| [X] | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|-----|-----------------------------------------------------------------------------------------------------------------|

| [               ] |  TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT |
|------------------------|-----------------------------------------------------------------------------------------------------|

| NEVADA                                                                       |   | 88-0433489                                                      |
|------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|
| (State                or other jurisdiction of                incorporation) |   | (IRS                Employer Identification                No.) |

----

----

|                                                                                                                                                                                            | PageNumber |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                            |       |
| **Part I -Financial              Information**                                                                                                                                                  |       |
|                                                                                                                                                                                            |       |
| *Item 1. Financial              Statements:*                                                                                                                                                    |       |
|                                                                                                                                                                                            |       |
| Interim Consolidated Balance Sheets              - July              31, 2006 (Unaudited) and January 31, 2006 (Audited)                                                                        |       |
|                                                                                                                                                                                            |       |
| Interim Consolidated Statement of Income              and              Retained Earnings for the Three and Six Month Periods Ended July 31,              2005              and 2006 (Unaudited) |       |
|                                                                                                                                                                                            |       |
| Interim Consolidated Statements of Cash              Flows              for the Six Month Periods Ended July 31, 2005 and 2006              (Unaudited)                                         |       |
|                                                                                                                                                                                            |       |
| Notes to the Interim Consolidated Financial              Statements                                                                                                                             |       |
|                                                                                                                                                                                            |       |
| Item 2. Management’s Discussion and Analysis              of Financial Condition and Results of Operations                                                                                |       |
|                                                                                                                                                                                            |       |
| Item 3. Controls and Procedures                                                                                                                                                                 |       |
|                                                                                                                                                                                            |       |
| **Part II - Other              Information**                                                                                                                                                    |       |
|                                                                                                                                                                                            |       |
| Item 1. Legal Proceedings                                                                                                                                                                       |       |
|                                                                                                                                                                                            |       |
| Item 6. Exhibits and Reports on Form              8-K                                                                                                                                           |       |

----

**KMA      GLOBAL SOLUTIONS INTERNATIONAL, INC.**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**July      31, 2006**

**(unaudited)**

**(expressed      in U.S. dollars)**

----

**KMA      GLOBAL SOLUTIONS INTERNATIONAL, INC.**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**July      31, 2006**

**(unaudited)**

**(expressed      in U.S. dollars)**

| **INDEX**                                                             |   | **PAGE**         |
|----------------------------------------------------------------------------|--------|-----------------------|
|                                                                       |   |                  |
| Consolidated Balance Sheet                                            |   | 1                - 2  |
|                                                                       |   |                  |
| Consolidated Statements of Income and              Retained Earnings  |   | 3                     |
|                                                                       |   |                  |
| Consolidated Statements of Cash              Flows                    |   | 4                     |
|                                                                       |   |                  |
| Notes to the Consolidated Financial              Statements           |   | 5                - 11 |

----

| KMA GLOBAL SOLUTIONS INTERNATIONAL,                INC. | Page                  1 |
|---------------------------------------------------------|-------------------------|

**INTERIM        CONSOLIDATED BALANCE SHEET**

----

|   |   | July                  31, 2006 |   | Jan                  31, 2006 |   |
|--------|--------|--------------------------------|--------|-------------------------------|--------|
|   |   | (unaudited)                    |   | (audited)                     |   |
|   |   | $                              |   | $                             |   |

----

|                                                            |   |   |         |   |   |
|-----------------------------------------------------------------|--------|--------|--------------|--------|--------|
| **ASSETS**                                                      |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
| **CURRENT**                                                     |   |   |         |   |   |   |   |
| Cash                                                            |   |   | 29,298       |   |   | 126,727 |   |
| Accounts                  receivable (net of allowance of $240) |   |   | 203,527      |   |   | 74,773 |   |
| Inventories                  (Note 3)                           |   |   | 437,700      |   |   | 452,055 |   |
| Advances                  to shareholders (Note 4)              |   |   | -            |   |   | 50,922 |   |
| Prepaid                  expenses                               |   |   | 219,208      |   |   | 104,980 |   |
|                                                            |   |   |         |   |   |   |   |
| **TOTAL                  CURRENT ASSETS**                       |   |   | 889,733      |   |   | 809,457 |   |
|                                                            |   |   |         |   |   |   |   |
| **DEPOSITS                  ON EQUIPMENT AND PATENTS**          |   |   | 243,584      |   |   | 231,867 |   |
|                                                            |   |   |         |   |   |   |   |
| **EQUIPMENT                  AND PATENTS**(Note 5)              |   |   | 489,046      |   |   | 498,917 |   |
|                                                            |   |   |         |   |   |   |   |
| **FUTURE                  INCOME TAXES** (Note 6)               |   |   | 179,464      |   |   | - |   |
|                                                            |   |   |         |   |   |   |   |
| **DEFERRED                  COSTS** (Note 8)                    |   |   | 220,926      |   |   | - |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   |    |   |   |    |   |
|                                                            |   |   |         |   |   |   |   |
|                                                            |   |   | 2,022,753    |   |   | 1,540,241 |   |

