      Company on March 24, 2005 settled with a former officer/employee of the Company
      who was owed back pay. The settlement was for $166,943 with $16,943 due at
      the
      signing of the settlement agreement and the remaining $150,000 in the form
      of a
      promissory note due August 22, 2005 in one lump payment. The note was not paid
      in August 2005, and extended by the parties until the filing of the disclosure
      statement with the Securities and Exchange Commission. The Company paid $21,250
      in the quarter ended December 31, 2005. There were two payments made totaling
      $24,302 in September 2006. Balance due at June 30, 2007 is $104,448, and the
      Company has been accruing interest at the rate of 10% per annum, and the accrued
      interest as of June 30, 2007 is $28,652.





On
      March
      25, 2005, the Company and a director entered into a promissory note agreement
      for $17,000 due the earlier of one year or upon the availability of a $750,000
      commercial line of credit. The Company entered into additional notes with this
      director totaling $153,251, to bring the total outstanding amounts to $170,251.
      The notes bear interest at 10% per annum. Interest expense for the six months
      ended June 30, 2007 and 2006 was $8,513 and $8,237, respectively. The total
      interest of $28,455 since inception of these loans remains accrued for as of
      June 30, 2007. As of June 2007, the Company provides the director an update
      on
      the status of the repayment of the note.





On
      June
      24, 2005, the Company and a director entered into a convertible promissory
      note
      agreement for $90,000, replacing a promissory note entered into January 7,
      2005,
      due the earlier of one year or upon the availability of a $750,000 commercial
      line of credit. The note bears interest at 10% per annum. Interest expense
      for
      the six months ended June 30, 2007 and 2006 was $4,750 and $5,000, respectively.
      This director converted their accrued interest of $20,000 into 133,033 shares
      of
      stock in October 2006. Additionally, the director converted $10,000 in principal
      and $1,704 in accrued interest on this note in February 2007. As of June 2007,
      the Company provides the director an update on the status of the repayment
      of
      the note.





The
      Company entered into two unsecured notes payable due December 31, 2006 for
      $5,000 each with two different parties at 10% interest, one in January 2006
      and
      one on February 2006 which has been extended until the Company obtains an equity
      line of credit. Interest expense for the six months ended June 30, 2007 and
      2006
      was $500 and $396, respectively, and all interest incurred to date, $1,396
      is
      accrued as of June 30, 2007. As of June 2007, the Company provides the related
      parties an update on the status of the repayment of the notes.





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES**





The
      Company from June 28, 2004 through April 4, 2006 entered into various
      convertible debenture agreements with Cornell Capital Partners, LP for amounts
      totaling $2,250,000, which includes a compensation debenture in the amount
      of
      $400,000. All of these agreements were replaced on April 4, 2006, with new
      two-year debenture agreements with a maturity date of April 4, 2008. In
      the six months ended June 30, 2007, $159,041 of these debentures were
      converted into 9,909,894 shares of common stock.





17





**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





In
      addition to this amount, accrued interest in the amount of $48,798 was added
      to
      the outstanding principal amount to be converted. All of the debentures accrue
      interest at a rate of 8% per annum.





In
      addition, when the Company entered into a reverse merger with Networth
      Technologies, Inc., they assumed convertible debentures issued to Montgomery
      Equity Partners, Ltd. (“Montgomery”) and Advantage Capital Development Corp.
      (“Advantage”), companies affiliated with Cornell Capital. The proceeds of these
      debentures totaled $625,000, which were funded to Networth in two tranches
      of
      $400,000 and $225,000, respectively, from July 2004 through January 2005.
      Knightsbridge who was the agent, was issued shares of Networth stock at the
      time
      in February 2005. In 2006, $30,000 of these debentures were converted into
      431,159 shares of common stock. In the six months ended June 30, 2007, an
      additional $22,500 of these debentures were converted into 551,441 shares of
      common stock.





The
      Company is in default under the terms of the Advantage debenture, and
      accordingly has the right to accelerate all payments owed of principal and
      interest into common stock.





The
      debentures are convertible into shares of common stock at a price equal to
      either (a) an amount equal to one hundred twenty percent (120%) of the closing
      bid price of the common stock as of the closing date or (b) an amount equal
      to
      eighty percent (80%) of the lowest volume weighted average price of the common
      stock for the thirty trading days immediately preceding the conversion date.





The
      convertible debentures meet the definition of hybrid instruments, as defined
      in
      SFAS 133, *Accounting
      for Derivative Instruments and Hedging Activities* (SFAS
      No. 133). The hybrid instruments are comprised of a i) a debt instrument, as
      the
      host contract and ii) an option to convert the debentures into common stock
      of
      the Company, as an embedded derivative. The embedded derivative derives its
      value based on the underlying fair value of the Company’s common stock.





The
      embedded derivative is not clearly and closely related to the underlying host
      debt instrument since the economic characteristics and risk associated with
      this
      derivative are based on the common stock fair value. The Company has separated
      the embedded derivative from the hybrid instrument based on an independent
      valuation and classified the embedded derivative as a current liability with
      an
      offsetting debit to debt discount, which will be amortized over the term of
      the
      debenture based on the effective interest method.





18


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





The
      embedded derivative does not qualify as a fair value or cash flow hedge under
      SFAS No. 133. Accordingly, changes in the fair value of the embedded derivative
      are immediately recognized in earnings and classified as a gain or loss on
      the
      embedded derivative financial instrument in the accompanying statements of
      operations. The Company entered into amended and restated agreements on April
      4,
      2006 with respect to its convertible debentures as described below.





*Secured
      Convertible Debenture* .
      The
      Company entered into a secured convertible debenture dated April 4, 2006 and
      due
      April 4, 2008. The debenture carries an interest rate of 8%. The Company has
      an
      option to redeem a portion or all amounts outstanding under the amended and
      restated convertible debenture upon three days advance written notice provided
      that the closing bid price of the Company’s common stock is less than $.75.





Cornell
      Capital has a right to convert the debenture into shares of the Company’s common
      stock based upon a quotient obtained by dividing (i) the outstanding amount
      of
      the convertible debenture by the (ii) conversion price which is equal to the
      lesser of $.75 or 80% of the lowest bid price of the Company’s common stock
      during the thirty trading days immediately prior to the conversion date. In
      the
      event the Company does not have enough shares authorized or listed or quoted
      on
      the OTCBB or it cannot timely satisfy the conversion sought by Cornell Capital,
      then Cornell Capital can demand cash equal to the product of the outstanding
      principal amount to be converted plus any interest due provided by the
      conversion price and multiplied by the highest closing price of the stock from
      the date of the conversion notice until the date that such cash payment is
      made.
      Cornell Capital cannot convert the debenture or receive shares of the Company’s
      common stock if it would beneficially own in excess of 4.9% of the Company’s
      issued and outstanding shares of common stock at the time of such conversion,
      such determination to be made by Cornell Capital.





Under
      the
      terms of the convertible debenture so long as any principal amount or interest
      is owed, the Company cannot, without the prior consent of Cornell Capital (i)
      issue or sell any common or preferred stock with or without consideration,
      (ii)
      issue or sell any preferred stock, warrant, option, right, contract or other
      security or instrument granting the holder thereof the right to acquire common
      stock with or without consideration, (iii) enter into any security instrument
      granting the holder of security interest in any of the Company’s assets or (iv)
      file any registration statement on Form S-8. Under the terms of the convertible
      debenture there are a series of events of default, including failure to pay
      principal and interest when due, the Company’s common stock ceasing to be quoted
      for trading or listing on the OTCBB and shall not again be quoted or listed
      for
      trading within five trading days of such listing, the Company being in default
      of any other debentures that the Company has issued to Cornell Capital.





19


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





Following
      an event of default and while the event of default is not cured, Cornell Capital
      may accelerate all amounts due and payable in cash or elect to convert such
      amounts to common stock having a conversion price of the lower of $.75 per
      share
      or the lowest closing bid price during the thirty days immediately preceding
      the
      conversion date.





*Termination
      Agreement* .
      The
      standby equity distribution agreement, registration rights agreement, escrow
      agreement and placement agent agreement, each dated December 20, 2005, were
      cancelled. Cornell Capital, however, retained the $400,000 Compensation
      Debenture in connection with the standby equity distribution agreement, the
      material terms of which are the same as the amended and restated secured
      convertible debenture described below.





*Second
      Amended and Restated Secured Convertible Debenture* .
      The
      Company entered into a second amended and restated convertible debenture in
      the
      principal amount of $642,041 dated April 4, 2006. The Company has assumed the
      obligations of STI to Cornell Capital under two secured debentures each in
      the
      amount of $300,000 issued on June 29, 2004 and August 23, 2004, respectively
      plus accrued interest of $42,041. Interest payments are to be paid monthly
      in
      arrears commencing April 4, 2006 and continuing for the first day of each
      calendar month thereafter that any amounts due under the convertible debenture
      are due and payable. The interest includes a redemption premium of 20% in
      addition to interest set at an annual rate of 8%. At June 30, 2007 the balance
      of this convertible debenture was $483,000.





The
      Company has an option to redeem a portion or all amounts outstanding under
      the
      amended and restated convertible debenture upon three days advance written
      notice. Cornell Capital has a right to convert the debenture into shares of
      the
      Company’s common stock based upon a quotient obtained by dividing (i) the
      outstanding amount of the convertible debenture by the (ii) the conversion
      price
      which is equal to the lesser of $.75 or 80% of the lowest closing bid price
      of
      the Company’s common stock during the thirty trading days immediately prior to
      the conversion date. In the event the Company does not have enough shares of
      common stock authorized or listed or quoted on the OTCBB or it cannot timely
      satisfy the conversion sought by Cornell Capital, then Cornell Capital can
      demand cash equal to the product of the outstanding principal amount to be
      converted plus any interest due divided by the conversion price and multiplied
      by the highest closing price of the stock from the date of the conversion notice
      until the date that such cash payment is made. Cornell Capital cannot convert
      the debenture or receive shares of the Company’s common stock if it would
      beneficially own in excess of 4.99% of our issued and outstanding shares of
      common stock at the time of such conversion, such determination to be made
      by
      Cornell Capital.





