**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-QSB**




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




**For
      the quarterly period ended September 30, 2007**




o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
      the
      transition period from ______________to ______________




Commission
      file number 333-134658




SPLINTERNET
      HOLDINGS, INC.


(Exact
      Name of Small Business Issuer as Specified in Its Charter)




Delaware
            
            22-393-8509(State
                or Other Jurisdiction of
            
            (IRS
                Employer Identification No.)Incorporation
                or Organization)




535
      Connecticut Avenue, 2ndfloor,
      Norwalk, CT 06854


(Address
      of Principal Executive Offices)




Issuer’s
      Telephone Number, Including Area Code: ( 203)
      354-9164




_____________________________________________________________________


Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report.





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




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




**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
      YEARS:**




Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. Yes o No o




**APPLICABLE
      ONLY TO CORPORATE ISSUERS:**




State
      the
      number of shares outstanding of each of the Issuer ’ s
      classes
      of common equity, as of the latest practicable date:  As
      of
      November 1, 2007, the Issuer had 53,500,500 outstanding shares of Common Stock,
      $.001 par value.




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










**SPLINTERNET
      HOLDINGS, INC.**





**TABLE
      OF CONTENTS**





**Page****PART
                I - FINANCIAL INFORMATION**Item
                1.
            Financial
                Statements.
            3Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation.
            10Item
                3.
            Controls
                and Procedures.
            14**PART
                II - OTHER INFORMATION**Item
                1.
            Legal
                Proceedings.
            15Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds.
            15Item
                3.
            Default
                upon Senior Securities.
            15Item
                4.
            Submission
                of Matters to a Vote of Security Holders.
            15Item
                5.
            Other
                Information.
            15Item
                6.
            Exhibits.
            15**SIGNATURES**
            16





2




**PART
      I – FINANCIAL
      INFORMATION**




**Item
                1.**
            **Financial
                Statements.**Condensed
                Consolidated Balance Sheets at September 30, 2007 (Unaudited) and
                December
                31, 2006
            4Condensed
                Consolidated Statements of Operations (Unaudited) for the three and
                nine
                months ended September 30, 2007 and 2006
            5Condensed
                Consolidated Statements of Cash Flows (Unaudited) for nine months
                ended
                September 30, 2007 and 2006
            6Notes
                to the Condensed Consolidated Financial Statements
                (Unaudited)
            7





3





**SPLINTERNET
      HOLDINGS, INC. AND SUBSIDIARY**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





September
                30,
            
            December
                31,2007
            
            2006(unaudited)**ASSETS**Cash
            
            $
            1,389,106
            
            $
            2,307,232Accounts
                receivable, net
            
            
            26,283
            
            
            7,700Prepaid
                expenses
            
            
            47,300
            
            
            39,466Deposits
            
            
            2,500
            
            
            21,044Current
                assets
            
            
            1,465,189
            
            
            2,375,442Property
                and equipment, net
            
            
            24,947
            
            
            16,748Security
                deposits
            
            
            11,044
            
            
            -Total
                assets
            
            $
            1,501,180
            
            $
            2,392,190**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Liabilities:Accounts
                payable and accrued expenses
            
            $
            86,616
            
            $
            53,667Customer
                prepayments
            
            
            200
            
            
            200Total
                current liabilities
            
            $
            86,816
            
            $
            53,867Stockholders’
                equity:Capital
                stock:Preferred
                Stock, 10,000,000 shares authorized and none outstandingCommon
                  stock, $0.001 par value; 90,000,000 shares
                  authorized; 53,500,500 sharesIssued
                  and outstanding
            
            
            53,500
            
            
            53,500Additional
                paid-in capital
            
            
            3,044,090
            
            
            3,056,590Accumulated
                deficit
            
            
            (1,683,224
            )
            
            (771,767
            )Total
                stockholders’ equity
            
            
            1,414,364
            
            
            2,338,323Total
                liabilities and stockholders’ equity
            
            $
            1,501,180
            
            $
            2,392,190





See
      notes
      to condensed consolidated financial statements.


