UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from ~~_________to~~_________ ~~________~~to _________

Commission File No. 000-29895

SMART-TEK SOLUTIONS INC.
(Exact name of registrant as specified in its charter)

Nevada	90-0749326
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1100 Quail Street, Newport Beach, CA 92660
(Address of principal executive offices) (zip code)

(858) 798-1644
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes [X ] No [ ]

Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer," "accelerated filer,” and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)

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

Yes [ ] 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 distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

Yes [ ] No [ ]

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 October ~~August 7~~31, 2012, there were 49,212,123 shares of common stock, par value $0.001, outstanding.

Smart-Tek Solutions Inc. Period Ended ~~June~~September 30, 2012 and 2011

PART I -- FINANCIAL INFORMATION

CONTENTS	PAGES
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Operations and Comprehensive Income	3
Condensed Consolidated Statements of Cash Flows	4
Notes to the Condensed Consolidated Financial Statements	5-1412

Smart-Tek Solutions Inc.Condensed Consolidated Balance Sheets As of ~~June~~September 30, 2012 and December 31, 2011 (Unaudited)

		June 30,			December 31,
		September 30,			December 31,
		2012			2011
		(unaudited)
Assets
Current assets
Cash and cash equivalents	$	-		$	132,492
Accounts receivable, net		1,~~309~~343,~~170~~247			1,626,583
Due from related parties		21,~~228~~685,~~103~~285			2,739,220
Prepaid expenses and deposits		5,346			52,152
Prepaid expense and deposits		7,055			52,152
Total current assets		3,~~542~~035,~~619~~587			4,550,447
Equipment, net of accumulated depreciation		4338,~~851~~271			55,007
Prepaid workers compensation		4,~~527~~656,~~058~~667			3,440,000
Goodwill		476,356			476,356
Total Assets	$	8,589,884		$	8,521,810
Total assets	$	8,206,881		$	8,521,810
Liabilities
Current liabilities
Bank overdraft	$	17316,~~525~~308		$	-
Accounts payable and accrued liabilities		~~446~~400,~~354~~742			441,435
Assigned receivables liability		~~801~~719,~~043~~285			826,943
Accrued payroll taxes		1516,~~727~~488,~~778~~599			11,958,012
Accrued workers compensation		1,~~095~~318,~~131~~493			1,055,980
Payable to related parties		~~516~~863,~~691~~114			609,022
Note payable to related party		500,000			500,000
Total current liability		19,104,522			15,391,392
Total current liabilities		20,606,541			15,391,392
Other long-term liabilities		-			35,000
Total liabilities		1920,~~104~~606,~~522~~541			15,426,392
Commitments and contingencies		-			-
Stockholders’ (Deficit)
Stockholders’ deficit
Preferred stock: $0.001 par value, 5,000,000 shares authorized, zero shares of Class A preferred issued and outstanding at June 30, 2012 and December 31,2011		-			-
Preferred stock: $0.001 par value, 5,000,000 shares authorized, zero shares of Class A preferred issued and outstanding at September 30, 2012 and December 31, 2011		-			-
Common stock: $0.001 par value, 500,000,000 shares authorized, 49,212,123 issued and outstanding at June 30, 2012 and December 31, 2011		49,212			49,212
Common stock: $0.001 par value, 500,000,000 shares authorized, 49,212,123 issued and outstanding at September 30, 2012 and December 31, 2011		49,212			49,212
Additional paid in capital		7,271,945			7,271,945
Accumulated deficit		(1719,~~835~~720,~~795~~817	)		(14,225,739	)
Total stockholders’ (deficit)		(10,514,638	)		(6,904,582	)
Total stockholders’ deficit		(12,399,660	)		(6,904,582	)
	$	8,~~589~~206,~~884~~881		$	8,521,810

See accompanying notes to the consolidated financial statements. 2

2Smart-Tek Solutions Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss For the Three and Nine Months Ended September 30, 2012 and 2011 (Unaudited)

Smart-Tek Solutions Inc. Condensed Consolidated Statements of Operations and Comprehensive Income For the Three and Six Months ended June 30, 2012 and 2011 (Unaudited)

		Three Months			Three Months			Nine Months			Nine Months
		Ended			Ended			Ended			Ended
		September 30,			September 30,			September 30,			September 30,
		2012			2011			2012			2011

Revenue
(For the three months ending September 30, 2012 and September 30, 2011 gross billings of $23.259 and $28.834 million, less worksite employee payroll cost of $17.154 and $24.206 million respectively)	$	6,104,919		$	4,628,141		$	18,719,513		$	15,251,133
(For the nine months ending September 30, 2012 and September 30, 2011 gross billings of $73.607 and $65.371 million, less worksite employee payroll cost of $54.888 and $50.120 million, respectively)

Cost of revenue and service delivery		(6,312,692	)		(4,783,318	)		(17,619,577	)		(12,448,612	)

Gross profit (loss)		(207,773	)		(155,177	)		1,099,936			2,802,521

Selling, general and administrative expenses		(1,591,920	)		(1,997,439	)		(6,051,656	)		(5,167,062	)

Operating loss		(1,799,693	)		(2,152,616	)		(4,951,720	)		(2,364,541	)
Other Income
Other Income		315			-			342			-
Interest		-			(811,236	)		(16,314	)		(835,118	)
Tax penalties		(85,644	)		-			(527,386	)		-

Net loss from continuing operations		(1,885,022	)		(2,963,852	)		(5,495,078			(3,199,659	)

Comprehensive loss for the period	$	(1,885,022	)	$	(2,963,852	)	$	(5,495,078	)	$	(3,199,659	)

Loss per share, basic and diluted	$	(0.04	)	$	(0.06	)	$	(0.11	)	$	(0.09	)

Weighted average shares outstanding basic and diluted		49,212,123			49,212,123			49,212,123			34,531,977

		Three Months			Three Months			Six Months			Six Months
		Ended			Ended			Ended			Ended
		June 30,			June 30,			June 30,			June 30,
		2012			2011			2012			2011
Revenue:
(For the three months ending June 30, 2012 and June 30, 2011 gross billings of $24,586 and $20,876 million, less worksite employee payroll cost of $18,452 and $14,475 million respectively)	$	6,133,600		$	6,401,186		$	12,614,594		$	10,622,992
(For the six months ending June 30, 2012 and June 30, 2011 gross billings of $50,349 and $36,537 million, less worksite employee payroll cost of $37,734 million and $25,914 million respectively)
Cost of revenue and service delivery		(5,758,400	)		(4,716,003	)		(11,306,885	)		(7,665,294	)
Gross profit		375,200			1,685,183			1,307,709			2,957,698
Selling, general and administrative expenses		(1,906,817	)		(2,270,792	)		(4,459,736	)		(3,169,625	)
Operating income (loss)		(1,531,617	)		(585,609	)		(3,152,027	)		(211,927	)
Other Income (Expense)
Other Income		12			-			27			-
Interest		(7,994	)		(13,552	)		(16,314	)		(23,881	)
Tax Penalties		(385,209	)		-			(441,742	)		-
Net income (loss) from continuing operations		(1,924,808	)		(599,161	)		(3,610,056	)		(235,808	)
Comprehensive (loss) for the period		($1,924,808	)		($599,161	)		($3,610,056	)		($235,808	)
Loss per share, basic and diluted		($0.04	)		($0.02	)		($0.07	)		($0.01	)
Weighted average shares outstanding basic and diluted		49,212,123			29,796,080			49,212,123			27,070,245

See accompanying notes to the consolidated financial statements.
3

~~See~~Smart-Tek ~~accompanying~~Solutions ~~notes~~Inc.Condensed toConsolidated Statements of Cash Flows For the ~~consolidated~~Nine ~~financial~~Months Ended September 30, 2012 ~~statements.~~and 2011 (Unaudited)

		Nine Months Ended September 30,
		2012			2011

Operating Activities

Net loss	$	(5,495,078	)	$	(3,199,659	)
Adjustments to reconcile net loss to cash used by operating activities
Depreciation and amortization		16,734			17,010
Changes in operating assets and liabilities
Accounts receivable		283,336			553,878
Due from related party		1,053,935			-
Prepaid expenses and deposits		45,097			(2,230,876	)
Prepaid workers compensation		(1,216,666	)		-
Accrued workers compensation		262,513			-
Accrued payroll taxes		4,530,587			-
Accounts payable and accrued liabilities		275,615			4,225,121

Net cash used by operating activities		(243,927	)		(634,526	)

Investing activities

Purchase of equipment		-			(46,125	)

Net cash used in investing activities		-			(46,125	)

Financing activities

Assignment of accounts receivable		(107,658	)		-
Payments to related party		254,093			(275,000	)
Payments of long-term payable		(35,000	)		-
Issuance of shares		-			443,979

Net cash provided by financing activities		111,435			168,979

Net decrease in cash from continuing operations		(132,492	)		(511,672	)

