**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      DC 20549**

**FORM      10-QSB**

**KMA      GLOBAL SOLUTIONS INTERNATIONAL, INC.**

| **NEVADA***(State                or other jurisdiction of**incorporation                or organization)*                                                     | **88-0433489***(I.R.S.                Employer**Identification                No.)* |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
|                                                                                                                                                          |
| **5570A                KENNEDY ROAD****MISSISSAUGA                ONTARIO, CANADA L4Z2A9***(Address                of principal executive offices, zip code)* |
|                                                                                                                                                          |
| **Issuer’s                telephone number, including area code:  (905)                568-5220**                                             |

----

**PART      I**

**FINANCIAL      INFORMATION**

**Item      1. FINANCIAL STATEMENTS**

**KMA      GLOBAL SOLUTIONS INTERNATIONAL, INC.**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**OCTOBER      31, 2007**

**(unaudited)**

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

| **INDEX**                                                             | **PAGE**                             |
|-----------------------------------------------------------------------|--------------------------------------|
|                                                                  |                                 |
| Interim                Consolidated Balance Sheets                    | 1                -                2  |
|                                                                  |                                 |
| Interim                Consolidated Statements of Income and Deficit  | 3                                    |
|                                                                  |                                 |
| Interim                Consolidated Statements of Cash Flows          | 4                                    |
|                                                                  |                                 |
| Notes                to the Interim Consolidated Financial Statements | 5                -                13 |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.    |   |  Page                1 |
|-------------------------------------------------------------------------------|--------|-----------------------------|
|   **INTERIM              CONSOLIDATED BALANCE SHEETS**              |   |                        |
|   (expressed              in U.S. dollars)                          |   |                        |

|                                                 |   | As                atOct                31, 2007(unaudited)$ |      |   | As                atJan                31, 2007(audited)$ |   |
|------------------------------------------------------|--------|-------------------------------------------------------------|-----------|--------|-----------------------------------------------------------|--------|
|                                                 |   |                                                        |      |   |                                                      |   |
| **ASSETS**                                           |   |                                                        |      |   |                                                      |   |
|                                                 |   |                                                        |      |   |                                                      |   |
| **CURRENT**                                          |   |                                                        |      |   |                                                      |   |
| Cash                                                 |   |                                                        | 66,929    |   |                                                      |   | 22,710 |   |
| Accounts                receivable                   |   |                                                        | 184,844   |   |                                                      |   | 287,701 |   |
| Inventories                (Note 3)                  |   |                                                        | 465,566   |   |                                                      |   | 303,117 |   |
| Prepaid                expenses                      |   |                                                        | 226,013   |   |                                                      |   | 340,210 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **TOTAL                CURRENT ASSETS**              |   |                                                        | 943,352   |   |                                                      |   | 953,738 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **DEPOSITS                ON EQUIPMENT AND PATENTS** |   |                                                        | 312,352   |   |                                                      |   | 57,342 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **EQUIPMENT                AND PATENTS**(Note 5)     |   |                                                        | 957,105   |   |                                                      |   | 641,178 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **FUTURE                INCOME TAXES** (Note 6)      |   |                                                        | 1,087,223 |   |                                                      |   | 335,958 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **DEFERRED                COSTS** (Note 8(b))        |   |                                                        | 120,337   |   |                                                      |   | 212,404 |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
| **ADVANCES                TO SHAREHOLDER** (Note 4)  |   |                                                        | 53,601    |   |                                                      |   | - |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        |      |   |                                                      |   |   |   |
|                                                 |   |                                                        | 3,473,970 |   |                                                      |   | 2,200,620 |   |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.  |   |    Page                2 |
|-------------------------------------------------------------------|--------|-----------------------------------------|
|  **INTERIM              CONSOLIDATED BALANCE SHEETS**        |   |                                    |
|  (expressed              in U.S. dollars)                    |   |                                    |