4


**SPLINTERNET
      HOLDINGS, INC. AND SUBSIDIARY**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





Three
                Months Ended
              September
                30,
            
            Nine
                Months ended
              September
                30,2007
            
            2006
            
            2007
            
            2006Service
                revenue
            
            $
            105,104
            
            $
            4,236
            
            $
            140,533
            
            $
            40,861Cost
                of revenue
            
            
            102,877
            
            
            -
            
            
            117,570
            
            
            -Gross
                profit
            
            
            2,227
            
            
            4,236
            
            
            22,963
            
            
            40,861Selling,
                general and administrative expenses
            
            
            346,466
            
            
            225,839
            
            
            999,997
            
            
            506,704Interest
                income
            
            
            20,162
            
            
            32,930
            
            
            65,577
            
            
            77,186Interest
                Expense
            
            
            
            
            
            487
            
            
            
            
            
            505Net
                (loss)
            
            $
            (324,077
            )
            $
            (189,160
            )
            $
            (911,457
            )
            $
            (389,162
            )Net
                (loss) per share:Basic:
            
            $
            (0.01
            )
            $
            (0.00
            )
            $
            (0.02
            )
            $
            (0.01
            )Diluted:
            
            $
            (0.01
            )
            $
            (0.00
            )
            $
            (0.02
            )
            $
            (0.01
            )Weighted
                average common stock outstanding:Basic
            
            
            53,500,500
            
            
            53,500,500
            
            
            53,500,500
            
            
            52,750,222Diluted
            
            
            53,500,500
            
            
            53,500,500
            
            
            53,500,500
            
            
            52,750,222





See
      notes
      to condensed consolidated financial statements.


5


**SPLINTERNET
      HOLDINGS, INC. AND SUBSIDIARY**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





Nine Months Ended September 30,2007
            
            2006Cash
                flow from operating activities:Net
                (loss)
            
            
            ($
                911,457
            )
            
            ($
                389,162
            )Adjustments
                to reconcile net (loss) to net cash used
                in operating activities:Depreciation
            
            
            2,896
            
            
            1,287Change
                in assets and liabilities(Increase)
                in accounts receivable
            
            
            (18,583
            )
            
            (22,397
            )(Increase)
                decrease in prepaid expenses
            
            
            (7,834
            )
            
            2,852(Increase)
                in deposits
            
            
            (2,500
            )
            
            -Decrease
                (increase) in security deposits
            
            
            10,000
            
            
            (17,544
            )Increase
                      in accounts payable and accrued
                      liabilities
            
            
            32,959
            
            
            30,484Increase
                in customer deposits
            
            
            -
            
            
            200Net
                cash (used in) operating activities
            
            
            (894,519
            )
            
            (394,280
            )Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            (11,107
            )
            
            (14,631
            )Net
                cash used in investing activities
            
            
            (11,107
            )
            
            (14,631
            )Cash
                flows from financing activities:Net
                sales/(return) of common stock proceeds
            
            
            (12,500
            )
            
            740,799Net
                cash (used in) provided by financing activities
            
            
            (12,500
            )
            
            740,799Net
                (decrease) increase in cash and cash equivalents
            
            
            (918,126
            )
            
            331,888Cash
                and cash equivalents, beginning of period
            
            
            2,307,232
            
            
            2,199,602Cash
                and cash equivalents, end of period
            
            $
            1,389,106
            
            $
            2,531,490





See
      notes
      to condensed consolidated financial statements.




6




**SPLINTERNET
      HOLDINGS, INC.** AND
      SUBSIDIARY


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**1.
      PRINCIPAL BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





On
      April
      3, 2006, Splinternet Holdings, Inc. a Company incorporated in the State of
      Delaware on March 22, 2006 conducted a share for share exchange of securities
      with Splinternet Communications, Inc. (“Splinternet”) whereby 214,002 shares of
      the common stock, par value $0.001 per share, of Splinternet Communications,
      Inc. were exchanged for 53,500,500 shares of the common stock, par value $0.001
      per share, of Splinternet Holdings, Inc. (the “Share Exchange”), as a result of
      which Splinternet Communications, Inc. became a wholly owned subsidiary of
      Splinternet Holdings, Inc. (“ the Company”). Splinternet Holdings, Inc. does not
      conduct any business or own any assets other than all of the issued and
      outstanding shares of Splinternet Communications, Inc. Accordingly, all amounts
      of common stock and common stock warrants have been retroactively restated
      throughout these consolidated financial statements to give affect for this
      capital change.