Cash and cash equivalents, beginning of period		132,492			781,720

Cash and cash equivalents end of period	$	0		$	270,048

Supplemental cash flow information

Interest paid	$	16,314		$	835,118
Income taxes payable	$	-		$	-

~~Smart-Tek~~See ~~Solutions~~accompanying ~~Inc.~~notes ~~Condensed~~to ~~Consolidated Statements of Cash Flows For~~ the ~~Six~~consolidated ~~Months~~financial ~~Ended June 30, 2012 and~~statements. ~~2011~~4

		2012			2011
Operating Activities
Net (loss)	$	(3,610,056	)	$	(235,808	)
Adjustments to reconcile net (loss) to cash provided (used) by operating activities
Depreciation and amortization		11,156			12,308
Changes in operating assets and liabilities
Accounts receivable		317,413			1,321,861
Due from related party		511,117			(275,000	)
Prepaid expenses and deposits		46,806			(424,010	)
Prepaid worker compensation expense		(1,087,058	)		-
Bank overdraft		17,525			-
Accrued workers compensation expense		39,151			-
Payroll taxes payable		3,769,766			-
Accounts payable and accrued liabilities		4,919			(696,856	)
Net cash provided (used) by operating activities		20,739			(297,505	)
Investing activities
Purchase of equipment		-			(46,125	)
Net cash used in investing activities		-			(46,125	)
Financing activities
Assignment of accounts receivable		(25,900	)
Payments to related party		(92,331	)		-
Payments of long-term payable		(35,000	)		-
Issuance of shares		-			443,979
Net cash provided by (used in) financing activities		(153,231	)		443,979
Net increase (decrease) in cash from continuing operations		(132,492	)		100,349
Cash and cash equivalents, beginning of period		132,492			781,720
Cash and cash equivalents, end of period	$	0		$	882,069
Supplemental cash flow information
Interest paid	$	16,314		$	23,881
Income taxes payable	$	-		$	-

Smart-Tek Solutions Inc.

Notes to the Consolidated Financial Statements

September 30, 2012

~~See~~1. INTERIM ~~accompanying~~CONDENSED ~~notes~~CONSOLIDATED toFINANCIAL ~~the consolidated financial~~STATEMENTS: ~~statements.~~

4Basis of Presentation

These interim condensed consolidated financial statements are ~~INTERIM~~unaudited ~~CONDENSED~~but ~~CONSOLIDATED~~reflect, ~~FINANCIAL~~in ~~STATEMENTS:~~the opinion of management, all normal recurring adjustments necessary to present fairly the financial position of Smart-Tek Solutions, Inc. and its subsidiaries (“STS” or the “Company”) as of September 30, 2012, its consolidated results of operations for the three and nine months ended September 30, 2012 and September 30, 2011, and the consolidated cash flows for the nine months ended September 30, 2012 and September 30, 2011. The Company owns 100% of the outstanding stock in its subsidiaries. Certain information and footnote disclosures normally included in the audited consolidated financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Because all the disclosures required by accounting principles generally accepted in the United States are not included, these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2011. The results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2012, or any other period. The year-end condensed consolidated balance sheet data as of December 31, 2011 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

~~These~~Going ~~interim~~Concern ~~condensed~~– The accompanying condensed consolidated financial statements ~~are~~have ~~unaudited~~been ~~but~~prepared ~~reflect,~~assuming inthat the ~~opinion~~Company will ofcontinue ~~management,~~as ~~all~~a ~~normal recurring~~going ~~adjustments~~concern ~~necessary~~and tocontemplate ~~present fairly~~ the ~~financial~~realization ~~position~~ of ~~Smart-Tek~~assets ~~Solutions, Inc.~~ and ~~its subsidiaries~~ ~~(“STS” or~~ the ~~“Company”)~~satisfaction as of ~~June~~liabilities ~~30,~~in ~~2012,~~the ~~its~~normal ~~consolidated~~course ~~results~~ of ~~operations for the three and six month period ended June 30, 2012 and June 30, 2011, and the consolidated cash flows for the six month period ended June 30, 2012 and June 30, 2011~~business. ~~All intercompany balances and transactions have been eliminated in consolidation.~~ The Company has ~~owns~~generated ~~100%~~insufficient ofrevenues ~~the~~from ~~outstanding~~operations ~~stock in its subsidiaries. Certain information~~ and ~~footnote~~has ~~disclosures~~incurred ~~normally included in~~substantial ~~the~~and ~~audited~~recurring ~~consolidated~~losses ~~financial statements have been condensed or omitted pursuant~~ to ~~the rules and regulations of the Securities and Exchange Commission~~date. ~~Because~~Additionally, ~~all~~ the ~~disclosures~~Company ~~required~~has byminimal ~~accounting~~to ~~principles~~no ~~generally accepted in the~~cash, ~~United~~negative ~~States~~working ~~are not included~~capital, ~~these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements~~ and ~~notes~~a ~~thereto in the Company~~stockholders’s ~~Annual~~deficit ~~Report on Form 10-K~~ as of ~~and~~September ~~for the year ended December 31, 2011. The results for the three and six month period ended June~~ 30, 2012. These ~~are~~conditions ~~not~~raise ~~necessarily~~substantial ~~indicative~~doubt ofabout the ~~results~~Company’s ability to becontinue as ~~expected~~a ~~for~~going ~~the entire fiscal year ending December 31, 2012, or any other period~~concern. The ~~year-end~~accompanying condensed consolidated ~~balance sheet data as of December 31, 2011 was derived from audited~~ financial statements, do ~~but does~~ not include ~~all~~any ~~disclosures~~adjustments ~~required~~that bymight ~~accounting~~result ~~principles~~from ~~generally accepted in~~ the ~~United~~outcome ~~States~~of this uncertainty.

~~Business~~The ~~Condition~~Company –incurred ~~The~~a ~~accompanying~~net ~~condensed~~operating ~~consolidated~~loss ~~financial~~of ~~statements~~$1.8 ~~have~~million ~~been~~and $5.0 ~~prepared~~million ~~assuming~~respectively ~~that~~for the ~~Company~~three ~~will~~and ~~continue~~nine asmonths aended ~~going~~September ~~concern.~~30, ~~The Company has generated insufficient revenues from operations and~~2012 ~~has~~and ~~incurred~~a ~~substantial~~net ~~and~~operating ~~recurring~~loss ~~losses~~of toapproximately ~~date~~$8.1 ~~Additionally,~~million for the ~~Company~~year ~~has~~ended December ~~minimal~~31, ~~to no cash~~2011, ~~negative~~and ~~working~~has ~~capital,~~incurred ~~and~~accumulated alosses ~~stockholders’~~totaling ~~deficit~~approximately $19.7 asmillion ofthrough ~~June~~September 30, 2012. ~~These~~Because ~~conditions~~of ~~raise~~these ~~substantial~~conditions, ~~doubt about~~ the Company’s ~~ability~~will require additional working capital to continue asoperations aand develop ~~going~~its ~~concern~~business. The ~~accompanying~~Company ~~condensed~~intends ~~consolidated~~to ~~financial~~raise ~~statements~~additional doworking ~~not~~capital either ~~include~~through ~~any~~private ~~adjustments~~placements, ~~that~~public ~~might~~offerings ~~result~~and/or ~~from~~bank ~~the~~financing, ~~outcome~~and continues ofto ~~this~~strive ~~uncertainty~~to ~~(See~~increase ~~Note~~its 1)revenues each year.

1.There ~~Summary~~are no assurances that the Company will be able to achieve a level of ~~significant~~revenues ~~accounting~~adequate ~~policies~~to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations or execute its business plan.

These conditions raise substantial doubt about the Company’s ~~Nature~~ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset ~~operations,~~carrying ~~basis~~amounts or the amount and classification of ~~financial~~liabilities ~~statement~~that might ~~presentation~~be necessary should the Company be unable to continue as a going concern.

~~Smart-Tek~~Nature ~~Solutions Inc. (“the Company”) was incorporated in the State~~ of ~~Nevada~~operations ~~on March 22, 1995.~~

~~In July 2005, the Company changed its name from Royce Biomedical Inc. to~~ Smart-Tek Solutions Inc. ~~(“STS”~~was orincorporated in the ~~“Company”)~~State toof Nevada ~~better~~on ~~reflect~~March ~~its~~22, ~~new business activities~~1995.

In ~~March~~July 2005, the Company ~~entered~~changed ~~into~~its aname ~~Letter~~from ofRoyce Biomedical ~~Intent~~Inc. to ~~acquire~~ Smart-Tek ~~Communications,~~Solutions Inc. ~~(“SCI”) a British Columbia based security design and installation contractor. Pursuant~~ to abetter ~~Share~~reflect ~~Exchange~~its ~~Agreement~~new ~~executed in April~~business ~~2005, SCI became a wholly-owned subsidiary of the Company~~activities.

Smart-Tek Solutions Inc.

Notes to the Consolidated Financial Statements

September 30, 2012

In March 2005, the Company entered into a Letter of Intent to acquire Smart-Tek Communications, Inc. (“SCI”) a British Columbia based security design and installation contractor. Pursuant to a Share Exchange Agreement executed in April 2005, SCI became a wholly-owned subsidiary of the Company.