|                                                                                                                                         |   | As                atOct                31, 2007(unaudited)$ |       |   | As                atJan                31, 2007(audited)$ |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|------------|--------|-----------------------------------------------------------|--------|
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |
| **LIABILITIES**                                                                                                                              |   |                                                        |       |   |                                                      |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |
| **CURRENT**                                                                                                                                  |   |                                                        |       |   |                                                      |   |
| Accounts                payable and accrued liabilities                                                                                      |   |                                                        | 1,081,944  |   |                                                      |   | 1,062,297 |   |
| Current                portion of capital lease obligation (Note 7)                                                                          |   |                                                        | 18,542     |   |                                                      |   | 55,804 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **TOTAL                CURRENT LIABILITIES**                                                                                                 |   |                                                        | 1,100,486  |   |                                                      |   | 1,118,101 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **ADVANCES****FROM SHAREHOLDER** (Note 4)                                                                                                    |   |                                                        | -          |   |                                                      |   | 87,053 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **CAPITAL                LEASE OBLIGATION**(Note 7)                                                                                          |   |                                                        | -          |   |                                                      |   | 207 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
|                                                                                                                                         |   |                                                        | 1,100,486  |   |                                                      |   | 1,205,361 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **SHAREHOLDERS'                EQUITY**                                                                                                      |   |                                                        |       |   |                                                      |   |   |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **CAPITAL                STOCK  **(Note 8)                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| Preferred                stock, $0.001 par value, 25,000,000 shares authorized and none issued                and                outstanding |   |                                                        |       |   |                                                      |   |   |   |
| Common                stock, $0.001 par value, 175,000,000 shares authorized and 75,333,319                shares issued and outstanding     |   |                                                        | 75,333     |   |                                                      |   | 42,066 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **ADDITIONAL                PAID-IN CAPITAL**(Note 8)                                                                                        |   |                                                        | 4,958,281  |   |                                                      |   | 729,098 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **SUBSCRIPTIONS                RECEIVABLE**(Note 8)                                                                                          |   |                                                        | (2,730,000 | )      |                                                      |   | - |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **SHARES                TO BE ISSUED**(Note 8)                                                                                               |   |                                                        | -          |   |                                                      |   | 826,485 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **ACCUMULATED                COMPREHENSIVE INCOME** (Note 8)                                                                                 |   |                                                        | 551,669    |   |                                                      |   | 51,031 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **WARRANTS**(Note 9)                                                                                                                         |   |                                                        | 1,149,000  |   |                                                      |   | - |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
| **(DEFICIT)**(Note 8)                                                                                                                        |   |                                                        | (1,630,799 | )      |                                                      |   | (653,421 | ) |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
|                                                                                                                                         |   |                                                        | 2,373,484  |   |                                                      |   | 995,259 |   |
|                                                                                                                                         |   |                                                        |       |   |                                                      |   |   |   |
|                                                                                                                                         |   |                                                        | 3,473,970  |   |                                                      |   | 2,200,620 |   |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.              |   |  Page                3 |
|------------------------------------------------------------------------------------|--------|-----------------------------|
|  **INTERIM              CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT**  |   |
|  (unaudited)(expressed                in U.S. dollars)                        |   |                        |

|                                                                                           |   | Three                  Months EndedOct                  31, |       |   | Nine                  Months EndedOct                  31, |   |
|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|------------|--------|------------------------------------------------------------|--------|
|                                                                                           |   | $                                                           |  2007 |   |                                                       | $      | 2006 |   |   | $ | 2007 |   |   | $ | 2006 |   |
| **SALES**                                                                                      |   |                                                        | 1,377,478  |   |                                                       |   | 1,688,891 |   |   |   | 3,893,884 |   |   |   | 4,704,503 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **COST                  OF SALES**                                                             |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| Inventories,                  beginning of period                                              |   |                                                        | 471,790    |   |                                                       |   | 437,701 |   |   |   | 303,117 |   |   |   | 452,055 |   |
| Purchases                                                                                      |   |                                                        | 1,012,618  |   |                                                       |   | 1,314,877 |   |   |   | 3,073,041 |   |   |   | 3,736,355 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |                                                        | 1,484,408  |   |                                                       |   | 1,752,578 |   |   |   | 3,376,158 |   |   |   | 4,188,410 |   |
| Less:  Inventories,                  end of period                                   |   |                                                        | 465,566    |   |                                                       |   | 353,099 |   |   |   | 465,566 |   |   |   | 353,099 |   |
|                                                                                           |   |                                                        | 1,018,842  |   |                                                       |   | 1,399,479 |   |   |   | 2,910,592 |   |   |   | 3,835,311 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **GROSS                  MARGIN**                                                              |   |                                                        | 358,636    |   |                                                       |   | 289,412 |   |   |   | 983,292 |   |   |   | 869,192 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **SELLING,                  GENERAL AND ADMINISTRATIVE**                                       |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **    EXPENSES**(Schedule)                                                 |   |                                                        | 1,044,383  |   |                                                       |   | 478,703 |   |   |   | 2,552,792 |   |   |   | 1,688,822 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| (Loss)                  before income taxes                                                    |   |                                                        | (685,747   | )      |                                                       |   | (189,291 | ) |   |   | (1,569,500 | ) |   |   | (819,630 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| Income                  taxes – future (Note 6)                                          |   |                                                        | (267,934   | )      |                                                       |   | (74,373 | ) |   |   | (592,122 | ) |   |   | (266,384 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **NET                  (LOSS) FOR THE PERIOD**                                                 |   |                                                        | (417,813   | )      |                                                       |   | (114,918 | ) |   |   | (977,378 | ) |   |   | (553,246 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **(DEFICIT),**beginning of period      (Note                  8) |   |                                                        | (1,212,986 | )      |                                                       |   | (355,346 | ) |   |   | (653,421 | ) |   |   | 82,982 |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **(DEFICIT),**end of period (Note 8)                                                           |   |                                                        | (1,630,799 | )      |                                                       |   | (470,264 | ) |   |   | (1,630,799 | ) |   |   | (470,264 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| **(LOSS)                  PER SHARE**                                                          |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| Basic                                                                                          |   |                                                        | (0.01      | )      |                                                       |   | (0.00 | ) |   |   | (0.02 | ) |   |   | (0.01 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                        |   |                                                        | (0.01      | )      |                                                       |   | (0.00 | ) |   |   | (0.02 | ) |   |   | (0.01 | ) |
|                                                                                           |   |                                                        |       |   |                                                       |   |   |   |   |   |   |   |   |   |
| Weighted                  average number of common shares                                      |   |                                                        | 64,304,515 |   |                                                       |   | 41,933,926 |   |   |   | 58,576,726 |   |   |   | 38,869,780 |   |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.      |   |  Page                4 |
|----------------------------------------------------------------------------|--------|-----------------------------|
|  **INTERIM              CONSOLIDATED STATEMENTS OF CASH FLOWS**  |   |
|  FOR              THE NINE MONTH PERIODS ENDED OCTOBER 31             |   |                        |
|  (unaudited)                                                          |   |                        |
|  (expressed              in U.S. dollars)                             |   |                        |