Splinternet
      Communications, Inc. was incorporated in the State of Connecticut in January
      2000. Splinternet is a developer of VoIP (Voice over Internet Protocol)
      technology and services which enable the customer to make phone calls utilizing
      the internet as an alternative to the traditional Public Switched Telephone
      Network.





On
      November 3, 2005, the Company undertook a stock split for which every share
      of
      common stock was converted into approximately 9 shares of common stock
      outstanding in accordance with the approval of the Company's stockholders.
      The
      stock split affected all the Company's common stock outstanding immediately
      prior to the effective date of the stock split. Any fractional share resulting
      from the stock split was rounded up to a full share. The stock split increased
      the number of shares of the Company's common stock outstanding including shares
      issuable in connection with the exercise of warrants. Accordingly, all amounts
      of common stock have been retroactively restated throughout these financial
      statements to give effect to the 9.343 to 1 stock split.





**2.
      BASIS OF PREPARATION**





Pursuant
      to the rules and regulations of the Securities and Exchange Commission for
      Form
      10-QSB, the financial statements, footnote disclosures and other information
      normally included in financial statements prepared in accordance with generally
      accepted accounting principles have been condensed. The financial statements
      contained in this report are unaudited but, in the opinion of the Company,
      reflect all adjustments, consisting of only normal recurring adjustments
      necessary to fairly present the financial position as of September 30, 2007
      and
      the results of operations and cash flows for the interim period of the fiscal
      year ending December 31, 2007 presented herein. The results of operations for
      any interim period are not necessarily indicative of results for the full year.
      The balance sheet at December 31, 2006 has been derived from the audited
      financial statements at that date but does not include all of the information
      and footnotes required by accounting principles generally accepted in the United
      States of America for complete financial statements. The unaudited financial
      statements include all the accounts of the Company.





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      debt instruments purchased with an original maturity of three months or less
      to
      be cash equivalents.




The
      Company maintains cash in bank deposit accounts which, at times, exceed
      federally insured limits. The Company has not experienced any losses on these
      accounts.





Property
      and equipment are stated at cost. Depreciation is provided using the
      straight-line method over the estimated useful life.




7




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires the use of estimates by management. Actual
      results could differ from these estimates.




The
      Company follows the guidance of the Securities and Exchange Commission’s (“SEC”)
      Staff Accounting Bulletin 104 for revenue recognition.  In general, the
      Company records revenue when persuasive evidence of an arrangement exists,
      services have been rendered or product delivery has occurred, the sales price
      to
      the customer is fixed or determinable, and collectability is reasonably
      assured.




The
      Company recognizes income when products have been shipped or services have
      been
      performed. In cases where a customer prepays a subscription for services to
      be
      performed in a period which extends from one accounting period into a subsequent
      period, the Company only recognizes the portion of income due for services
      performed in the current reporting period. In cases where there is an acceptance
      period during which a subscriber may cancel their agreement without penalty,
      the
      Company defers the revenue recognition until the end of that acceptance
      period.




In
      the
      past, the Company also purchased hardware (for resale) from suppliers who offer
      a warranty of one year. The Company generally warranted these same hardware
      products for one year after sale and provided for estimated future warranty
      costs at the time revenue was recognized. Consequently, our warranty liability
      is limited to the cost of the logistics involved in accepting returns and
      shipping replacements. No warranty cost has been recorded for the nine month
      periods ended September 30, 2007 and 2006, respectively. The Company has not
      sold hardware since May, 2005. The Company has not experienced any costs for
      warranty liabilities in 2007 or 2006.





