**Securities and Exchange Commission****Washington, D.C.****FORM 10QSB**

(Mark One)				[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934				        For the quarterly period ended March 31, 2007				[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934				        For the transition period from                              to                             

000-07693(Commission file number)**SoftNet Technology Corporation**(Exact name of small business issuer as specified in its charter)				        Nevada                                                                                 74-3035831(State or other jurisdiction                                                            (IRS Employer				of incorporation or organization)                                                  Identification No.)				Woodbridge Corporate Plaza				485 Route 1 South, Building C, Suite 350AIselin, New Jersey  08830(Address of principal executive offices) (Zip Code)(908) 212-1780(Registrant's telephone number, including area code)				(Address of principal executive offices) (Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]   No [  ].				State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.				Class A 361,943,775 shares of Common Stock, $0.001 par value, as of May 15, 2007; 2,104,000 Class B $0.001 par value as of May 15, 2007.				Transitional Small Business Disclosure Format (check one) Yes [  ] No [X]				Indicate if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ] No [X] 

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****CONSOLIDATED CONDESNED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****INDEX TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

Consolidated condensed Balance Sheet as of March 31, 2007 (unaudited)					Consolidated condensed Statements of Operations for the Three Months    Ended March 31, 2007 and 2006 (unaudited)				Consolidated condensed Statements of Cash Flows for the Three Months     Ended March 31, 2007 and 2006 (unaudited)Notes to Consolidated condensed Financial Statements (unaudited)

2

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| **SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES**                                                 |
|-----------------------------------------------------------------------------------------------|
| **CONSOLIDATED CONDENSED BALANCE SHEET**                                                      |
| **MARCH 31, 2007**                                                                            |
|   						
****                                                                       |
| **ASSETS**                                                                                    |
| Current Assets:                                                                               |   |
|   Cash and cash equivalents                                                              | $       11,757 |
|   Accounts receivable                                                                    |    374,429 |
|   Prepaid Expenses                                                                       |        11,624 |
|   Current portion of notes receivable                                                    |        25,000 |
|                                                                                               |  |
|                                                                                     |  |
|     Total Current Assets                                                       | 422,910 |
|                                                                                               |  |
|                                                                                     |  |
|   Notes receivable, net of current portion                                               |   102,000 |
|   Fixed assets, net of depreciation                                                      |   116,498 |
|   Deposits                                                                               |     21,100 |
|                                                                                               |  |
|                                                                                |  |
| **TOTAL ASSETS**                                                                              | $     662,508 |
|                                                                                          | ============ |
|                                                                                     |  |
| ** LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                                      |
| **LIABILITIES**                                                                               |   |
| Current Liabilities:                                                                          |   |
|   Accounts payable and accrued expenses                                                  |   $   1,050,836 |
|   Due to related parties                                                                 |           280,000 |
|   Line of Credit                                                                         |             95,543 |
|   Current portion of notes payable                                                       |             16,333 |
|                                                                                               |  |
|                                                                                |  |
|       Total Current Liabilities                                      |        1,442,712 |
|                                                                                               |  |
|                                                                                |  |
| **LONG-TERM LIABILITIES**                                                                     |   |
|    Notes payable, net of current portion                                            |          120,156 |
|                                                                                               |  |
|                                                                                |  |
| **      Total Liabilities**                                          |        1,562,868 |
|                                                                                               |  |
|                                                                                |  |
| **STOCKHOLDERS' EQUITY (DEFICIT)**                                                            |   |
|   Preferred Stock, Series A, $1.00 Par Value; 5,000,000 shares                 |   |
|      authorized, 5,000,000 shares issued and outstanding             |              5,000 |
|   Preferred Stock, Series B, $.001 Par Value; 5,000,000 shares                 |   |
|      authorized, and 0 shares issued and outstanding                 | -0-    |
|   Common Stock, Class A, $.001  Par Value; 500,000,000                              |   |
|       shares authorized, 361,943,775 shares issued and outstanding , |           361,944 |
|   Common Stock, Class B, $.001  5,000,000 shares authorized                         |                  2,104 |
|      and 2,104,000 shares issued and outstanding                     |                |
|   Warrants                                                                               |            618,059 |
|   Additional paid-in capital                                                             |       30,035,724 |
|   Accumulated other comprehensive income (loss)                                          |          65,498 |
|   Deficit                                                                                | (31,988,689) |
|                                                                                               |  |
|                                                                                |  |
| **      Total Stockholders' Equity (Deficit)**                       |       (900,360) |
|                                                                                               |  |
|                                                                                |  |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                                      | $        662,508 |
|                                                                                          | ============ |