|                                                                                                                             |   | $      | 2007       |   |   | $      | 2006     |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|----------|--------|
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                                                                          |   |   |       |   |   |   |     |   |
| Net                (loss) for the period                                                                                         |   |   | (977,378   | )      |   |   | (553,246 | )      |
| Adjustments                for:                                                                                                  |   |   |       |   |   |   |     |   |
| Amortization                                                                                                                     |   |   | 104,948    |   |   |   | 68,115   |   |
| Shares                issued for services provided                                                                               |   |   | 6,500      |   |   |   | 91,698   |   |
| Future                income taxes                                                                                               |   |   | (592,122   | )      |   |   | (266,384 | )      |
|                                                                                                                             |   |   | (1,458,052 | )      |   |   | (659,817 | )      |
| Changes                in non-cash working capital:                                                                              |   |   |       |   |   |   |     |   |
| Decrease                (increase) in accounts receivable                                                                        |   |   | 151,502    |   |   |   | (209,015 | )      |
| (Increase)                decrease in inventories                                                                                |   |   | (76,722    | )      |   |   | 104,760  |   |
| (Increase)                in research and development tax credits receivable                                                     |   |   | -          |   |   |   | (66,434  | )      |
| Decrease                (Increase) in prepaid expenses                                                                           |   |   | 172,668    |   |   |   | (131,665 | )      |
| (Decrease)                increase in accounts payable and      accrued                liabilities |   |   | (210,821   | )      |   |   | 659,337  |   |
|                                                                                                                             |   |   | 36,627     |   |   |   | 356,983  |   |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| Cash                flows from operating activities                                                                              |   |   | (1,421,425 | )      |   |   | (302,834 | )      |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                                          |   |   |       |   |   |   |     |   |
| Issuance                of capital stock                                                                                         |   |   | 700,000    |   |   |   | -        |   |
| Exercise                of warrants                                                                                              |   |   | 1,270,000  |   |   |   | -        |   |
| (Decrease)                in capital lease obligation                                                                            |   |   | (44,719    | )      |   |   | (38,422  | )      |
| (Decrease)                increase in advances from shareholders                                                                 |   |   | (141,430   | )      |   |   | 140,461  |   |
| Increase                in promissory note payable                                                                               |   |   | -          |   |   |   | 141,580  |   |
| Cash                flows from financing activities                                                                              |   |   | 1,783,851  |   |   |   | 243,619  |   |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                                          |   |   |       |   |   |   |     |   |
| Decrease                in advances to shareholders                                                                              |   |   | -          |   |   |   | 51,350   |   |
| Purchase                of equipment and patents                                                                                 |   |   | (242,372   | )      |   |   | (232,359 | )      |
| Deposits                on equipment and patents                                                                                 |   |   | (210,243   | )      |   |   | 145,404  |   |
| Cash                flows from investing activities                                                                              |   |   | (452,615   | )      |   |   | (35,605  | )      |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| **EFFECT                OF EXCHANGE RATE****CHANGES                ON CASH**                                                     |   |   | 134,408    |   |   |   | (5,501   | )      |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| Increase                (decrease) in cash                                                                                       |   |   | 44,219     |   |   |   | (100,321 | )      |
| Cash,                beginning of period                                                                                         |   |   | 22,710     |   |   |   | 126,727  |   |
|                                                                                                                             |   |   |       |   |   |   |     |   |
| Cash,                end of period                                                                                               |   |   | 66,929     |   |   |   | 26,406   |   |

**SUPPLEMENTAL      INFORMATION:**

| Interest                paid                                      |   |   | 5,047     |   |   |   | 17,874 |   |
|-------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|
| Income                taxes paid                                  |   |   | -         |   |   |   | -      |   |
| Issuance                of common stock- subscriptions receivable |   |   | 2,730,000 |   |   |   | -      |   |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.               |   |     Page                5 |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**  |   |
|  OCTOBER              31, 2007                                                 |   |                                          |
|  (unaudited)                                                                   |   |                                          |
|  (expressed              in U.S. dollars)                                      |   |                                          |

**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**

**3.         INVENTORIES**

|                          |   | October                31,2007$ |    |   |  January                31,2007$ |   |
|-------------------------------|--------|---------------------------------|---------|--------|---------------------------------------|--------|
| Finished                goods |   |                            | 265,048 |   |                                  |   | 117,702 |   |
| Raw                materials  |   |                            | 200,518 |   |                                  |   | 185,415 |   |
|                          |   |                            | 465,566 |   |                                  |   | 303,117 |   |

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

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.         |  Page                6 |
|-------------------------------------------------------------------------------|-----------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                        |
|  OCTOBER              31, 2007                                           |                        |
|  (unaudited)                                                             |                        |
|  (expressed              in U.S. dollars)                                |                        |

**5.         EQUIPMENT      AND PATENTS**

|                                         |   | Cost$  |      |   | AccumulatedAmortization$ |   |    | October                31,2007Net$ |   |
|----------------------------------------------|--------|--------|-----------|--------|--------------------------|--------|---------|------------------------------------|--------|
| Equipment                                    |   |   | 1,264,076 |   |                     |   | 654,589 |                               |   |   | 609,487 |   |
| Equipment                under capital lease |   |   | 201,330   |   |                     |   | 52,010  |                               |   |   | 149,320 |   |
| Patents                                      |   |   | 101,124   |   |                     |   | 28,337  |                               |   |   | 72,787 |   |
| Computer                equipment            |   |   | 79,549    |   |                     |   | 34,692  |                               |   |   | 44,857 |   |
| Leasehold                improvements        |   |   | 75,339    |   |                     |   | 11,078  |                               |   |   | 64,261 |   |
| Office                furniture              |   |   | 20,941    |   |                     |   | 4,548   |                               |   |   | 16,393 |   |
|                                         |   |   | 1,742,359 |   |                     |   | 785,254 |                               |   |   | 957,105 |   |

|                                         |   | Cost$  |      |   | AccumulatedAmortization$ |   |    | January                31,2007Net$ |   |
|----------------------------------------------|--------|--------|-----------|--------|--------------------------|--------|---------|------------------------------------|--------|
| Equipment                                    |   |   | 892,915   |   |                     |   | 460,364 |                               |   |   | 432,551 |   |
| Equipment                under capital lease |   |   | 161,594   |   |                     |   | 29,626  |                               |   |   | 131,968 |   |
| Patents                                      |   |   | 81,166    |   |                     |   | 19,049  |                               |   |   | 62,117 |   |
| Computer                equipment            |   |   | 36,379    |   |                     |   | 24,549  |                               |   |   | 11,830 |   |
| Office                furniture              |   |   | 4,720     |   |                     |   | 2,008   |                               |   |   | 2,712 |   |
|                                         |   |   | 1,176,774 |   |                     |   | 535,596 |                               |   |   | 641,178 |   |

**6.         INCOME      TAXES**

|                                                                                                                                                                       |   | October                31,2007$ |     |   | October                31,2006$ |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|----------|--------|---------------------------------|--------|
| Income                tax provision at combined Canadian federal and     provincial                statutory rate of 36.12% (2006 - 36.12%)  |   |                            | (566,903 | )      |                            |   | (296,050 | ) |
| Increase                due to:                                                                                                                                            |   |                            |     |   |                            |   |   |   |
| Change                in statutory tax rate                                                                                                                                |   |                            | -        |   |                            |   | 24,543 |   |
| Other                                                                                                                                                                      |   |                            | (25,219  | )      |                            |   | 5,123 |   |
|                                                                                                                                                                       |   |                            | (592,122 | )      |                            |   | (266,384 | ) |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.    |  Page                7 |
|-------------------------------------------------------------------------------|-----------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                        |
|  OCTOBER              31, 2007                                           |                        |
|  (unaudited)                                                             |                        |
|  (expressed              in U.S. dollars)                                |                        |