Income
      taxes are accounted for under the asset and liability method of Statement of
      Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS
      109”). Under SFAS 109, deferred tax assets and liabilities are recognized for
      the future tax consequences attributable to differences between the financial
      statement carrying amounts of existing assets and liabilities and their
      respective tax bases. Deferred tax assets and liabilities are measured using
      enacted tax rates expected to apply to taxable income in the years in which
      those temporary differences are expected to be recovered or settled. Under
      SFAS
      109, the effect on deferred tax assets and liabilities of a change in tax rates
      is recognized in income in the period that includes the enactment
      date.




Basic
      loss per share is computed by dividing net loss by the weighted average number
      of shares of common stock outstanding during the period. Diluted loss per share
      is computed by dividing net loss by the weighted average number of shares of
      common stock, potential common stock and potentially dilutive securities
      outstanding during each period. As of September
      30, 2007 ,
      the
      Company had outstanding warrants to purchase an aggregate of 3,214,500 shares
      of
      common stock, which could potentially dilute future earnings per share. Since
      the impact of the warrants would be antidilutive, the warrants have been
      excluded from the computation of diluted earnings per share.





Management
      does not believe that any other recently issued, but not yet effective,
      accounting standards if currently adopted would have a material effect on the
      accompanying financial statements.





**3.
      COMMITMENT**





The
      Company is obligated under a noncancelable operating lease for office space
      which commenced on March 15, 2006 and expires March 15, 2009 at an annual rent
      of approximately $43,000.





**4.
      MAJOR CUSTOMER**





During
      the nine months ended September 30, 2007, one customer (BuenaVox LLC) accounted
      for 96% of all revenues.




8





**5.
      TAXES**





Effective
      January 1, 2007, the Company adopted the provisions of FASB Interpretation
      No.
      48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — An Interpretation
      of FASB Statement No. 109.” FIN 48 provides detailed guidance for the financial
      statement recognition, measurement and disclosure of uncertain tax positions
      recognized in the financial statements in accordance with SFAS No. 109. Tax
      positions must meet a “more-likely-than-not” recognition threshold at the
      effective date to be recognized upon the adoption of FIN 48 and in subsequent
      periods. Upon the adoption of FIN 48, the Company had no unrecognized tax
      benefits. During the nine months ended September 30, 2007, the Company
      recognized no adjustments for uncertain tax benefits.




The
      Company recognizes interest and penalties, if any, related to uncertain tax
      positions in selling, general and administrative expenses. No interest and
      penalties related to uncertain tax positions were accrued at September 30,
      2007.




Income
      taxes are computed using the asset and liability method of accounting. Under
      the
      asset and liability method, a deferred tax asset or liability is recognized
      for
      estimated future tax effects attributable to temporary differences and
      carryforwards. The measurement of deferred income tax assets is adjusted by
      a
      valuation allowance, if necessary, to recognize future tax benefits only to
      the
      extent, based on available evidence, it is more likely than not such benefits
      will be realized. The Company’s deferred tax assets were fully reserved at
      September 30, 2007 and December 31, 2006.




The
      tax
      years 2003 through 2006 remain open to examination by the major taxing
      jurisdictions in which the Company operates. The Company expects no material
      changes to unrecognized tax positions within the next twelve
      months.




The
      Company has net operating loss carryforwards of approximately
      $1,680,000 available to offset taxable income through the year
      2027.




The
      Company recorded a deferred income tax asset for the tax effect of net operating
      loss carryforwards and temporary differences, aggregating approximately
      $670,000. In recognition of the uncertainty regarding the ultimate amount of
      income tax benefits to be derived, the Company has recorded a valuation
      allowance of $670,000 at September 30, 2007.





**6.
      STOCKHOLDERS’ EQUITY**





During
      the period from inception in 2000 to December 31, 2004, the Company issued
      44,785,500 shares of common stock and received proceeds of
      $196,400.