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| **SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES**                     |
|-------------------------------------------------------------------|
| **CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS**               |
| **FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**            |
| **      **                          |
|                                                              | **2007** |   | **2006** |
| **     **                                |   |   |   |
| **OPERATING REVENUES**                                            |   |   |   |
|   Revenue                                                    | $     2,084,685 |   | $       1,093,523 |
|                                                    |   |   |   |
| **COST OF SALES**                                                 | 1,598,490 |   | 733,973 |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **GROSS PROFIT **                                            | 486,195 |   | 359,550 |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **OPERATING EXPENSES**                                            |   |   |   |
|    Professional fees and compensation expenses          | 676,805 |   | 487,085 |
|    Advertising and marketing expenses                   | 14,996 |   | 19,013 |
|    General and administrative expenses                  | 150,133 |   | 369,881 |
|    Depreciation, amortization and impairment            | 20,000 |   | 1,157,623 |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **       Total Operating Expenses** | 861,934 |   | 2,033,602 |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **LOSS BEFORE OTHER (EXPENSE)**                                   | (375,739) |   | (1,674,052) |
|    						
****                                     |  |  |  |
| **OTHER (EXPENSE)**                                               |   |   |   |
|    Interest expense                                     | (78,570) |   |   |
|    Interest income                                      | 3,000 |   | (5,552) |
|                                                                   |  |  |  |
|                                                         |  |   |  |
| **       Total Other (Expense)**    | (75,570) |   | (5,552) |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **NET LOSS FROM CONTINUING OPERATIONS**                           |           |   | (1,679,604) |
| **DISCONTINUED OPERATIONS**                                       |   |   |   |
|    Gain (loss) from disposal, net of income taxes       |                |   | 513,903 |
|                                                                   |  |  |  |
|                                                    |  |   |  |
| **      Total Discontinued Operations**  |                |   | 513,903 |
|                                                    |  |   |  |
| **NET LOSS BEFORE PROVISION FOR INCOME TAXES**                    | (451,309) |   | (1,165,701) |
|                                                    |   |   |   |
| **Provision for Income Taxes**                                    |              |   | (6,515)  |
|                                                                   |  |  |  |
|                                                         |  |   |  |
| **NET LOSS APPLICABLE TO COMMON SHARES**                          | $     (451,309) |   | $   (1,172,216) |
|                                                         | ============== |   | ============== |
| **NET LOSS PER BASIC AND DILUTED SHARES**                         | $  (0.00136) |   | $      (0.00319) |
|                                                         | ============== |   | ============== |
|    From continuing operations                           | $   (0.00136) |   | $            (0.00) |
|                                                                   |  |   |  |
|    From discontinued operations                         | $   0.00 |   | $            0.00 |
|                                                    |  |   |  |
|                                                    |  |   |  |
| **WEIGHTED AVERAGE NUMBER OF COMMON **                       |   |   |   |
| **    SHARES OUTSTANDING**                         | 331,298,378 |   | 367,397,469 |
|                                                              | ============== |   | ============== |

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| **SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES**                                                                                                                                                                                                                                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS**                                                                                                                                                                                                                                                                                                         |
| **FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**                                                                                                                                                                                                                                                                                                      |
| **                                                         **

**** |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                        | **2007** |   | **2006** |
|                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| **CASH FLOW FROM OPERTING ACTIVIITES**                                                                                                                                                                                                                                                                                                                      |   |   |   |
| **Continuing Operations:**                                                                                                                                                                                                                                                                                                                                  |   |   |   |
|    Net loss                                                                                                                                                                                                                                                                                                                                       |   $   (451,310) |   |   $  (1,172,216) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                              |  |   |  |
| **   Adjustments to Reconcile Net (Loss) to Net Cash**                                                                                                                                                                                                                                                                                            |   |   |   |
| **     (used in) operating activities:**                                                                                                                                                                                                                                                                                                |   |   |   |
|      Depreciation                                                                                                                                                                                                                                                                                                                  | 20,000 |   |           8,113 |
|      Impairment of goodwill                                                                                                                                                                                                                                                                                                             | 13,000 |   | 1,149,510 |
|      Common stock issued for consulting services                                                                                                                                                                                                                                                                                   | 50,858 |   |            207,111 |
|      Foreign currency change                                                                                                                                                                                                                                                                                                            |                         |   |             - |
|      Net cash provided received in acquisition of subsidiary                                                                                                                                                                                                                                                                            |              |   |             37,568 |
|                                                                                                                                                                                                                                                                                                                                              |   |   |   |
| **  Changes in assets and liabilities**                                                                                                                                                                                                                                                                                                                |   |   |   |
|      Decrease in accounts receivable                                                                                                                                                                                                                                                                                                    | 20,654 |   |           44,828 |
|      Decrease in prepaid expenses                                                                                                                                                                                                                                                                                                       | 25,756 |   |             - |
|      (Increase) in deposits                                                                                                                                                                                                                                                                                                             | (220) |   | (1,245) |
|      (Increase) in inventory                                                                                                                                                                                                                                                                                                            |                       - |   | - |
|      (Decrease) in accounts payable and                                                                                                                                                                                                                                                                                                 |   |   |   |
|        and accrued expenses                                                                                                                                                                                                                                                                                                   | 240,882 |   |      (387,973) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                              |  |   |  |
|      Total adjustments                                                                                                                                                                                                                                                                                                                  | 370,930 |   |        1,057,912 |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                              |  |   |  |
| **     Net cash (used in) operating activities - **                                                                                                                                                                                                                                                                                |   |   |   |
| **     continuing operations**                                                                                                                                                                                                                                                                                                          | (80,380) |   |          (114,304) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                              |  |   |  |
| **Discontinued Operations:**                                                                                                                                                                                                                                                                                                                                |   |   |   |
|      Gain (loss) from discontinued operations                                                                                                                                                                                                                                                                                           |                      |   | - |
|      Adjustments to Reconcile Net Cash (used in)                                                                                                                                                                                                                                                                                        |   |   |   |
|      discontinuing operations                                                                                                                                                                                                                                                                                                           | -0-      |   |          (65,499) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                   |  |   |  |
|                                                                                                                                                                                                                                                                                                                                              |   |   |   |
| **     Net cash (used in) operating activities - **                                                                                                                                                                                                                                                                                |   |   |   |
| **     discontinued operations**                                                                                                                                                                                                                                                                                                        | -0-      |   |          (65,499) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                              |  |   |  |
|                                                                                                                                                                                                                                                                                                                                              |   |   |   |
| **     Net cash (used in) Operating Activities  **                                                                                                                                                                                                                                                                            | (80,380) |   |         (179,803) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                   |  |   |  |
|                                                                                                                                                                                                                                                                                                                                              |   |   |   |
| **CASH FLOWS FROM INVESTING ACTIVITIES:**                                                                                                                                                                                                                                                                                                                   |   |   |   |
| **Continuing Operations:**                                                                                                                                                                                                                                                                                                                                  |   |   |   |
|    (Increase) decrease in amounts due to related parties                                                                                                                                                                                                                                                                                          | 80,000 |   |           217,947 |
|    Acquisition of fixed assets                                                                                                                                                                                                                                                                                                                    | (13,000) |   |              (2,109) |
|                                                                                                                                                                                                                                                                                                                                                             |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                        |  |   |  |
|                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| **      Net cash provided by (used in) investing activities**                                                                                                                                                                                                                                                                      | 67,000 |   |          215,838 |
|                                                                                                                                                                                                                                                                                                                                                        |  |  |  |