**6.**
**INCOME      TAXES **

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

|                                                                                                      |   | October                31,2007$ |      |   | January                31,2007$ |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|---------------------------------|--------|
| Future                income tax assets:    Losses                carried forward     |   |                            | 1,172,948 |   |                            |   | 411,800 |   |
| Future                income tax liabilities:    Equipment                and patents |   |                            | (85,725   | )      |                            |   | (75,842 | ) |
| Future                tax asset                                                                           |   |                            | 1,087,223 |   |                            |   | 335,958 |   |

**7.         OBLIGATIONS      UNDER CAPITAL LEASE**

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.     | Page                8 |
|-------------------------------------------------------------------------------------|-----------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**       |                  |
|  OCTOBER              31, 2007                                                 |                  |
|  (unaudited)                                                                   |                  |
|  (expressed              in U.S. dollars)                                      |                  |

**8.         SHAREHOLDERS’      EQUITY**

**Continuity      of Shareholders’ Equity – KMA Global Solutions Inc. (“KMA      Canada”)**

**prior      to reverse merger**

|                                                      |   | Common                Shares$ |       |   | Par                Value$ |   |   | Additional                Paid-in Capital$ |   |   | Comp.                Income$ |   |   | Accumulated                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 Global Solutions International,      Inc.**

|                                                              |   | Common                Shares$ |       |   | Par                Value$ |   |   | Additional                Paid-in Capital$ |   |   | Comp.                Income$ |   |   | Accumulated                Earnings/ (losses)$ |   |
|-------------------------------------------------------------------|--------|-------------------------------|------------|--------|---------------------------|--------|--------|--------------------------------------------|--------|--------|------------------------------|--------|--------|------------------------------------------------|--------|
| 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 replacement shares                     |   |                          | 1,179,000  |   |                      |   | 1,179  |                                       |   |   | (1,179                       | )      |   |                                           | -      |   |   |   | - |   |
| Currency                translation adjustment                    |   |                          | -          |   |                      |   | -      |                                       |   |   | -                            |   |   |                                           | 4,601  |   |   |   | - |   |
| Issuance                of shares for investor relations services |   |                          | 25,000     |   |                      |   | 25     |                                       |   |   | 11,025                       |   |   |                                           | -      |   |   |   | - |   |
| Issuance                of shares for consulting services         |   |                          | 150,000    |   |                      |   | 150    |                                       |   |   | 28,500                       |   |   |                                           | -      |   |   |   | - |   |
| Net                loss January 31, 2007                          |   |                          | -          |   |                      |   | -      |                                       |   |   | -                            |   |   |                                           | -      |   |   |   | (736,403 | ) |
| January                31, 2007                                   |   |                          | 42,065,991 |   |                      |   | 42,066 |                                       |   |   | 729,098                      |   |   |                                           | 48,148 |   |   |   | (653,421 | ) |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.              |  Page                9 |
|-------------------------------------------------------------------------------|-----------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                        |
|  OCTOBER              31, 2007                                           |                        |
|  (unaudited)                                                             |                        |
|  (expressed              in U.S. dollars)                                |                        |

