UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-QSB

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(Mark One)



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



For The Quarterly Period Ended May 31, 2007



| | 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:

000-50374



INFE-HUMAN RESOURCES, INC.

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(Exact name of small business issuer as specified in its charter)



NEVADA                                    54-2013455

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(State or other jurisdictionof incorporation or organization)  (IRS Employer Identification No.)





67 Wall Street, 22nd Floor, New York, New York, 10005-3198

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(Address of principal executive offices)



(212) 859-3466

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(Issuers telephone number)



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(Former Name, former address and former fiscal year, if changed since last report)



Check whether the issuer (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 |_|



Indicate by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act) 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 by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court   Yes [ ]  No  [ ]



APPLICABLE ONLY TO CORPORATE ISSUERS



State the number shares outstanding of each of the issuers classes of common equity, as of the latest practicable date:



As of July 23, 2007, there were 17,673,759 shares of the Registrant's Common Stock, $0.001 par value per share, outstanding.



Transitional Small Business Disclosure Format   Yes ||   No |X|



2





INFE-HUMAN RESOURCES, INC.

FOR THE QUARTERLY PERIOD ENDED May 31, 2007



TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION



Item 1. Financial Statements. ..........................................F-1



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

Operation...............................................................4



Item 3. Controls and Procedures.........................................13



PART II - OTHER INFORMATION



Item 1. Legal Proceedings...............................................14



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.....14



Item 3. Defaults upon Senior Securities.................................15



Item 4. Submission of Matters to a Vote of Securities Holders...........15



Item 5. Other Information...............................................15



Item 6. Exhibits........................................................15



3





THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE   RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE  EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.



PART I

FINANCIAL INFORMATION



Item 1.

Financial Statements







INFe-HUMAN RESOURCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET

May 31 , 2007

(Unaudited)



[bs002.gif]

See accompanying notes to consolidated financial statements.

F-1



INFe-HUMAN RESOURCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE SIX AND THREE MONTHS ENDED MAY 31, 2007 AND MAY 31, 2006
         (Unaudited)

[so002.gif]

[so2002.gif]

See accompanying notes to consolidated financial statements.

F-2



INFe-HUMAN RESOURCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THREE MONTHS ENDED MAY 31, 2007 AND MAY 31, 2006
         (Unaudited)

[cf002.gif]

[cf2002.gif]

See accompanying notes to consolidated financial statements.

F-3



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006





NOTE 1-  ORGANIZATION AND BASIS OF PRESENTATION



INFe- Human Resources, Inc. (the Company) was incorporated in the State of Nevada on March 31, 2000.  The Company was organized to provide human resource administrative management, executive compensation plans and staffing services to client companies.  The business became a publicly traded entity in late 2003 as a result of its acquisition of all of the common stock of Daniels Corporate Advisory Company, Inc. (Daniels), a publicly traded Nevada company.



The Corporate Financial Consulting Division has a growth goal of providing advisory services to payroll client as well as non-payroll client companies.  This division will work with companies seeking to create and/or acquire adjunct service businesses, whose services will initially provide better lifestyles for its existing workforce, and ultimately will be packaged, on an additional profit center basis, for sale to other small companies for the retention of their employees.  The profits generated from all the financial consulting assignments will be available for venture investment through the second division, The Merchant Banking Division.



The Merchant Banking Division has an in-house equity funding program, whereby Daniels will profit by helping finance the growth of client, payroll service companies, as well as non-payroll service companies.  This division will also profit by the purchase of equity in attractive small public companies whose growth strategies are in line with a philosophy of growth through leveraged acquisitions.

On December 20, 2005 the Companys wholly owned subsidiary INfe Human Resources of New York purchased all of the outstanding shares of Monarch Human Resources (Monarch), all of whose transactions from the date of acquisition are included as part of these consolidated statements.



On June 1, 2006 the Companys wholly owned subsidiary INfe Human Resources - