**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**





**FORM
      10-QSB**





(Mark
      One)





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





For
      the
      quarterly period ended July 31, 2007.





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





For
      the
      transition period from _____________ to _____________





Commission
      file number: 0-50046





**KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.**


----------------------------------------


(Name
      of
      Small Business Issuer in its Charter)




**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**


Check
      whether the
      issuer:  (1) filed all reports required to be filed by Section 13 or
      15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
      (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past 90 days.
      Yes
      [X] No [ ]





Indicate
      by check mark whether the
      registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.Yes
      [ ] No [ X ]





The
      number of shares outstanding of the issuer's stock, $0.001 par value per share,
      as of September 13, 2007 was 65,933,319.





Transitional
      Small Business Disclosure
      Format (check one): Yes [ ]  No [X]










**PART
      I**


**FINANCIAL
      INFORMATION**








**Item
      1. FINANCIAL STATEMENTS**














**KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.**





**INTERIM
      CONSOLIDATED FINANCIAL STATEMENTS**





**JULY
      31, 2007**





**(unaudited)**





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














**INDEX**
            **PAGE**Interim
                Consolidated Balance Sheets
            1
                -
                2Interim
                Consolidated Statements of Income and Deficit
            3Interim
                Consolidated Statements of Cash Flows
            4Notes
                to the Interim Consolidated Financial Statements
            5-11



























KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
      1


**INTERIM
      CONSOLIDATED BALANCE SHEETS**


(expressed
      in U.S. dollars)


As
                at
              July
                31, 2007
              (unaudited)
              $
            
            
            As
                at
              Jan
                31, 2007
              (audited)
              $**ASSETS****CURRENT**Cash
            
            
            339,986
            
            
            
            22,710Accounts
                receivable
            
            
            43,770
            
            
            
            287,701Inventories
                (Note 3)
            
            
            471,790
            
            
            
            303,117Prepaid
                expenses
            
            
            286,496
            
            
            
            340,210**TOTAL
                CURRENT ASSETS**
            
            
            1,142,042
            
            
            
            953,738**DEPOSITS
                ON EQUIPMENT AND PATENTS**
            
            
            188,496
            
            
            
            57,342**EQUIPMENT
                AND PATENTS**(Note 5)
            
            
            852,010
            
            
            
            641,178**FUTURE
                INCOME TAXES** (Note 6)
            
            
            706,706
            
            
            
            335,958**DEFERRED
                COSTS** (Note 8(b))
            
            
            188,948
            
            
            
            212,4043,078,202
            
            
            
            2,200,620








APPROVED
      ON BEHALF OF THE BOARD:





_____________________________,  Director





_____________________________,  Director










The
            accompanying notes are an integral part of these interim consolidated
            financial
            statements.


KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
      2


**INTERIM
      CONSOLIDATED BALANCE SHEETS**


(expressed
      in U.S. dollars)


As
                at
              July
                31, 2007
              (unaudited)
              $
            
            
            As
                at
              Jan
                31, 2007
              (audited)
              $**LIABILITIES****CURRENT**Accounts
                payable and accrued liabilities
            
            
            1,132,650
            
            
            
            1,062,297Current
                portion of capital lease obligation (Note 7)
            
            
            31,838
            
            
            
            55,804**TOTAL
                CURRENT LIABILITIES**
            
            
            1,164,488
            
            
            
            1,118,101**ADVANCES****FROM
                SHAREHOLDERS** (Note 4)
            
            
            178,534
            
            
            
            87,053**CAPITAL
                LEASE OBLIGATION**(Note 7)
            
            
            -
            
            
            
            2071,343,022
            
            
            
            1,205,361**SHAREHOLDERS'
                EQUITY****CAPITAL
                STOCK**(Note 8)Preferred
                stock, $0.001 par value, 25,000,000 shares authorized
              and
                none issued and outstandingCommon
                stock, $0.001 par value, 175,000,000 shares authorized
              and
                58,783,319 shares issued and outstanding
            
            
            58,783
            
            
            
            42,066**ADDITIONAL
                PAID-IN CAPITAL**(Note 8)
            
            
            2,530,741
            
            
            
            729,098**SHARES
                TO BE ISSUED**(Note 8)
            
            
            -
            
            
            
            826,485**WARRANTS**(Note 9)
            
            
            247,390
            
            
            
            -**ACCUMULATED
                COMPREHENSIVE INCOME** (Note 8)
            
            
            111,252
            
            
            
            51,031**(DEFICIT)**(Note 8)
            
            
            (1,212,986
            )
            
            
            (653,421
            )1,735,180
            
            
            
            995,2593,078,202
            
            
            
            2,200,620









The
            accompanying notes are an integral part of these interim consolidated
            financial
            statements.


KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
      3


**INTERIM
      CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT**


(unaudited)


(expressed
      in U.S. dollars)




Three
                    Months Ended
                  July
                    31,
                
                
                Six Months
                      Ended
                    July
                      31,2007
                  $
                
                
                
                2006
                  $
                
                
                
                2007
                  $
                
                
                
                2006
                  $**SALES**
                
                
                1,316,730
                
                
                
                1,888,803
                
                
                
                2,516,406
                
                
                
                3,015,613**COST
                    OF SALES**Inventories,
                    beginning of period
                
                
                591,997
                
                
                
                483,313
                
                
                
                303,117
                
                
                
                452,055Purchases
                
                
                872,463
                
                
                
                1,487,815
                
                
                
                2,060,423
                
                
                
                2,421,4781,464,460
                
                
                
                1,971,128
                
                
                
                2,363,540
                
                
                
                2,873,533Less:  Inventories,
                    end of period
                
                
                471,790
                
                
                
                437,701
                
                
                
                471,790
                
                
                
                437,700992,670
                
                
                
                1,533,427
                
                
                
                1,891,750
                
                
                
                2,435,833**GROSS
                    MARGIN**
                
                
                324,060
                
                
                