**8.**
**SHAREHOLDERS’      EQUITY **

**Continuity      of Shareholders’ Equity - KMA Global Solutions International,      Inc.**

|                                                      |   | Common                Shares$ |       |   | Par                Value$ |   |   | Additional                Paid-in Capital$ |   |   | SubscriptionsReceivable$ |   |   | Comp.                Income$ |       |   | Accumulated                losses$ |   |
|-----------------------------------------------------------|--------|-------------------------------|------------|--------|---------------------------|--------|--------|--------------------------------------------|--------|--------|--------------------------|--------|--------|------------------------------|------------|--------|------------------------------------|--------|
| Issuance                of shares for financing, net      |   |                          | 10,000,000 |   |                      |   | 10,000 |                                       |   |   | 965,000                  |   |   |                         | -          |   |                               |   | 2,883 |   |   |   | - |   |
| Warrant                valuation allocation               |   |                          | -          |   |                      |   | -      |                                       |   |   | (346,000                 | )      |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Issuance                of shares for agent fees          |   |                          | 1,000,000  |   |                      |   | 1,000  |                                       |   |   | -                        |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Issuance                of agent warrants on financing    |   |                          | -          |   |                      |   | -      |                                       |   |   | (90,000                  | )      |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Issuance                of shares for consulting services |   |                          | 1,867,328  |   |                      |   | 1,867  |                                       |   |   | 337,133                  |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Warrants                exercised                         |   |                          | 3,850,000  |   |                      |   | 3,850  |                                       |   |   | 746,900                  |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Warrant                valuation allocation               |   |                          | -          |   |                      |   | -      |                                       |   |   | 188,610                  |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Warrants                exercised                         |   |                          | 7,150,000  |   |                      |   | 7,150  |                                       |   |   | 1,387,150                |   |   |                         | (930,000   | )      |                               |   | - |   |   |   | - |   |
| Warrant                valuation allocation               |   |                          | -          |   |                      |   | -      |                                       |   |   | 247,390                  |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Issuance                of shares                         |   |                          | 8,000,000  |   |                      |   | 8,000  |                                       |   |   | 1,942,000                |   |   |                         | (1,800,000 | )      |                               |   | - |   |   |   | - |   |
| Issuance                of shares for agent fees          |   |                          | 1,400,000  |   |                      |   | 1,400  |                                       |   |   | -                        |   |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Warrant                valuation allocation               |   |                          | -          |   |                      |   | -      |                                       |   |   | (1,149,000               | )      |   |                         | -          |   |                               |   | - |   |   |   | - |   |
| Currency                translation adjustment            |   |                          | -          |   |                      |   | -      |                                       |   |   | -                        |   |   |                         | -          |   |                               |   | 500,638 |   |   |   | - |   |
| Net                loss October 31, 2007                  |   |                          | -          |   |                      |   | -      |                                       |   |   | -                        |   |   |                         | -          |   |                               |   | - |   |   |   | (977,378 | ) |
|                                                      |   |                          | 75,333,319 |   |                      |   | 75,333 |                                       |   |   | 4,958,281                |   |   |                         | (2,730,000 | )      |                               |   | 551,669 |   |   |   | (1,630,799 | ) |

|   | During                the period ended October 31, 2007, 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) | On                February 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 was reflected as a deferred cost until                such time as the planned equity financing is completed.  During                the nine month period ended October 31, 2007, $130,000 was recognized                as a                cost of issue. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (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). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.         |  Page                10 |
|-------------------------------------------------------------------------------|------------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                         |
|  OCTOBER              31, 2007                                           |                         |
|  (unaudited)                                                             |                         |
|  (expressed              in U.S. dollars)                                |                         |

**8.**
**SHAREHOLDERS’      EQUITY **

| (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 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                  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. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | On                October 20, 2006, KMA International issued 150,000 common shares                with a                deemed value of USD $0.19 per share in exchange for consulting                services. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.                   |   Page                11 |
|-------------------------------------------------------------------------------|------------------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                               |
|  OCTOBER              31, 2007                                           |                               |
|  (unaudited)                                                             |                               |
|  (expressed              in U.S. dollars)                                |                               |

**8.**
**SHAREHOLDERS’      EQUITY **

| (g)   | On                December 12, 2006, KMA International agreed to issue 360,000 common                shares                at USD $0.15 per share with piggyback registration rights in exchange                for                consulting services. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | On                December 12, 2006, KMA International agreed to issue 300,000 common                shares                at USD $0.15 per share with piggyback registration rights in exchange                for                consulting services. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | On                January 19, 2007, KMA International agreed to issue 1,000,000 common                shares at  $0.20 per share with piggyback registration rights in                exchange for consulting services. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j)   | On                January 31, 2007, KMA International issued 207,328 common shares                for                consulting services.  The shares were valued as follows; 71,429                common shares at $0.14 per share, 59,701 common shares at $0.17 per                share,                57,471 common shares at $0.17 per share and 18,727 common shares                at $0.53                per share. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k)   | On                January 31, 2007, a group of investors agreed to purchase 10,000,000                shares of the company’s common stock at a price of USD $0.10 per                share.  The total purchase price of  $1,000,000 was                paid to KMA International as follows: (i) $500,000 payable upon closing                and (ii) $500,000 payable within 30 days of the effective date of                the                Registration Statement. The agreement includes 10,000,000 Warrants                issued                to the investors, which shall be exercisable only within 2 years                of the                effective date of the Registration Statement, at an exercise price                of                $0.20 per share. Upon closing, the Agent was paid a fee of 10% of                the                gross value received or 1,000,000 common shares, together with Warrants                exercisable within 2 years of the effective date of the Registration                Statement, at an exercise price of  $0.20 per                share.  The shares of common stock were registered on March 12,                2007. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l)   | During                the nine month period ended October 31, 2007, KMA International issued                11,000,000 common shares pursuant to the exercise of warrants at                an                exercise price of $0.20 per share.  The company received                $1,270,000 and $930,000 has been recorded as a subscription receivable                at                October 31, 2007. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m)   | On                September 21, 2007, KMA International agreed to issue 8,000,000 shares                of                common stock at $0.25 per share in connection with a private offering.                The                purchase price of the shares is $2,000,000 which will be paid as                follows:                (i) $200,000 shall be due upon the filing of the registration statement;                (ii)  a payment of $600,000 shall be due 60 days after the                effective date of the registration statement; (iii) an additional                payment                of $600,000 shall be due 90 days after the effective date of the                registration statement; and (iv) a final payment is due 120 days                after the                effective date of the registration statement. As of October 31,2007,                the                company received $200,000 and recorded $1,800,000 as a subscription                receivable.  The purchasers of the shares also will receive                warrants to acquire an additional 8,000,000 shares of common stock                at an                exercise price of $0.30 per share for a period of 2                years.   The agent for the investors received a fee of                1,400,000 shares of common stock at $0.43 per share and warrants                to                acquire 1,400,000 of common stock at an exercise price of $0.30 per                share                for a period of 2 years. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.         |  Page                12 |
|-------------------------------------------------------------------------------|------------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                         |
|  OCTOBER              31, 2007                                           |                         |
|  (unaudited)                                                             |                         |
|  (expressed              in U.S. dollars)                                |                         |