----

| KMA GLOBAL SOLUTIONS INTERNATIONAL,                    INC. | Page                      2 |
|-------------------------------------------------------------|-----------------------------|

**INTERIM        CONSOLIDATED BALANCE SHEET**

----

|   |   | July                  31, 2006 |   | Jan                  31, 2006 |   |
|--------|--------|--------------------------------|--------|-------------------------------|--------|
|   |   | (unaudited)                    |   | (audited)                     |   |
|   |   | $                              |   | $                             |   |

----

|                                                                  |   |   |      |   |   |
|-----------------------------------------------------------------------|--------|--------|-----------|--------|--------|
| **LIABILITIES**                                                       |   |   |      |   |   |
|                                                                  |   |   |      |   |   |
| **CURRENT**                                                           |   |   |      |   |   |   |   |
| Accounts                  payable and accrued liabilities             |   |   | 1,495,586 |   |   | 829,769 |   |
| Current                  portion of capital lease obligation (Note 7) |   |   | 54,200    |   |   | 52,419 |   |
|                                                                  |   |   |      |   |   |   |   |
| **TOTAL                  CURRENT LIABILITIES**                        |   |   | 1,549,786 |   |   | 882,188 |   |
|                                                                  |   |   |      |   |   |   |   |
| **ADVANCES                  FROM SHAREHOLDERS** (Note 4)              |   |   | 7,571     |   |   | - |   |
|                                                                  |   |   |      |   |   |   |   |
| **CAPITAL                  LEASE OBLIGATION** (Note 7)                |   |   | 30,231    |   |   | 56,787 |   |
|                                                                  |   |   |      |   |   |   |   |
| **FUTURE                  INCOME TAXES** (Note 6)                     |   |   | -         |   |   | 12,836 |   |
|                                                                  |   |   |      |   |   |   |   |
|                                                                  |   |   | 1,587,588 |   |   | 951,811 |   |
|                                                                  |   |   |      |   |   |   |   |
| **SHAREHOLDERS'                  EQUITY**                             |   |   |      |   |   |   |   |
|                                                                  |   |   |      |   |   |   |   |
| **CAPITAL                  STOCK** (Note 8)                           |   |   |      |   |   |   |   |
| Common                  stock, $0.001 par value, 175,000,000 shares   |   |   |      |   |   |   |   |
| authorized                  and 41,915,991 shares issued and          |   |   |      |   |   |   |   |
| outstanding                                                           |   |   |      |   |   |   |   |
| Preferred                  stock, $0.001 par value, 25,000,000 shares |   |   |      |   |   |   |   |
| authorized                  and none issued and outstanding           |   |   | 41,916    |   |   | 461,901 |   |
|                                                                  |   |   |      |   |   |   |   |
| **ADDITIONAL                  PAID-IN CAPITAL** (Note 8)              |   |   | 700,598   |   |   | - |   |
|                                                                  |   |   |      |   |   |   |   |
| **ACCUMULATED                  COMPREHENSIVE INCOME** (Note 8)        |   |   | 47,997    |   |   | 43,547 |   |
|                                                                  |   |   |      |   |   |   |   |
| **(DEFICIT)                  RETAINED EARNINGS**(Note 8)              |   |   | (355,346  | )      |   | 82,982 |   |
|                                                                  |   |   |      |   |   |   |   |
|                                                                  |   |   | 435,165   |   |   | 588,430 |   |
|                                                                  |   |   |      |   |   |   |   |
|                                                                  |   |   | 2,022,753 |   |   | 1,540,241 |   |

----

| KMA GLOBAL SOLUTIONS INTERNATIONAL,                  INC. | Page                    3 |
|-----------------------------------------------------------|---------------------------|

**INTERIM          CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS**

|   |   | Three                  Months Ended |   | Six                  Months Ended |   |
|--------|--------|-------------------------------------|--------|-----------------------------------|--------|
|   |   | July                  31,           |   | July                  31,         |   |

----

|   |   | 2006 |   | 2005 |   | 2006 |   | 2005 |   |
|--------|--------|------|--------|------|--------|------|--------|------|--------|
|   |   | $    |   | $    |   | $    |   | $    |   |