5

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| **SOFTNET TECHNOLOGY CORP., AND SUBSIDIARIES**                                                                                                                                                                                                                                                                                                                                                 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)**                                                                                                                                                                                                                                                                                                                                |
| **FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**                                                                                                                                                                                                                                                                                                                                         |
| **                                                              **

**** |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                           |   |   | ** (Reclassified)** |
|                                                                                                                                                                                                                                                                                                                                                                                           | **2007** |   | **2006** |
|                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |
| **CASH FLOWS FROM FINANCING ACTIVITES**                                                                                                                                                                                                                                                                                                                                                        |   |   |   |
| **Continuing Operations:**                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |
|     Proceeds from common stock issuances and stock subscriptions                                                                                                                                                                                                                                                                                                                | $                  |   |   $                 - |
|     Net payments from issuance of notes payable - other                                                                                                                                                                                                                                                                                                                         |                       |   | - |
|                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                 |  |   |  |
| **       Net cash provided by financing activities**                                                                                                                                                                                                                                                                                                             |  |   |           - |
|                                                                                                                                                                                                                                                                                                                                                                                                |  |   |  |
|                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |
| **NET INCREASE IN CASH**                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |
| **    AND CASH EQUIVALENTS**                                                                                                                                                                                                                                                                                                                                                    | (13,380) |   |           36,035 |
| **    **                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |
| **CASH AND CASH EQUIVALENTS -**                                                                                                                                                                                                                                                                                                                                                                |   |   |   |
| **    BEGINNING OF PERIOD**                                                                                                                                                                                                                                                                                                                                                     | 25,137 |   |             20,541 |
|                                                                                                                                                                                                                                                                                                                                                                                                |  |   |  |
| **  **                                                                                                                                                                                                                                                                                                                                                                               |    |   |    |
| **CASH AND CASH EQUIVALENTS - END OF PERIOD**                                                                                                                                                                                                                                                                                                                                                  |   $       11,757 |   |   $      56,576 |
|                                                                                                                                                                                                                                                                                                                                                                                           | ============= |   | ============= |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW **                                                                                                                                                                                                                                                                                                                                                 |   |   |   |
| **   INFORMATION:**                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |
| **  **                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |
| **CASH PAID DURING THE PERIOD FOR:**                                                                                                                                                                                                                                                                                                                                                           |   |   |   |
|     Interest expense                                                                                                                                                                                                                                                                                                                                                            |   $                   |   |   $               - |
|                                                                                                                                                                                                                                                                                                                                                                                           | ============= |   | ============= |
|                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |
| **SUPPLEMENTAL DISCLOSURE OF NONCASH**                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| **  ACTIVITIES:**                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
|     Issuance of common stock for:                                                                                                                                                                                                                                                                                                                                               |   |   |   |
|        Consulting services                                                                                                                                                                                                                                                                                                                                       |   $                   |   |   $     207,111 |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
|        Acquisition of InsPara:                                                                                                                                                                                                                                                                                                                                   |   |   |   |
|          Accounts receivable                                                                                                                                                                                                                                                                                                                           |   $                   |   |   $  (264,960)  |
|          Fixed assets                                                                                                                                                                                                                                                                                                                                  |  |   |             (120,000)  |
|          Deposit                                                                                                                                                                                                                                                                                                                                       |  |   |           (3,426)  |
|          Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                         |  |   |                246,714  |
|          Goodwill                                                                                                                                                                                                                                                                                                                                      |  |   |          (4,320,760) |
|          Common stock issued                                                                                                                                                                                                                                                                                                                           |  |   | 4,500,000  |
|                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                 |  |   |  |
|          Cash acquired in acquisiiton                                                                                                                                                                                                                                                                                                                  |   $                  |   |   $      37,568 |
|                                                                                                                                                                                                                                                                                                                                                                                           | ============= |   | ============= |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
|    Impairment of goodwill                                                                                                                                                                                                                                                                                                                                                            |   $                - |   |   $               - |
|                                                                                                                                                                                                                                                                                                                                                                                           | ============= |   | ============= |