During
      the year ended December 31, 2005, the Company issued 2,715,000 shares of common
      stock and received proceeds of $100,000. In connection with these issuances
      the
      investors received warrants to purchase 3,214,500 shares of common stock at
      an
      exercise price of $.048 per share. The warrants expire in November 2007. The
      Company has assessed whether the warrants should be classified as either a
      liability or equity in accordance with EITF 00-19 “Accounting for Derivative
      Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own
      Stock” and concluded that the warrants should be classified as equity. During
      November and December of 2005 the Company commenced selling common stock through
      a private placement. As of December 31, 2005, the Company had received
      subscriptions and funds for 4,175,000 shares at a price of $.50 per share,
      or
      gross proceeds of $2,087,500, less fees of approximately $14,600. During the
      nine month period ended September 30, 2006 the Company sold the remainder of
      the
      offering (1,825,000 common shares) for an additional gross proceeds of $925,000
      and received net proceeds of $740,810 after expenses of which $184,190 was
      recorded during the nine months ended September 30, 2006.





9




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





The
      following discussion should be read in conjunction with the Financial Statements
      included in this report and is qualified in its entirety by the
      foregoing.





**Forward-Looking
      Statements**





This
      report contains “forward-looking statements”, which involve known and unknown
      risks, uncertainties and other factors which could cause actual financial or
      operating results, performances or achievements expressed or implied by such
      forward-looking statements not to occur or be realized. These forward-looking
      statements generally are based on our best estimates of future results,
      performances or achievements, based upon current conditions and assumptions.
      Forward-looking statements may be identified by the use of forward-looking
      terminology such as “may,” “can,” “could,” “project,” “expect,” “believe,”
“plan,” “predict,” “estimate,” “anticipate,” “intend,” “continue,” “potential,”
“would,” “should,” “aim,” “opportunity” or similar terms, variations of those
      terms or the negative of those terms or other variations of those terms or
      comparable words or expressions. These risks and uncertainties include, but
      are
      not limited to:





·
            general
                economic conditions in both foreign and domestic
                markets,





·
            cyclical
                factors affecting our industry,





·
            lack
                of growth in our industry,





·
            our
                ability to comply with government
                regulations,





·
            a
                failure to manage our business effectively and profitably,
                and





·
            our
                ability to sell both new and existing products and services at profitable
                yet competitive prices.





You
      should carefully consider these risks, uncertainties and other information,
      disclosures and discussions which contain cautionary statements identifying
      important factors that could cause actual results to differ materially from
      those provided in the forward-looking statements. Splinternet Holdings, Inc.
      undertakes no obligation to update or revise any forward-looking statements,
      whether as a result of new information, future events or otherwise.





**Overview**




Splinternet
      Holdings, Inc. (“we”, “us”, “our”, the “Company” or “Splinternet”) was
      incorporated in the State of Delaware on March 22, 2006. On April 3, 2006,
      Splinternet Holdings, Inc. conducted a share for share exchange of securities
      with Splinternet Communications, Inc. whereby 214,002 shares of the common
      stock, par value $0.001 per share, of Splinternet Communications, Inc. were
      exchanged for 53,500,500 shares of the common stock, par value $0.001 per share,
      of Splinternet Holdings, Inc. (the “Share Exchange”), as a result of which
      Splinternet Communications, Inc. became a wholly owned subsidiary of Splinternet
      Holdings, Inc. Splinternet Holdings, Inc. does not conduct any business or
      own
      any assets other than all of the issued and outstanding shares of Splinternet
      Communications, Inc. Accordingly, all amounts of common stock and common stock
      warrants have been retroactively restated throughout the consolidated financial
      statements to give affect for this capital change.





Splinternet
      Communications, Inc. was incorporated in the State of Connecticut in January
      12,
      2000. Splinternet is a developer of VoIP (Voice over Internet Protocol)
      technology and services which enable the customer to make phone calls utilizing
      the internet as an alternative to the traditional Public Switched Telephone
      Network.





On
      November 3, 2005, and prior to the share for share exchange of securities with
      Splinternet Holdings, Inc., Splinternet Communications, Inc. undertook a stock
      split for which every share of common stock was converted into 9.343 shares
      of
      common stock outstanding in accordance with the approval of the Company’s
      stockholders.