----

|                                                           |   |   |       |   |   |       |   |   |       |
|----------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|
| **SALES**                                                      |   |   | 1,888,803  |   |   | 1,717,288  |   |   | 3,015,613  |   |   | 2,836,934 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **COST                  OF SALES**                             |   |   |       |   |   |       |   |   |       |   |   |   |   |
| Inventories,                  beginning of period              |   |   | 483,313    |   |   | 233,260    |   |   | 452,055    |   |   | 616,157 |   |
| Purchases                                                      |   |   | 1,487,815  |   |   | 1,546,968  |   |   | 2,421,478  |   |   | 2,047,970 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
|                                                           |   |   | 1,971,128  |   |   | 1,780,228  |   |   | 2,873,533  |   |   | 2,664,127 |   |
| Less:                  Inventories, end of period              |   |   | 437,701    |   |   | 446,754    |   |   | 437,700    |   |   | 446,754 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
|                                                           |   |   | 1,533,427  |   |   | 1,333,474  |   |   | 2,435,833  |   |   | 2,217,373 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **GROSS                  MARGIN**                              |   |   | 355,376    |   |   | 383,814    |   |   | 579,780    |   |   | 619,561 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **SELLING,                  GENERAL AND ADMINISTRATIVE**       |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **EXPENSES**                                                   |   |   | 650,343    |   |   | 260,253    |   |   | 1,210,119  |   |   | 450,787 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| (Loss)                  income before income taxes             |   |   | (294,967   | )      |   | 123,561    |   |   | (630,339   | ) |   | 168,774 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| Income                  taxes - future (Note 6)                |   |   | (101,611   | )      |   | 21,653     |   |   | (192,011   | ) |   | 41,362 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **NET                  (LOSS) INCOME FOR THE PERIOD**          |   |   | (193,356   | )      |   | 101,908    |   |   | (438,328   | ) |   | 127,412 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **RETAINED                  EARNINGS (DEFICIT)**, beginning of |   |   |       |   |   |       |   |   |       |   |   |   |   |
| period                  (Note 8)                               |   |   | (161,990   | )      |   | 13,304     |   |   | 82,982     |   |   | (12,200 | ) |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **(DEFICIT)                  RETAINED EARNINGS,** end of       |   |   |       |   |   |       |   |   |       |   |   |   |   |
| period                  (Note 8)                               |   |   | (355,346   | )      |   | 115,212    |   |   | (355,346   | ) |   | 115,212 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| **(LOSS)                  EARNINGS PER SHARE**                 |   |   |       |   |   |       |   |   |       |   |   |   |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| Basic                                                          |   |   | (0.01      | )      |   | 0.00       |   |   | (0.01      | ) |   | 0.00 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| Diluted                                                        |   |   | (0.01      | )      |   | 0.00       |   |   | (0.01      | ) |   | 0.00 |   |
|                                                           |   |   |       |   |   |       |   |   |       |   |   |   |   |
| Weighted                  average number of common shares      |   |   | 41,903,219 |   |   | 28,289,000 |   |   | 38,820,601 |   |   | 28,289,000 |   |

----

| KMA GLOBAL SOLUTIONS INTERNATIONAL,                INC | Page                  4 |
|--------------------------------------------------------|-------------------------|

**INTERIM        CONSOLIDATED STATEMENT OF CASH FLOWS**

----

|   |   | 2006 |   | 2005 |   |
|--------|--------|------|--------|------|--------|
|   |   | $    |   | $    |   |

----

| **CASH                  FLOWS FROM OPERATING ACTIVITIES**                |   |   |     |   |   |     |   |
|--------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
| Net                  (loss) income for the period                        |   |   | (438,328 | )      |   | 127,413  |   |
| Adjustments                  for:                                        |   |   |     |   |   |     |   |
| Amortization                                                             |   |   | 43,526   |   |   | 33,845   |   |
| Shares                  issued for services provided                     |   |   | 63,197   |   |   | -        |   |
| Future                  income taxes                                     |   |   | (192,011 | )      |   | 41,362   |   |
|                                                                     |   |   | (523,616 | )      |   | 202,620  |   |
| Changes                  in non-cash working capital:                    |   |   |     |   |   |     |   |
| (Increase)                  in accounts receivable                       |   |   | (128,016 | )      |   | (172,552 | )      |
| Decrease                  in inventories                                 |   |   | 17,278   |   |   | 176,440  |   |
| (Increase)                  decrease in prepaid expenses                 |   |   | (113,322 | )      |   | 4,657    |   |
| Increase                  (decrease) in accounts payable and             |   |   |     |   |   |     |   |
| accrued                  liabilities                                     |   |   | 659,109  |   |   | (219,966 | )      |
|                                                                     |   |   | 435,049  |   |   | (211,421 | )      |
|                                                                     |   |   |     |   |   |     |   |
| Cash                  flows from operating activities                    |   |   | (88,567  | )      |   | (8,801   | )      |
|                                                                     |   |   |     |   |   |     |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES**                |   |   |     |   |   |     |   |
| Increase                  in bank indebtedness                           |   |   |     |   |   |     |   |
| (Decrease)                  increase in capital lease obligation         |   |   | (25,439  | )      |   | 124,889  |   |
| Increase                  (decrease) in advances from shareholders (net) |   |   | 58,711   |   |   | (3,320   | )      |
| Cash                  flows from financing activities                    |   |   | 33,272   |   |   | 121,569  |   |
|                                                                     |   |   |     |   |   |     |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES**                |   |   |     |   |   |     |   |
| Decrease                  in advances to shareholders                    |   |   | -        |   |   | (19,609  | )      |
| Purchase                  of equipment and patents                       |   |   | (30,416  | )      |   | (155,994 | )      |
| Deposits                  on equipment and patents                       |   |   | (10,181  | )      |   | 71,127   |   |
| Cash                  flows from investing activities                    |   |   | (40,597  | )      |   | (104,475 | )      |
|                                                                     |   |   |     |   |   |     |   |
| **EFFECT                  OF CUMULATIVE CURRENCY TRANSLATION**           |   |   |     |   |   |     |   |
| **ADJUSTMENTS**                                                          |   |   | (1,537   | )      |   | (6,441   | )      |
|                                                                     |   |   |     |   |   |     |   |
| (Decrease)                  increase in cash                             |   |   | (97,429  | )      |   | 1,852    |   |
| Cash,                  beginning of period                               |   |   | 126,727  |   |   | 41,885   |   |
|                                                                     |   |   |     |   |   |     |   |
| Cash,                  end of period                                     |   |   | 29,298   |   |   | 43,737   |   |
|                                                                     |   |   |     |   |   |     |   |
| **SUPPLEMENTAL                  INFORMATION:**                           |   |   |     |   |   |     |   |
| Interest                  paid                                           |   |   | 6,955    |   |   | 6,793    |   |
| Income                  taxes paid                                       |   |   | -        |   |   | -        |   |
| Equipment                  acquired by capital lease                     |   |   | -        |   |   | 155,376  |   |