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006**

**NOTE 1 -    ORGANIZATION AND BASIS OF PRESENTATION**The unaudited  consolidated condensed financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  The  consolidated condensed financial statements and notes are presented as permitted on Form 10-QSB and do not contain information included in the Company's annual consolidated condensed 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 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 consolidated condensed financial statements be read in conjunction with the December 31, 2006 Forms 10KSB and the audited financial statements and the accompanying notes thereto.  While management believes the procedures followed in preparing these  consolidated condensed 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  consolidated condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the consolidated condensed operations and cash flows for the periods presented.				The publicly held entity that is today Softnet Technology Corporation (the Company or "SoftNet"), was founded in March, 1971 as International Mercantile Corporation (International Mercantile), organized under the laws of the State of Missouri. On July 31, 1999, International Mercantile liquidated its' majority interest in University Mortgage, Inc., a it's wholly owned subsidiary International Mercantile later determined to change its direction and sought to acquire new business. On September 30, 2001 the International Mercantile entered into a preliminary agreement which was formalized on October 17, 2001 to acquire Solutions Technology Inc., a Nevada Corporation, as a wholly-owned subsidiary. On February 24, 2000, the Board of Directors of the company approved the merger of Pro Athletes Golf League, Inc., a California corporation ("PAGL") with and into the Company, together with the election of a new Board of Directors. The merger was completed upon the terms and conditions provided in an agreement and plan of merger dated as of February 24, 2000, by and between the Company and PAGL. Concurrent with the execution of the merger agreement, PAGL merged with and into the Company.				Under the terms of the Agreement the issued and outstanding shares of STI were exchanged on a one (1) for one (1) basis for shares of International Mercantile. In order to facilitate the transaction the Board of Directors of International Mercantile authorized the issuance of issued an additional 20,511,365, resulting in no change in its capital structure. The stock certificates were issued on October 19, 2001 by approval of the board. Further aspects of the exchange included the purchase of 1,142,858 shares of Class B common stock of Solutions Technology, Inc. by two parties, David A. Facciani and Integrated Capital Corporation for $1.00. On January 14, 2002 the transaction was completed and on February 14, 2002 the Company changed its corporate name to of T & G2 Inc. and it's state of incorporation to Nevada. T & G2 also effected an eight (8) for one (1) reverse stock split of its common stock changed the par value of its shares to $0.001.				On July 22, 2004, The Company changed its name to Softnet Technology Corp.				On or about January 11, 2006, the Company entered into a certain Plan and Agreement of Reorganization (the Agreement) with InSpara. The Company previously entered into a Plan and Agreement of Reorganization with InSpara, Inc. on October 31, 2005, which was terminated on January 11, 2006. Under the terms of the Agreement InSpara would merge with and into the Company. The closing took place on January 18, 2006 effective, January 1, 2006. Pursuant to the Agreement: (i) certain key employees of InSpara have entered into employment agreements with the Company; (ii) all registration rights held by stockholders of InSpara, if any, shall be terminated; and (iii) InSpara shall have 291,000 shares of its Class B Common Stock issued and outstanding. Under the Agreement, the stockholders of InSpara received, pro rata, a total of 49,999,998 shares of Softnet's Common Stock. The Acquisition Shares are not registered shares and will only be free trading upon a filing of a Registration Statement for the Acquisition Shares, or an exemption from the registration thereof. Prior to the execution of the Agreement, there were no material relationships between (i) InSpara or any of its affiliates, or any officer or director of InSpara, and (ii) the Company or any of its affiliates, or any officer or director of the Company. The Company filed the Articles of Merger with the Secretary of State of the State of Nevada. The Company recognized $4,320,760 of goodwill in this transaction and has impaired the entire amount as of  the year ended December 31, 2006.				In June of 2006, to achieve economies of scale and centralized organizational and operational continuity, the Company performed a merger rollup whereby each of its subsidiaries was rolled up and into SoftNet.  Accordingly, beginning in the second quarter of 2006, the Company no longer had any wholly owned subsidiaries and was one operating unit.