                355,376
                
                
                
                624,656
                
                
                
                579,780**SELLING,
                    GENERAL AND**
                  **ADMINISTRATIVE****EXPENSES**
                
                
                816,367
                
                
                
                650,343
                
                
                
                1,508,409
                
                
                
                1,210,119(Loss)
                    before income taxes
                
                
                (492,307
                )
                
                
                (294,967
                )
                
                
                (883,753
                )
                
                
                (630,339
                )Income
                    taxes – future (Note 6)
                
                
                (192,012
                )
                
                
                (101,611
                )
                
                
                (324,188
                )
                
                
                (192,011
                )**NET
                    (LOSS) FOR THE PERIOD**
                
                
                (300,295
                )
                
                
                (193,356
                )
                
                
                (559,565
                )
                
                
                (438,328
                )**(DEFICIT),**beginning of period
                  (Note
                    8)
                
                
                (912,691
                )
                
                
                (161,990
                )
                
                
                (653,421
                )
                
                
                82,982**(DEFICIT),**end of period (Note 8)
                
                
                (1,212,986
                )
                
                
                (355,346
                )
                
                
                (1,212,986
                )
                
                
                (355,346
                )**(LOSS)
                    PER SHARE**Basic
                
                
                (0.01
                )
                
                
                (0.01
                )
                
                
                (0.01
                )
                
                
                (0.01
                )Diluted
                
                
                (0.01
                )
                
                
                (0.01
                )
                
                
                (0.01
                )
                
                
                (0.01
                )Weighted
                    average number of common shares
                
                
                56,373,536
                
                
                
                41,903,219
                
                
                
                54,030,288
                
                
                
                38,820,601


The
            accompanying notes are an integral part of these interim consolidated
            financial
            statements.


KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
      4


**INTERIM
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


FOR
      THE
      SIX MONTH PERIODS ENDED JULY 31


(unaudited)


(expressed
      in U.S. dollars)


2007
              $
            
            
            
            2006
              $**CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                (loss) for the period
            
            
            (559,565
            )
            
            
            (438,328
            )Adjustments
                for:Amortization
            
            
            66,735
            
            
            
            43,526Shares
                issued for services provided
            
            
            6,500
            
            
            
            63,197Future
                income taxes
            
            
            (324,188
            )
            
            
            (192,011
            )(810,518
            )
            
            
            (523,616
            )Changes
                in non-cash working capital:Decrease
                (increase) in accounts receivable
            
            
            263,689
            
            
            
            (128,016
            )(Increase)
                decrease in inventories
            
            
            (132,361
            )
            
            
            17,278Decrease
                (Increase) in prepaid expenses
            
            
            85,623
            
            
            
            (113,322
            )(Decrease)
                increase in accounts payable and
              accrued
                liabilities
            
            
            (37,948
            )
            
            
            659,109179,003
            
            
            
            435,049Cash
                flows from operating activities
            
            
            (631,515
            )
            
            
            (88,567
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Issuance
                of capital stock
            
            
            500,000
            
            
            
            -Exercise
                of warrants
            
            
            770,000
            
            
            
            -(Decrease)
                in capital lease obligation
            
            
            (28,868
            )
            
            
            (25,439
            )Increase
                in advances from shareholders (net)
            
            
            79,486
            
            
            
            58,711Cash
                flows from financing activities
            
            
            1,320,618
            
            
            
            33,272**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of equipment and patents
            
            
            (206,082
            )
            
            
            (30,416
            )Deposits
                on equipment and patents
            
            
            (120,673
            )
            
            
            (10,181
            )Cash
                flows from investing activities
            
            
            (326,755
            )
            
            
            (40,597
            )**EFFECT
                OF CUMULATIVE CURRENCY**
              **TRANSLATION
                ADJUSTMENTS**
            
            
            (45,072
            )
            
            
            (1,537
            )Increase
                (decrease) in cash
            
            
            317,276
            
            
            
            (97,429
            )Cash,
                beginning of period
            
            
            22,710
            
            
            
            126,727Cash,
                end of period
            
            
            339,986
            
            
            
            29,298**SUPPLEMENTAL
              INFORMATION:**Interest paid
            
            
            1,361
            
            
            
            6,955Income taxes paid
            
            
            -
            
            
            
            -Equipment acquired by capital lease
            
            
            -
            
            
            
            -






The
            accompanying notes are an integral part of these interim consolidated
            financial
            statements.




KMA
        GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
        5
 **NOTES
        TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 JULY
        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**




The
      accompanying unaudited interim consolidated financial statements of the Company
      have been prepared in accordance with accounting principles generally accepted
      in the United States of America for interim financial information and the
      requirements of item 310 (b) of Regulation S-B. Accordingly, certain information
      and disclosures normally included in financial statements prepared in accordance
      with accounting principles generally accepted in the United States of America
      have been condensed or omitted pursuant to the rules and regulations of the
      Securities and Exchange Commission. The interim consolidated financial
      statements reflect all adjustments (consisting only of normal recurring
      adjustments), which, in the opinion of management, are necessary for a fair
      presentation of the results for the periods presented. There have been no
      significant changes of accounting policy since January 31, 2007. The results
      from operations for the period may not be indicative of the results
      expected for the full fiscal year or any future period.