----

| KMA                  GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                  TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**JULY                  31, 2006(unaudited)(expressed                  in U.S. dollars)  |   | Page 5 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|

| **1.** | **DESCRIPTION                OF THE BUSINESS** |
|--------|------------------------------------------------|

|   | KMA                Global Solutions International, Inc. (“KMA International” or the                “Company”) is engaged in the supply of Electronic Article Surveillance                (“EAS”) solutions, focusing on providing customized solutions in the                apparel, multi media, sporting goods, food and pharmaceutical                industries. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.** | **BASIS                OF PRESENTATION** |
|--------|------------------------------------------|

|   | The                accompanying unaudited consolidated financial statements of the Company                have been prepared in accordance with accounting principles generally                accepted in the United States of America for interim financial information                and the requirements of item 310 (b) of Regulation S-B. Accordingly,                certain information and disclosures normally included in financial                statements prepared in accordance with accounting principles generally                accepted in the United States of America have been condensed or omitted                pursuant to the rules and regulations of the Securities and Exchange                Commission. The consolidated financial statements reflect all adjustments                (consisting only of normal recurring adjustments), which, in the                opinion                of management, are necessary for a fair presentation of the results                for                the periods presented. There have been no significant changes of                accounting policy since January 31, 2006. The results from operations                for the period are not indicative of the results expected for the                full                fiscal year or any future period. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **INVENTORIES** |
|--------|-----------------|

|                            |   | July                  31, |    | January                  31, |   |
|---------------------------------|--------|---------------------------|---------|------------------------------|--------|
|                            |   | 2006                      |    | 2006                         |   |
|                            |   | $                         |    | $                            |   |
|                            |   |                      |    |                         |   |
| Finished                  goods |   |                      | 187,014 |                         |   | 206,654 |   |
| Raw                  materials  |   |                      | 250,686 |                         |   | 245,401 |   |
|                            |   |                      |    |                         |   |   |   |
|                            |   |                      | 437,700 |                         |   | 452,055 |   |

| **4.** | **ADVANCES                TO (FROM) SHAREHOLDERS** |
|--------|----------------------------------------------------|

|  |   | Advances                to (from) shareholders are non-interest bearing, are unsecured and                have no                fixed terms of repayment. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| KMA                    GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                    TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                    31, 2006(unaudited)(expressed                    in U.S. dollars)  |   | Page 6 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|

| **5.** | **EQUIPMENT                AND PATENTS** |
|--------|------------------------------------------|

|                                           |   |   |    |         |   | July                  31, |   |
|------------------------------------------------|--------|--------|---------|--------------|--------|---------------------------|--------|
|                                           |   |   |    | Accumulated  |   | 2006                      |   |
|                                           |   | Cost   |    | Amortization |   | Net                       |   |
|                                           |   | $      |    | $            |   | $                         |   |
| Equipment                                      |   |   | 707,848 |         |   | 444,588                   |   |   | 263,260 |   |
| Equipment                  under capital lease |   |   | 168,077 |         |   | 22,410                    |   |   | 145,667 |   |
| Patents                                        |   |   | 79,821  |         |   | 17,170                    |   |   | 62,651 |   |
| Computer                  equipment            |   |   | 33,573  |         |   | 19,172                    |   |   | 14,401 |   |
| Office                  furniture              |   |   | 4,910   |         |   | 1,843                     |   |   | 3,067 |   |
|                                           |   |   |    |         |   |                      |   |   |   |   |
|                                           |   |   | 994,229 |         |   | 505,183                   |   |   | 489,046 |   |