20


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





Under
      the
      terms of the convertible debenture so long as any principal amount or interest
      is owed, the Company cannot, without the prior consent of Cornell Capital (i)
      issue or sell any common or preferred stock with or without consideration,
      (ii)
      issue or sell any preferred stock, warrant, option, right, contract or other
      security or instrument granting the holder thereof the right to acquire common
      stock with or without consideration, (iii) enter into any security instrument
      granting the holder of security interest in any of the Company’s assets or (iv)
      file any registration statement on Form S-8. Under the terms of the convertible
      debenture there are a series of events of default, including failure to pay
      principal and interest when due, the common stock ceasing to be quoted for
      trading or listing on the OTCBB and not again being quoted or listed for trading
      within five trading days of such listing, or if the Company being in default
      of
      any other debentures issued by the Company to Cornell Capital. Following an
      event of default, and while the event of default is not cured, Cornell Capital
      may accelerate all amounts due and payable in cash or elect to convert such
      amounts to common stock having a conversion price of $.01 per share.





*Amended
      and Restated Investor Registration Rights Agreement* .
      On
      April 4, 2006 the Company entered into an amended and restated registration
      rights agreement with Cornell Capital. Under the terms of the registration
      rights agreement the Company is obligated to register on Form SB-2 or any other
      applicable form the shares of its common stock issuable to Cornell Capital
      upon
      conversion of the convertible debentures, the warrant shares to be issued under
      the warrant to Cornell Capital described above, the $642,041 convertible
      debenture issued to Cornell Capital, the $256,757 debenture issued to Montgomery
      and the warrant shares to be issued under the warrant to Montgomery. The Company
      will pay all expenses in connection with such registration. The Company is
      required to file with the SEC in a timely manner all reports or other documents
      required under the Securities Act of 1933, as amended and the Securities
      Exchange Act of 1934, as amended to allow Cornell Capital and Montgomery to
      take
      advantage of Rule 144 under the Securities Act of 1933 (as amended).





*Amended
      and Restated Security Agreement* .
      The
      Company entered into a security agreement dated April 4, 2006 with Cornell
      Capital and Montgomery. Under the terms of the security agreement, the Company
      provided a blanket lien to Cornell Capital and Montgomery to secure its
      obligations under the convertible debentures issued to Cornell Capital and
      Montgomery, respectively. Under the terms of the security agreement the Company
      is not allowed to permit any debts or liens against the Company’s property other
      than the lien previously granted by STI to Crosshill Georgetown Capital under
      the terms of a loan agreement for $750,000 plus interest between STI and
      Crosshill Georgetown Capital.





21


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





*Amended
      and Restated Pledge and Escrow Agreement* .
      The
      Company entered into a pledge and escrow agreement dated April 4, 2006 with
      Cornell Capital, Montgomery, Dan L. Jonson and David Gonzales, Esq., acting
      as
      escrow agent. Under the terms of the pledge and escrow agreement, Dan L. Jonson,
      President and CEO of STI, pledged 623,940 (post-split) shares of the Company
      to
      secure the Company’s obligations under the convertible debenture issued to
      Cornell Capital and to Montgomery under the securities purchase agreement
      between the Company and Montgomery. Mr. Jonson's shares are being held by David
      Gonzales, Esq., who is a principal with Cornell Capital. In the event of default
      under the pledge and escrow agreement, that includes failure of Montgomery
      or
      the Company to comply with any of the agreements between themselves and either
      Montgomery or Cornell Capital, Mr. Jonson's pledged shares can be sold to cover
      any of the obligations owed by the Company to Cornell Capital and Montgomery
      under the various financing agreements discussed here. The pledged shares shall
      be returned to Mr. Jonson upon payment in full of all amounts owed to Cornell
      Capital and Montgomery under the convertible debentures.





*Irrevocable
      Transfer Agent Instructions Agreement* .
      The
      Company entered into an irrevocable transfer agent instructions agreement dated
      April 4, 2006 among the Company’s transfer agent, Olde Monmouth Stock Transfer
      Company, Cornell Capital and David Gonzales, Esq., as escrow agent. Under the
      terms of the irrevocable transfer agent instructions, the Company’s common stock
      to be issued upon conversion of the convertible debentures and any interest
      and
      liquidated damages to be converted into shares of the Company’s common stock,
      Olde Monmouth is required to issue those shares to Cornell Capital upon
      receiving a duly executed conversion notice described in the irrevocable
      transfer instructions. The Company confirmed under the terms of the irrevocable
      transfer agent instructions that the conversion shares shall be freely
      transferable on our books and records and not bear any legend restricting
      transfer. The transfer agent has agreed to reserve for issuance to Cornell
      Capital sufficient shares of common stock should Cornell Capital elect to
      convert any of the Company’s obligations under the convertible debenture into
      shares of the Company’s common stock.





*Warrant* .
      The
      Company issued a warrant dated April 4, 2006 for 266,667 shares of its common
      stock (subject to adjustment for stock splits, stock dividends and
      recapitalizations) to Montgomery and Cornell at an exercise price of $.01 and
      $.03 per share, respectively. The warrant is exercisable until April 4, 2011.
      Montgomery cannot exercise the warrant if doing so would cause it to
      beneficially own in excess of 4.99% of the total issued and outstanding shares
      of the Company’s common stock unless the exercise is made within sixty days
      prior to the maturity date. The shares issued upon exercise of the warrant
      have
      piggyback and demand registration rights set forth in the registration rights
      agreement described above.





22


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





*Securities
      Purchase Agreement* .
      The
      Company entered into a securities purchase agreement dated April 4, 2006 with
      Cornell Capital. The securities purchase agreement relates to the $1,000,000
      secured convertible debenture described above. In accordance with the securities
      purchase agreement, the Company agreed to enter into (i) an amended and restated
      investor registration rights agreement to provide registration rights under
      the
      Securities Act of 1933, as amended, for shares of the Company’s common stock
      that could be issued upon conversion of the amounts owed for principal and
      interest under the convertible debentures described above, (ii) an amended
      and
      restated security agreement to provide a blanket lien against our property
      as
      described above, (iii) an amended and restated pledge and escrow agreement
      under
      which Mr. Jonson pledged 623,940 (post-split) shares of the Company’s common
      stock to Cornell and Montgomery, (iv) a second amended and restated security
      agreement among the Company, Cornell Capital, Montgomery and STI and (v) an
      irrevocable transfer agent instructions letter agreement described above. Under
      the securities purchase agreement the Company agreed to preserve an adequate
      number of shares to effect any right of conversion exercised by Cornell Capital
      under the warrant and the convertible debenture described above.





The
      Company also agreed to pay Yorkville Advisors Management, LLC, a company
      affiliated with Montgomery and Cornell Capital, a fee equal to 10% of the
      purchase price or $100,000 and a structuring fee to Yorkville Advisors
      Management, LLC of $10,000. These fees are being amortized over 24
      months.





*Second
      Amended and Restated Subsidiary Security Agreement* .
      The
      Company entered into a second amended and restated subsidiary security agreement
      dated April 4, 2006. The material terms of the second amended and restated
      subsidiary security agreement are the same as the security agreement that the
      Company executed with Cornell Capital described above.





*Amended
      and Restated Guaranty* .
      The
      Company entered into an amended and restated guaranty dated April 4, 2006 with
      Cornell Capital under which it guaranteed as a direct obligor the Company’s
      payment and performance under the $1,000,000 convertible debenture described
      above, the $400,000 convertible debenture described above, and the $642,041
      and
      the $256,757 convertible debenture issued by the Company to Montgomery,
      including all collection fees incurred by Cornell Capital and Montgomery should
      they have to seek enforcement of their rights under the amended and restated
      guaranty.





*Amended
      and Restated Secured Convertible Debenture* .
      The
      Company entered into amended and restated secured convertible debenture with
      Montgomery in the amount of $256,757 due April 4, 2008. This debenture has
      similar redemption, conversion and remedies upon an event of default as the
      second amended and restated secured convertible debenture described above.





23


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**




**NOTE
          7-** **CONVERTIBLE
          DEBENTURES** **(CONTINUED)**





*Amended
      and Restated Convertible Compensation Debenture* .
      The
      Company entered into an amended and restated convertible compensation debenture
      in the amount of $400,000 due April 4, 2008. The debenture is for a fee to
      be
      paid to Cornell Capital in connection with the now terminated stand by equity
      distribution agreement. This debenture has similar redemption, conversion and
      remedies upon an event of default as the second amended and restated secured
      convertible debenture described above. The Company entered into a convertible
      compensation debenture in the amount of $400,000 payable to Cornell Capital
      and
      dated June 29, 2004 that was assigned by the Company and assumed by the Company
      on December 20, 2005 under the assignment and assumption agreement dated
      December 20, 2005. The terms of the secured convertible debenture are the same
      as the secured convertible debentures described above.





Interest
      expense on the convertible debentures was $102,222 and $ 29,135 for the
      six months ended June 30, 2007 and 2006, respectively. Accrued interest at
      June
      30, 2007 is $340,749. $48,798 was converted from accrued interest to additional
      debentures on December 31, 2005.





**NOTE
      8-**  **COMMITMENTS
      AND CONTINGENCIES**




**Operating
      Lease**





The
      Company entered into a lease on June 1, 2006 with Garrett College, McHenry
      Maryland in the Garrett Information Enterprise Center, 685 Mosser Road, Suite
      11, McHenry, Maryland 21541. The annual lease is renewable with 90 days advance
      notice with a monthly rent of $1,414 per month. A security deposit of $2,828
      was
      paid at the inception of the initial lease period.





Rent
      expense for the six months ended June 30, 2007 and 2006 was $10,570 and $47,776,
      respectively.