**3.**  **INVENTORIES**





July
                31,
              2007
            
            
            
            
            
            January
                31,
              2007$
            
            
            
            
            
            
            
            $Finished
                goods
            
            
            283,471
            
            
            
            
            
            
            
            117,702Raw
                materials
            
            
            188,319
            
            
            
            
            
            
            
            185,415471,790
            
            
            
            
            
            
            
            303,117





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





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




**5.         EQUIPMENT
        AND PATENTS**


Cost
            
            
            
            
            
            Accumulated
              Amortization
            
            
            
            
            
            July
                1,
              2007
              Net$
            
            
            
            
            
            
            $
            
            
            
            
            
            
            
            $Equipment
            
            
            1,083,972
            
            
            
            
            
            
            
            557,434
            
            
            
            
            
            
            
            526,538Equipment
                under capital lease
            
            
            178,286
            
            
            
            
            
            
            
            41,600
            
            
            
            
            
            
            
            136,686Patents
            
            
            89,550
            
            
            
            
            
            
            
            23,735
            
            
            
            
            
            
            
            65,815Computer
                equipment
            
            
            67,760
            
            
            
            
            
            
            
            30,183
            
            
            
            
            
            
            
            37,577Leasehold
                improvements
            
            
            74,179
            
            
            
            
            
            
            
            4,363
            
            
            
            
            
            
            
            69,816Office
                furniture
            
            
            18,345
            
            
            
            
            
            
            
            2,767
            
            
            
            
            
            
            
            15,5781,512,092
            
            
            
            
            
            
            
            660,082
            
            
            
            
            
            
            
            852,010























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






**5.**         **EQUIPMENT
      AND PATENTS**(Continued)





Cost
            
            
            
            
            
            Accumulated
              Amortization
            
            
            
            
            
            January
                31,
              2007
              Net$
            
            
            
            
            
            
            $
            
            
            
            
            
            
            
            $Equipment
            
            
            892,915
            
            
            
            
            
            
            
            460,364
            
            
            
            
            
            
            
            432,551Equipment
                under capital lease
            
            
            161,594
            
            
            
            
            
            
            
            29,626
            
            
            
            
            
            
            
            131,968Patents
            
            
            81,166
            
            
            
            
            
            
            
            19,049
            
            
            
            
            
            
            
            62,117Computer
                equipment
            
            
            36,379
            
            
            
            
            
            
            
            24,549
            
            
            
            
            
            
            
            11,830Office
                furniture
            
            
            4,720
            
            
            
            
            
            
            
            2,008
            
            
            
            
            
            
            
            2,7121,176,774
            
            
            
            
            
            
            
            535,596
            
            
            
            
            
            
            
            641,178





**6.         INCOME
      TAXES**





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









July
                31,
              2007
            
            
            
            
            
            July
                31,
              2006$
            
            
            
            
            
            
            
            $Income
                tax provision at combined Canadian federal and
              provincial
                statutory rate of 36.12% (2006 – 36.12%)
            
            
            (319,212
            )
            
            
            
            
            
            
            (227,678
            )Increase
                due to:Change
                in effective tax rate
            
            
            -
            
            
            
            
            
            
            
            21,787Other
            
            
            (4,976
            )
            
            
            
            
            
            
            13,880(324,188
            )
            
            
            
            
            
            
            (192,011
            )




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





July
                31,
              2007
            
            
            
            
            
            January
                31,
              2007$
            
            
            
            
            
            
            
            $Future
                income tax assets:Losses
                carried forward
            
            
            781,625
            
            
            
            
            
            
            
            411,800Future
                income tax liabilities:Equipment
                and patents
            
            
            (74,919
            )
            
            
            
            
            
            
            (75,842
            )Future
                tax asset
            
            
            706,706
            
            
            
            
            
            
            
            335,958





**7.         CAPITAL
      LEASE OBLIGATIONS**





The
      Company has entered into a leasing agreement for equipment dated March 15,
      2005.  The lease bears an effective rate of interest of 13.8% per
      annum, requires monthly payments of $5,893 Canadian dollars, and is secured
      by
      the equipment.  The remaining amount of $31,838 is due within one
      year.













KMA
            GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
            7
 **NOTES
            TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 JULY
            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
            
            
            
            82,982Issuance
                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
            
            
            
            82,982January
                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
            
            
            
            82,982Accumulated
                deficit
              acquired
                in reverse
              merger
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            171,341Retirement
                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
          8
 **NOTES
          TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 JULY
          31,
          2007
 (unaudited)
 (expressed
          in U.S. dollars)




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





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




Common
                Shares
              
              
              Par
                Value
              
              
              Additional
                Paid-in
                Capital
              
              
              Comp.
                Income
              
              
              Accumulated
                Earnings$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Issuance
                  of shares
                for
                  financing, net
              
              
              10,000,000
              
              
              
              10,000
              
              
              
              965,000
              
              
              
              2,883
              
              
              
              -Warrant
                  valuation
                allocation
              
              
              -
              
              
              
              -
              
              
              
              (346,000
              )
              
              
              -
              
              
              
              -Issuance
                  of share 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
              
              
              
              -
              
              
              
              -Net
                  loss July 31,
                2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              60,221
              
              
              
              (559,565
              )58,783,319
              
              
              
              58,783
              
              
              
              2,530,741
              
              
              
              111,252
              
              
              
              (1,212,986
              )





During
      the period ended July 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 has been reflected as a deferred cost until
      such time as the planned equity financing is completed.  During the
      six month period ended July 31, 2007, $44,250 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).





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







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





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




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







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





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





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




















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







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





(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, a group of investors agreed to purchase 10,000,000 shares
      of
      the company’s common stock at a price of $0.10 per share.  The
      total purchase price of $1,000,000 shall be 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 shall be 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.  As of April 30, 2007 KMA International received
      $1,000,000.  The shares of common stock were registered on March 12,
      2007.





(k)  On
      January 31, 2007, KMA International agreed to issue 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.





(l)  During
      the second quarter of 2008, KMA International issued 3,850,000 common shares
      pursuant to the exercise of warrants at an exercise price of $0.20 per
      share.  The company received $770,000.