On July 1, 2010, the Company completed the disposition of the Company’s wholly-owned subsidiary SCI to its president and founder Perry Law.

On February 11, 2009, Smart-Tek Automated Services Inc., a wholly-owned subsidiary of the Company, was incorporated in the State of Nevada. On June 17, 2009, Brian Bonar was contracted to use his expertise and contacts in the professional employer organization (“PEO”) area for the benefit of Smart-Tek Automated Services, Inc. Smart-Tek Automated Services Inc. provides integrated and cost- effective management solutions for human resource functions for public and private companies. Though Smart-Tek Automated Services Inc., provides ~~mainly professional employer organization (“~~PEO”) services, it is equipped to provide temporary staffing services as well. In a PEO co-employment contract, the Company becomes the employer of record for client company employees’ for tax and insurance purposes. The client company continues to direct the employees’ day-to-day activities, and charges a service fee for providing services. 100% of Smart-Tek Automated Services Inc.’s operations are in the United States.

On October 1, 2011 Smart-Tek Solutions, Inc. purchased the assets and brand name of Solvis Medical from American Marine LLC dba AMS Outsourcing a Montana limited liability corporation. Solvis Medical provides medical staffing services to hospitals, medical clinics, surgical centers, skilled nursing facilities, and nursing care to patients in their homes.

2. Summary of significant accounting policies

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the following significant accounting policies:

Liquidity and Management Plans

At ~~June~~September 30, 2012, the Company had cash and cash equivalents of $0, a working capital deficit of approximately $1517.657 million and an accumulated deficit of $1719.87 million. The Company also has substantial unpaid tax liabilities as of ~~June~~ September 30, 2012. Due to these circumstances, the Company’s management monitors and attempts to minimize, to the extent possible, all cash expenditures. The Company plans to seek additional funds, equity or debt, to support its operations. The Company’s management believes it will generate sufficient additional revenues to meet its working capital needs in future periods.

Going Concern

The Company incurred a net operating loss of $1.9 million and $3.6 million respectively for the three and six month period ended June 30, 2012 and a net operating loss of approximately $8.1 million for the year ended December 31, 2011, and has incurred accumulated losses totalling approximately $17.8 million through June 30, 2012. Because of these conditions, the Company will require additional working capital to continue operations and develop its business. The Company intends to raise additional working capital either through private placements, public offerings and/or bank financing, and continues to strive to increase its revenues each year.

There are no assurances that the Company will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations or execute its business plan.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Principles of consolidation

The consolidated financial statements include the accounts of Smart-Tek Solutions Inc. and its wholly-owned subsidiary Smart-Tek Automated Services Inc. Significant inter-company transactions have been eliminated in consolidation.

Use of estimates

The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Specific areas, among others, requiring the application of management’s estimates and judgment includes assumptions pertaining to ~~credit~~creditworthiness ~~worthiness~~ of customers, interest rates, useful lives of assets, future cost trends, tax strategies, and other external market and economic conditions. Actual results could differ from estimates and assumptions made.

~~Accounts~~6 ~~Receivable~~

~~Accounts~~Smart-Tek ~~receivables~~Solutions ~~are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed~~Inc. ~~The~~Notes ~~Company uses the allowance method~~ to ~~account for uncollectible accounts receivable balances. Under~~ the ~~allowance~~Consolidated ~~method,~~Financial ifStatements ~~needed,~~September an estimate of uncollectible customer balances is made based upon specific account balances that are considered uncollectible. Factors used to establish an allowance include the credit quality and payment history of the customer. The allowance for doubtful accounts was $150,000 and zero as of June 30, 2012 ~~and 2011, respectively.~~

~~The Company regularly discounts selected trade accounts receivable from clients to a commercial factoring company~~2. ~~Under the terms~~ Summary of ~~the~~significant ~~factoring~~accounting ~~agreement~~policies, ~~the~~continued ~~factor remits the invoiced amounts to the Company less a portion for reserves. When paid in full, the factor remits the reserve amount less a portion for processing fees and interest.~~ Accounts ~~are~~Receivable factored with recourse as to credit losses. The Company reflects a liability to the factoring company in its Balance Sheet for the amounts that remains uncollected until the factored invoices have been paid in full. At June 30, 2012 the company had $801,043 in assigned accounts receivable.

Accounts receivables are recorded at net realizable value 7consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, if needed, an estimate of uncollectible customer balances is made based upon specific account balances that are considered uncollectible. Factors used to establish an allowance include the credit quality and payment history of the customer. The allowance for doubtful accounts was $232,823 and zero as of September 30, 2012 and 2011, respectively.

The Company regularly discounts selected trade accounts receivable from clients to a commercial factoring company. Under the terms of the factoring agreement, the factor remits the invoiced amounts to the Company less a portion for reserves. When paid in full, the factor remits the reserve amount less a portion for processing fees and interest. Accounts are factored with recourse as to credit losses. The Company reflects a liability to the factoring company in its Balance Sheet for the amounts that remain uncollected until the factored invoices have been paid in full. At September 30, 2012 the company had $719,285 in assigned accounts receivable.

Workers compensation insurance

The Company maintains reserves in the form of prepaid cash deposits for known workers' compensation claims which are made up of estimated collateral required to pay claims and estimated expenses to settle the claims. The collateral amounts are determined by the insurance carrier and are not recoverable by the Company until all claims related to a policy period are settled.

The prepaid cash deposits will not be recoverable in the near term and accordingly, they are classified as a long term asset. The Company reserves prepaid cash deposits for case reserves at a rate of 150%. Case reserves, included in accrued workers compensation, are an estimate for the costs of claims, administrative costs as well as legal costs. These estimates are continually reviewed and adjustments to liabilities are reflected in current operating results as they become known.

Concentration of credit risk

Credit risk arises from the potential that a counterpart will fail to perform its obligations. The Company is exposed to credit risk related to its accounts receivable. The Company’s receivables are comprised of a number of debtors which minimizes the concentration of credit risk.

Revenue recognition

The Company recognizes ~~professional employment organizations (~~PEO) revenues when each periodic payroll is delivered. The Company’s net PEO revenues and cost of PEO revenues do not include the payroll cost of its worksite employees. Instead, PEO revenues and cost of PEO revenues are comprised of all other costs related to its worksite employees, such as payroll taxes, employee benefit plan premiums and workers’ compensation insurance.

PEO revenues also include professional service fees, which are primarily computed as a percentage of client payroll or on a per check basis. Revenues related to the Solvis Medical business are recognized when the services are invoiced to the client.

In determining the pricing of the markup component of its billings, the Company takes into consideration its estimates of the costs directly associated with its worksite employees, including payroll taxes, benefits and workers’ compensation costs, plus an acceptable gross profit margin. As a result, the Company’s operating results are significantly impacted by the Company’s ability to accurately estimate, control and manage its direct costs relative to the revenues derived from the markup component of the Company’s gross billings.

~~Goodwill~~Smart-Tek Solutions Inc. Notes to the Consolidated Financial Statements September 30, 2012

2. Summary of significant accounting policies, continued Goodwill

The Company’s goodwill was derived from the acquisition of Solvis Medical assets. Goodwill is the excess of cost over the fair market value of net tangible assets acquired. Goodwill is not amortized but tested for impairment on an annual basis or if certain circumstances indicate a possible impairment may exist.

Share-based compensation

The Company measures the cost of employee services received in exchange for equity awards based on the grant date fair-value of the awards. Fair value is typically the market price of the shares on the date of issuance. Costs are recognized as compensation expense over the vesting period of the awards. Under this method, the Company began recognizing compensation cost for equity-based compensation for all new or modified grants after the date of adoption. The pro-forma disclosures previously permitted under SFAS No. 123 are no longer an alternative to financial statement recognition.

~~Earnings~~Loss ~~(loss)~~ per share

The Basic net ~~earnings (~~loss) per common share is computed by dividing the net ~~earnings (~~loss) available to common stock outstanding during the period. Net ~~earnings (~~loss) per share on a diluted basis is computed by dividing the net ~~earnings (~~loss) for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Due to the Company incurring a loss for the three and ~~six~~nine months ending ~~June~~ September 30, 2012 and 2011, all potential dilutive securities were considered to be anti-dilutive.

Fair Value of Financial Instruments

Fair value is determined to be the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company follows a fair value hierarchy that prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company's assumptions.

The Company is required to use observable market data if such data is available without undue cost and effort.

9At September 30, 2012 and 2011, the carrying amounts of financial instruments, including cash, accounts and other receivables, accounts payable and accrued liabilities, and accounts payable to related parties approximate fair value because of their short maturity.

At8 June 30, 2012 and 2011, the carrying amounts of financial instruments, including cash, accounts and other receivables, accounts payable and accrued liabilities, and accounts payable to related parties approximate fair value because of their short maturity.