24


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      9-**  **STOCKHOLDERS’
      DEFICIT**




**Preferred
      Stock**





On
      May
      14, 2002, the Company’s Board of Directors adopted a certificate for 1,000,000
      shares (amended on April 17, 2003 to 2,000,000 shares) of the 10,000,000 shares
      of preferred stock authorized by the shareholders at the Annual Meeting (the
      “Certificate of Designation”). The Certificate of Designation designated
      2,000,000 shares as “Class A Non-Voting, Convertible Preferred Stock” (the
“Class A Preferred Stock”). The holder of shares of the Class A Preferred Stock
      will be entitled to all dividends declared by the Board of Directors at a rate
      per share 10 times that paid per share of common stock, and will be entitled
      to
      convert each share of Class A Preferred Stock for 100 shares of common stock
      (subject to adjustment upon the occurrence of certain events as specified in
      the
      Certificate of Designation), but only to the extent that the aggregate number
      of
      shares of common stock held by the holder (and any other person with whom the
      holder must aggregate shares for purposes of Commission Rule 144) is less than
      5% of the Company’s outstanding common stock so that the holder will not be
      deemed to have “control” within the meaning of Commission Rule 405.





The
      Certificate of Designation further provides: (1) for liquidation rights that
      treat one share of Class A Preferred Stock as if it were 1,000 shares of common
      stock in the event of the liquidation, dissolution or winding up of the Company;
      (2) that the Class A Preferred Stock will have no voting rights; and (3) that
      no
      holder of Class A Preferred Stock may serve as an officer or director of the
      Company, or serve in any capacity with the Company that would render such person
      a “control person” within the meaning of the Securities Exchange Act.





The
      Company at June 30, 2007 has 801,831 shares of the Class A Preferred Shares
      issued and outstanding.





**Common
      Stock**




As
      of
      June 30, 2007, the Company has 650,000,000 shares of common stock authorized
      and
      65,274,702 shares issued and 65,273,449 shares outstanding. The par value of
      the
      common stock is $.01. On August 15, 2006, the Company approved a 1 for 150
      share
      reverse stock split. The result of the reverse stock split brought the issued
      and outstanding shares to 2,375,254 from 356,317,160 shares. The share amounts
      have been reflected retrospective of the stock split.




25





**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      9-**  **STOCKHOLDERS’
      DEFICIT** **(CONTINUED)**





**Common
      Stock** **(Continued)**





During
      the six months ended June 30, 2007, the Company issued:





234,088
      shares of common stock in conversion of a related note payable in the amount
      of
      $10,000 and accrued interest of $1,704 on this note.





1,000,000
      shares of common stock in settlement of litigation for accrued compensation
      to a
      former employee. The shares were valued at $79,678.





551,441
      shares of common stock in conversion of $22,500 of convertible debentures issued
      to Advantage.





9,909,894
      shares of common stock in conversion of $159,041 of convertible debentures
      issued to Cornell Capital.





3,110,417
      shares of common stock in conversion of $40,425 of accrued
      compensation.





During
      the year ended December 31, 2006, the Company issued:





1,950,103
      shares of common stock on January 5, 2006 to effectuate a 10 for 1 stock split
      approved by the Company’s board of directors. The shares have been retroactively
      stated in these statements to reflect the stock split as of January 1,
      2005.





208,667
      shares of common stock in conversion of 313,000 shares of preferred
      stock.





38,800,285
      shares of common stock to complete the merger with STI. The issuance of shares
      eliminated the liability for stock to be issued of $3,272,721 that was booked
      by
      the Company on June 20, 2005, the effective date of the merger.





392,129
      shares of common stock in conversion of a related note payable in the amount
      of
      $20,000 and accrued interest on this note in the amount of $3,332.





133,333
      shares of common stock in conversion of $20,000 in accrued interest on a note
      payable - related parties.





7,936,508
      shares of common stock in a private placement for $250,000. The shares were
      valued at $0.0315 per share, the fair value at the date of
      issuance.





400,000
      shares of common stock to a consultant in the private placement transaction,
      valued at $.05 per share, the fair value of the stock on the date of
      issuance.





431,159
      shares of common stock in conversion of $30,000 of convertible debentures issued
      to Advantage.





26





**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      9-**  **STOCKHOLDERS’
      DEFICIT** **(CONTINUED)**





**Stock
      Options**





The
      Company has not issued any stock options for the six months ended June 30,
      2007.
      or the year ended December 31, 2006.





**Warrants**





The
      Company granted 266,667 warrants to Cornell in connection with the SPA entered
      into April 4, 2006. In addition, the Company issued 1,500,000 warrants in
      October 2006 to a consultant for investor and public relations services. The
      Company also has 10,122,245 warrants outstanding to Crosshill as noted in Note
      4. The following is a breakdown of the warrants:


**Exercise**
              
              **Date****Warrants**
              
              
              **Price**
              
              
              **Issued**
              
              
              **Term**266,667
              
              $
              0.03
              
              
              4/4/2006
              
              
              5
                  years1,500,000
              
              $
              0.15
              
              
              10/23/2006
              
              
              Indefinite10,122,245
              
              $
              0.0022
              
              
              11/3/2006
              
              
              3.165
                  years11,888,912





The
      fair
      value of each warrant is estimated on the date of grant using the Black-Scholes
      option-pricing model. The following weighted average assumptions were used
      in
      the model:


**2007**
              
              **2006**Dividend
                  yield
              
              
              0.00
              %
              
              0.00
              %Expected
                  volatility
              
              
              100.00
              %
              
              100.00
              %Risk
                  free interest rates
              
              
              3.50
              %
              
              3.50
              %Expected
                  lives (years)
              
              
              Term
              
              
              Term




27


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**





**NOTE
      10-**  **PROVISION
      FOR INCOME TAXES**





Deferred
      income taxes are determined using the liability method for the temporary
      differences between the financial reporting basis and income tax basis of the
      Company’s assets and liabilities. Deferred income taxes are measured based on
      the tax rates expected to be in effect when the temporary differences are
      included in the Company’s tax return. Deferred tax assets and liabilities are
      recognized based on anticipated future tax consequences attributable to
      differences between financial statement carrying amounts of assets and
      liabilities and their respective tax bases.





At
      June
      30, 2007, deferred tax assets consist of the following:


Net
                  operating losses
              
              $
              2,296,356Amortization
                  of intangible assets
              
              
              (21,788
              )2,274,568Valuation
                  allowance
              
              
              (2,274,568
              )$
              -





At
      June
      30, 2007, the Company had a net operating loss carryforward in the approximate
      amount of $6,750,000, available to offset future taxable income through 2027.
      The Company established valuation allowances equal to the full amount of the
      deferred tax assets due to the uncertainty of the utilization of the operating
      losses in future periods.





A
      reconciliation of the Company’s effective tax rate as a percentage of income
      before taxes and federal statutory rate for the six months ended June 30, 2007
      and 2006 is summarized as follows:


2007
              
              2006Federal
                  statutory rate
              
              
              (34.0
              )%
              
              (34.0
              )%State
                  income taxes
              
              
              3.3
              
              
              3.3Valuation
                  allowance
              
              
              30.7
              
              
              30.70
              %
              
              0
              %
 28


**SOLUTION
      TECHNOLOGY INTERNATIONAL, INC.**


**(FORMERLY
      NETWORTH TECHNOLOGIES, INC.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007 AND 2006 (UNAUDITED)**




**NOTE
      11-**  **LITIGATION**





Sachs
      Sax
      Klein v. NetWorth Technologies, Inc. (Palm Beach County, Florida, filed March
      28, 2005). The amount in controversy is $11,039.80, representing the balance
      owed to plaintiff for legal services performed by plaintiff for the predecessor
      of its former subsidiary, NetWorth Systems, and the value of a warrant for
      3% of
      the Company’s Common Stock. No answer has been filed by NetWorth Technologies
      and no action has been taken by the plaintiff to seek a default judgment. The
      plaintiff initially expressed interest in a settlement based on issuances of
      the
      Company's Common Stock but the Company has had not had further discussions
      since
      those initial discussions.




James
      Andrew Rice v. Solution Technology International, Inc. (U.S. District Court
      for
      the District of Maryland). Mr. Rice, a former employee of Solution Technology
      International, Inc., has sued to recover alleged unpaid wages of $89,677.80
      (which he claims are trebled under the Maryland wage and hour laws to
      $269,033.40) and alleged expenses of approximately $9,600. Defendants’ motion to
      dismiss Dan L. Jonson as a defendant was granted November 9, 2006. The Company
      settled this complaint in March 2007, and issued approximately 1,000,000 shares
      in settlement of the complaint which were valued at $79,678.




Urban
      Jonson v. Solution Technology International, Inc. (Circuit Court for Frederick
      County, Maryland). Mr. Jonson, a former employee of Solution Technology
      International, Inc. and the son of Dan L. Jonson, has sued to recover on a
      confessed judgment note in the principal amount of $150,000 to recover unpaid
      wages. Plaintiff filed a writ of garnishment to collect on the unpaid note
      and
      garnished $25,000. Plaintiff and defendants have had settlement negotiations
      but
      no settlement has been reached.




Langsam
      Borenstein Corporation v. Solution Technology International, Inc. (New Jersey
      Superior Court for Camden County, filed February 23, 2007). This amount in
      controversy is $10,690, representing the balance owed to the prior independent
      public accounting firm for STI prior to the merger with the Company. A default
      judgment was entered against the Company on July 3, 2007. The Company is
      currently in settlement discussions with the plaintiff.




**NOTE
      12-**  **SUBSEQUENT
      EVENTS**





The
      Company issued 17,500,000 shares of stock in a private placement for $.01 per
      share for $175,000. The cash was received by the Company in June 2007 and the
      shares were issued in July 2007. The $175,000 is reflected as a liability for
      stock to be issued on the condensed consolidated balance sheet at June 30,
      2007.





The
      Company issued 1,461,402 shares of stock in July 2007 in conversion of $5,000
      in
      notes payable - related parties and $3,038 in accrued interest to this note
      holder.





29




**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation.**




*The
      information set forth and discussed in this Management’s Discussion and Analysis
      or Plan of Operation is derived from our financial statements and the related
      notes, which are included. The following information and discussion should
      be
      read in conjunction with those financial statements and notes, as well as the
      information provided in our Annual Report on Form 10-KSB for our fiscal year
      ended December 31, 2006.*





**Overview**




The
      following is a discussion of: (i) our results of operations and financial
      condition for the six and three months ended June 30, 2007 versus June 30,
      2006;
      (ii) our liquidity and capital resources; (iii) risk factors relating to an
      investment in our common stock; and (iv) our critical accounting
      policies.