7

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****

****

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENT****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 1 -    ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)**The Company entered into a merger agreement with PeriNet Technologies LLC (Perinet), a Pennsylvania based information technology firm, Inc. in September 2006 effective July 1, 2006. Under the merger agreement PeriNet was to merge into the Company. Under the terms of the merger, the Company is to pay a total of $300,000 in cash over a period of 180 days, and issue restricted Class A, Common Stock of the Company with a  maximum value of $2,100,000, $1,000,000 of which is guaranteed and the remaining being vested based on future performance.  The shares will be valued based on the average share price of the stock the month preceding the vesting period. The Company in this transaction acquired $171,057 of assets and $376,098 in liabilities. Based on the initial payout of $100,000 and $1,000,000 of stock the difference of $1,305,851 was recognized as goodwill. However the entire goodwill amount of $1,305,851 was impaired in the current year.**NOTE 2 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES****Principles of Consolidation**The  consolidated condensed financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.**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 disclosures of contingent assets and liabilities at the date of the  consolidated condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.**Revenue Recognition**Commencing in 2002, the Company started generating revenues. The Company currently records its revenue as follows for each of its operating entities:				Pursuant to SAB 104, the general criteria for recognition of revenue are:				1)      Persuasive evidence of an arrangement exists;				2)      Delivery has occurred or services have been rendered;				3)      The seller's price to the buyer is fixed or determinable, and				4)      Collectibility is reasonably assured.*A)     SoftNet Technology Corp., Indigo Technology Services, InsPara Networking Technologies, Inc. and PeriNet Technologies, LLC*In June of 2006, the Company performed a merger rollup where all of its subsidiaries were merged with and into SoftNet Technology Corp.  Prior to the rollup, each of these companies recognized revenue when computer networking professional services are provided. Staffing revenue is recognized when the personnel provide the service.  Beginning with the third quarter 2006, the Company no longer has any subsidiaries and is one operating unit.				Although SOP 97-2 specifically deals with software revenue recognition, there are basic principles the Company follows contained in this pronouncement. They are 1) Licensing vs. Sales, meaning transfers of rights to software by licenses rather than by outright sales will have the same impact on revenue recognition; 2) Product may not equate with delivery of software, relating to specifically when the services do not entail significant production, modification or customization of the software, the services are accounted for as a separate element; 3) Delivery is the key threshold issue for revenue recognition, which is consistent with CON #5, Recognition and Measurement in Financial Statements of Business Enterprises; 4) Revenue must be allocated to all elements of the sales arrangement, with recognition dependent upon meeting the criteria on an element-by-element basis, this being vendor specific objective evidence (VSOE). This principle does not apply to the Company at this time; and 5) The earnings process is not complete if fees are subject to forfeiture.				EITF 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, provides guidance on whether an entity is an agent for a vendor-manufacturer, and thus recognizes the net retainage (commission) for serving in that capacity, or whether that entity is a seller of goods (principal), and thus recognizes revenue for the gross amount billed to a customer and an expense for the amount paid to the vendor-manufacturer. The Company, considers this EITF when recognizing revenue for its WholesaleByUs subsidiary. The Company considers themselves the primary obligor in an arrangement, and establishes the selling price and assumes the credit risk, therefore recognizes revenue gross.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 2-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)***B)     Solutions Technology, Inc. *Prior to its sale in January  2006, the only revenue generated in this company was service revenue relating to consulting and maintenance services on the company's time clocks.				1)     The company would have an arrangement in the form of a service agreement.				2)     Delivery of the services occurred when the services were rendered, hence revenue recorded at that time.				3)     Buyer knew the terms of the agreement which were a fixed price.				4)     Collectibility was reasonably assured at the time the revenue recorded and services performed.**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.				The Company maintains cash and cash equivalent balances at several financial institutions that are insured by the Federal Deposit Insurance Corporation up to $100,000.