**9.         WARRANTS**

|                                                                         |   | October                31, 2007   |        |   | October                31, 2006                |   |
|------------------------------------------------------------------------------|--------|-----------------------------------|-------------|--------|------------------------------------------------|--------|
|                                                                         |   | Number                of warrants |        |   | WeightedAverage                Exercise Price$ |   |   | Number                of warrants |   |   | Weighted                Average Exercise Price$ |   |
| Balance,                January 31, 2007                                     |   |                              | -           |   |                                           |   | - |   |   |   | - |   |   |   | - |   |
| Granted,                private      placement |   |                              | 10,000,000  |   |                                           |   | 0.20 |   |   |   | - |   |   |   | - |   |
| Granted,                agent warrants as share issue costs                  |   |                              | 1,000,000   |   |                                           |   | 0.20 |   |   |   | - |   |   |   | - |   |
|     Warrants                exercised                    |   |                              | (11,000,000 | )      |                                           |   | 0.20 |   |   |   | - |   |   |   | - |   |
| Granted,                private placement                                    |   |                              | 8,000,000   |   |                                           |   | 0.30 |   |   |   | - |   |   |   | - |   |
| Granted,                agent warrants as share issue costs                  |   |                              | 1,400,000   |   |                                           |   | 0.30 |   |   |   | - |   |   |   | - |   |
| Balance,                end of period                                        |   |                              | 9,400,000   |   |                                           |   | 0.30 |   |   |   | - |   |   |   | - |   |

| Number                ofWarrants | Exercise                Price | Expiry                Date        | Fair                Value |
|----------------------------------|-------------------------------|-----------------------------------|---------------------------|
| $                                | $                             |
| 9,400,000                        | 0.30                          | September                21, 2009 | 1,149,000                 |

----

|  KMA              GLOBAL SOLUTIONS INTERNATIONAL, INC.              |  Page                13 |
|-------------------------------------------------------------------------------|------------------------------|
|  **NOTES              TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS** |                         |
|  OCTOBER              31, 2007                                           |                         |
|  (unaudited)                                                             |                         |
|  (expressed              in U.S. dollars)                                |                         |

**10.         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 $122,049 which are due within                one                year. |
|--------|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 $57,648                including $44,259 within one year and $13,389 due in                2009. |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | The                Company is committed to minimum annual rentals under a long-term                lease for                premises which expires March 14, 2010.  Minimum rental                commitments remaining under this lease approximate $231,759 including                $86,909 due within one year, $86,909 due in 2009 and $57,941 due                in                2010. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**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**