10


The
      stock
      split affected all the Splinternet Communications, Inc.’s common stock
      outstanding immediately prior to the effective date of the stock split. Any
      fractional share resulting from the stock split was rounded up to a full share.
      The stock split increased the number of shares of the Splinternet
      Communications, Inc.’s common stock outstanding including shares issuable in
      connection with the exercise of warrants. Accordingly, all amounts of common
      stock have been retroactively restated throughout the financial statements
      to
      give effect to the 9.343 to 1 stock split.





Since
      our
      inception, the Company has generated limited revenues. We
      are
      presently considering the acquisition of other companies operating in the VoIP
      market space or with compatible products and which can benefit from the
      Company’s infrastructure under circumstances where there is a strategic,
      technology, and marketing fit for enhancement. In addition to seeking
      acquisition candidates, during the quarter ended September 30, 2007, the Company
      implemented a strategy of marketing service and equipment sales to companies.
      The Company believes that over time it will build sales volume sufficient to
      cover the costs of operations through this strategy. There is no guarantee
      that
      the Company will be successful in its efforts to either acquire other companies
      or generate service or equipment sales sufficient to cover its costs of
      operations.





In
      addition, we believe our infrastructure is sufficiently flexible to allow the
      development and deployment of a variety of communications products and services.
      We continue to develop those products and expect to begin marketing them
      actively in the third quarter of this year.





**Results
      of Operations**




SERVICE
      REVENUES





Service
      revenue for the quarter ended September 30, 2007 were $105,104 which is an
      increase from $4,236 in the quarter ended September 30, 2006. Service revenue
      for the nine months ended September 30, 2007 were $140,533 which is an increase
      from $40,861 for the nine months ended September 30, 2006. The Company continues
      to provide hosting services but new switching and termination services were
      initiated during the second quarter 2007. This new service contributed to
      the
      increase in revenues during the nine months ended September 20,
      2007.





COST
      OF
      REVENUES





The
      use
      of VoIP services requires a combination of hardware and software to convert
      the
      electronic signals which would otherwise comprise a traditional telephone call
      into a packetized data stream and route those packets over a data network,
      such
      as the Internet.





In
      2007,
      the Company began purchasing long distance minutes at wholesale prices from
      phone companies and then resells them at a markup to its customers. For the
      three months and nine months ended September 30, 2007, the costs of the
      wholesale minutes were $102,877 and $117,570. In 2006, the services sold were
      limited to hosting (essentially renting space to others for locating their
      equipment) and switching (moving communications traffic over our system for
      others), and these services had no direct incremental cost to us so that the
      margin on those sales was 100% of sales. The Company did not resell wholesale
      minutes during the same period in 2006. Therefore, we had no cost of sales
      for
      the three and nine months ended September 30, 2006.





SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES





In
      the
      third quarter of 2007, selling, general and administrative costs were $346,466
      which is an increase from $225,839 in the comparable period in 2006. Selling,
      general and administrative costs for the nine months ended September 30, 2007
      were $999,997 which is an increase from $506,704 in the nine months ended
      September 30, 2006. This change is primarily a reflection of the emphasis being
      placed and investments being made in the second and third quarters of 2007
      in
      development and marketing of new products and service offerings while still
      continuing our efforts in seeking to acquire other companies. The increases
      were
      the result of salaries and consulting expenses related to product development
      associated to our change in emphasis.


11


INTEREST
      INCOME





Interest
      earned in the three months ended September 30, 2007 were $20,162 compared to
      $32,930 in the prior year. This was primarily due to a lower average balance
      invested in 2007. Interest earned in the nine months ended September 30, 2007
      were $65,577 compared to $77,186 in the prior year. The average balance was
      lower in 2007, but was partially offset by higher rates in 2007.