~~Recent~~Smart-Tek ~~Accounting~~Solutions ~~Pronouncements~~Inc. Notes to the Consolidated Financial Statements September 30, 2012

2. Summary of significant accounting policies, continued Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

The Company has reviewed accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in future periods. The Company believes that the following impending standards may have an impact on its future filings. The applicability of any standard will be evaluated by the Company and is still subject to review by the Company.

The Company has adopted FASB ASC 220 “Comprehensive Income”, which establishes standards for reporting and display of comprehensive income (loss), its components and accumulated balances. The Company had no no components of comprehensive income (loss) for the periods presented.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”). ASU 2012-02 is intended to reduce the cost and complexity of the annual indefinite-lived intangible assets impairment testing by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. As such, there is the possibility that quantitative assessments would not need to be performed if it is more likely than not that no impairment exists. This new update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company will adopt ASU 2012-02 as of December 31, 2012 for its annual impairment testing. The Company does not expect it to significantly affect its testing.

We do not believe any other recent accounting pronouncements issued by the FASB, the AICPA, or the SEC have a material impact on the Company's present or future consolidated financial statements.

23. Equipment

		June 30, 2012										December 31, 2011
						September 30,						December 31,
						2012						2011
				Accumulated		Net Book				Accumulated		Net Book
		Cost		Depreciation		Value		Cost		Depreciation		Value
Computer equipment & software	$	55,008	$	2427,~~952~~142	$	3027,~~056~~866	$	55,008	$	20,574	$	34,434
Office furniture & equipment		19,334		1011,~~301~~754		97,~~033~~580		19,334		7,397		11,937
Automobile		23,242		1820,~~480~~417		42,~~762~~825		23,242		14,606		8,636
	$	97,584	$	5359,~~733~~313	$	4338,~~851~~271	$	97,584	$	42,577	$	55,007

Depreciation and amortization of property and equipment was $5,578 and $74,~~606~~702 for the three ~~month~~months ~~period~~ ended ~~June~~September 30, 2012 and 2011 respectively and $1116,~~156~~734 and $1217,~~308~~010 for the ~~six~~nine ~~month~~months ~~period~~ ended ~~June~~September 30, 2012 and 2011, respectively.

109

3Smart-Tek Solutions Inc. ~~Equity~~Notes to the Consolidated Financial Statements September 30, 2012

~~At June 30, 2012, the Company is authorized to issue shares as~~4. Equity ~~follows:~~

	1.	5,000,000 shares of preferred stock, par value $0.001 per share.
	2.	500,000,000 shares of common stock, par value $0.001 per share.

At September 30, 2012, the Company is authorized to issue shares as follows:

Common Stock

At ~~June~~September 30, 2012, there are 49,212,123 shares of common ~~stock~~ stock outstanding.

On June 16, 2011 the Board of Directors approved the Smart-Tek Solutions 2011 Stock Compensation Plan (“2011 Plan”) authorizing the sale or award of up to an additional 10,000,000 shares and/or options of the Company's Common Stock. The Stock Option Plan expires in August 20, 2013. On June 13, 2011, the company issued 21,897,999 shares to the Company’s CEO pursuant to a Strategic Marketing Agreement. The cost of these shares was measured at the market value of $.01 per share or $218,980 and expensed at the time of issuance. On June 16, 2011 3,000,000 shares were issued to a consultant as compensation for services rendered. The cost of these shares was measured at the market value of $.075 per share or $225,000 and expensed at the time of issuance. The value in excess of Par Value was recognized as Additional Paid Inin Capital. 7,000,000 shares and/or options of the Company’s common stock are available for issuance under the 2011 Plan as of ~~June~~September 30, 2012.

Preferred Shares

There are no preferred shares issued or outstanding.

45. Loss ~~Earnings (loss)~~ per share

		Three			Three
		Three Months			Three Months
		Months			Months
		Ended			Ended
		June 30,			June 30,
		September 30,			September 30,
		2012			2011
Net income (loss)	$	(1,~~924~~885,~~808~~022	)	$	(~~599~~2,~~161~~963,852	)
Weighted number of shares outstanding		49,212,123			2949,~~796~~212,~~080~~123
Income(loss) per share	$	(0.04	)	$	(0.02	)
Loss per share	$	(0.04	)	$	(0.06	)

		Nine Months			Nine Months
		Ended			Ended
		September 30, 2012			September 30, 2011

Net loss	$	(5,495,078	)	$	(3,199,659	)

Weighted number of shares outstanding		49,212,123			34,531,977

Loss per share	$	(0.11	)	$	(0.09	)

~~Earnings~~10 ~~(loss) per share (continued)~~

		Six Months			Six Months
		June 30,			June 30,
		2012			2011
Net income (loss)	$	(3,610,056	)	$	(235,808	)
Weighted number of shares outstanding		49,212,123			27,070,245
Income(loss) per share	$	(0.07	)	$	(0.01	)

Smart-Tek Solutions Inc.

Notes to the Consolidated Financial Statements

September 30, 2012

56. Acquisitions

On October 1, 2011, Smart-Tek Solutions, Inc. acquired the assets and the brand name of Solvis Medical from American Marine LLC dba AMS Outsourcing, a Montana limited liability corporation.

The purchase price was $535,000 consisting of a $35,000 cash payment at closing plus a $500,000 promissory note that matures on September 3130, ~~2012~~2013 and bears a 6% simple interest rate. The purchase price will be revalued at the one and two year time periods based on performance as follows:

Year 2012 – At December 31, 2012, the acquired net assets will be revalued at four (4) times pretax earnings. A one year promissory note at 6% interest will be issued for the net change between the original value and the 2012 revalue.
Year 2013 – At December 31, 2013, the acquired net assets will be revalued at four (4) times pretax earnings. A one year promissory note at 6% interest will be issued for the net change between the revalue as of December 31, 2012 and the revalue at December 31, 2013

The Company recorded the purchase price as follows:

Prepaid expenses	$	52,303
Furniture & fixtures	$	6,341
Goodwill	$	476,~~536~~356
Total	$	535,000

Management does not believe that the calculation of 4 times earnings will exceed the purchase price of $535,000.

127. Note Payable to Related Party

6At September 30, 2012, the Company has an outstanding note payable in the amount of $500,000 payable to an affiliated company relating to the acquisition of Solvis Medical assets. ~~Short~~The ~~Term~~loan ~~Note~~is ~~Payable~~unsecured, bears a simple 6% interest and matures at September 30, 2013.

~~At June 30, 2012, the Company has an outstanding note payable in the amount of $500,000 payable to an affiliated company relating to the acquisition of Solvis Medical assets~~8. ~~The loan is unsecured, bears a simple 6%~~ ~~interest~~ Related ~~and~~Party ~~matures~~Transactions ~~at September 30, 2012.~~

7During the three month period ended September 30, 2012, Smart-Tek Automated Services Inc. ~~Related~~(a ~~Party~~wholly-owned ~~Transactions~~subsidiary) paid $358,943 in management salaries to its Chief Executive Officer and Chief Operating Officer which included commissions of $70,000 and benefits of $100,481. Such costs have been reflected in the accompanying statement of operations.

During the ~~three~~nine ~~month~~months ~~period~~ ended ~~June~~September 30, 2012, Smart-Tek Automated Services Inc. (a wholly-owned subsidiary) paid $~~358~~1,~~054~~017,032 in ~~management~~ management salaries to its Chief Executive Officer and Chief Operating Officer ~~which~~ which included commissions of $~~102~~279,~~832~~078 and benefits of $74179,~~069~~878. Such ~~Costs~~costs have ~~been~~ been reflected in the accompanying statement of operations.

During the six month period ended June 30, 2012, Smart-Tek Automated Services Inc. (a wholly-owned subsidiary) paid $658,090 in management salaries to its Chief Executive Officer and Chief Operating Officer which included commissions of $209,078 and benefits of $79,397. Such Costs have been reflected in the accompanying statement of operations.

From time to time, Smart-Tek Automated Services Inc. purchases additional services from related parties to take advantage of economies of scale as opposed to maintaining full time staff and resources within its own operations. Likewise, Smart-Tek Automated services shares its own resources with these same related parties again to leverage economies of scale.

During the three and ~~six~~nine ~~month~~months ~~period~~ ended ~~June~~September 30, 2012, Smart-Tek Automated Services Inc. (a wholly-owned subsidiary) paid consulting fees of $~~135~~61,000 and $~~322~~383,500, respectively, to a company controlled by an ~~officer~~ officer of the Company for Financial, HR and Legal Services. Such costs have ~~been~~ been reflected in the accompanying statement of operations.

Smart-Tek Solutions Inc.

Notes to the Consolidated Financial Statements

September 30, 2012

8. Related Party Transactions, continued

Smart-Tek additionally pays certain fees to another related party for the sharing of office space and utilities. These expenses are included in the accompanying statement of operations and were based upon actual usage or allocations agreed to by management personnel.

Amounts due from/to related companies

Mr. Brian Bonar, the Company’s Chief Executive Officer and Chairman, has a 40% direct and a 50% indirect ownership interest in American Marine LLC (“AMS”), American Transportation Administrative Services, Corp is owned by AMS. Mr. Bonar is the CEO and director of Dalrada Management, and is a minority shareholder. The amounts due from or to related companies are interest-free, unsecured and payable on demand.