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**Fixed Assets**Fixed assets are stated at cost. Depreciation is computed  using the straight-line method over the estimated useful life of the assets.			Furniture and fixtures                                        5 to7 Years			Computer Software and Equipment                  3 to 5 Years**Income Taxes**Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates.**Comprehensive Income**The Company adopted Statement of Financial Accounting Standards No, 130, Reporting Comprehensive Income, (SFAS No. 130). SFAS No. 130 requires the reporting of comprehensive income in addition to net income from operations. 			Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income.**Segment Information**The Company follows the provisions of SFAS No. 131, * Disclosures about Segments of an Enterprise and Related Information* . This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions.**Advertising**Costs of advertising and marketing are expensed as incurred. Advertising and marketing costs were $14,996 and $19,103 for the three months ended March 31, 2007 and 2006, respectively.**Goodwill and Other Intangible Assets**In June 2001, the FASB issued Statement No. 142 Goodwill and Other Intangible Assets. This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This Statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. The Company tests for impairment of the goodwill at least annually, if not more depending upon substantial changes in the Company that may lead to a change in the goodwill during interim periods.			The company has not obtained any intangible assets in the current quarter and no impairment review is necessary.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 2-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)****Software Development Costs**Internal use software costs are recorded in accordance with Statement of Position (SOP) No. 98-1,*  "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use"* .  Qualifying costs incurred during the application development stage, which consist primarily of outside services are capitalized and amortized over the estimated useful life of the asset. All other costs are expensed as incurred. The Company has determined that all costs for the three months ended March 31, 2007 and 2006 do not relate to the application development stage and therefore have expensed these costs as they were incurred.**Reclassifications**Certain amounts for the three months ended March 31, 2006 have been reclassified to conform to the presentation of the March 31, 2007 amounts. The reclassifications have no effect on net income for the three months ended March 31, 2006.**Earnings (Loss) Per Share of Common Stock**Historical net income (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 are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be antidilutive for the periods presented.				The following is a reconciliation of the computation for basic and diluted EPS:				                                                                        March 31,                  March 31,				                                                                            2007                          2006Net Loss                                                         ( $451,309)               ( $1,172,216)Weighted-average common shares				   outstanding (Basic)                                     331,298,378                 367,397,469				Weighted-average common stock				    equivalents:				       Stock options/Warrants                                        --                                   --				Weighted-average common shares				     outstanding (Diluted)                                 331,298,378                367,397,469				                                                                     =========               =========				Options and warrants outstanding to purchase stock were not included in the computation of diluted EPS because inclusion would have been antidilutive.**Fair Value of Financial Instruments**The carrying amount reported in the  consolidated condensed balance sheet for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable approximate fair value because of the immediate or short-term maturity of these financial instruments.**Stock-Based Compensation**The Company as of January 1, 2006, has elected to follow 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 next fiscal year after December 15, 2005.  The change in accounting principle had no effect on the consolidated condensed financial statements.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 2 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)****Recent Accounting Pronouncements**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  plans.  The provisions of SFAS 123R, as amended, are effective for small business issuers beginning as of the next fiscal year after December 15, 2005.				In February 2007, the FASB issued SFAS No. 159,*  The Fair Value Option for Financial Assets and Financial Liabilities*  . SFAS No. 159 permits entities to choose to measure eligible financial instruments at fair value. The unrealized gains and losses on items for which the fair value option has been elected should be reported in earnings. The decision to elect the fair value options is determined on an instrument by instrument basis, it should be applied to an entire instrument, and it is irrevocable. Assets and liabilities measured at fair value pursuant to the fair value option should be reported separately in the balance sheet from those instruments measured using another measurement attribute. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The Company is currently analyzing the potential impact of adoption of SFAS No. 159 to its consolidated condensed financial statements.				In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108,*Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements*  . SAB 108 provides guidance on the consideration of effects of the prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The SEC staff believes registrants must quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB 108 was effective for the first annual period ending after November 15, 2006 with early application encouraged. The Company adopted the provisions of SAB 108 on December 31, 2006 and the impact of adoption was not material to its consolidated condensed financial statements.				In September 2006, the FASB issued SFAS No. 158,*  Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans*  -*  an amendment of FASB Statements No. 87, 88, 106 and 132(R)*  . SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and recognize changes in the funded status in the year in which the changes occur. The statement also requires actuarial valuations to be performed as of the balance sheet date. The balance sheet recognition provisions of SFAS No. 158 were effective for fiscal years ending after December 15, 2006. The valuation date provisions are effective for fiscal years ending after December 15, 2007. The Company adopted SFAS No. 158 on December 31, 2006 and the impact of adoption was not material to its consolidated condensed financial statement.				In February 2006, the FASB issued SFAS 155, which applies to certain "hybrid financial instruments," which are instruments that contain embedded derivatives. The new standard establishes a requirement to evaluate beneficial interests in securitized financial assets to determine if the interests represent freestanding derivatives or are hybrid financial instruments containing embedded derivatives requiring bifurcation. This new standard also permits an election for fair value remeasurement of any hybrid financial instrument containing an embedded derivative that otherwise would require bifurcation under SFAS 133. The fair value election can be applied on an instrument-by-instrument basis to existing instruments at the date of adoption and can be applied to new instruments on a prospective basis. The adoption of SFAS No.155 did not have a material impact on the Company's financial position and results of operations.				In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year beginning after September 15, 2006. The adoption of this statement is not expected to have a significant effect on the Company's future reported financial position or results of operations.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 2 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109." This interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in SFAS No. 109, "Accounting for Income Taxes." FIN No. 48 prescribes a threshold condition that a tax position must meet for any of the benefit of an uncertain tax position to be recognized in the financial statements. Guidance is also provided regarding de-recognition, classification, and disclosure of uncertain tax positions. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company does not expect that this interpretation will have a material impact on its financial position, results of operations, or cash flows.				In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). This Statement defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure related to the use of fair value measures in financial statements. The Statement is to be effective for the Company's financial statements issued in 2008; however, earlier application is encouraged. The Company is currently evaluating the timing of adoption and the impact that adoption might have on its financial position or results of operations. In May 2005, the FASB issued SFAS No. 154,*  Accounting Changes and Error Corrections,* which was adopted effective January 1, 2006. This statement addresses the retrospective application of such changes and corrections and will be followed if and when necessary. Adoption of this standard did not have a material impact on the Company's consolidated condensed financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated condensed financial statements upon adoption.**Customer Concentrations**As of March 31, 2007, the Company's has two customers that accounted for approximately 25% of its accounts receivable. For the three months ended March 31, 2007, these two customers accounted for approximately 73% of its revenues.**NOTE 3-     ACCOUNTS RECEIVABLE**The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts of has not been established at March 31, 2007.******NOTE 4-    FIXED ASSETS**Fixed assets consist of the following at March 31, 2007:				Computer equipment                            $   98,995				Furniture and fixtures                                 30,397				Software                                                   30,000				                                                               159,392    

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                                                               (42,894)