NET
      LOSS





We
      recognized a net loss of $324,077, during the three months ended September
      30,
      2007 compared to net loss of $189,160 during the same period in the prior year
      for an overall increase in net loss of $134,917. We recognized a net loss of
      $911,457, during the nine months ended September 30, 2007 compared to net loss
      of $389,162 during the same period in the prior year for an overall increase
      in
      net loss of $522,295. The increase in the net loss was primarily the result
      of
      an increase in selling, general and administrative expenses incurred in 2007
      compared to the same period of the prior year. This was due to a greater
      emphasis being placed and investments being made in the second and third
      quarters of 2007 in new products and service offerings while still continuing
      our efforts in seeking to acquire other companies. We believe the steps being
      taken in new products and service offerings will allow us to compete effectively
      in the future.





**Liquidity
      and Capital Resources**




As
      of
      September 30, 2007, we had approximately $1,389,000 in cash and liabilities
      of
      approximately $86,800. Our net cash used in operating activities for the nine
      months ended September 30, 2007 was $894,519; hence, we expect to be adequately
      funded for the next twelve months. Further, with the registration of shares
      of
      our Common Stock with the Securities and Exchange Commission and subsequent
      commencement of trading on the OTC Bulletin Board under the symbol “SLNH” which
      trading commenced on October 5, 2006, we feel we will have increased access
      to
      both private and public capital markets should our capital needs increase within
      the next twelve months or thereafter.





Net
      cash
      used by operating activities for the nine months ended September 30, 2007 was
      $894,519 which was primarily the result of the net loss of $911,457. This
      compared to net cash used by operating activities of $394,280 for the nine
      months ended September 30, 2006 which was primarily the result of net loss
      of
      $389,162. Net cash used in investing activities for the nine months ended
      September 30, 2007 was $11,107 compared to $14,631 for the nine months ended
      September 30, 2006 which change was due to a decrease in the purchase of
      property and equipment. For the nine months ended September 30, 2007, net cash
      used in financing activities was $12,500 compared to $740,799 which was provided
      by financing activities for the nine months ended September 30, 2006. The change
      in 2006 was due to completion of the equity financing during the first quarter
      of 2006 versus a return of an overpayment of equity in 2007. We expect no trends
      will impact our short-term liquidity, since we have adequate resources to cover
      our operating costs for at least 12 months.





Capital
      Commitments





The
      Company currently has no material commitments for capital
      expenditures.


Trends





The
      industry in which we operate is in a state of dynamic and rapid change. VoIP
      services are gaining acceptance in the marketplace and we intend to take
      advantage of that trend by attempting to sell into a more willing marketplace,
      despite the increased competition.





We
      have
      noted that several VoIP service retailers in the United States are currently
      offering services to end users for no charge, as a promotional program to
      attract users to their systems. We acknowledge that this may attract users,
      but
      do not believe there is any assurance users acquired in this manner can be
      converted into sources of revenue, even if they are part of a subscriber base
      to
      which advertising can be delivered on behalf of third parties.


12


The
      role
      of United States retail services in that environment is unknown.





We
      are
      developing products suited for retail deployment internationally in countries
      where there is still a significant premium charged for traditional
      telecommunications relative to the cost of providing VoIP services.





Seasonal
      Fluctuations





There
      have been no fluctuations in our business to date which can be attributed to
      seasonality.





Employment
      Agreements





Currently,
      we have no written employment agreements with any of our employees or
      officers.





Additional
      Employee Benefits: The Company offers medical insurance coverage to its
      employees.





**Critical
      Accounting Policies**





The
      following is a discussion of the accounting policies that the Company believes
      are critical to its operations :




Use
      of
      Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States 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 financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.





Income
      Taxes





The
      Company accounts for its income taxes using SFAS No. 109, “ *Accounting
      for Income Taxes* ”,
      which
      requires the recognition of deferred tax liabilities and assets for expected
      future tax consequences of events that have been included in the financial
      statements or tax returns. Under this method, deferred tax liabilities and
      assets are determined based on the difference between the financial statement
      and tax bases of assets and liabilities using enacted tax rates in effect for
      the year in which the differences are expected to reverse.