Following is a summary of the balances both ~~Due~~due Toto and ~~From~~from these related parties as of ~~June~~September 30, 2012 which in some cases is an ~~accumulation~~ accumulation over several years of activity:

		Due From		Due To
Allegiant Professional Business Services Inc.	$	1425,~~266,570~~996	$	~~293~~604,~~348~~248
American Marine LLC		~~585~~884,~~550~~214		~~158~~156,~~076~~600
Dalrada Management Consulting Corp.		~~355~~341,~~485~~791		2562,484
American Transportation Administrative Services Corp.		2033,~~498~~284		-
Other		-2,515		39,~~783~~782
Total Due from Related Parties	$	21,~~228~~687,~~103~~800	$	~~516~~863,~~691~~114

13 12

8ITEM 2. ~~Subsequent~~MANAGEMENT'S ~~events~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

InOPERATIONS July 2012, the Internal Revenue Service (IRS) requested the Company for a substantial amount of payroll records through a document request. The Company is and will continue to submit the documentation requested by the IRS. As noted in the Balance Sheet, the Company has a payroll tax withholding liability of approximately $15.7 million. The IRS staff is in process of reconciling the total amount of the payroll tax liability. After the conclusion of the reconciliation process by the IRS staff, the Company’s legal tax counsel will handle a negotiated repayment plan that is acceptable to the IRS and the Company.

14Certain statements in this quarterly report on Form 10-Q that are not historical in fact constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this annual report on Form 10-Q are made pursuant to the PSLRA. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors based on the Company’s estimates and expectations concerning future events that may cause the actual results of the Company to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These risks and uncertainties, as well as the Company’s critical accounting policies, are discussed in more detail under “Management’s Discussion and Analysis—Critical Accounting Policies” and in periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

~~ITEM~~ You 2should read the following discussion of our financial condition and results of operations together with the audited financial statements and the notes to the audited financial statements included in this annual report. ~~MANAGEMENT'S~~This ~~DISCUSSION~~discussion ~~AND~~contains forward-looking ~~ANALYSIS~~statements OFthat ~~FINANCIAL~~reflect ~~CONDITION~~our ~~AND~~plans, ~~RESULTS~~estimates OFand ~~OPERATIONS~~beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

~~Certain~~Our ~~statements~~audited infinancial ~~this~~statements ~~quarterly report on Form 10-Q that~~ are ~~not~~stated ~~historical~~ in ~~fact~~United ~~constitute~~States ~~“forward-looking~~Dollars statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this annual report on Form 10-Q are made pursuant to the PSLRA. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and ~~similar expressions~~ are ~~intended~~prepared to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors based on the Company’s estimates and expectations concerning future events that may cause the actual results of the Company to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These risks and uncertainties, as well as the Company’s critical accounting policies, are discussed in ~~more~~accordance ~~detail~~with ~~under~~United ~~“Management’s~~States ~~Discussion~~Generally ~~and~~Accepted ~~Analysis—Critical~~ Accounting ~~Policies”~~ ~~and in periodic filings with the Securities and Exchange Commission~~Principles. ~~The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.~~

~~You~~Overview should read the following discussion of our financial condition and results of operations together with the audited financial statements and the notes to the audited financial statements included in this annual report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

~~Our~~Through ~~audited~~our ~~financial~~wholly ~~statements~~owned ~~are~~subsidiary ~~stated~~Smart-Tek inAutomated ~~United~~Services, ~~States~~Inc. ~~Dollars~~(“Smart-Tek Automated”), we provide integrated and ~~are~~cost-effective ~~prepared~~management solutions in ~~accordance~~the ~~with~~area ~~United~~of ~~States~~human ~~Generally~~resources ~~Accepted~~services ~~Accounting~~to ~~Principles~~small and medium-size businesses, relieving our clients from many of the day-to-day tasks that negatively impact their core business operations, such as payroll processing, human resources support, workers' compensation insurance, safety programs, employee benefits, and other administrative and aftermarket services predominantly related to staffing - staff leasing, temporary staffing and co-employment.

~~Overview~~Through our Solvis Medical business line we provides medical staffing services to hospitals, medical clinics, surgical centers, skilled nursing facilities, and nursing care to patients in their homes.

~~Through~~Plan ~~our wholly owned subsidiary Smart-Tek Automated Services, Inc. (“Smart-Tek Automated”), we provide integrated and cost-effective management solutions in the area~~ of ~~human~~Operation resources services to small and medium-size businesses, relieving our clients from many of the day-to-day tasks that negatively impact their core business operations, such as payroll processing, human resources support, workers' compensation insurance, safety programs, employee benefits, and other administrative and aftermarket services predominantly related to staffing - staff leasing, temporary staffing and co-employment.

~~Through~~Short ~~our~~Term ~~Solvis Medical business line we provides medical staffing services to hospitals, medical clinics, surgical centers, skilled nursing facilities, and nursing care to patients in their homes.~~

~~Plan~~Smart-Tek Automated Services Inc.: Continue to concentrate on signing up new brokers who have a large book of ~~Operation~~business that we can service. Grow the new nurse staffing business line.

~~Short~~Long Term

Smart-Tek Automated Services Inc.: ~~Continue~~Our current strategy is to ~~concentrate~~expand onour ~~signing~~service upbusiness, ~~new~~including ~~brokers~~staff ~~who~~- ~~have~~and anurse ~~large~~staffing ~~book~~leasing, ofPEO ~~business~~services, ~~that~~and wevalue ~~can~~added ~~service.~~products ~~Grow~~and ~~the~~services ~~new~~to ~~nurse~~small ~~staffing~~and ~~business~~medium-size ~~line~~businesses.

~~Long~~PLAN ~~Term~~OF OPERATION AND FUNDING

~~Smart-Tek~~Our ~~Automated~~cash ~~Services~~reserves ~~Inc~~are not sufficient to meet our obligations for the next twelve month period.: ~~Our~~As ~~current~~a ~~strategy~~result, iswe will need to ~~expand~~seek ~~our~~additional ~~service~~funding ~~business~~in the near future. We currently do not have a specific plan of how we will obtain such funding; however, ~~including~~we ~~staff~~anticipate that additional funding will be in the form of equity financing from the sale of shares of our common stock or issuance of convertible debentures. We may also seek to obtain short-term ~~and~~loans ~~nurse~~from ~~staffing~~our ~~leasing,~~directors ~~PEO~~or ~~services~~unrelated parties, ~~and~~although ~~value~~no ~~added~~such ~~products~~arrangements ~~and~~have ~~services~~been tomade. ~~small~~We ~~and~~do ~~medium-size~~not ~~businesses~~have any arrangements in place for any future equity financing.

15PEO Business Environment

~~PLAN~~We OFprovide ~~OPERATION~~professional ~~AND~~employer ~~FUNDING~~organization outsourcing (PEO) and human resources services to small and medium-size businesses. These services allow our customers to outsource many human resources tasks, including payroll processing, workers' compensation insurance, employee benefits administration, risk management and human resource administration. These services relieve existing and potential customers of the burdens associated with personnel management and control.

~~Our cash reserves are not sufficient to meet our obligations for the next twelve month period.~~ As a ~~result,~~human weresource ~~will~~department ~~need~~and tostrategic ~~seek~~business ~~additional~~partner ~~funding~~for inour ~~the near future. We currently do not have a specific plan of how we will obtain such funding; however~~clients, weour ~~anticipate~~service ~~that~~offerings ~~additional~~allow ~~funding will be in the form of equity financing from the sale of shares of~~ our ~~common~~clients ~~stock or issuance of convertible debentures. We may also seek~~ to: ~~obtain short-term loans from our directors or unrelated parties, although no such arrangements have been made. We do not have any arrangements in place for any future equity financing.~~

~~PEO~~comply ~~Business~~with ~~Environment~~ever evolving complex employment related regulatory and tax issues;
Weincrease ~~provide~~productivity ~~professional~~by ~~employer~~improving organization outsourcing (PEO) and human resources services to small and medium-size businesses. These services allow our customers to outsource many human resources tasks, including payroll processing, workers' compensation insurance, employee ~~benefits~~satisfaction ~~administration, risk management~~ and ~~human resource administration. These services relieve existing and potential customers of the burdens associated with personnel management and control.~~ retention;
Asreduce apayroll ~~human~~expenses ~~resource~~with ~~department~~lower ~~and~~workers' ~~strategic~~compensation ~~business~~costs; ~~partner for our clients, our service offerings allow our clients to:~~ and
~~comply~~focus ~~with~~on ~~ever~~core ~~evolving~~business ~~complex~~activities ~~employment~~instead ~~related~~of ~~regulatory~~human ~~and~~resource ~~tax issues;~~matters.

~~increase~~Our ~~productivity~~main bybusiness, ~~improving~~a ~~employee~~co-employment ~~satisfaction~~or PEO contract arrangement, we become a co-employer of the client's existing workforce and ~~retention;~~assume some or all of the client's human resource management responsibilities.