                                     Total             $   116,498			                                                         =========			Depreciation expense was 7,000 and $8,113 for the three months ended March 31, 2007 and 2006. The Company acquired $155,000 of fixed assets in the acquisition of InsPara and Perinet.**NOTE 5-     NOTES PAYABLE – BANK**In the acquisition of PeriNet the company acquired a line of credit agreement with a bank. The line bears interest of the floating interest rate of 1.5% per year in excess of the Wall Street Prime Rate and provides for a maximum borrowing of $100,000. The line of credit is in the process of being assigned to the company and had a balance at acquisition of $60,000 and at quarter end of $95,543.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 6-     NOTES PAYABLE**In April 2005, the Company entered into an agreement with a company to borrow money. The amount funded by this company was $530,000. There is no interest being charged on this note, the note is due on demand, and had been classified by the Company as a current liability. This amount has been agreed to by the lender and was converted into 5,000,000 shares of Class A Common Stock.				In February 2005, the Company entered into a loan agreement with a foreign company in the amount not to exceed $500,000. This foreign company funded the entire $500,000 to the Company in February 2005. The term of the agreement is for three years, and the Company is obligated to make quarterly payments of interest at 10% only, with a balloon payment due on the maturity date. Interest for the year ended December 31, 2006 and 2005 was approximately $87,000 and $31,288. On June 30, 2006, the Company agreed to convert this debt as of June 30, 2006 (both the note and all accrued interest) into 20,000,000 warrants to purchase Class A Common Shares at an exercise price of $0.035 per share. The warrants expire April 30, 2007 (see Note 9). For financial reporting purposes the note has been canceled and is no longer being reported by the company as outstanding. The prior outstanding balance due has been classified to equity.**NOTE 7-     RELATED PARTY TRANSACTIONS**Amounts due to related parties at March 31, 2007 were $280,000 and consists of advances totaling $240,000 from Jim Farinella, a former director of the company and $40,000 advanced from Jim Booth, Chief Executive Officer.**NOTE 8-     ACQUISITIONS**The Company acquired Indigo Technology Services (Indigo), a technology company based in Atlanta, Georgia and Net Centric Solutions, Inc. in April 2005 for 9,000,000 shares of restricted Class A Common Shares of stock (6,000,000 for Indigo and 3,000,000 for Net Centric). The Company in this transaction acquired $14,170 of accounts receivable and $58,235 in cash. The shares were valued at $.15 per share at the time of the transaction for a value of $1,350,000. The remaining $1,277,595 was recognized as goodwill. Management has determined that the entire amount has been impaired as of  the year ended December 31, 2006.				Indigo is a provider of business technology consulting and technology products and solutions designed to help companies integrate technology into everyday lives. Indigo is the creator of Guest Worx High Speed Internet Access. Net Centric provides similar services that Indigo provides. On October 17, 2005, Indigo entered into an Asset Purchase Agreement whereby they sold to Seamless Sky-Fi, Inc. (Seamless) all of its right, title and interest in the Guest Worx business of Indigo, including without limitation, all assets, property (including the Guest Worx software) and contracts, in a cashless transaction where the consideration consisted of the delivery of the sufficient number of shares of Seamless' Class C Preferred Stock with a market value of $100,000 as calculated in the Asset Purchase Agreement.  These preferred shares have been converted to common shares totaling 2,500,000. The investment represents approximately 2% of Seamless.				On October 31, 2005, the Company entered into a Plan and Agreement of Reorganization with Inspara, Inc., a Delaware corporation (Inspara). Under the terms of the Agreement, Inspara will merge with and into the Company (the Merger). The Merger was scheduled to close no later than November 29, 2005. At the closing, Inspara was to exchange all of its common stock for approximately 40,909,091 shares of common stock of the Company and receive 291,000 shares of the Company's Class B common stock. The Company and Inspara on November 4, 2005, extended the due date to December 15, 2005, without revising any of the terms of the transaction. The transaction did not close on December 15, 2005, and the Company and Inspara entered into an Amended Plan and Agreement of Reorganization as of January 1, 2006, whereby the number of shares Inspara is to receive was increased to approximately 50,000,000 and established a new closing date of January 18, 2006.  Under this agreement, the stockholders of InsPara received, pro rata, after adjustments for fractional shares and rounding, a total of 49,999,998 shares of common stock of the Company. In the acquisition, the Company incurred $4,320,760 of goodwill. The Company had impaired all of this goodwill as of December 31, 2006.				The Company entered into a merger agreement with PeriNet Technologies LLC (Perinet), a Pennsylvania based information technology firm, Inc. in September 2006 effective July 1, 2006. Under the merger agreement PeriNet would merge into the Company. Under the terms of the merger, the Company will pay a total of $300,000 in cash over a period of 180 days, and issue restricted Class A, Common Stock of the Company with a maximum value of $2,100,000, $1,000,000 of which is guaranteed and remaining being vested based on future performance.  The shares will be valued based on the average share price of the stock the month preceding the vesting period. The Company in this transaction acquired $171,057 of assets and $376,098 in liabilities. Based on the initial payout of $100,000 and $1,000,000 of stock the difference of $1,305,851 was recognized as goodwill. Due to the fact Perinet audited financial opinion was a going concern, the entire goodwill amount of $1,305,851 has been impaired.