The
      former Solution Technology International, Inc. (“Old STI”) merged with a
      wholly-owned subsidiary of NetWorth Technologies, Inc. on June 20, 2005 in
      a
      transaction that for accounting purposes was treated as a reverse merger by
      the
      accounting acquirer, Old STI. In August 2006, we merged with Old STI, the
      separate legal existence of Old STI ceased, and we changed our name to “Solution
      Technology International, Inc.”




We
      design, develop, market and support a web-based multi-language, multi-currency
      software solution (“SurSITE®”) used by insurance and reinsurance companies to
      facilitate and support their most critical back-office business processes.
      Our
      reinsurance application is proprietary software for reinsurance management
      of
      complex reinsurance contract combinations throughout the entire reinsurance
      contract workflow, from assumed and ceded to retroceded business.




What
      distinguishes SurSITE® from competition solutions is an “industry-first”
Technical Accounting Management Server (“TAMS”) application that automates
      calculations and generates transactions for premiums, commissions, and claims
      based on events and transactions at the original insurance policy level; it
      also
      manages statements of account, reinsurance recovery notices, and claims
      notifications. To further enhance the applicability of the SurSITE® software, we
      currently are designing extensive support for facultative reinsurance used
      to
      insure very large risks that cannot be insured by a single insurance company,
      like property and liability insurance for multinational corporations, airlines
      and aerospace, cargo, energy, engineering, manufacturers, ocean hull, etc.
      In
      addition to this software product, we will provide customers with complete
      requirements studies, data migrations, data integration tools, system
      integrations and other related professional services.




We
      are
      marketing our products worldwide, at the outset by utilizing a network of
      international industry contacts developed by senior management and indirectly
      through third parties. As part of the planned scaling of the organization,
      we
      will establish resellers with experienced professionals and well-established
      track records and contacts throughout the insurance and reinsurance industry.
      We
      plan to establish a presence in the London market because it is the global
      center of reinsurance trading. We also expect to establish our own sales team
      to
      focus on the North American market. We have initiated product sales discussions
      with several U.S. & EU based insurance companies through our existing
      management team.




Our
      initial multi-million dollar deployment and charter client, won by our existing
      management team in competition against Computer Science Corporation, is the
      Swiss Pool for Aviation Insurance (“SPL”), an insurance and reinsurance
      consortium based in Zurich, Switzerland consisting of 26 well-known member
      companies, including among others, Allianz, Partner Re, Swiss Re, Winterthur
      Insurance Company and Zurich Insurance Group. The member companies are using
      our
      software platform to produce direct insurance business and manage the
      reinsurance transactions of the produced direct insurance business.




For
      decades, lack of automation coupled with fragmented information systems of
      many
      global insurance and reinsurance organizations have made it difficult to
      accurately manage complex technical accounting methods causing losses from
      hard-to-detect errors involving premiums received and payable, claims and risk
      allocation, unnecessary operating expenses and reduced investment income from
      the negative impact of delayed claims recovery.




30




Frequently,
      these shortcomings have been amplified by fragmented business process, many
      repetitive, manual paper-based processes, untimely and incomplete collection
      of
      data and lack of access to intelligence embedded in an insurance company’s own
      data to facilitate making the correct business decisions. In addition, it is
      difficult for many organizations to maintain reinsurance contract knowledge
      as a
      result of staff turnover since losses may be reported years after a reinsurance
      contract has been initiated.




Our
      reinsurance software enables an organization to overcome the limitations of
      fragmented business processes and gain control of mission-critical reinsurance
      administration. The TAMS, which has been tested by some of the most experienced
      reinsurance industry professionals, provides the solution that addresses the
      many problems associated with accurately managing complex technical accounting
      methods, timely loss recoveries, and error prone business processes. Our
      software products allow companies to leverage their substantial investments
      in
      existing IT infrastructures while exploiting the many benefits offered by
      automation of technical accounting transactions. We believe that our SurSITE®
reinsurance software solution improves the quality, consistency, and accuracy
      of
      work performed and positions management to significantly and measurably reduce
      operating expenses and reduce errors.




Our
      objective is to establish our reinsurance solution as a leading software
      solution in managing complex reinsurance contract combinations throughout the
      entire reinsurance contract workflow. To achieve this goal, we are gradually
      enhancing our technology by adding the most efficient system controls available
      to achieve maximum configurability and flexibility to meet the needs of
      insurance groups with a fleet of insurance subsidiaries. In addition, we are
      adding support for new and evolving premium and claims recovery methods;
      functionality for trend analysis, capacity utilization and exposure control;
      and
      providing the software and services necessary to conduct safe and reliable
      technical accounting transactions over the Internet. In addition to traditional
      license agreements, we introduced an all-inclusive annual subscription model
      in
      2006, reducing the upfront cost of our SurSITE® product for new
      clients.




**Results
      of Operations and Financial Condition**




***Six
      Months Ended June 30, 2007 versus June 30, 2006***




*Total
      Operating Revenues*




The
      Company recognized $19,275 in revenue during the second fiscal quarter of 2007
      as fees related to the design and development of a project commenced during
      this
      period. The Company did not recognize revenue for the six months ended June
      30,
      2006. The lack of revenues was attributed to our lack of operating capital
      as a
      result of not being able to raise additional capital until we could complete
      the
      actions described in our annual report on Form 10-KSB.




*Total
      Cost of Operating Revenues*




Our
      cost
      of operating revenues for the six months ended June 30, 2007 and 2006 were
      $48,061 and $48,061, respectively, and consisted of amortization of intangible
      assets for each six month period.




*Total
      Operating Expenses*




Total
      operating expenses for the six months ended June 30, 2007 were $324,692 as
      compared to $391,880 for the six months ended June 30, 2006. This represented
      a
      decrease of $67,188, or approximately 20%. Operating expenses included payroll,
      professional fees, and related expenses of $254,241 and $196,363, rent expense
      of $10,570 and $47,776, and other general and administrative expenses of $56,662
      and $142,165 for the six months ended June 30, 2007 and 2006, respectively.
      The
      decrease from 2007 to 2006 is a result of the streamlining of administrative
      costs including no longer using additional consultants and outsourced investor
      and public relations to assist the Company in raising money.




We
      depreciate fixed assets. This resulted in an expense of $5,019 and $5,576 for
      the six months ended June 30, 2007 and 2006, respectively. We determine the
      fair
      value of the undiscounted cash flows annually, and sooner if circumstances
      change and determination is required, to value any impairment on our intangible
      assets and long-lived assets. As of June 30, 2007 and 2006, we determined that
      there was no impairment charge.




31




*Other
      Income (Expense)*




Included
      in other income (expense) is the amortization on the debt discount on the
      convertible debentures of $510,775 and $243,396 for the six months ended June
      30, 2007 and 2006, respectively based on the Effective Interest Method
      calculation. There was also a recognized gain (loss) on the valuation of our
      derivative liability of $315,161 and $772 for the six months ended June 30,
      2007
      and 2006, respectively. In addition in 2007, we recognized a gain on
      extinguishment of convertible debentures of $116,563.




Interest
      expense was $189,734 compared to $152,187 for the six months ended June 30,
      2007
      and 2006, respectively. The interest expense is primarily due to the convertible
      debentures and related party notes.




*Net
      Income (Loss) from Continuing Operations*




We
      reported a net (loss) from operations of $(622,263), or $(0.01) per share on
      a
      basic and diluted basis, for the six months ended June 30, 2007 versus
      $(384,761), or $(0.17) per share on a basic and diluted basis, for the six
      months ended June 30, 2006. The increase in the net loss is attributable to
      the
      charges related to the Cornell Capital financing for the six months ended June
      30, 2007 versus 2006. The operating (loss) lines before other income (expense)
      in the condensed consolidated statements of operations is believed by management
      to be the true indicator of our performance during the period.




*Provision
      for Income Taxes*




There
      was
      no provision for income taxes for the six months ended June 30, 2007 and 2006,
      respectively. There was no provision due to the carry forward of approximately
      $6,750,000 of net operating losses as of June 30, 2007 that we reserved in
      valuation allowances against this deferred tax asset.




***Three
      Months Ended June 30, 2007 versus June 30, 2006***




*Total
      Operating Revenues*




The
      Company recognized $19,275 in revenue during the second fiscal quarter of 2007
      as fees related to the design and development of a project commenced during
      this
      period. The Company did not recognize revenue for the three months ended June
      30, 2006. The lack of revenues was attributed to our lack of operating capital
      as a result of not being able to raise additional capital until we could
      complete the actions described in our annual report on Form 10-KSB.




*Total
      Cost of Operating Revenues*




Our
      cost
      of operating revenues for the three months ended June 30, 2007 and 2006 were
      $24,030 and $24,030, respectively, and consisted of amortization of intangible
      assets for each six month period.




*Total
      Operating Expenses*




Total
      operating expenses for the three months ended June 30, 2007 were $153,302 as
      compared to $267,937 for the three months ended June 30, 2006. This represented
      a decrease of $114,635, or approximately 42%. Operating expenses included
      payroll, professional fees, and related expenses of $121,276 and $152,308,
      rent
      expense of $6,292 and $10,361, and other general and administrative expenses
      of
      $23,324 and $102,597 for the three months ended June 30, 2007 and 2006,
      respectively. The decrease from 2007 to 2006 is a result of the streamlining
      of
      administrative costs including no longer using additional consultants and
      outsourced investor and public relations to assist the Company in raising
      money.




32




We
      depreciate fixed assets. This resulted in an expense of $2,510 and $2,671 for
      the three months ended June 30, 2007 and 2006, respectively. We determine the
      fair value of the undiscounted cash flows annually, and sooner if circumstances
      change and determination is required, to value any impairment on our intangible
      assets and long-lived assets. As of June 30, 2007 and 2006, we determined that
      there was no impairment charge.




*Other
      Income (Expense)*




Included
      in other income (expense) is the amortization on the debt discount on the
      convertible debentures of $254,183 and $243,396 for the three months ended
      June
      30, 2007 and 2006, respectively based on the Effective Interest Method
      calculation. There was also a recognized a gain (loss) on the valuation of
      our
      derivative liability of $316,493 and $772 for the three months ended June 30,
      2007 and 2006, respectively. In addition in 2007, we recognized a gain on
      extinguishment of convertible debentures of $69,794.