|                                           |   |   |    |         |   | January                  31, |   |
|------------------------------------------------|--------|--------|---------|--------------|--------|------------------------------|--------|
|                                           |   |   |    | Accumulated  |   | 2006                         |   |
|                                           |   | Cost   |    | Amortization |   | Net                          |   |
|                                           |   | $      |    | $            |   | $                            |   |
| Equipment                                      |   |   | 684,211 |         |   | 414,623                      |   |   | 269,588 |   |
| Equipment                  under capital lease |   |   | 166,985 |         |   | 13,916                       |   |   | 153,069 |   |
| Patents                                        |   |   | 79,303  |         |   | 14,676                       |   |   | 64,627 |   |
| Computer                  equipment            |   |   | 22,779  |         |   | 12,375                       |   |   | 10,404 |   |
| Office                  furniture              |   |   | 4,214   |         |   | 2,985                        |   |   | 1,229 |   |
|                                           |   |   |    |         |   |                         |   |   |   |   |
|                                           |   |   | 957,492 |         |   | 458,575                      |   |   | 498,917 |   |

|   | Included                in equipment is the cost of a machine which remains in the testing                phase.                The cost of the machine to date is approximately $49,809. This asset                has                not been amortized. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.** | **INCOME                TAXES** |
|--------|---------------------------------|

|   | The                reconciliation of the income tax provision calculated using the combined                Canadian federal and provincial statutory income tax rate with the                income                tax provision in the consolidated financial statements is as                follows: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                   |   | July                  31, |     | July                  31, |   |
|------------------------------------------------------------------------|--------|---------------------------|----------|---------------------------|--------|
|                                                                   |   | 2006                      |     | 2005                      |   |
|                                                                   |   | $                         |     | $                         |   |
| Income                  tax provision at combined Canadian federal and |   |                      |     |                      |   |   |   |
| provincial                  statutory rate of 36.12% (2005-18.62%)     |   |                      | (227,678 | )                         |   | 31,426 |   |
| Increase                  due to:                                      |   |                      |     |                      |   |   |   |
| Change                  in effective tax rate                          |   |                      | 21,787   |                      |   | - |   |
| Other                                                                  |   |                      | 13,880   |                      |   | 9,936 |   |
|                                                                   |   |                      |     |                      |   |   |   |
|                                                                   |   |                      | (192,011 | )                         |   | 41,362 |   |

----

| KMA                      GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                      TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                      31, 2006(unaudited)(expressed                      in U.S. dollars)  |   | Page 7 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|

| **6.** | **INCOME                  TAXES**(Continued) |
|--------|----------------------------------------------|

|   | Significant                components of the Company’s future income tax assets and liabilities are                as follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | July                  31, |    | January                  31, |   |
|-------------------------------------------------|--------|---------------------------|---------|------------------------------|--------|
|                                            |   | 2006                      |    | 2006                         |   |
|                                            |   | $                         |    | $                            |   |
| Future                  income tax assets:      |   |                      |    |                         |   |   |   |
| Losses                  carried forward         |   |                      | 250,904 |                         |   | 19,908 |   |
| Future                  income tax liabilities: |   |                      |    |                         |   |   |   |
| Equipment                  and patents          |   |                      | (71,440 | )                            |   | (32,744 | ) |
|                                            |   |                      |    |                         |   |   |   |
| Future                  tax asset (liability)   |   |                      | 179,464 |                         |   | (12,836 | ) |

| **7.** | **OBLIGATIONS                UNDER CAPITAL LEASE** |
|--------|----------------------------------------------------|

|   | The                Company has entered into a leasing agreement for equipment dated                March 15,                2005. The lease bears an effective rate of interest of 13.8% per                annum,                requires monthly payments of $5,208, and is secured by the                equipment. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                following is a summary of future minimum lease payments under this                capital                lease expiring February 15, 2008, together with the present balance                of the                obligations: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   |   |                             | 2006   |   |
|------------------------------------|--------|--------|----------------------------------|--------|--------|
|                               |   |   |                             | $      |   |
|                               |   |   |                             |   |   |
| Periods                    ending: |   |   | July                    31, 2007 |   |   | 54,200 |   |
|                                    |   |   | July                    31, 2008 |   |   | 30,231 |   |
|                               |   |   |                             |   |   |   |   |
|                               |   |   |                             |   |   | 84,431 |   |