**9.         WARRANTS**





Warrant
      transactions during the periods were as follows:




July
                31, 2007
            
            
            July
                31, 2006Number
                of warrants
            
            
            Weighted
              Average
              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
            
            
            (3,850,000
            )
            
            
            0.20
            
            
            
            -
            
            
            
            -Balance,
                end of period
            
            
            7,150,000
            
            
            
            0.20
            
            
            
            -
            
            
            
            -





At
      July
      31, 2007, outstanding warrants to acquire common shares of the Company were
      as
      follows:





Number
                of
              Warrants
            Exercise
                Price
            Expiry
                Date
            Fair
                Value$
            $7,150,000*
            0.20
            January
                31, 2009
            247,390




The
        fair
        value of these warrants was estimated using the Black-Scholes option model
        with
        the following assumptions: dividend yield 0%, expected volatility of 100%,
        risk
        - free interest rate of 4.1% and an expected life of two years.  The
        fair value assigned to these warrants during the period was
        $436,000.
 *All
        Warrants outstanding were exercised subsequent to the period
        end.

















KMA
          GLOBAL SOLUTIONS INTERNATIONAL, INC.                   Page
          11
 **NOTES
          TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 JULY
          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 $135,100 including $108,080 due within one year,
      $27,020 due in 2009.  The Company is also responsible for common area
      costs.





(b)  The
      Company has entered into various vehicle leases and has accounted for them
      as
      operating leases.  Obligations due approximate $51,049 including
      $39,194 within one year and $11,855 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 $231,063 including $86,648 due within
      one
      year, $86,648 due in 2009 and $57,767 due in 2010.





**11.         FINANCIAL
      INSTRUMENTS**





**Fair
      Value**





Generally
      accepted accounting principles in the United States require that the Company
      disclose information about the fair value of its financial assets and
      liabilities.  Fair value estimates are made at the balance sheet date,
      based on relevant market information and information about the financial
      instrument.  These estimates are subjective in nature and involve
      uncertainties in significant matters of judgment and therefore cannot be
      determined with precision.  Changes in assumptions could significantly
      affect these estimates.





The
      carrying amounts for cash, accounts receivable and accounts payable and accrued
      liabilities on the balance sheet approximate fair value because of the limited
      term of these instruments.





**Foreign
      Exchange Risk**





Certain
      of the Company's sales and expenses are incurred in Canadian and Hong Kong
      currency and are therefore subject to gains and losses due to fluctuations
      in
      that currency.





**Credit
      Risk**





The
      Company is exposed, in its normal course of business, to credit risk from its
      customers. No one single party accounts for a significant balance of accounts
      receivable.





**Interest
      Rate Risk**


The
      Company has interest-bearing borrowings for which general rate fluctuations
      apply.




12.     
      SUBSEQUENT EVENTS




See Note 9.
















CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





Unless
      otherwise indicated or the context otherwise requires, all references to the
      "Company," "we," "us" or "our" and similar terms refer to KMA Global Solutions
      International, Inc. and its subsidiaries.





The
      information contained in this report on Form 10-QSB and in other public
      statements by the Company and Company officers or directors includes or may
      contain certain "forward-looking statements" within the meaning of Section
      27A
      of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended. All statements other than statements of
      historical facts included or incorporated by reference in this report,
      including, without limitation, statements regarding our future financial
      position, business strategy, budgets, projected revenues, projected costs and
      plans and objective of management for future operations, are forward-looking
      statements. Forward-looking statements generally can be identified by the use
      of
      forward-looking terminology such as "may," "will," "expect," "intend,"
      "project," "estimate," "anticipate," or "believe" or the negative thereof or
      any
      variation thereon or similar terminology.





Such
      forward-looking statements are made based on management's beliefs, as well
      as
      assumptions made by, and information currently available to, management pursuant
      to the "safe-harbor" provisions of the Private Securities Litigation Reform
      Act
      of 1995. Although we believe that the expectations reflected in such
      forward-looking statements are reasonable, we can give no assurance that such
      expectations will prove to have been correct. Such statements are not guarantees
      of future performance or events and are subject to known and unknown risks
      and
      uncertainties that could cause the Company's actual results, events or financial
      positions to differ materially from those included within the forward-looking
      statements. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which speak only as of the date made. All subsequent
      written and oral forward-looking statements attributable to us, or persons
      acting on our behalf, are expressly qualified in their entirety by these
      cautionary statements. Except as required by law, we undertake no obligation
      to
      disclose any revision to these forward-looking statements to reflect events
      or
      circumstances after the date made, changes in internal estimates or
      expectations, or the occurrence of unanticipated events.





**Item
      2.MANAGEMENT'S DISCUSSION AND ANALYSIS**





The
      following Management's Discussion and Analysis is intended to help the reader
      understand our results of operations and financial condition. Management's
      Discussion and Analysis is provided as a supplement to, and should be read
      in
      conjunction with, our financial statements and the accompanying notes thereto.
      The revenue and operating income (loss) amounts in this Management's Discussion
      and Analysis are presented in accordance with United States generally accepted
      accounting principles.





**OVERVIEW**





KMA
      Global Solutions International, Inc., which was formed on March 9, 2006
      under the laws of the State of Nevada, through our operating subsidiary, KMA
      Global Solutions Inc. ("KMA (Canada)"), is an innovator and internationally
      recognized leader in the Electronic Article Surveillance ("EAS") market. We
      serve a diverse and geographically dispersed customer base consisting
      predominantly of retailer suppliers, branded apparel, multimedia and
      pharmaceutical companies and contract manufacturers, providing low cost and
      customized solutions to protect against retail merchandise theft.  The
      retail industry generally refers to these losses as “inventory shrinkage” or
“shrink”.  On average, shrink represents nearly 2% of a retailer's
      revenue and can often be much more.  Worldwide, retail losses due to
      shrinkage are a problem exceeding $70 Billion USD. The Company has developed
      a
      suite of proprietary EAS products to address the specific needs of a changing
      marketplace, using patented processes to manufacture its tags at high speeds
      and
      deliver its products on a just in time basis. Our EAS solutions are designed
      to
      fit the needs of major suppliers to multinational retailers in the apparel,
      multimedia, sporting goods, food and over-the-counter (OTC) pharmaceutical
      and
      health supplement industries.