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 8 -   ACQUISITIONS (CONTINUED)**The summarized unaudited pro forma financial information for the year ended December 31, 2006 and 2005 that follows assumes the acquisition of PeriNet Technologies, Indigo Technology, Net Centric Solutions, Inc., Cord Consulting , InsPara and PeriNet was consummated on January 1, 2006:

|                                           | ** Three Months Ended							March 31, 2006**                                                                                                 |
|------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 | ** **                                                                                                                                        |
| Sales                                          | $      1,349,414                                                                                                         |
| Cost of sales                                  |                     (857,874)                 |
| Gross profit (loss)                            |                        491,540 |
| Operating expenses                             |                   (2,149,857)                           |
| Loss before other (expense)                    |                 (1,658,317)                                       |
| Other (income) expense                         |                      445,425                  |
| Net loss before provision for income taxes     |                   (1,212,892)                           |
| Provision for income taxes                     |                    (6,515)                         |
| Net loss                                  |           $  (1,219,407)                                                                   |
|                                                | ===========                                                                                                                                       |
| Net loss per basic and diluted shares          |  $      (.00319)                                                                                               |
|                                                | ===========                                                                                                                                       |
| Weighted average number of common shares  |                                                                                                                                              |
|    outstanding                       | 367,397,469                                                                                                                                       |
|                                           | ===========                                                                                                                                       |

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 9-    STOCKHOLDERS' EQUITY (DEFICIT)  (CONTINUED)**Black-Scholes method is $618,059 and is reflected on the consolidated condensed balance sheet. The difference of $49,374 represents a loss on conversion of the debt to warrants and is reflected in the consolidated condensed statements of operations of the year ended December 31, 2006. The Black-Scholes assumptions utilized were as follows: expected life in years – 2 years; annualized volatility – 125%; and discount rate – 5%.

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|                                                                                                                        | **Options**                          |   | **Weighted Average****Exercise Price** |
|-----------------------------------------------------------------------------------------------------------------------------|--------------------------------------|--------|----------------------------------------|
| Options outstanding at December 31, 2006						Granted during the year						Surrendered, forfeited or expired						Exercised | 9,400,00						500,000						(500,000) |   |                                   | .0025						.0025						-						.0025 |
|                                                                                                              |                                      |   |                                        |
| Options outstanding at March 31, 2007                                                                                       | 9,400,000                            |   | $                                      | .0025 |
|                                                                                                                        | ==============                       |   | =============                          |

|                                                                                                                                                                                                                                                                      |   | **2007**                       |   | **2006**                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|--------------------------------|
| Outstanding options:						     Number outstanding						     Weighted average exercise price						     Weighted average remaining						      contractual life in years | $      | 9,400,000						.0025						4.50 | $      | 9,400,000						.0025						4.50 |
| Exercisable options:						     Number outstanding						     Weighted average exercise price                                                                                                                             | $      | 9,400,000						.0025           | $      | 9,400,000						.0025           |

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**SOFTNET TECHNOLOGY CORP. AND SUBSIDIARIES****NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS****MARCH 31, 2007 AND 2006****(CONTINUED)**

**NOTE 10-   NOTES RECEIVABLE**Indigo entered into a loan agreement with Pearlnet LLC, an Atlanta, Georgia based limited liability company on March 1, 2005. Indigo lent Pearlnet LLC, $165,000, which is to be repaid in two annual installments of $25,000, and the remaining $115,000 in the third year. Interest is payable to Indigo at the rate of .007 percent compounded daily. As of March 31, 2006, all interest has been paid to date. The amount outstanding as of March 31, 2007 is $125,000.**NOTE 11-   GOING CONCERN**As shown in the accompanying  consolidated condensed financial statements the Company has incurred significant recurring losses of $451,309 and $1,172,216 for the three months ended March 31, 2007 and 2006, and has a working capital deficiency of $1,019,802 as of March 31, 2007.  The Company in 2006 acquired InsPara and Perinet, and the full impact of this acquisition will impact operations later on this year. 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 2006 acquisitions of InsPara and Perinet. The Company's ability to continue as a going concern for a reasonable period following its pending acquisitions of InsPara and Perinet is also 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  consolidated condensed 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 12-   PROVISION FOR INCOME TAXES**Deferred income taxes will be 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 will be measured based on the tax rates expected to be in effect when the temporary differences are included in the Company's consolidated condensed 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 March 31, 2007, deferred tax assets approximated the following:				Net operating loss carryforwards          $ 9,800,000				Less:  valuation allowance                       (9,800,000)                                                            $            -0-				                                                            =========				At March 31, 2007, the Company had accumulated deficits  approximating $31,988,689 available to offset future taxable income through 2026.  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 three months ended March 31, 2007 and 2006 is summarized as follows:

|                                   |        2007       |   |        2006      |
|---------------------------------------------|------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|
| Federal statutory rate                      | (34.0)%                                                                            |   | (34.0)%                                                                      |
| State income taxes, net of federal benefits | 4.0                                                                                |   | 4.0                                                                          |
| Valuation allowance                         | 30.0                                                                               |   | 30.0                                                                         |
|                                   |                                                                                    |   |                                                                              |
|                                   | 0%                                                                                 |   | 0%                                                                           |
|                              | ==========                                                                         |   | ==========                                                                   |

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**SIGNATURES**

In accordance with the requirements of the Securities Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.				                                                                                       SoftNet Technology Corporation Date: May 15, 2007                                                       By:  /s/ James Booth                                                                                                                  James Booth				                                                                                              Chief Executive Officer

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