----

| KMA                      GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                      TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                      31, 2006(unaudited)(expressed                      in U.S. dollars)  |   | Page 8 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|

| **8.** | **SHAREHOLDERS’                  EQUITY** |
|--------|-------------------------------------------------|

|  |   | **Continuity of                    Shareholders’ Equity - KMA Canada prior to reverse                    merger** |
|--|--------|------------------------------------------------------------------------------------------------------------------------------|

|                                    |   |        |       |   |   | Additional |   |   |    |        |   |
|-----------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|---------|-------------|--------|
|                                    |   | Common |       | Par    |   | Paid-in    |   | Comp.  |    | Accumulated |   |
|                                    |   | Shares |       | Value  |   | Capital    |   | Income |    | Earnings    |   |
|                                    |   | $      |       | $      |   | $          |   | $      |    | $           |   |
| January                  31, 2006       |   |   | 32,136,800 |   |   | -          |   |   | 461,901 |        |   | 43,547 |   |   | 82,982 |   |
| Issuance                  of shares for |   |   |       |   |   |       |   |   |    |        |   |   |   |   |   |   |
| consulting                  services    |   |   | 408,000    |   |   | -          |   |   | 52,173  |        |   | - |   |   | - |   |
| Issuance                  of shares for |   |   |       |   |   |       |   |   |    |        |   |   |   |   |   |   |
| finder’s                  fee     |   |   | 1,700,000  |   |   | -          |   |   | 217,391 |        |   | - |   |   | - |   |
| March                  15, 2006         |   |   | 34,244,800 |   |   | -          |   |   | 731,465 |        |   | 43,547 |   |   | 82,982 |   |

|  |   | **Continuity                of Shareholders’ Equity - KMA                International** |
|--|--------|------------------------------------------------------------------------------------------------|

|                                   |   |   |       |   |   | Additional |   |   |                        |        |   |
|----------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------------------------|-------------|--------|
|                                   |   | Common |       | Par    |   | Paid-in    |   | Comp.  |                        | Accumulated |   |
|                                   |   | Shares |       | Value  |   | Capital    |   | Income |                        | Earnings    |   |
|                                   |   | $      |       | $      |   | $          |   | $      |                        | $           |   |
| January                  31, 2006      |   |   | 4,920,250  |   |   | 4,920      |   |   | 166,421                     |        |   | - |   |   | (171,341 | ) |
| Retired                  to treasury   |   |   | (4,225,427 | )      |   | (4,225     | )      |   | 4,225                       |        |   | - |   |   | - |   |
| 17:1                  share split      |   |   | 11,117,168 |   |   | 11,117     |   |   | (11,117                     | )           |   | - |   |   | - |   |
| Issuance                  of shares in |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| reverse                  merger        |   |   | 34,244,800 |   |   | 34,245     |   |   | 525,878                     |        |   | 43,547 |   |   | 82,982 |   |
| Accumulated                  deficit   |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| acquired                  in reverse   |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| merger                                 |   |   | -          |   |   | -          |   |   | -                           |        |   | - |   |   | 171,341 |   |
| Retirement                  of shares  |   |   | (5,344,800 | )      |   | (5,345     | )      |   | 5,345                       |        |   | - |   |   | - |   |
| Issuance                  of replace-  |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| ment                  shares           |   |   | 1,179,000  |   |   | 1,179      |   |   | (1,179                      | )           |   | - |   |   | - |   |
| Currency                  translation  |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| adjustment                             |   |   | -          |   |   | -          |   |   | -                           |        |   | 4,450 |   |   | - |   |
| Issuance                  of shares    |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| for                  investor          |   |   |       |   |   |       |   |   |                        |        |   |   |   |   |   |   |
| relations                  services    |   |   | 25,000     |   |   | 25         |   |   | 11,025                  - - |        |   |   |   |   |   |   |
| Net                  loss              |   |   | -          |   |   | -          |   |   | -                           |        |   | - |   |   | (438,328 | ) |
| July                  31, 2006         |   |   | 41,915,991 |   |   | 41,916     |   |   | 700,598                     |        |   | 47,997 |   |   | (355,346 | ) |

----

| KMA                GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                31, 2006(unaudited)(expressed                in U.S. dollars)  |   | Page 9 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|

| **8.** | **SHAREHOLDERS’                EQUITY**(Continued) |
|--------|----------------------------------------------------------|

|  |   | During                the period ended July 31, 2006, the following transactions                occurred: |
|--|--------|-----------------------------------------------------------------------------------------------------------|