The
      Company is engaged in the supply of EAS solutions (including the Company's
      products, NEXTagTM and DUAL TagTM), focusing on providing customized solutions in
      the apparel, multi media, sporting goods, food and pharmaceutical industries.
      We
      will grow by concentrating on executing a strategy as a global operating
      company, while maintaining a continued focus on providing customers with
      innovative products and solutions, outstanding service, consistent quality,
      on-time delivery and competitively priced products. Together with continuing
      investments in new product development, state-of-the-art manufacturing
      equipment, and innovative sales and marketing initiatives, management believes
      the Company is well-positioned to compete successfully as a provider of EAS
      tagging solutions to the retail apparel, multimedia and pharmaceutical
      industries, worldwide. The capital needed to fund our growth has been generated
      to date through investment by the founding shareholders and through reinvestment
      of profits and private placements of securities.





The
      use
      of EAS systems in the retail environment continues to generate significant
      cost
      savings for retailers. Our management believes that the extremely competitive
      retail environment, and the Company's low cost solutions relative to other
      EAS
      suppliers, places us in a favorable position for the future. The addition of
      new
      high-speed high volume equipment is expected to drive costs of production lower
      and may enable the Company to capture a larger share of the EAS market. With
      the
      completion of the implementation of new production equipment, we plan to open
      production facilities in high-demand locations, thus shortening supply lines
      on
      raw materials, and reducing operating costs through efficiencies, and shipping
      costs for finished goods. We anticipate increased demand for our products in
      international as well as North American markets. Management's ongoing strategy
      includes implementing process improvements to reduce costs in all of our
      manufacturing facilities, re-deploying assets to balance production capacity
      with customer demand, and seeking to expand our production in new and emerging
      markets to minimize labor costs and maximize operating performance
      efficiencies.





The
      Company has begun to execute its expansion plan, which includes relocation
      of
      our existing manufacturing capacity from our Canadian facilities, primarily
      to
      facilities in Hong Kong, India and Mexico, expanding our sales operation to
      include Europe and Asia, as well as relocating our headquarters from Ontario,
      Canada to a suitably located US city.





**RESULTS
      OF OPERATIONS**





The
      Company’s results of operations for the three and six months ended July 31, 2007
      and 2006  in dollars and as a percent of sales, are presented
      below:





**Three
                Months ended July 31**
            
            
            **Six
                Months ended July 31****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Sales
            
            
            1,316,730
            
            
            
            100
            %
            
            
            1,888,803
            
            
            
            100
            %
            
            
            2,516,406
            
            
            
            100
            %
            
            
            3,015,613
            
            
            
            100
            %Cost
                of Sales
            
            
            992,670
            
            
            
            75.4
            %
            
            
            1,533,427
            
            
            
            81.2
            %
            
            
            1,891,750
            
            
            
            75.2
            %
            
            
            2,435,833
            
            
            
            80.8
            %Gross
                Profit
            
            
            324,060
            
            
            
            24.6
            %
            
            
            355,376
            
            
            
            18.8
            %
            
            
            624,656
            
            
            
            24.8
            %
            
            
            579,780
            
            
            
            19.2
            %Selling
                General & Administrative Expenses
            
            
            816,367
            
            
            
            62.0
            %
            
            
            650,343
            
            
            
            34.4
            %
            
            
            1,508,409
            
            
            
            59.9
            %
            
            
            1,210,119
            
            
            
            40.1
            %Income
                Before Income Taxes
            
            
            (492,307
            )
            
            
            (37.4
            %)
            
            
            (294,967
            )
            
            
            (15.6
            )%
            
            
            (883,753
            )
            
            
            (35.1
            %)
            
            
            (630,339
            )
            
            
            (20.9
            %)Net
                Income
            
            
            (300,295
            )
            
            
            (22.8
            %)
            
            
            (193,356
            )
            
            
            (10.2
            )%
            
            
            (559,565
            )
            
            
            (22.2
            %)
            
            
            (438,328
            )
            
            
            (14.5
            %)




















**Sales**





The
      Company's sales decreased $572,073 or 30.3% to $1,316,730, for the three months
      ended July 31, 2007, compared to $1,888,803 for the three months ended July
      31,
      2006 and decreased $499,207 to $2,516,406 for the six months ended July 31,
      2007
      compared to $3,015,613 for the six months ended July 31,
      2006.  Despite the acquisition of new accounts and expanding our
      programs with some existing accounts, our ability to realize the potential
      from
      those gains was hampered by delays in the placement of actual orders, delays
      in
      the implementation of new production lines, and the cancellation of a
      significant retail program affecting a number of companies in the industry,
      which had contributed to a strong quarter last
      year.****** Although sales results are lower than
      anticipated, the final six months are trending upward, and we believe sales
      growth may return KMA to profitability during the third and fourth quarters
      of
      the fiscal year.





During
      the past fiscal year, we introduced a number of new feature sets to the NEXTagTM
product line, including the use of new materials, greater printing capability,
      and precisely matching material and ink colors in order to faithfully recreate
      brand images and logos, all of which has been well received.  We
      believe these added value items will eventually permit KMA to secure additional
      business, particularly from international accounts, as more and more specialty
      retailers and design groups throughout the world, who have demonstrated an
      interest in initiating EAS source tagging programs using custom branded
      solutions.





We
      have
      nearly completed the re-positioning of our production and operations in order
      to
      allow us to move further forward with larger apparel programs that we anticipate
      will help deliver increased sales revenue.   As part of this
      repositioning, we anticipate having a greater ability to manage our anticipated
      growth and implement our global strategy of cutting costs by placing
      manufacturing facilities in the countries of demand and reducing head office
      costs.