~~reduce~~Our ~~payroll~~business ~~expenses~~continues ~~with~~to ~~lower~~experience ~~workers'~~some ~~compensation~~liquidity ~~costs;~~problems. ~~and~~Accordingly, year-to-year comparisons may be of limited usefulness as our business continues to seek growth.

~~focus~~Our oncurrent ~~core~~strategy is to expand our service business, ~~activities~~including ~~instead~~staff ofleasing, ~~human~~PEO ~~resource~~services, ~~matters~~and value added products and services to small and medium-size businesses.

~~Our main business, a co-employment or~~ PEO ~~contract~~Market ~~arrangement,~~Overview ~~we become a co-employer of the client's existing workforce and assume some or all of the client's human resource management responsibilities.~~

~~Our~~The ~~business~~burdens ~~continues~~placed on small and medium-sized employers by the complex legal and regulatory issues related to ~~experience~~human ~~some~~resources ~~liquidity~~management ~~problems~~caused our industry segment to grow beginning in the 1980's. ~~Accordingly~~While various service providers have been available to assist these businesses with specific tasks, ~~year-~~companies like ours emerged as providers of a more comprehensive range of services relating to the employer/employee relationship. We assume broad aspects of the employer/employee relationship for our clients. Because we provide employee-~~year~~related ~~comparisons~~services ~~may~~to bea large number of ~~limited~~employees, ~~usefulness~~we asprovide economies of scale that provide our ~~business~~clients ~~continues~~employment-related functions more efficiently, provide a greater variety of employee benefits, and devote more attention to ~~seek~~human ~~growth~~resources management.

~~Our~~We ~~current~~believe ~~strategy~~that isthe todemand ~~expand~~for our ~~service~~services ~~business,~~is ~~including~~driven ~~staff~~by ~~leasing,~~(1) ~~PEO~~the ~~services,~~trend by small and ~~value~~medium-sized ~~added~~businesses ~~products~~toward outsourcing management tasks outside of core competencies; (2) the difficulty of providing competitive health care and ~~services~~related benefits to ~~small~~attract and ~~medium-size~~retain ~~businesses.~~employees; (3) the increasing costs of health and workers' compensation insurance coverage and workplace safety programs; and (4) complex regulation of labor and employment issues and the related costs of compliance.

~~PEO~~Medical ~~Market~~Staffing ~~Overview~~

~~The~~Provides ~~burdens~~medical ~~placed~~staffing onservices ~~small and medium-sized employers by the complex legal and regulatory issues related~~ to ~~human resources management caused our industry segment to grow beginning in the 1980's. While various service providers have been available to assist these businesses with specific tasks~~hospitals, ~~companies~~medical like ours emerged as providers of a more comprehensive range of services relating to the employer/employee relationship. We assume broad aspects of the employer/employee relationship for our clients. Because we provide employee-related services to a large number of employeesclinics, wesurgical ~~provide economies of scale that provide our clients employment-related functions more efficiently~~centers, ~~provide~~skilled anursing ~~greater variety of employee benefits~~facilities, and ~~devote more~~nursing ~~attention~~care to ~~human~~patients ~~resources~~in ~~management~~their homes.

We ~~believe~~RESULTS ~~that~~OF the demand for our services is driven by (1) the trend by small and medium-sized businesses toward outsourcing management tasks outside of core competencies; (2) the difficulty of providing competitive health care and related benefits to attract and retain employees; (3) the increasing costs of health and workers' compensation insurance coverage and workplace safety programs; and (4) complex regulation of labor and employment issues and the related costs of compliance. OPERATIONS

Three and nine months ending September 30, 2012 and 16 2011

~~Medical~~ Revenue ~~Staffing~~

~~Provides~~ For ~~medical~~the ~~staffing~~three ~~services~~months toending ~~hospitals,~~September ~~medical clinics~~30, ~~surgical~~2012 ~~centers~~and 2011, ~~skilled~~revenues ~~nursing~~were ~~facilities~~$6,104,919 and ~~nursing~~$4,628,141 ~~care~~respectively, for an increase of $1,476,778 (32%) over the same period in 2011. The increase was attributable to ~~patients~~ a net increase in ~~their~~our ~~homes~~payroll and staffing business through Smart-Tek Automated Services. The Solvis Medical nurse staffing business line contributed $1,038,217 during the quarter.

~~RESULTS~~For OFthe ~~OPERATIONS~~nine months ending September 30, 2012 and 2011, revenues were $18,719,513 and $15,251,133 respectively, for an increase of $3,468,380 (23%) over the same period in 2011. The increase was attributable to a net increase in our payroll and staffing business through Smart-Tek Automated Services. The Solvis Medical nurse staffing business line contributed $3,113,042 in 2012.

~~Three~~Gross ~~and~~Profit ~~six months ending June 30, 2012 and 2011~~

~~Revenue~~Gross profit (loss) for the three months ending September 30, 2012 and 2011 were $(207,773) and $(155,177) respectively, for an increase loss of $52,596 (34%) over the same period in 2011. The increase in loss was attributed to increased workers compensation expense.

~~For~~Gross profit for the ~~three~~nine months ending ~~June~~September 30, 2012 and 2011, ~~revenues~~ were $61,~~133~~099,~~600~~936 and $62,~~401~~802,~~186~~521 respectively, for a decrease of $~~267~~1,~~586~~ 702,585 (~~4.2~~64%) over the same period in 2011. The decrease ~~was~~in ~~attributable~~gross toprofit ~~the~~was ~~loss~~directly of a ~~large~~result ~~client.~~of ~~The~~increased workers compensation expense. Solvis Medical nurse staffing business line contributed $~~986~~415,~~307~~341 ~~during~~to the ~~quarter~~decrease in 2012.

~~For~~Expenses the six months ending June 30, 2012 and 2011, revenues were $12,614,594 and $10,622,992 respectively, for an increase of $1,991,602 (18.8%) over the same period in 2011. The increase was attributable to a net increase in our payroll and staffing business through Smart-Tek Automated Services. The Solvis Medical nurse staffing business line contributed $2,074,825 in 2012.

~~Gross~~Our ~~Profit~~expenses for the nine months ended September 30, 2012 and 2011 are outlined in the table below:

Gross profit for the three months ending June 30, 2012 and 2011 were $375,200 and $1,685,183 respectively, for a decrease of $1,309,983 (77.7%) over the same period in 2011. The decrease in gross profit was directly a result of increased workers compensation expense. Solvis Medical nurse staffing business line contributed $84,651 to the decrease during the quarter.

		Nine months		Nine months
		ended		ended	Percentage
		September 30,		September 30,	Increase/
		2012		2011	(Decrease)
Cost of Revenue	$	17,619,577	$	12,448,612	41.5%
Selling, General and Administrative expenses		6,051,656		5,167,062	17.1%
Interest Expense and Tax Penalties		543,700		835,118	(34.9%	)
Total Expenses	$	24,214,933	$	18,450,792	31.2%

~~Gross~~Cost ~~profit for the six months ending June 30, 2012 and 2011 were $1,307,709 and $2,957,698 respectively, for a decrease~~ of ~~$1,649,989 (55.8%)~~revenue over the same period in 2011. The decrease in gross profit was directly as result of increased workers compensation expense. Solvis Medical nurse staffing business line contributed $232,595 to the decrease in 2012.

~~Expenses~~Cost of revenue of $6,312,692 for the three months ended September 30, 2012 increased by $1,529374 or 32% over the same period prior year amount of $4,783,318. The increase was attributable to an increase in worker’s compensation claims and premium expense. Solvis Medical contributed $855,469 to the cost of revenue during the quarter.

~~Our~~Cost ~~expenses~~of revenue of $17,619,577 for the ~~six~~nine months ended September ~~June~~ 30, 2012 ~~and~~increased ~~2011~~by $5,170,965 or 41.5% over the same period prior ~~are~~year ~~outlined~~amount of $12,448,612. The increase was attributable to an increase in worker’s compensation claims and premium expense. Solvis Medical contributed $2,697,701 to the ~~table~~cost ~~below:~~of revenue in 2012.

					Percentage
		Six months ended			Increase/
		June 30, 2012			(Decrease)
		2012		2011
Cost of Revenue	$	11,306,885	$	7,665,294	47.5%
Selling, General and Administrative expenses		4,459,736		3,169,625	40.7%
Interest Expense and Tax Penalties		458,056		23,881	1,818.1%
Total Expenses	$	16,224,677	$	10,858,800	49.4%

Administrative

~~Cost~~Selling, general and administrative expenses of ~~revenue~~$1,591,920 for the three months ended September 30, 2012 decreased by $405,519 or 20.3% over the same period prior year amount of $1,997,439. The decrease was mainly attributable to reduced legal fees in the second quarter.