Revenue
      recognition





We
      follow
      the guidance of the Securities and Exchange Commission’s (“SEC”) Staff
      Accounting Bulletin 104 for revenue recognition.  In general, we record
      revenue when persuasive evidence of an arrangement exists, services have been
      rendered or product delivery has occurred, the sales price to the customer
      is
      fixed or determinable, and collectability is reasonably assured.




We
      recognize income when products have been shipped or services have been
      performed. In cases where a customer prepays a subscription for services to
      be
      performed in a period which extends from one accounting period into a subsequent
      period, we only recognize the portion of income due for services performed
      in
      the current reporting period. In cases where there is an acceptance period
      during which a subscriber may cancel their agreement without penalty, we defer
      the revenue recognition until the end of that acceptance period.




We
      also
      purchase hardware (for resale) from suppliers who offer a warranty of one year.
      We generally warrant these same hardware products for one year after sale and
      provides for estimated future warranty costs at the time revenue is recognized.
      Consequently, our warranty liability is limited to the cost of the logistics
      involved in accepting returns and shipping replacements. Management does not
      believe that any recently issued, but not yet effective, accounting standards
      if
      currently adopted would have a material effect on the accompanying financial
      statements.


13





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off balance sheet arrangements that are reasonably likely to have
      a
      current or future effect on our financial condition, revenues, results of
      operations, liquidity or capital expenditures.





**Item
      3.**  **Controls
      and Procedures**





We
      maintain disclosure controls and procedures that are designed to ensure (1)
      that
      information required to be disclosed by us in the reports we file or submit
      under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is
      recorded, processed, summarized, and reported within the time periods specified
      in the Securities and Exchange Commission’s (“SEC”) rules and forms, and (2)
      that this information is accumulated and communicated to our management,
      including our Chief Executive Officer and Chief Financial Officer, as
      appropriate, to allow timely decisions regarding required disclosure. In
      designing and evaluating the disclosure controls and procedures, management
      recognizes that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and management necessarily was required to apply its judgment in
      evaluating the cost benefit relationship of possible controls and
      procedures.





Prior
      to
      the filing date of this report, under the supervision and review of our Chief
      Executive Officer and Chief Financial Officer, we conducted an evaluation of
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of the end of the period covered by this report. Based on that
      evaluation, our Chief Executive Officer and Chief Financial Officer have
      concluded that our disclosure controls and procedures are effective in alerting
      them in a timely manner to material information regarding us that is required
      to
      be included in our periodic reports to the SEC.





In
      addition, there have been no significant changes in our internal controls or
      in
      other factors that could significantly affect those controls that occurred
      during the fiscal quarter covered by this report that have materially affected,
      or are reasonably likely to materially affect, our internal control over
      financial reporting. We can provide no assurance, however, that our system
      of
      disclosure controls and procedures will always achieve its stated goals under
      all future conditions, no matter how remote.


14


**PART
      II - OTHER INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





We
      are
      not a party to any pending legal proceeding, nor is our property the subject
      of
      a pending legal proceeding, that is not in the ordinary course of business
      or
      otherwise material to the financial condition of our business. None of our
      directors, officers or affiliates is involved in a proceeding adverse to our
      business or has a material interest adverse to our business.





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





Not
      applicable





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





Not
      applicable.





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





Not
      applicable.





**Item
      5.**  **Other
      Information**





Not
      applicable.





**Item
      6.**  **Exhibits**





31.1
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange
                Act)31.2
            Certification
                of Principal Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange
                Act)32.1
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002 (18 U.S.C. 1350)32.2
            Certification
                of Principal Financial Officer pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C.
                1350)





15


**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.





**SPLINTERNET
                HOLDINGS, INC.**(Registrant)Dated:
                November 1, 2007
            By:
            /s/
                James C. AckerlyJames C. Ackerly, Chief Executive Officerand President (Principal Executive Officer)Dated:
                November 1, 2007
            By:
            /s/
                John T. GrippoJohn T. Grippo, Chief Financial Officer(Principal Financial Officer)




16