Although
      largely driven by North American retail accounts to date, a significant portion
      of our current NEXTagTM activity involves offshore fulfillment, as the majority
      of apparel manufacturing now takes place in overseas markets.  In an
      effort to better serve these markets, KMA has, for a number of years now,
      maintained sales offices in both Hong Kong and in Taiwan, while manufacture
      the
      majority of its products in Canada.  We believe that providing local
      representation has been important in helping fuel growth in this segment, and
      as
      indications suggests, this sector will expand.  During the period
      ending July 31, 2007, we secured appropriate space to establish a manufacturing
      facility in Hong Kong, in order to better serve this important
      market.  Although the new Hong Kong facility currently serves as our
      logistics center for Asia, we will be outfitting it with production equipment
      and plan to be in full production by the end of October 2007.





Once
      the
      new Hong Kong facility is fully operational as a manufacturing site, we plan
      to
      turn our attention to another key apparel market by establishing a similar
      production facility in one of the principal garment manufacturing centers in
      India.  Our plans have been modified so that we now plan to secure a
      site and bring the new Indian facility on line during the spring of
      2008.  When fully operational, these two facilities will allow us to
      benefit from a number of economies, by not only physically locating production
      in the geographical centers where most of our finished goods are used, but
      will
      also permit significant savings in raw materials, freight and labor costs,
      which
      will result in positioning our NEXTag product much more competitively than
      it is
      currently.  In addition, we plan to add local sales representation in
      these international locations to directly interact with the many apparel
      factories located in these regions, which will improve KMA’s ability to take
      advantage of opportunities as they become available.





KMA’s
      DualTagTM business is based in supplying the only patent pending,
      dual-technology, self-adhesive label in the industry, containing the base
      elements of the two most popular EAS technologies in use today.  By
      providing both technologies on a single label, KMA enables manufacturers to
      tag
      their entire production with a single device, permitting them to maintain a
      single inventory of each product, regardless of what EAS technology is in use
      at
      the store to which the product unit is eventually shipped.  Without
      DualTag, manufacturers traditionally find it necessary to maintain multiple
      inventories of their products that differ only by label technology in order
      to
      comply with their retail customers’ requirements. In addition, we have completed
      the necessary advance planning that will allow the incorporation of RFID into
      the DualTag product as specialty retailers begin to incorporate item-level
      RFID
      into their operations and begin to demand its inclusion in their suppliers
      products.














During
      the period ending July 31, 2007, we introduced a new, non-adhesive, insertable
      DualTag suitable for such products as CD and DVD discs, or boxed products such
      as pharmaceuticals, which has received an enthusiastic initial response from
      a
      number of accounts.  Although we anticipated bringing our new DualTag
      production equipment into full online status during the period, we were hampered
      by a number of supplier delays which prevented us from benefiting from the
      increased capacity we anticipated, which affected our ability to take advantage
      of certain DualTag opportunities that became available to
      us.  Although this resulted in lost sales during the period, we do not
      expect it to negatively impact our relationship with the involved accounts
      and
      believe that we will benefit from future orders from these same
      clients.





**Gross
      Profit**





Gross
      profit was $324,060 or 24.6% of sales for the three months ended July 31, 2007,
      compared with $355,376 or 18.8% for the three months ended July 31, 2006, and
      $624,656 or 24.8% for the six months ended July 31, 2007, as compared with
      $579,780 or 19.2% in the six months ended July 31, 2006.  The gross
      profit for the three months and six months ended July 31, 2007 as compared
      to
      the previous year was considerably higher as a percentage of sales, primarily
      due to shifting production of our DualTag from an outsource to a
      new in-house production line, as well as realizing the benefits derived
      from a number of improvements to our production methodologies, sourcing of
      raw
      materials and reduction in waste as a result of a focus on product
      quality.





Management's
      ongoing strategy to achieve and improve profits includes implementing process
      and purchasing improvements to reduce costs in manufacturing and transferring
      the majority of existing manufacturing capacity from the Company's Canadian
      operations primarily to Hong Kong and India, in order to minimize labor, raw
      materials, and freight.





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





SG&A
      expenses were $816,367 or 62.0% of sales for the three months ended July 31,
      2007, compared with $650,343 or 34.4% of sales for the three months ended July
      31, 2006, and $1,508,409 or 59.9% for the six months ended July 31, 2007 as
      compared to $1,210,119 or 40.1% for the six months ended July 31,
      2006.





The
      increase in the ratio of SG&A expenses to sales is primarily due
      to: (i) An unfavorable shift in exchange rates as the Canadian dollar rose
      strongly against its US counterpart; (ii) The impact of lower sales
      revenues and its effect on SG&A as a percentage of sales; (iii) Increases in
      wages and benefits resulting primarily from the addition of experienced
      management to assist in the implementation of our growth plan, the full cost
      of
      which is included in the period ending July 31, 2007, versus only a portion
      of
      which was included in the period ending July 31, 2006; (iv) The
      implementation of a full group benefits program in order to both attract and
      retain quality staff and management; (v) An increase in consulting services
      and
      sales commissions; and (vi) An increase in occupancy costs as a result of
      opening our new Hong Kong facility. These higher expenses were offset to a
      degree through: (i) lower professional fees which in the period ending July
      31,
      2006 were associated with the company’s cost of going public; and (ii) A modest
      reduction in travel expense.
















**Operating
      Income (Loss)**





Operating
      loss before taxes was $492,307 or 37.4% for the three months ended July 31,
      2007, compared with an operating loss before taxes of $294,967 or 15.6% for
      the
      three months ended July 31, 2006, and $883,753 or 35.1% for the six months
      ended
      July 31, 2007 as compared to an operating loss of $630,339 or 20.9% for the
      six
      months ended July 31, 2006.