~~Cost~~Selling, ofgeneral ~~revenue~~and administrative expenses of $56,~~758~~051,~~400~~656 for the ~~three~~nine months ended ~~June~~ September 30, 2012 increased by $1884,~~042,397~~594 or 2217.1% over the same period prior year amount of $45,~~716~~167,~~003~~062. The increase was mainly attributable to anlegal ~~increase~~fees in ~~worker’s compensation claims and premium expense~~2012. ~~Solvis Medical contributed 901,656 to the cost of revenue during the quarter.~~

17Interest and tax penalties

~~Cost~~Interest ofexpense ~~revenue~~and oftax ~~$11,306,885~~penalties for the ~~six~~three months ended ~~June~~ September 30, 2012 ~~increased~~was by $385,~~641~~644,~~591~~ ora 47decrease of $725,592or 847.52% over the same period prior year amount of $7811,~~665,294~~236. ~~The increase was attributable to an increase in worker’s compensation claims and premium expense. Solvis Medical contributed 1,842,232 to the cost of revenue in 2012.~~

~~Administrative~~Interest expense and tax penalties for the nine months ended September 30, 2012 was $543,670, a decrease of $291,448 or 34.9% over the same period prior year amount of $835,118.

~~Selling,~~Liquidity ~~general~~ and ~~administrative~~Capital ~~expenses~~Resources of $1,906,817 for the three months ended June 30, 2012 decreased by $363,975 or 16% over the same period prior year amount of $2,270,792. The decrease was mainly attributable to reduced legal fees in the second quarter .

Selling, general and administrative expenses of $4,459,736 for the six months ended June 30, 2012 increased by $1,290,111 or 40.7% over the same period prior year amount of $3,169,625. The increase was mainly attributable to legal fees in 2012.

Working Capital
							Percentage
		September 30,			December 31,		Increase/
		2012			2011		(Decrease)
Current Assets	$	3,035,587		$	4,550,447		(33.3%	)
Current Liabilities		20,606,541			15,391,392		33.9%
Working Capital (Deficiency)	$	(17,570,954	)	$	(10,840,945	)	62.1%

Interest and tax penalties

Cash Flows
	Nine Months			Nine Months		Percentage
	September			September 30,		Increase/
	30, 2012			2011		(Decrease)
Cash used in Operating Activities	(560,235	)	$	(634,526	)	(11.7%	)
Cash used in Investing Activities	-			(46,125	)	-
Cash from Financing Activities	111,435			168,979		(34.1%	)
Net Decrease in Cash	(448,800	)		(511,672	)	(12.3%	)

~~Interest~~We ~~expense~~had ~~and~~cash ~~tax~~on ~~penalties~~hand ~~for~~of ~~the~~$(316,308) ~~three~~and ~~months~~working ~~ended~~capital deficit ~~June~~of $17,570,954 as of September 30, 2012 ~~was~~compared ~~$393,203,~~to ancash ~~increase~~on hand of $~~379~~132,~~651~~492 orand working 2capital deficit of $10,~~801.4%~~840,945 ~~over~~for the ~~same~~year ended December 31, 2011. We ~~period~~anticipate ~~prior~~that ~~year~~we ~~amount~~will ofincur approximately $13730,~~552.~~000 a month for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next twelve months.

~~Interest~~Cash ~~expense~~Used ~~and~~In ~~tax~~Operating ~~penalties~~Activities ~~for the six months ended June 30, 2012 was $458,056, an increase of $434,175 or 1,818.1% over the same period prior year amount of $23,881.~~

~~Liquidity~~Cash flow used in operations for the nine months ending September 30, 2012 amounted to $243,927 which mainly consisted of the following: 1) the net loss for the period of $5,495,078 and ~~Capital~~2) ~~Resources~~increase in prepaid workers compensation of $1,216,666, 3) payroll taxes payable of $4,530,587 and 4) workers compensation expense of $262,513 offset by 1) depreciation expense of $16,734, 2) due from related party of $1,053,935; 3) accounts receivable of 283,336; 4) prepaid expenses of $45,097 and 5) accounts payable of $275,615.

Working Capital							Percentage
		June 30,			December 31,		Increase/
		2012			2011		(Decrease)
Current Assets	$	3,542,619		$	4,550,447		(22.1%	)
Current Liabilities		19,104,522			15,391,392		24.1%
Working Capital (Deficiency)	$	(15,561,903	)	$	(10,840,945	)	(43.6%	)

Cash Used In Financing Activities

Cash Flows	Six Months		Six Months
	Ended		Ended		Percentage
	June 30,		June 30,		Increase/
	2012		2011		(Decrease)
Cash from (used in) Operating Activities	20,740		(297,505	)	107.0%
Cash from (used in) Investing Activities	-		(46,125	)	100%
Cash from (used in) Financing Activities	(153,232	)	443,979		(134.5%	)
Net Increase (Decrease) in Cash	(132,492	)	100,349		(232.0%	)

We used cash in financing activities that amounted to $111,435 consisting of 1) assigned accounts receivable of $107,658, 2) decrease in proceeds from related party of $254,093, and 3) payment of long-term payable of $35,000.

WeFuture ~~had~~Cash ~~cash~~Flows on hand of $0 and working capital deficit of $15,561,903 as of June 30, 2012 compared to cash on hand of $132,492 and working capital deficit of $10,840,945 for the year ended December 31, 2011. We anticipate that we will incur approximately $730,000 a month for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next twelve months.

18STTN’s future capital requirements will depend on numerous factors, including the control of workers compensation claims, the establishment of reasonable workers compensation premiums, and growing the business with business that employee more favorable worker compensation class types. We cannot for certain claim that our current operations along with financing from outside will be sufficient to meet our ongoing operating needs. We will need to seek outside capital in order to continue as a going concern. In addition, we cannot predict when and if any additional capital contributions may be needed and we may need to seek one or more substantial new investors. New investors could cause substantial dilution to existing stockholders.

~~Cash~~Going ~~Used~~Concern ~~In Operating Activities~~

~~Cash~~As ~~flow~~shown ~~provided~~ in ~~operations~~the ~~for~~accompanying financial statements, the ~~six~~Company has ~~months~~incurred ~~ending~~a ~~June~~large loss from operations, and as of September 30, 2012, ~~amounted~~its total toliabilities exceeded its total assets by $2012,~~739~~399,660. ~~which~~These ~~mainly~~factors ~~consisted~~raise substantial doubt about the ~~following:~~Company’s 1)ability ~~the~~to ~~net~~continue ~~loss~~as ~~for~~a ~~the~~going ~~period~~concern. Management ofhas ~~$3,610,056~~hired ~~and~~a 2)consultant ~~increase~~to put controls in ~~prepaid~~the ~~workers~~cash ~~compensation~~management ofarea ~~$1,087,058,~~and ~~offset~~will byinstitute 1)more ~~depreciation~~efficient ~~expense~~management oftechniques ~~$11,156,~~in 2)the ~~due~~finance department. ~~form~~All ~~related~~areas ~~party~~ of ~~$511,117;~~operations 3)will ~~accounts~~be ~~receivable~~reviewed ofto ~~317~~look for savings. However,~~413;~~ 4)the ~~workers~~Company ~~compensation~~has ~~expense~~a ofneed ~~$39,151;~~for 5)additional ~~bank~~capital ~~overdraft~~investment. ofThe accompanying ~~$17,525;~~financial 6)statements ~~increase~~do innot ~~payroll taxes~~include ~~payable~~any ofadjustments ~~$3,769,766;~~that 7)might ~~prepaid~~be necessary ~~expenses~~if ofthe ~~$46,806~~Company ~~and~~is ~~increase~~unable into ~~accounts~~continue ~~payable~~as ofa ~~$4,919~~going concern.

~~Cash~~Off-Balance ~~Used~~Sheet InArrangements ~~Financing Activities~~

We ~~used~~have ~~cash~~no inoff-balance ~~financing~~sheet ~~activities~~arrangements that ~~amounted~~have or are reasonably likely to ~~$152,231,~~have ~~consisting~~a ofcurrent 1)or ~~assigned~~future ~~accounts~~effect ~~receivable~~on ofour ~~$25~~financial condition,~~900,~~ changes 2)in ~~decrease~~financial incondition, ~~proceeds~~revenues ~~from~~or ~~related~~expenses, ~~party~~results of ~~$92~~operations,~~331~~ liquidity, ~~and~~capital 3)expenditures ~~payment~~or ofcapital ~~long-term~~resources ~~payable~~that ofare ~~$35,000~~material to stockholders.

Future Cash Flows

STTN’s future capital requirements will depend on numerous factors, including the control of workers compensation claims, the establishment of reasonable workers compensation premiums, and growing the business with business that employee more favorable worker compensation class types. We cannot for certain claim that our current operations along with financing from outside will be sufficient to meet our ongoing operating needs. We will need to seek outside capital in order to continue as a going concern. In addition, we cannot predict when and if any additional capital contributions may be needed and we may need to seek one or more substantial new investors. New investors could cause substantial dilution to existing stockholders

Going Concern

As shown in the accompanying financial statements, the Company has incurred a large loss from operations, and as of June 30, 2012, its total liabilities exceeded its total assets by $10,514,638. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management has hired a consultant to put controls in the cash management area and will institute more efficient management techniques in the finance department. All areas of operations will be reviewed to look for savings. However, the Company has a need for additional capital investment. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Recent Accounting Pronouncements

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not expect that the adoption of ASU 2011-11 will have a significant, if any, impact on the Company’s financial statements.