|  | (a) | On                February 15, 2006, KMA Canada issued 120,000 common shares (408,000                post                split reorganization common shares) with a deemed value of Cdn $0.50                per                share in exchange for services rendered by a group of consultants                of KMA                Canada. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | OnFebruary                    28, 2006, KMA Canada issued 500,000 common shares (1,700,000                    post split                    reorganization common shares) with a deemed value of Cdn $0.50                    per share                    as an advance on finders fees in relation to a planned equity                    financing.                    The advance has been reflected as a deferred cost until such                    time as the                    planned equity financing is                    completed. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | On                March 1, 2006, pursuant to a resolution of the Board of Directors,                the                issued and outstanding common shares of KMA Canada were subject to                a                reverse stock split at a ratio of five (5) shares to one (1), reducing                the                number of shares outstanding from 10,072,000 to 2,014,400 (34,244,800                post                split reorganization common                shares). |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | KMA                Canada and KMA International, a corporation organized under the laws                of                the state                of Nevada entered into an acquisition agreement dated March 15, 2006.                Pursuant to the                terms of the agreement and upon the completion of satisfactory due                diligence and receipt                of applicable regulatory and shareholder approvals, KMA International                acquired 100%                of the outstanding shares of the capital stock of the KMA Canada                in                exchange for 34,244,800                post split reorganization common shares. (34,244,800 post split                reorganization                shares being the aggregate of 28,900,000 owned by KMA LLC and 5,344,800                owned by KMA Canada shareholders.) Pursuant to an agreement between                the                KMA                Canada shareholders and KMA International, the shares in KMA International                owned                by the KMA Canada shareholders were retired to treasury and cancelled                and                the KMA                Canada shareholders received 1,179,000 post split reorganization                shares. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| KMA                  GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                  TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                  31, 2006(unaudited)(expressed                  in U.S. dollars)  |   | Page 10 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|

| **8.** | **SHAREHOLDERS’                EQUITY**(Continued) |
|--------|----------------------------------------------------------|

|  |   | KMA                International is the surviving corporation as a result of a merger                transaction with Espo’s, Ltd., a corporation formed under the laws of the                State of New York. The merger occurred March 15, 2006. At the time                of the                merger transaction, Espo’s, Ltd. was a non-SEC reporting corporation. As a                result of the merger and acquisition transactions the former shareholders                of Espo’s, Ltd. hold 11,811,991 or 28.2% of the post split reorganization                common shares of KMA International. Pursuant to the merger agreement,                the                remaining 71,832,259 post split reorganization shares (4,225,427                pre split                reorganization shares), held by individuals that were former shareholders                of Espo’s, were retired to treasury effective March 15, 2006 and cancelled                on May 19, 2006. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | The                terms of the merger transaction and the acquisition agreement provided                that the mind and management of KMA International would be replaced                by the                officers and directors of KMA Canada and having had no significant                business activity for a number of years, upon the effective time                of the                acquisition, KMA International adopted the business plan of KMA Canada.                The transaction was therefore accounted for as a reverse acquisition                with                KMA Canada as the acquiring party and KMA International as the acquired                party, in substance, a reorganization of KMA Canada. Generally accepted                accounting principles in the United States of America require, among                other                considerations, that a company whose stockholders retain a majority                interest in a business combination be treated as the acquirer for                accounting purposes. Accordingly, the results of operations for the                periods prior to the combination are those of KMA Canada. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | On                June 16, 2006, KMA International issued 25,000 common shares with                a deemed                value                of Cdn $0.50 per share in exchange for investor relation services                provided                by a consulting                company for KMA International. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9.** | **COMMITMENTS** |
|--------|-----------------|

|  | a) | The                    Company is committed to minimum annual rentals under a long-term                    lease for                    premises which expires October 31, 2008. Minimum rental commitments                    remaining under this lease approximate $229,254 including $101,891                    due                    within one year, $101,891 due in 2008, and $25,472 due in 2009. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | The                Company is also responsible for common area                costs. |
|--|--------|--------------------------------------------------------------------------------------|

|  | b) | The                    Company has entered into various vehicle leases and has accounted                    for them                    as operating leases. Obligations due approximate $106,892 including                    $61,250 within one year, $35,583 due in 2008 and $10,059 due                    in fiscal                    2009. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| KMA                  GLOBAL SOLUTIONS INTERNATIONAL, INC.**NOTES                  TO THE CONSOLIDATED FINANCIAL STATEMENTS**JULY                  31, 2006(unaudited)(expressed                  in U.S. dollars)  |   | Page 11 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|

| **10.** | **RESEARCH                AND DEVELOPMENT COSTS** |
|---------|---------------------------------------------------|

|  |   | As                at January 31, 2004 the Company had a research and development program                which was eligible for investment tax credits of $65,507. The investment                tax credits earned are generally subject to audit by Canada Revenue                Agency                ("CRA") before refund or reduction of income taxes payable is allowed.                Due                to the technical nature of the development undertaken by the Company                and                CRA's changing interpretation of qualifying activities, there is                no                certainty that the projects claimed will qualify. Therefore, no provision                has been recorded in relation to these tax credits or the related                tax                liability of approximately $12,200. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **11.** | **FINANCIAL                INSTRUMENTS** |
|---------|------------------------------------------|

|  |   | **Fair                Value** |
|--|--------|-------------------------------|