Interest
      expense was $95,990 compared to $77,364 for the three months ended June 30,
      2007
      and 2006, respectively. The interest expense is primarily due to the convertible
      debentures and related party notes.




*Net
      Income (Loss) from Continuing Operations*




We
      reported a net (loss) from operations of $(121,943), or $(0.00) per share on
      a
      basic and diluted basis, for the three months ended June 30, 2007 versus
      $(161,964), or $(0.07) per share on a basic and diluted basis, for the three
      months ended June 30, 2006. The increase in the net loss is attributable to
      the
      charges related to the Cornell Capital financing for the three months ended
      June
      30, 2007 versus 2006. The operating (loss) lines before other income (expense)
      in the condensed consolidated statements of operations is believed by management
      to be the true indicator of our performance during the period.




*Provision
      for Income Taxes*




There
      was
      no provision for income taxes for the three months ended June 30, 2007 and
      2006,
      respectively. There was no provision due to the carry forward of approximately
      $6,750,000 of net operating losses as of June 30, 2007 that we reserved in
      valuation allowances against this deferred tax asset.




**Liquidity
      and Capital Resources**




During
      the six months ended June 30, 2007, the balance in cash and cash equivalents
      increased by $1 07,571 compared
      to no change for the six months ended June 30, 2006. This decrease is
      attributable solely to cash used in operating activities, which was attributable
      to a net loss from operations of ($622,263) offset by accretion of discount
      of
      convertible debentures of $510,775 and an increase in accounts payable and
      accrued expenses (including accrued compensation) of $391,622 .
      This
      compares to a decrease in cash from operating activities for the six months
      ended June 30, 2006 of ($625,453), which was attributable to a net loss from
      operations of ($384,761) and a decrease in accounts payable and accrued expenses
      (including accrued compensation) of ($554,940). We received proceeds from the
      issuance of convertible debentures net of deferred fees of $890,000 in the
      six
      months ended June 30, 2006.




As
      of
      June 30, 2007, we had $171,614 in current assets, solely consisting of cash
      and
      cash equivalents.




As
      of
      June 30, 2007, we had $5,510,838 in current liabilities, primarily consisting
      of
      $939,391 in accounts payable and accrued expenses, $723,340 in accrued
      compensation and $1,578,365 of derivative liabilities resulting from the
      Securities Purchase Agreement and Secured Convertible Debenture entered into
      and
      amended on April 4, 2006. The derivative liability will be converted to equity
      upon conversion into common stock by Cornell Capital. The balance is adjusted
      based on market adjustments to fair value on a quarterly basis.




Notwithstanding
      our present working capital deficiency, our condensed consolidated financial
      statements have been prepared on the assumption that we continue to have the
      ability to generate sufficient cash flows from operations or raise sufficient
      capital to ensure the reduction of the working capital deficiency and fund
      future operations, as a going concern. We have suffered significant recurring
      operating losses in the past few years, and this factor along with the fact
      that
      we have been unsuccessful in raising equity other than through Cornell Capital
      or related parties for the most part, have caused significant doubt about our
      ability to continue as a going concern for a period of twelve months. The
      condensed consolidated financial statements do not include any adjustments
      that
      might result from the outcome of this uncertainty.




33




**Risk
      Factors**





Investing
      in our securities involves a high degree of risk. Before investing in our
      securities, you should consider the following discussion of risk factors, other
      information contained in this Quarterly Report on Form 10-QSB. Our future
      results may also be impacted by other risk factors listed from time to time
      in
      our future filings with the SEC.





***Risks
      Related to Our Business***





***We
      are a development-stage company with an unproven business model, a new and
      relatively unproven software technology model and a short operating history,
      which makes it difficult to evaluate our current business and future
      prospects.***





We
      have
      only a limited operating history upon which to base an evaluation of our current
      business and future prospects. Although we were originally founded in 1993,
      we
      didn’t become operational until 1997 as a professional services company and
      began offering our SurSITE ® software
      products in 2003. Due to the startling twenty-eight months it took to become
      a
      publicly traded company, we were forced to substantially scale back our sales
      and marketing efforts due to our limited capital during this period. As a
      result, we experienced a corresponding loss of sales. Our limited operating
      history makes an evaluation of our business and prospects very difficult. You
      must consider our business and prospects in light of the risks and difficulties
      we encounter as a development-stage company in the rapidly evolving insurance
      and reinsurance market. These risks and difficulties include, but are not
      limited to, the following:





·
            Our
                new and relatively unproven business and software
                models;





·
            A
                limited number of service offerings and risks associated with developing
                new product and service offerings;





·
            The
                difficulties we face in managing rapid growth in personnel and
                operations;





·
            A
                failure of our physical infrastructure or internal systems caused
                by a
                denial of service, third-party attack, employee error or malfeasance,
                or
                other causes;





·
            A
                general failure of the Internet that impairs our ability to deliver
                our
                service;





·
            A
                loss or breach of confidentiality of customer
                data;





·
            The
                negative impact on our brand, reputation or trustworthiness caused
                by any
                significant unavailability of our
                service;





·
            The
                systematic failure of a core component of our service from which
                it would
                be difficult for us to recover;





·
            The
                timing and success of new service introductions and new technologies
                by
                our competitors; and





·
            Our
                ability to build brand awareness in a highly competitive
                market.





We
      may
      not be able to successfully address any of these risks or others. Failure to
      adequately do so could seriously harm our business, damage our ability to retain
      existing customers or obtain new customers and cause our operating results
      to
      suffer more.




34




***We
      have lost money historically, which means that we may not be able to maintain
      profitability.***





From
      2003
      through June 30, 2007, we have not been profitable and have lost money on both
      a
      cash and overall basis. No assurances can be given that we will be successful
      in
      reaching or maintaining profitable operations. Accordingly, we may experience
      liquidity and cash flow problems. If our losses continue, our ability to operate
      may be severely impacted.





***We
      may need to raise additional capital in the future, but that capital may not
      be
      available.***





As
      of
      June 30, 2007, we had a working capital deficit of $5,339,224 and should we
      be
      unable to increase our current assets to satisfy our current liabilities, our
      operations could be at risk.





Current
      assets are assets that are expected to be converted to cash within one year
      and,
      therefore, may be used to pay current liabilities as they become due. Our
      working capital deficiency means that our current assets as of June 30, 2007
      were not sufficient to satisfy all of our current liabilities as of that date.
      If our ongoing operations do not begin to provide sufficient profitability
      to
      offset the working capital deficiency, we may have to raise additional capital
      or debt to fund the deficit or curtail future operations.





We
      cannot
      assure you that we will be successful or that our operations will generate
      sufficient revenues, if any, to meet the expenses of our operations. If we
      require additional financing in the future, such financing may not be available
      or, if available, may not be available on satisfactory terms. Additionally,
      the
      nature of our business activities may require the availability of additional
      funds in the future due to more rapid growth than is forecast, and thus, we
      may
      need additional capital or credit lines to continue that rate of business
      growth. We may encounter difficulty in obtaining these funds and/or credit
      lines. Moreover, even if additional financing or credit lines were to become
      available, it is possible that the cost of such funds or credit would be high
      and possibly prohibitive.





If
      we
      were to decide to obtain such additional funds by equity financing in one or
      more private or public offerings, current stockholders would experience a
      corresponding decrease in their percentage ownership.





***Our
      independent registered public accounting firm has expressed substantial doubt
      regarding our ability to continue as a going concern.***





The
      report of our independent registered public accounting firm on our December
      31,
      2006 and 2005 consolidated financial statements, as noted in Note 1, included
      an
      explanatory paragraph indicating that there is substantial doubt about our
      ability to continue as a going concern due to our recurring losses from
      operations. The fact that we have received this “going concern opinion” from our
      independent registered public accounting firm will likely make it more difficult
      for us to raise capital on favorable terms and could hinder, to some extent,
      our
      operations. Additionally, if we are not able to continue as a going concern,
      it
      is likely that stockholders will lose all of their investment. Our financial
      statements do not include any adjustments that might result from the outcome
      of
      this uncertainty.





***Our
      obligations under the secured convertible debentures are secured by all of
      our
      assets.***





Our
      obligations under the secured convertible debentures issued to Cornell Capital
      are secured by all of our assets. As a result, if we default under the terms
      of
      the secured convertible debentures, Cornell could foreclose its security
      interest and liquidate all of our assets. This would cease
      operations.





***Our
      common stock may be affected by limited trading volume and may fluctuate
      significantly, which may affect our stockholders’ ability to sell shares of our
      common stock.***





There
      has
      been a limited public market for our common stock and there can be no assurance
      that a more active trading market for our common stock will develop. An absence
      of an active trading market could adversely affect our stockholders’ ability to
      sell our common stock in short time periods, or possibly at all. Our common
      stock has experienced, and is likely to experience in the future, significant
      price and volume fluctuations, which could adversely affect the market price
      of
      our common stock without regard to our operating performance. In addition,
      we
      believe that factors such as quarterly fluctuations in our financial results
      and
      changes in the overall economy or the condition of the financial markets could
      cause the price of our common stock to fluctuate substantially. These
      fluctuations may also cause short sellers to enter the market from time to
      time
      in the belief that we will have poor results in the future. We cannot predict
      the actions of market participants and, therefore, can offer no assurances
      that
      the market for our stock will be stable or appreciate over time. These factors
      may negatively impact stockholders’ ability to sell shares of our common
      stock.