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU No. 2011-04”), which amends current guidance to result in common fair value measurements and disclosures between accounting principles generally accepted in the United States and International Financial Reporting Standards. The amendments explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. ASU No. 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable inputs (Level 3 inputs, as defined in Note 7). The amendments in ASU No. 2011-04 are effective for interim and annual periods beginning after December 15, 2011. The adoption of the provisions of ASU No. 2011-04 did not have a material impact on the Company’s financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Presentation of Comprehensive Income” (“ASU No. 2011-05”), which improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income (“OCI”) by eliminating the option to present components of OCI as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently in December 2011, the FASB issued Accounting Standards Update No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income” (“ASU No. 2011-12”), which indefinitely defers the requirement in ASU No. 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income (loss) in the statement(s) where the components of net income (loss) and the components of OCI are presented. The amendments in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income (loss), or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU No. 2011-05 and ASU No. 2011-12 are effective for interim and annual periods beginning after December 15, 2011 and are to be applied retrospectively. The adoption of the provisions of ASU No. 2011-05 and ASU No. 2011-12 did not have a material impact on the Company’s financial statements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our principal executive officer and our principal financial officer concluded that as of ~~June~~September 30, 2012, our disclosure controls and procedures were not effective due to a material weakness related to a lack of accounting personnel with sufficient experience in maintaining books and records and preparing financial statements in accordance with U.S. GAAP. We identified and disclosed this material weakness in our 2011annual report filed on Form 10-K with the SEC.

IDENTIFIED MATERIAL WEAKNESS

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.

Management identified the following material weakness in 20internal control during its assessment of internal controls over financial reporting as of September 30, 2012:

Management identified the following material weakness in internal control during its assessment of internal controls over financial reporting as of June 30, 2012:
Our organization structure is not properly set up to manage the flow of cash and the efficient payment of taxes.
We lack the expertise to properly manage the finance and treasury function.

MANAGEMENT'S REMEDIATION INITIATIVES

We are undertaking the remedial measures to establish an effective disclosure controls and procedures and internal control over the cash management / treasury functions, including consolidating finance and treasury into one department reporting to one manager and improving the supervision and training of our accounting staff to understand and implement accounting requirements, policies and procedures for the Treasury department. We have hired a qualified consultant who can work with the Company’s Chief Financial Officer to ~~indentify~~identify cash issues and help evaluate and address such issues to prevent ~~and~~ and fix any present problems in managing cash as well as establishing a procedure to prevent future failures to manage cash properly.

In light of the identified material weaknesses, management, performed (1) significant additional substantive review of those areas described above, and (2) performed additional analyses, including but not limited to a detailed balance sheet and statement of operations analytical review that compared changes from the prior period's financial statements and analyzed all significant differences. These procedures were completed so management could gain assurance that the financial statements and schedules included in this Form 10-Q fairly present in all material respects the Company's financial position, results of operations and cash flows for the periods presented.

Changes in Internal Controls

There has been no additional change except for what is discussed above in our internal control over financial reporting during this fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS.

Not Applicable.

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.

Exhibit Number	Description
3.1	Articles of Incorporation as amended⁽¹⁾
3.2	Bylaws⁽¹⁾
3.3	Certificate of Amendment to Certificate of Incorporation ⁽²⁾
4.1	Incentive Stock Option Plan ⁽¹⁾
4.2	Non-Qualified Incentive Stock Option Plan ⁽¹⁾
4.3	Stock Bonus Plan ⁽¹⁾
4.4	2005 Incentive Stock Plan ⁽²⁾
10.1	Letter of Intent between Smart-Tek Communications and Smart-Tek ⁽³⁾
10.2	Share Exchange Agreement between Registrant and Smart-Tek Communication, Inc. dated April 15, 2005 ⁽⁴⁾
10.3	Employment Agreement with Perry Law dated April 23, 2005 ⁽⁵⁾
10.4	Employment Agreement with Stephen Platt dated April 23, 2005 ⁽⁵⁾
10.5	Stock Option Grant to Perry Law dated April 23, 2005 ⁽⁶⁾
10.6	Stock Option Grant to Stephen Platt dated April 23, 2005 ⁽⁶⁾
10.7	Amendment to Employment Agreement between Smart-Tek Communications Inc. and Perry Law dated July 31, 2009
10.8	Form of Debt Settlement and Subscription Agreement dated September 30, 2009
10.9	Strategic Marketing Partner Agreement between Smart-Tek Automated Services Inc. and ACEO Inc. dated August 1, 2009
10.10	Marketing Partner Agreement dated June 17, 2009
10.11	Amended Marketing Partner Agreement dated December 9, 2010 with Smart-Tek Automated Services, Inc. and Brian Bonar
10.12	General Release of Claims Agreement Entered into between Richardson Patel LLC and Smart-Tek Solutions, Inc.
14.1	Amended and Restated Code of Ethics
21.1	Subsidiaries
31.1*	CEO and CFO Section 302 Certification under Sarbanes-Oxley Act of 2002
32.1*	CEO and CFO Section 906 Certifications under Sarbanes-Oxley Act of 2002

Exhibit Number	Description
3.1	Articles of Incorporation as amended(1)
3.2	Bylaws(1)
3.3	Certificate of Amendment to Certificate of Incorporation (2)
4.1	Incentive Stock Option Plan (1)
4.2	Non-Qualified Incentive Stock Option Plan (1)
4.3	Stock Bonus Plan (1)
4.4	2005 Incentive Stock Plan (2)
10.1	Letter of Intent between Smart-Tek Communications and Smart-Tek (3)
10.2	Share Exchange Agreement between Registrant and Smart-Tek Communication, Inc dated April 15, 2005 (4)
10.3	Employment Agreement with Perry Law dated April 23, 2005 (5)
10.4	Employment Agreement with Stephen Platt dated April 23, 2005 (5)
10.5	Stock Option Grant to Perry Law dated April 23, 2005 (6)
10.6	Stock Option Grant to Stephen Platt dated April 23, 2005 (6)
10.7	Amendment to Employment Agreement between Smart-Tek Communications Inc. and Perry Law dated July 31, 2009
10.8	Form of Debt Settlement and Subscription Agreement dated September 30, 2009
10.9	Strategic Marketing Partner Agreement between Smart-Tek Automated Services Inc. and ACEO Inc. dated August 1, 2009
10.10	Marketing Partner Agreement dated June 17, 2009
10.11	Amended Marketing Partner Agreement dated December 9, 2010 with Smart-Tek Automated Services, Inc. and Brian Bonar
10.12	General Release of Claims Agreement Entered into between Richardson Patel LLC and Smart-Tek Solutions, Inc.
14.1	Amended and Restated Code of Ethics
21.1	Subsidiaries
31.1*	CEO and CFO Section 302 Certification under Sarbanes-Oxley Act of 2002
32.1*	CEO and CFO Section 906 Certifications under Sarbanes-Oxley Act of 2002

*Filed herewith

(1)	Incorporated by reference to our Registration Statement on Form 10-SB, filed September 28, 1995.
(2)	Incorporated by reference to our Annual Report on Form 10-KSB, filed October 26, 1995.
(3)	Incorporated by reference to our Current Report on Form 8-K, filed March 8, 2005.
(4)	Incorporated by reference to our Current Report on Form 8-K, filed April 19, 2005.
(5)	Incorporated by reference to our Current Report on Form8-K, filed April 27, 2005.
(6)	Incorporated by reference to our Current Report on Form 8-K, filed on August 22, 2005.
(7)	Incorporated by reference to our Current Report on Form 8-K, filed on June 27, 2008.
(8)	Incorporated by reference to our Form 10-Q for the period ended December 31, 2008, filed on February 23, 2009.
(9)	Incorporated by reference to our Current Report on Form 8-K, filed on June 24, 2009.
(10)	Incorporated by reference to our Annual Report on Form 10-K, filed October 15, 2008.
(11)	Incorporated by reference to our Annual Report on Form 10-K, filed October 13, 2009.
(12)	Incorporated by reference to our Current Report on Form 8-K, filed on March 17, 2010.
(13)	Incorporated by reference to our Current Report on Form 8-K, filed on December 10, 2010

22Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

By	/s/ Brian Bonar
	Brian Bonar
	President
	/s/ Brian Bonar
Date:	~~August~~November 1520, ~~2012~~201

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	/s/ Brian Bonar
	Brian Bonar
	Chief Executive Officer, Chief Financial Officer
	Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)
	and Director (Principal Executive Officer, Principal Accounting Officer
Date:	November 20, 201
	and Principal Financial Officer)
	/s/ Owen Naccarato
Date:	August 20, 2012
	Owen Naccarato
	/s/ Owen Naccarato
	Director
	Owen Naccarato
Date:	November 20, 201
	Director
Date:	August 20, 2012

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