**Taxes
      on Income**





The
      Company experienced an operating loss for the year and therefore recognized
      a
      future tax benefit of $192,012 for the three months ended July 31, 2007 versus
      a
      future tax benefit of $101,611 for the three months ended July 31, 2006, and
      for
      the six months ended July 31, 2007, experienced a future tax benefit of $324,188
      as compared to a future tax benefit of $192,011 for the six months ended July
      31, 2006.  The effective income tax rates of the future tax benefit
      for the three and six months ended July 31, 2007 was 39% and 37%
      respectively.  For the three and six months ended July 31, 2006, the
      future tax benefit was 34% and 31%.  The statutory income tax rate
      going forward for the Company, with all of its operating activities taxed in
      Canada, is approximately 36% as a result of applicable combined federal and
      provincial tax rates.





**Liquidity
      and Capital Resources**





The
      table
      below represents summary cash flow information for the six months ended July
      31,
      2007, 2006 and 2005.




**** **Three
                  Months ended July 31,****2007**
              
              
              **2006**
              
              
              **2005**Net
                  cash from operating activities
              
              $
              (631,515
              )
              
              $
              (88,567
              )
              
              $
              (8,801
              )Net
                  cash from investing activities
              
              $
              (326,755
              )
              
              $
              (40,597
              )
              
              $
              (104,475
              )Net
                  cash from financing activities
              
              $
              1,320,618
              
              
              $
              33,272
              
              
              $
              121,569Effect
                  of currency translation adjustments
              
              $
              (45,072
              )
              
              $
              (1,537
              )
              
              $
              (6,441
              )Total
                  change in cash and cash equivalents
              
              $
              317,276
              
              
              $
              (97,429
              )
              
              $
              1,852




***Overview***.
      The Company had, as of the end of July 31, 2007, current liabilities of
      $1,164,488 and current assets of $1,142,042. Management believes that the
      Company will generate sufficient cash from its operating activities for the
      foreseeable future, supplemented by the contracted infusion of capital, to
      fund
      its working capital needs, strengthen its balance sheet and support its growth
      strategy of expanding its geographic distribution and product
      offerings.





***Operating
      Activities***. Cash flow from operating activities for the six months
      ended July 31, 2007 resulted in a negative cash flow of $631,513, as compared
      to
      the six-month period ended July 31, 2006, which saw a negative cash flow of
      $88,567, and the six month period ended July 31, 2005 which saw a negative
      cash
      flow of $8,801.  For the six months ended July 31, 2007, the net loss,
      as adjusted for amortization, shares issued for services provided and future
      income taxes, resulted in a negative cash flow of $810,518 and with changes
      in
      non-cash working capital of $179,003 our cash flows from operating activities
      decreased by $631,515. For the six months ended July 31, 2006, the net income,
      as adjusted for amortization and future income taxes, resulted in a negative
      cash flow of $523,616, together with positive changes in non-cash working
      capital of $435,049, resulted in a negative cash flow from operating activities
      of $88,567. The variances in cash flow from operations between the six months
      ended July 31, 2007 and July 31, 2006 are primarily the result of changes in
      accounts receivable and inventory. Accounts Receivable for the company decreased
      $263,689 for the six months ended July 31, 2007 as compared to an increase
      of
      $128,016 for the six months ended July 31, 2006 primarily due to our improved
      collection procedures. Inventories increased $132,361 in the six months ending
      July 31, 2007 as compared to a decrease of $17,278 in the six months ended
      July
      31, 2006, primarily as a result of the purchase of raw materials necessary
      for
      the build up of inventory for our new Hong Kong facility.













***Financing
      Activities***. The Company's cash flow from financing activities for
      the six months ended July 31, 2007 amounted to $1,320,618, as a result of an
      issuance of capital stock in the amount of $500,000, the exercise of warrants
      in
      the amount of $770,000, a decrease in capital lease obligations of $28,868
      and
      an increase in advances by shareholders of $79,486.  By comparison, in
      the six months ended July 31, 2006 the Company experienced a decrease in capital
      lease obligations of $25,439 and an increase in advances from shareholders
      of
      $58,711, resulting in a net cash flow from financing activities of
      $33,272.  In 2005, the net cash flow from financing activities was
      $121,569.





***Investing
      Activities***. In the six months ended July 31, 2007 the Company
      experienced a decrease in cash flow from investing activities of $326,755.
      This
      was due to an increase in purchase of equipment and patents of $206,082 and
      an
      increase in deposits on equipment and patents of $120,673.  By
      comparison in the six months ended July 31, 2006, the Company experienced a
      decrease in cash flow from investing activities of $40,597, in large part due
      to
      an increase in purchase of equipment and patents of $30,416 and an increase
      in
      deposits on equipment and patents that amounted to $10,181. In
      2005,  the Company experienced a decrease in cashflow from investing
      activities of $104,475.





***Off-Balance
      Sheet Arrangements***. The Company has no material transactions,
      arrangements, obligations (including contingent obligations), or other
      relationships with unconsolidated entities or other persons that have or are
      reasonably likely to have a material current or future impact on its financial
      condition, changes in financial condition, results of operations, liquidity,
      capital expenditures, capital resources, or significant components of revenues
      or expenses.





***Market
      Risk***. In the normal course of its business, the Company is exposed
      to foreign currency exchange rate and interest rate risks that could impact
      its
      results of operations.





We
      sell
      our products worldwide, and a substantial portion of our net sales, cost of
      sales and operating expenses are denominated in foreign currencies. This exposes
      the Company to risks associated with changes in foreign currency exchange rates
      that can adversely impact revenues, net income and cash flow. In addition,
      the
      Company is potentially subject to concentrations of credit risk, principally
      in
      accounts receivable. The Company performs ongoing credit evaluations of its
      customers and generally does not require collateral. Our major customers are
      retailers, branded apparel companies and contract manufacturers that have
      historically paid their balances with the Company.





There
      were no significant changes in the Company's exposure to market risk in the
      past
      three years.





**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**





Management
      has identified the following policies and estimates as critical to the Company's
      business operations and the understanding of the Company's results of
      operations. Note that the preparation of this Form 10-QSB requires management
      to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities, disclosure of contingent assets and liabilities at the date of
      the
      Company's financial statements, and the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those estimates,
      and the differences could be material.