35




***Our
      common stock is deemed to be a “penny stock,” which may make it more difficult
      for you to sell your shares.***





Our
      common stock is subject to the “penny stock” rules adopted under Section 15(g)
      of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These
      rules may reduce the potential market for our common stock by reducing the
      number of potential investors. This may make it more difficult for investors
      in
      our common stock to sell shares to third parties or to otherwise dispose of
      them. This could cause our stock price to decline. Penny stocks are
      stock:





·
            With
                a price of less than $5.00 per
                share;





·
            That
                are not traded on a “recognized” national
                exchange;





·
            Whose
                prices are not quoted on the NASDAQ automated quotation system (NASDAQ
                listed stock must still have a price of not less than $5.00 per share);
                or





·
            In
                issuers with net tangible assets less than $2.0 million (if the issuer
                has
                been in continuous operation for at least three years) or $10.0 million
                (if in continuous operation for less than three years), or with average
                revenues of less than $6.0 million for the last three years;
                and





·
            Broker/dealers
                dealing in penny stocks are required to provide potential investors
                with a
                document disclosing the risks of penny stocks. Moreover, broker/dealers
                are required to determine whether an investment in a penny stock
                is a
                suitable investment for a prospective
                investor.





***We
      could fail to attract or retain key personnel, which would be detrimental to
      our
      operations.***





Our
      success largely depends on the efforts and abilities of Dan L. Jonson, our
      President and Chief Executive Officer. The loss of the services of Dan L. Jonson
      could materially harm our business because of the cost and time necessary to
      find his successor. Such a loss would also divert management attention away
      from
      operational issues. We also have other key senior management who manage our
      operations, and if were to lose their services, we would be required to expend
      time and energy to find and train their replacements. To the extent that we
      are
      smaller than our competitors and have fewer resources we may not be able to
      attract the sufficient number and quality of staff.





***We
      are subject to price volatility due to our operations materially
      fluctuating.***





As
      a
      result of the evolving nature of the markets in which we compete, as well as
      the
      current nature of the public markets and our current financial condition, we
      believe that our operating results may fluctuate materially, as a result the
      quarter-to-quarter comparisons of our results of operations may not be
      meaningful. If in some future quarter, whether as a result of such a fluctuation
      or otherwise, our results of operations fall below the expectations of
      securities analysts and investors, the trading price of our common stock would
      likely be materially and adversely affected. You should not rely on our results
      of any interim period as an indication of our future performance. Additionally,
      our quarterly results of operations may fluctuate significantly in the future
      as
      a result of a variety of factors, many of which are outside our control.





Factors
      that may cause our quarterly results to fluctuate include, among
      others:





·
            Our
                ability to retain existing clients and
                customers;





·
            Our
                ability to attract new clients and customers at a steady
                rate;




36




·
            Our
                ability to maintain customer
                satisfaction;





·
            The
                extent to which our products gain market
                acceptance;





·
            The
                timing and size of client and customer
                purchases;





·
            Introductions
                of products and services by
                competitors;





·
            Price
                competition in the markets in which we
                compete;





·
            Our
                ability to attract, train, and retain skilled
                management;





·
            The
                amount and timing of operating costs and capital expenditures relating
                to
                the expansion of our business, operations, and infrastructure;
                and





·
            General
                economic conditions and economic conditions specific to wireless
                and
                portable communication device
                industry.





***We
      may not be able to compete effectively in markets where our competitors have
      more resources.***





Our
      ability to increase revenue and achieve profitability depends, in large part,
      on
      widespread acceptance of our service by medium-sized and large businesses.
      Our
      efforts to sell to these customers may not be successful. In particular, because
      we are a relatively new company with a limited operating history, these target
      customers may have concerns regarding our viability and may prefer to purchase
      critical software applications from one of our larger, more established
      competitors. Even if we are able to provide service to these types of customers,
      they may insist on additional assurances from management that we will be able
      to
      provide adequate levels of service, which could harm our business. Our
      prospective customers have expressed such concerns in the past, and our
      inability to address their concerns has hampered our growth. Additionally,
      each
      successive failure to deliver the desired services to customers further
      undermines our credibility in the marketplace and our ability to sell our
      software. Delays also allow our competitors to erode any technological lead
      we
      may have with our product.





***As
      more of our sales efforts are targeted at larger enterprise customers, our
      sales
      cycle may become more time-consuming and expensive, potentially diverting
      resources and harming our business.***





As
      we
      target more of our sales efforts at larger enterprise customers, we will face
      greater costs, longer sales cycles and less predictability in completing some
      of
      our sales. In this market segment, the customer’s decision to use our service
      may be an enterprise-wide decision and, if so, these types of sales would
      require management to provide greater levels of education to prospective
      customers regarding the use and benefits of our service. In addition, larger
      customers may demand more customization, integration services, and features.
      As
      a result of these factors, these sales opportunities may require management
      to
      devote greater sales support and professional service resources to individual
      sales, driving up costs and time required to complete sales and diverting sales
      and professional service resources to a smaller number of larger
      transactions.





***Our
      future financial performance may be hurt to the extent that we cannot introduce
      and gain customers acceptance of enhanced editions of our
      service.***





Our
      future financial performance will depend on our ability to develop and introduce
      new features to, and new additions of, our service. The success of new features
      and editions depends on several factors, including the timely completion,
      introduction and market acceptance of the feature or edition. Failure in this
      regard may significantly impair our revenue growth. In addition, the market
      for
      our service may be limited if prospective customers require customized features
      or functions that are incompatible with our application delivery model. If
      management is unable to develop new features or enhanced editions of our service
      that achieve widespread levels of market acceptance, our sales and reputation
      could suffer, particularly if we have been successful in meeting management’s
      goal of establishing our products as market leaders. If prospective customers
      require customized features or functions, our costs could increase and our
      reputation and sales could be harmed.




37




***If
      we do not successfully establish strong brand identity in the markets we are
      currently serving, we may be unable to achieve widespread acceptance of our
      products.***





We
      believe that establishing and strengthening our products is critical to
      achieving widespread acceptance of our future products and to establish key
      strategic relationships. The importance of brand recognition will increase
      as
      current and potential competitors enter the market with competing products.
      Our
      ability to promote and position our brand depends largely on the success of
      our
      marketing efforts and our ability to provide high quality products and customer
      support. These activities are expensive and we may not generate a corresponding
      increase in customers or revenue to justify these costs. If we fail to establish
      and maintain our brand, or if our brand value is damaged or diluted, we may
      be
      unable to attract new customers and compete effectively.





***Future
      acquisitions may disrupt our business and deplete our financial
      resources.***





Any
      future acquisitions we make could disrupt our business and seriously harm our
      financial condition. We intend to consider investments in complementary
      companies, products, and technologies. While we have no current agreements
      to do
      so, we anticipate buying businesses, products and/or technologies in the future
      in order to fully implement our business strategy. In the event of any future
      acquisitions, we may:





·
            Issue
                stock that would dilute our current stockholders’ percentage
                ownership;





·
            Incur
                debt;





·
            Assume
                liabilities;





·
            Incur
                impairment charges related to goodwill and other intangible assets
                we
                acquire; or





·
            Incur
                large and immediate write-offs.





The
      use
      of debt to finance our future acquisitions should allow us to make acquisitions
      with an amount of cash in excess of what may be currently available to us.
      If we
      use debt to leverage up our assets, we may not be able to meet our debt
      obligations if our internal projections are incorrect or if there is a market
      downturn. This may result in a default and the loss in foreclosure proceedings
      of the acquired business or the possible bankruptcy of our
      business.





Our
      operation of any acquired business will also involve numerous risks,
      including:





·
            Integration
                of the operations of the acquired business and its technologies or
                products;





·
            Unanticipated
                costs;





·
            Diversion
                of management’s attention from our core business;





·
            Adverse
                effects on existing business relationships with suppliers and
                customers;





·
            Risks
                associated with entering markets in which we have limited prior
                experience; and





·
            Potential
                loss of key employees, particularly those of the purchased
                companies.





***Any
      failure to adequately expand our direct sales force will impede our growth
      and
      ability to generate sales.***





Management
      expects to be substantially dependent on a direct sales force to obtain new
      customers, particularly large enterprise customers, and to mange our customer
      base. Management believes that there is significant competition for direct
      sales
      personnel with the advanced sales skills and technical knowledge we need. Our
      ability to achieve significant growth in revenue in the future will depend,
      in
      large part, on our success in recruiting, training and retaining sufficient
      direct sales personnel. New hires require significant training and may, in
      some
      cases, take more than a year before they achieve full productivity. Our recent
      hires and planned hires may not become as productive as management would like,
      and we may be unable to hire sufficient numbers of qualified individuals in
      the
      future in the markets where it does business. If we are unable to hire and
      develop sufficient numbers of productive sales personnel, sales of our services
      will suffer. Additionally, our financial resources have limited our ability
      to
      recruit employees, partners and customers. Many of our potential employees,
      partners and customers have expressed the same reluctance to join our company
      until such time as our financial resources are more secure. Until we begin
      generating significant revenue from customer contracts, we believe this problem
      will persist.




38




***Sales
      to customers outside the United States expose us to risks inherent in
      international sales.***





Sales
      in
      Europe represented all of our revenue in fiscal 2003 and 2002. We intend to
      expand our domestic and international sales efforts. As a result, we will be
      subject to risks and challenges that we would otherwise not face if we conducted
      business only in the United States. These risks and challenges
      include:





·
            Laws
                and business practices favoring local
                competitors;





·
            More
                established competitors with greater
                resources;





·
            Compliance
                with multiple, conflicting and changing governmental laws and regulations,
                including tax, privacy and data protection laws and
                regulations;





·
            Different
                pricing environments;





·
            Longer
                accounts receivable payment cycles and other collection difficulties;
                and





·
            Regional
                economic and political conditions.





These
      factors could harm our future international sales.





***We
      may not be able to effectively protect our intellectual property rights, which
      could harm our business by making it easier for our competitors to duplicate
      our
      services.***





Our
      success depends on our ability to protect our proprietary rights to the
      technologies used to implement and operate our software in the United States
      and
      foreign countries. In the event that a third party breaches the confidentiality
      provisions or other obligations in one or more of our agreements or
      misappropriates or infringes on our intellectual property or the intellectual
      property licensed to us by third parties, our business would be seriously
      harmed. To protect our proprietary rights, we rely on a combination of trade
      secrets, confidentiality agreements and other contractual provisions and
      agreements, copyright and trademark laws, which afford us limited protection.
      The measures we take to protect our proprietary rights may not be
      adequate.