|                                                                                |   | **Fiscal                Years**                  |      |
|-------------------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                                |   | **Three                Months ended October 31** |      |   | **Nine                Months ended October 31** |   |
|                                                                                |   | **2007**                                         |      |   | **2006** |   |   | **2007** |   |   | **2006** |   |
|                                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Sales             |   |                                             | 1,377,478 |   |   |   | 100 | % |   |   |   1,688,891 |   |   |   | 100 | % |   |   | 3,893,884 |   |   |   | 100 | % |   |   | 4,704,503 |   |   |   | 100 | % |
|  Cost                of Sales                                                  |   |                                             | 1,018,842 |   |   |   | 74.0 | % |   |   | 1,399,479 |   |   |   | 82.9 | % |   |   | 2,910,592 |   |   |   | 74.7 |   |   |   | 3,835,311 |   |   |   | 81.5 | % |
|  Gross                Profit                                                   |   |                                             | 358,636   |   |   |   | 26.0 | % |   |   | 289,412 |   |   |   | 17.1 | % |   |   | 983,292 |   |   |   | 25.3 |   |   |   | 869,192 |   |   |   | 18.5 | % |
| Selling                General & Administrative                Expenses         |   |                                             | 1,044,383 |   |   |   | 75.8 | % |   |   | 478,703 |   |   |   | 28.3 | % |   |   | 2,552,792 |   |   |   | 65.6 | % |   |   | 1,688,822 |   |   |   | 35.9 | % |
| Income                Before Income                Taxes                            |   |                                             | (685,747  | ) |   |   | (49.8 | %) |   |   | (189,291 | ) |   |   | (11.2 | )% |   |   | (1,569,500 | ) |   |   | (40.3 | %) |   |   | (819,630 | ) |   |   | (17.4 | %) |
| Net                Income                                                           |   |                                             | (417,813  | ) |   |   | (30.3 | %) |   |   | (114,918 | ) |   |   | (6.8 | %) |   |   | (977,378 | ) |   |   | (25.1 | %) |   |   | (553,246 | ) |   |   | (11.8 | %) |

----

***Sales***

*** ***

----

***Gross      Profit***

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

----

***Operating      Income (Loss)***

***Taxes      on Income***

***Liquidity      and Capital Resources***

|                                                      |   |     **Nine                Months ended October 31,** |       |
|-----------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|
|                                                      |   | **2007**                                                                 |       |   | **2006** |   |
| Net                cash from operating activities         |   | $                                                                        | (1,421,425 | ) |   | $ | (302,834 | ) |
| Net                cash from investing activities         |   | $                                                                        | (452,615   | ) |   | $ | (35,605 | ) |
| Net                cash from financing activities         |   | $                                                                        | 1,783,851  |   |   |   | 243,619 |   |
| Effect                of currency translation adjustments |   | $                                                                        | 134,408    |   |   | $ | (5,501 | ) |
| Total                change in cash and cash equivalents  |   | $                                                                        | 44,219     |   |   | $ | (100,321 | ) |

***Overview***

***Operating      Activities***

----

***Financing      Activities***

***Investing      Activities***

***Off-Balance      Sheet Arrangements***

***Market      Risk***

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

***Revenue      Recognition***

----

***Sales      Returns and Allowances***

***Allowance      for Doubtful Accounts***

***Inventories***

***Goodwill***

***Accounting      for Income Taxes***

----

**Item      3. CONTROLS AND PROCEDURES**

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

***Changes      in Internal Controls***

----

**PART      II**

**OTHER      INFORMATION**

**Item      1. LEGAL PROCEEDINGS**

**Item      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**Item      3. DEFAULTS UPON SENIOR SECURITIES**

**Item      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

| 1.   | Messrs.                Jeffrey D. Reid, Daniel K. Foster and Michael McBride were elected                to                serve as members of the Company’s Board of Directors; each receiving                38,030,411 votes in favor of election and 48,295 votes                withheld. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | The                appointment of McGovern, Hurley, Cunningham, LLP to serve as the                Company’s                independent auditors for its fiscal year ending January 31, 2008                was                ratified with 38,078,706 votes were cast for the ratification; 0                votes                were cast against the ratification; and there were 0 abstentions.                There                were no broker non-votes. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      5. OTHER INFORMATION**

**Item      6. EXHIBITS**

| **Exhibit                No.** | **Exhibit                Description**                                                                                                               |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| **31#**                        | Certifications                of Chief Executive Officer and Chief Financial Officer under Exchange                Act                Rule 13a-14(a) |
| **32#**                        | Certifications                of Chief Executive Officer and Chief Financial Officer under 18 U.S.C.                1350.                            |
| **#**                          | Filed                herewith.                                                                                                                       |

----

**SIGNATURES**

**KMA      GLOBAL SOLUTIONS INTERNATIONAL, INC.**

| December                18, 2007 | By:  /s/                Jeffrey D. Reid |   |
|----------------------------------|---------------------------------------------------|--------|
|   |  Name:              Jeffrey D.              Reid           |   |
|--------|-------------------------------------------------------------------------------------------------------------------|--------|
|   |  Title:              Chief Executive Officer and President |   |
|--------|-----------------------------------------------------------------|--------|
|   |  (Principal              Executive Officer and Principal Financial Officer) |   |
|--------|----------------------------------------------------------------------------------|--------|