***Revenue
      Recognition***





SAB
      No.
      104 requires that four basic criteria be met before revenue can be recognized:
      (1) persuasive evidence of an arrangement exists; (2) delivery has occurred
      or
      services have been rendered; (3) the fee is fixed or determinable; and (4)
      collectibility is reasonably assured. Should changes in conditions cause
      management to determine that these criteria are not met for certain future
      transactions, revenue recognized for a reporting period could be adversely
      affected.














***Sales
      Returns and Allowances***





Management
      must make estimates of potential future product returns, billing adjustments
      and
      allowances related to current period product revenues. In establishing a
      provision for sales returns and allowances, management relies principally on
      the
      Company's history of product return rates which is regularly analyzed.
      Management also considers (1) current economic trends, (2) changes in customer
      demand for the Company's products and (3) acceptance of the Company's products
      in the marketplace when evaluating the adequacy of the Company's provision
      for
      sales returns and allowances. Historically, the Company has not experienced
      a
      significant change in its product return rates resulting from these factors.
      For
      the six months ended July 31, 2007 and 2006, the provision for sales returns
      and
      allowances accounted for as a reduction to gross sales was not
      material.





***Allowance
      for Doubtful Accounts***





Management
      makes judgments, based on its established aging policy, historical experience
      and future expectations, as to the ability to collect the Company's accounts
      receivable. An allowance for doubtful accounts has been established. The
      allowance for doubtful accounts is used to reduce gross trade receivables to
      their estimated net realizable value. When evaluating the adequacy of the
      allowance for doubtful accounts, management analyzes customer-specific
      allowances, amounts based upon an aging schedule, historical bad debt
      experience, customer concentrations, customer creditworthiness and current
      trends. The Company's accounts receivable at July 31, 2007 was $43,770, net
      of
      an allowance of $0.





***Inventories***





Inventories
      are stated at the lower of cost or market value, and are categorized as raw
      materials, work-in-process or finished goods. The value of inventories
      determined using the first-in, first-out method at July 31, 2007 was $283,471
      for finished goods and $188,319 for raw materials.





On
      an
      ongoing basis, we evaluate the composition of its inventories and the adequacy
      of our allowance for slow-turning and obsolete products. The market value of
      aged inventory is determined based on historical sales trends, current market
      conditions, changes in customer demand, acceptance of the Company's products,
      and current sales activities for this type of inventory.





***Goodwill***





The
      Company did not attribute any value to goodwill as at July 31,
      2007.





***Accounting
      for Income Taxes***





As
      part
      of the process of preparing the consolidated financial statements, management
      is
      required to estimate the income taxes in each jurisdiction in which the Company
      operates. This process involves estimating the actual current tax liabilities,
      together with assessing temporary differences resulting from the different
      treatment of items for tax and accounting purposes. These differences result
      in
      deferred tax assets and liabilities, which are included in the consolidated
      balance sheet. Management must then assess the likelihood that the deferred
      tax
      assets will be recovered and, to the extent that management believes that
      recovery is not more than likely, the Company establishes a valuation allowance.
      If a valuation allowance is established or increased during any period, the
      Company records this amount as an expense within the tax provision in the
      consolidated statement of income. Significant management judgment is required
      in
      determining the Company's provision for income taxes, deferred tax assets and
      liabilities, and any valuation allowance recognized against net deferred tax
      assets. Valuation allowances are based on management's estimates of the taxable
      income in the jurisdictions in which the Company operates and the period over
      which the deferred tax assets will be recoverable.













**Item
      3. CONTROLS AND PROCEDURES**





Evaluation
      of Disclosure Controls and Procedures





Management,
      including our Chief Executive Officer and Chief Financial Officer, has evaluated
      the effectiveness of our disclosure controls and procedures (as defined in
      Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered
      by this report, and takes note that the filing with the Securities and Exchange
      Commission of our first Form 10-QSB was delayed and the second Form 10-QSB
      was
      filed on time.





Based
      upon its evaluation, management concluded that our disclosure controls and
      procedures were inadequate and not fully effective. Management has revised
      and
      enhanced our accounting review and scheduling procedures as well as instituted
      new training and other support measures for its accounting personnel to ensure
      that material information relating to periodic Exchange Act reports, including
      information from our consolidated subsidiaries, will be made known to them
      by
      the staff and officers of those entities, particularly during the periods in
      which the preparation of our Quarterly Reports shall occur.





Changes
      in Internal Controls





With
      the
      exception of our revised accounting review and scheduling procedures, which
      are
      intended to eliminate any delays in the filing of our periodic financial
      reports, there have been no changes in our internal controls over financial
      reporting or in other factors identified in connection with the evaluation
      that
      occurred during our last fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, our internal controls over financial
      reporting. Accordingly, the only corrective actions required or undertaken
      were
      for new and enhanced procedures for the review and filing of our periodic
      financial reports.


































**PART
      II**


**OTHER
      INFORMATION**





**Item
      1. LEGAL PROCEEDINGS**





The
      Company is unaware of any pending legal proceedings against it or any of its
      directors, officers, affiliates or beneficial owners of more than five percent
      (5%) of any class of voting securities.





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





None.





**Item
      3. DEFAULTS UPON SENIOR SECURITIES**





None.





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





None.





**Item
      5. OTHER INFORMATION**





None.





**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**









In
      accordance with the requirements of
      the Exchange Act, the registrant caused this report to be signed on its behalf
      by the undersigned, thereunto duly authorized.







**KMA
      GLOBAL SOLUTIONS INTERNATIONAL, INC.**






September
      14, 2007


By:
      /s/ Jeffrey D. Reid


Name: Jeffrey D. Reid


Title: Chief
      Executive Officer and
      President


(Principal
      Executive Officer and Principal Financial
      Officer)