***Stockholders
      may experience significant dilution from our sale of shares upon conversion
      of
      the Cornell Capital convertible debentures, and there may be a change in control
      as a result of these sales.***





We
      entered into many convertible debenture agreements that have been amended as
      of
      April 4, 2006. The convertible debentures mature on April 4, 2008, and Cornell
      Capital upon effective registration may convert and potentially dilute the
      ownership of our existing stockholders. As of June 30, 2007, Cornell Capital
      could receive approximately 542,450,000 shares of our common stock upon
      conversion of these convertible debentures.





**Critical
      Accounting Policies**





Critical
      accounting polices include the areas where we have made what we consider to
      be
      particularly subjective or complex judgments in making estimates and where
      these
      estimates can significantly impact our financial results under different
      assumptions and conditions.




39




We
      prepare our financial statements in conformity with accounting principles
      generally accepted in the United States of America. As such, we are required
      to
      make certain estimates, judgments and assumptions that we believe are reasonable
      based upon the information available. These estimate, judgments and assumptions
      affect the reported amounts of assets and liabilities at the date of the
      financial statement and the reported amounts of revenue and expenses during
      the
      periods presented. Actual results could be different than those estimates.





We
      believe the following critical accounting policies affect our more significant
      judgments and estimates used in the preparation of our financial
      statements:





***Principles
      of Consolidation***





The
      condensed consolidated financial statements include the accounts of us and
      all
      of our wholly-owned subsidiaries. All significant intercompany accounts and
      transactions have been eliminated in consolidation.





***Intangible
      Assets***





Under
      SFAS No. 142, “Goodwill and Other Intangible Assets”. (“SFAS 142”), goodwill and
      other indefinite-lived intangible assets are no longer amortized but instead
      are
      reviewed for impairment annually and on an interim basis if events or changes
      in
      circumstances between annual tests indicate that an asset might be impaired.
      Under SFAS 142, indefinite-lived intangible assets are tested for impairment
      by
      comparing their fair values to their carrying values. Testing for impairment
      of
      goodwill is a two-step process. The first step requires us to compare the fair
      value of its reporting units to the carrying value of the net assets of the
      respective reporting units, including goodwill. If the fair value of the
      reporting unit is less than the carrying value, goodwill of the reporting unit
      is potentially impaired and we then complete Step 2 to measure the impairment
      loss, if any. The second step requires the calculation of the implied fair
      value
      of goodwill by deducting the fair value of all tangible and intangible net
      assets of the reporting unit from the fair value of the reporting unit. If
      the
      implied fair value of goodwill is less then the carrying amount of goodwill,
      an
      impairment loss is recognized equal to the difference. Intangible assets that
      do
      not have indefinite lives are amortized over their useful lives.





***Revenue
      Recognition***





When
      a
      software license arrangement requires us to provide significant production,
      customization or modification of the software, or when the customer considers
      these services essential to the functionality of the software product, the
      fees
      for the product license, implementation services and maintenance and support
      are
      recognized using the percentage of completion method. Under percentage of
      completion accounting, these revenues are recognized as work progresses based
      upon cost incurred. Any expected losses on contracts in progress are expensed
      in
      the period in which the losses become probable and reasonably estimable.





If
      an
      arrangement includes acceptance criteria, revenue is not recognized until we
      can
      objectively demonstrate that the software or service can meet the acceptance
      criteria, or the acceptance period lapses, whichever occurs
      earlier.





Other
      elements of our software arrangements are services that do not involve
      significant production, modification or customization of our software as defined
      in SOP 97-2. These components do not constitute a significant amount of the
      revenue generated currently, and did not during the early years of the post
      technological feasibility period. These components are recognized as the
      services are performed based on the accrual method of accounting.





***Accounts
      Receivable***





We
      conduct business and extend credit based on an evaluation of the customers’
financial condition, generally without requiring collateral. Exposure to losses
      on receivables is expected to vary by customer due to the financial condition
      of
      each customer. We monitor exposure to credit losses and maintain allowances
      for
      anticipated losses considered necessary under the circumstances. The criteria
      for allowance provision are determined based on historical experience and our
      assessment of the general financial conditions affecting its customer base.
      If
      our actual collections experience changes, revisions to the allowance may be
      required.




40





***Income
      Taxes***





We
      account for income taxes utilizing the liability method of accounting. Under
      the
      liability method, deferred taxes are determined based on differences between
      financial statement and tax bases of assets and liabilities at enacted tax
      rates
      in effect in years in which differences are expected to reverse. Valuation
      allowances are established, when necessary, to reduce deferred tax assets to
      amounts that are expected to be realized.





***Impairment
      of Long-Lived Assets***





Long-lived
      assets, primarily fixed assets and intangible assets, are reviewed for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of the assets might not be recoverable. We do not perform a
      periodic assessment of assets for impairment in the absence of such information
      or indicators. Conditions that would necessitate an impairment assessment
      include a significant decline in the observable market value of an asset, a
      significant change in the extent or manner in which an asset is used, or a
      significant adverse change that would indicate that the carrying amount of
      an
      asset or group of assets is not recoverable. For long-lived assets to be held
      and used, we recognize an impairment loss only if its carrying amount is not
      recoverable through its undiscounted cash flows and measures the impairment
      loss
      based on the difference between the carrying amount and estimated fair value.





***Earnings
      (Loss) Per Share of Common Stock***





Basic
      net
      earnings (loss) per common share is computed using the weighted average number
      of common shares outstanding. Diluted earnings per share (EPS) includes
      additional dilution from common stock equivalents, such as stock issuable
      pursuant to the exercise of stock options and warrants. Common stock equivalents
      will not be included in the computation of diluted earnings per share when
      we
      report a loss because to do so would be antidilutive for periods
      presented.





***Stock-Based
      Compensation***





On
      December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
      Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based
      Payment” (“SFAS 123R”). SFAS 123R requires that compensation cost related to
      share-based payment transactions be recognized in the financial statements.
      Share-based payment transactions within the scope of SFAS 123R include stock
      options, restricted stock plans, performance-based awards, stock appreciation
      rights, and employee share purchase plans. The provisions of SFAS 123R, as
      amended, are effective for small business issuers beginning as of the first
      interim period after December 15, 2005. We adopted these provisions on January
      1, 2006, and the adoption of this pronouncement did not have a material effect
      on our condensed consolidated financial statements.





***Fair
      Value of Financial Instruments (other than Derivative Financial
      Instruments)***





The
      carrying amounts reported in the condensed consolidated balance sheet for cash
      and cash equivalents, and accounts payable approximate fair value because of
      the
      immediate or short-term maturity of these financial instruments. For the notes
      payable, the carrying amount reported is based upon the incremental borrowing
      rates otherwise available to us for similar borrowings. For the convertible
      debentures, fair values were calculated at net present value using our weighted
      average borrowing rate for debt instruments without conversion features applied
      to total future cash flows of the instruments.





***Convertible
      Instruments***





We
      reviewed the terms of convertible debt and equity securities for indications
      requiring bifurcation, and separate accounting, for the embedded conversion
      feature. Generally, embedded conversion features where the ability to physical
      or net-share settle the conversion option is not within our control are
      bifurcated and accounted for as a derivative financial instrument. (See
      Derivative Financial Instruments below). Bifurcation of the embedded derivative
      instrument requires allocation of the proceeds first to the fair value of the
      embedded derivative instrument with the residual allocated to the debt
      instrument. The resulting discount to the face value of the debt instrument
      is
      amortized through periodic charges to interest expense using the Effective
      Interest Method.




41





***Derivative
      Financial Instruments***





We
      generally do not use derivative financial instruments to hedge exposures to
      cash-flow or market risks. However, certain other financial instruments, such
      as
      warrants or options to acquire common stock and the embedded conversion features
      of debt and preferred instruments that are indexed to our common stock, are
      classified as liabilities when either (a) the holder possesses rights to
      net-cash settlement or (b) physical or net share settlement is not within our
      control. In such instances, net-cash settlement is assumed for financial
      accounting and reporting, even when the terms of the underlying contracts do
      not
      provide for net-cash settlement. Such financial instruments are initially
      recorded at fair value and subsequently adjusted to fair value at the close
      of
      each reporting period.





***Recent
      Accounting Pronouncements***





In
      May
      2005, the FASB issued Statement of Financial Accounting Standard No. 154,
“Accounting Changes and Error Corrections” (“SFAS 154”). SFAS 154 is a
      replacement of APB No. 20, *“Accounting
      Changes”* ,
      and
      SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”. SFAS
      154 applies to all voluntary changes in accounting principle and changes the
      requirements for accounting and reporting of a change in accounting principle.
      This statement establishes that, unless impracticable, retrospective application
      is the required method for reporting of a change in accounting principle in
      the
      absence of explicit transition requirements specific to the newly adopted
      accounting principle. It also requires the reporting of an error correction
      which involves adjustments to previously issued financial statements similar
      to
      those generally applicable to reporting an accounting change retrospectively.
      SFAS 154 is effective for accounting changes and corrections of errors made
      in
      fiscal years beginning after December 15, 2005. We believe the adoption of
      SFAS
      154 will not have a material impact on our condensed consolidated financial
      statements.





In
      February 2006, the FASB issued Statement of Financial Accounting Standard No.
      155, “Accounting for Certain Hybrid Instruments” (“SFAS 155”). FASB 155 allows
      financial instruments that have embedded derivatives to be accounted for as
      a
      whole (eliminating the need to bifurcate the derivative from its host) if the
      holder elects to account for the whole instrument on a fair value basis. This
      statement is effective for all financial instruments acquired or issued after
      the beginning of an entity’s first fiscal year that begins after September 15,
      2006. We will evaluate the impact of SFAS 155 on our condensed consolidated
      financial statements.





In
      March
      2006, the FASB issued Statement of Financial Accounting Standard No. 156,
“Accounting for Servicing of Financial Assets, an amendment of FASB Statement
      No. 140” (“SFAS 156”). SFAS 156 requires all separately recognized servicing
      assets and servicing liabilities to be initially measured at fair value, if
      practicable. The standard permits an entity to subsequently measure each class
      of servicing assets or servicing liabilities at fair value and report changes
      in
      fair value in the statement of operations in the period in which the changes
      occur. SFAS 156 is effective for us as of December 1, 2006. We do not expect
      the
      new standard to have any material impact on our financial position or results
      of
      operations.





FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an
      Interpretation of FASB Statement No. 109” - In June 2006, the FASB issued FASB
      Interpretation No. 48 (“FIN-48”), “Accounting for Uncertainty in Income Taxes -
      an Interpretation of FASB Statement No. 109.” The interpretation clarifies the
      accounting for uncertainty in income taxes recognized in an entity’s financial
      statements in accordance with SFAS No. 109, “Accounting for Income Taxes.”
Specifically, FIN-48 prescribes a recognition threshold and a measurement
      attribute for the financial statement recognition and measurement of a tax
      position taken or expected to be taken. The provisions of FIN-48 are effective
      for financial statements for fiscal years beginning after December 15, 2006.
      Accordingly, the Company will adopt FIN-48 as of January 1, 2007. The adoption
      of FIN-48 is not expected to have a material effect on the Company’s financial
      position or results of operations.





SFAS
      No.
      157, “Fair Value Measurements” - In September 2006, the FASB issued SFAS No.
      157, “Fair Value Measurements” (“SFAS 157”), which defines fair value,
      establishes a framework for measuring fair value and expands disclosures about
      fair value measurements. SFAS 157 applies whenever other accounting standards
      require or permit assets or liabilities to be measured at fair value.
      Accordingly, it does not expand the use of fair value in any new circumstances.
      Fair value under SFAS 157 is defined as the price that would be received to
      sell
      an asset or paid to transfer a liability in an orderly transaction between
      market participants at the measurement date. This Standard clarifies the
      principle that fair value should be based on the assumptions market participants
      would use when pricing an asset or liability. In support of this principle,
      SFAS
      157 establishes a fair value hierarchy that prioritizes the information used
      to
      develop those assumptions. The fair value hierarchy gives the highest priority
      to quoted prices in active markets and the lowest priority to unobservable
      data,
      for example, a reporting entity’s own data. Under SFAS 157, fair value
      measurements would be separately disclosed by level within the fair value
      hierarchy. SFAS 157 is effective for fiscal years beginning after November
      15,
      2007. Accordingly, the Company is to adopt SFAS 157 on January 1, 2008. The
      adoption of SFAS 157 is not expected to have a material effect on the Company’s
      financial position or results of operations.




42




Staff
      Accounting Bulletin No. 108, “Considering the Effects of Prior Year
      Misstatements When Quantifying Misstatements in Current Year Financial
      Statements” - In September 2006, the Securities and Exchange Commission issued
      Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year
      Misstatements When Quantifying Misstatements in Current Year Financial
      Statements” (“SAB 108”), which provides guidance on the consideration of the
      effects of prior year misstatements in quantifying current year misstatements
      for the purpose of a materiality assessment two approaches are commonly used
      to
      evaluate the materiality of misstatements or errors in financial statements:
      the
      roll-over, also known as the current-period or income-statement approach, and
      the iron curtain, also known as the cumulative or balance-sheet approach. The
      roll-over approach quantifies a misstatement based on the amount of the error
      originating in the current-period income statement. This approach could allow
      balance sheet items to grow each year by immaterial amounts, until the
      cumulative error becomes material. The iron curtain approach quantifies a
      misstatement based on the effects of correcting the misstatement existing in
      the
      balance sheet at the end of the current period. This approach does not consider
      the income statement effects of correcting prior year misstatements in the
      current year to be errors.





The
      reliance on only one of these approaches, to the exclusion of the other, does
      not appropriately quantify all misstatements that could be material to
      financial-statement users. Accordingly, SAB 108 will require quantification
      of
      financial statement errors based on the effects of the error on each of an
      entity’s financial statements and the related financial statement disclosures.
      This model is commonly referred to as a dual approach because it essentially
      requires quantification of errors under both the iron-curtain and the roll-over
      approaches.





SAB
      108
      is effective for annual financial statements covering the first fiscal year
      ending after November 15, 2006. From a transition perspective, SAB 108 permits
      companies to record the cumulative effect of initially applying the dual
      approach in the first year ending after November 15, 2006 by recording any
      necessary correcting adjustments to the carrying values of assets and
      liabilities as of the beginning of that year with the offsetting adjustment
      recorded to the opening balance of retained earnings. The initial adoption
      of
      SAB 108 had no affect on the Company’s financial position, results of operations
      or cash flows.





**Item
      3. Controls and Procedures.**




***Evaluation
      of Disclosure Controls and Procedures***




We
      are
      responsible for maintaining disclosure controls and procedures designed to
      ensure that information required to be disclosed in our Exchange Act reports
      is
      recorded, processed, summarized and reported within the time periods specified
      in the SEC’s rules and regulations, and that such information is accumulated and
      communicated to our management, including our chief executive officer and chief
      financial officer, as appropriate, to allow for timely decisions regarding
      required disclosure.




In
      designing and evaluating our disclosure controls and procedures, management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving their objectives
      and management necessarily is required to apply their judgment in evaluating
      the
      cost-benefit relationship of possible controls and procedures and implementing
      controls and procedures based upon the application of management’s
      judgment.




43




In
      connection with the past restatements of financial statements, the Board of
      Directors has reevaluated certain disclosure controls and procedures and
      internal control over financial reporting. As a result, the Board of Directors
      has established additional protocols for our certifying officers, senior
      management and accounting and finance staff to monitor closely new accounting
      pronouncements that impact our financial statements. This includes continuing
      education of our staff including review of new pronouncements and awareness
      of
      those pronouncements being discussed, and the evaluation of their impact on
      our
      financial statements and management’s discussion and analysis.




Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, evaluated the effectiveness of our disclosure controls and
      procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
      Act),
      including the remedial actions discussed above, as of the end of the period
      covered by this report. Based upon this evaluation, our Chief Executive Officer
      and Chief Financial Officer concluded that as of the date of filing this report,
      our disclosure controls and procedures were effective and designed to ensure
      that material information required to be disclosed in the reports that we file
      or submit under the Exchange Act is recorded, processed, summarized, and
      reported, within the time periods specified in the SEC’s rules and regulations
      and accumulated and communicated to them as appropriate to allow timely
      decisions regarding required disclosure.




***Changes
      in Internal Control over Financial Reporting***




There
      have not been any significant changes in our internal controls over financial
      reporting or in the factors that could significantly affect these controls
      subsequent to the date of their evaluation.




44


**PART
      II — OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




Sachs
      Sax
      Klein v. NetWorth Technologies, Inc. (Palm Beach County, Florida, filed March
      28, 2005). The amount in controversy is $11,039.80, representing the balance
      owed to plaintiff for legal services performed by plaintiff for the predecessor
      of its former subsidiary, NetWorth Systems, and the value of a warrant for
      3% of
      our Common Stock. We have not filed an answer and no action has been taken
      by
      the plaintiff to seek a default judgment. The plaintiff initially expressed
      interest in a settlement based on issuances of our common stock, but we have
      not
      had further discussions since those initial discussions.




James
      Andrew Rice v. Solution Technology International, Inc. (U.S. District Court
      for
      the District of Maryland). Mr. Rice, a former employee of Old STI, has sued
      to
      recover alleged unpaid wages of $89,677.80 (which he claims are trebled under
      the Maryland wage and hour laws to $269,033.40) and alleged expenses of
      approximately $9,600. Defendants’ motion to dismiss Dan L. Jonson as a defendant
      was granted November 9, 2006. We have reached an agreement to settle this
      complaint where we issued 1,000,000 shares of common stock to settle the
      claim.




Urban
      Jonson v. Solution Technology International, Inc. (Circuit Court for Frederick
      County, Maryland). Mr. Jonson, a former employee of Old STI and the son of
      Dan
      L. Jonson, has sued to recover on a confessed judgment note in the principal
      amount of $150,000 to recover unpaid wages. Plaintiff filed a writ of
      garnishment to collect on the unpaid note and garnished $25,000. Plaintiff
      and
      defendants have had settlement negotiations but no settlement has been
      reached.




Langsam
      Borenstein Corporation v. Solution Technology International, Inc. (New Jersey
      Superior Court for Camden County, filed February 23, 2007). This amount in
      controversy is $10,690, representing the balance owed to the prior independent
      public accounting firm for STI prior to the merger with the Company. A default
      judgment was entered against the Company on July 3, 2007. The Company is
      currently in settlement discussions with the plaintiff.




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




During
      the six months ended June 30, 2007, the Company issued:




234,088
      shares of common stock in conversion of a related note payable in the amount
      of
      $10,000 and accrued interest of $1,704 on this note.




1,000,000
      shares of common stock in settlement of litigation for accrued compensation
      to a
      former employee. The shares were valued at $79,678.




551,441
      shares of common stock in conversion of $22,500 of convertible debentures issued
      to Advantage.




9,909,894
      shares of common stock in conversion of $159,041 of convertible debentures
      issued to Cornell Capital.




3,110,417
      shares of common stock issued in conversion of $40,425 of accrued
      compensation.




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




None.




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




None.




45




**Item
      5. Other Information.**




None.




**Item
      6. Exhibits.**




31.1
            Certification
                of the Chief Executive Officer required by Rule 13a-14(a) or Rule
                15d-14(a).




31.2
            Certification
                of the Chief Financial Officer required by Rule 13a-14(a) or Rule
                15d-14(a).




32.1
            Certification
                of the Chief Executive Officer and Chief Financial Officer required
                by
                Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.
                1350.




46


**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.


**Solution
                Technology International, Inc.**Dated:
              August 14, 2007
            By:
            /s/ Dan L. JonsonDan
              L. JonsonChief
                Executive Officer


47


**Solution
      Technology International, Inc.**


**Quarterly
      Report on Form 10-QSB**


**for
      the Quarterly Period Ended**


**June
      30, 2007**




**-
      EXHIBIT INDEX -**


Exhibit
                  No.
              
              Description31.1
              
              Certification
                  of the Chief Executive Officer required by Rule 13a-14(a) or Rule
                  15d-14(a).31.2
              
              Certification
                  of the Chief Financial Officer required by Rule 13a-14(a) or Rule
                  15d-14(a).32.1
              
              Certification
                  of the Chief Executive Officer and Chief Financial Officer required
                  by
                  Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.
                  1350.




48