**Foreign      Exchange Risk**

**Credit      Risk**

**Interest      Rate Risk**

----

**CAUTIONARY      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

**Item      2. **
**Management’s      Discussion and Analysis. **

***OVERVIEW***

----

***RESULTS      OF OPERATIONS***

|                                      |   | **Three              months              ended July 31,**  |      | **Six              months              ended July 31,**  |   |
|-------------------------------------------|--------|-----------------------------------------------------------------|-----------|---------------------------------------------------------------|--------|
|                                      |   | **2006**                                                        |      | **2005**                                                      |   | **2006** |   | **2005** |   |
|                                      |   |                                                            |      |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                     |   |                                                            | 1,888,803 |                                                          |   | 100 | % |   | 1,717,288 |   |   | 100 | % |   | 3,015,613 |   |   | 100 | % |   | 2,836,934 |   |   | 100 | % |
| Cost                of Sales              |   |                                                            | 1,533,427 |                                                          |   | 81 | % |   | 1,333,474 |   |   | 78 | % |   | 2,435,833 |   |   | 81 | % |   | 2,217,373 |   |   | 78 | % |
| Gross                Profit               |   |                                                            | 355,376   |                                                          |   | 19 | % |   | 383,814 |   |   | 22 | % |   | 579,780 |   |   | 19 | % |   | 619,561 |   |   | 22 | % |
| Selling                General &      |   |                                                            | 650,343   |                                                          |   | 34 | % |   | 260,253 |   |   | 15 | % |   | 1,210,119 |   |   | 40 | % |   | 450,787 |   |   | 16 | % |
| Administrative                Expenses    |   |                                                            |           |                                                          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Income                Before Income Taxes |   |                                                            | -294,967  |                                                          |   | -16 | % |   | 123,561 |   |   | 7 | % |   | -630,339 |   |   | -21 | % |   | 168,774 |   |   | 6 | % |
| Net                Income                 |   |                                                            | -193,356  |                                                          |   | -10 | % |   | 101,                908 |   |   | 6 | % |   | -438,328 |   |   | -15 | % |   | 127,412 |   |   | 4 | % |

----

***Sales***

***Gross      Profit***

***Selling,      General and Administrative (***
* *
***“SG&A”)      Expenses***

***Operating      Income (Loss)***

***Taxes      on Income***

----

***Liquidity      and Capital Resources***

|                                                      |   |   | Six                Months ended July 31, |   |
|-----------------------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                      |   |   | **2006**                                 |   |   | **2005** |   |
|                                                      |   |   |                                     |   |   |   |   |
| Net                cash from operating activities         |   |   | (88,567                                  | )      |   | (8,801 | ) |
| Net                cash from investing activities         |   |   | (40,597                                  | )      |   | (104,475 | ) |
| Net                cash from financing activities         |   |   | 33,272                                   |   |   | 121,569 |   |
|                                                      |   |   |                                     |   |   |   |   |
| Effect                of currency translation adjustments |   |   | (1,537                                   | )      |   | (6,441 | ) |
| Total                change in cash and cash equivalents  |   |   | (97,429                                  | )      |   | 1,852 |   |

----

***CRITICAL      ACCOUNTING POLICIES***
***AND      ESTIMATES***

***Revenue      Recognition***

(3)      the      fee is fixed or determinable; and (4) collectibility is reasonably assured.      Should changes in conditions cause management to determine that these criteria      are not met for certain future transactions, revenue recognized for a reporting      period could be adversely affected.

***Sales      Returns and Allowances***

----

***Allowance      for Doubtful Accounts***

***Inventories***

***Goodwill***

***Accounting      for Income Taxes***

***Recently      Issued Accounting Pronouncement***

----

**Item      3. CONTROLS AND PROCEDURES**

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

***Changes      in Internal Controls***

----

**Item6.        Exhibits.**

| Exhibit              No. | Exhibit |
|--------------------------|---------|

| 31.1 | Certification                of Chief Executive Officer and Chief Financial Officer of the Company                required by Rule 13a-14(a)                under the Securities Exchange Act of 1934, as                amended. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                of Chief Executive Officer and Chief Financial Officer of the Company                required by Rule 13a-14(b)                under the Securities Exchange Act of 1934, as                amended |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |                                                               |                                  |
|---------------------------------------|--------------------------------------------------------------------|---------------------------------------|
|                                  | KMA              GLOBAL              SOLUTIONS INTERNATIONAL, INC. |
|                             |                                                          |                             |
| Date:              September 15, 2006 | By:                                                      | /s/ Jeffrey              D. Reid |
|                                  | Jeffrey              D. Reid                                       |
|                                  | Chief              Executive Officer                               |

----

| ExhibitNumber | Description |
|---------------|-------------|

| 31.1 | Certification                  of Chief Executive Officer and Chief Financial Officer of the Company                  required by Rule 13a-14(a)                  under the Securities Exchange Act of 1934, as                  amended. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                  of Chief Executive Officer and Chief Financial Officer of the Company                  required by Rule 13a-14(b)                  under the Securities Exchange Act of 1934, as                  amended |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----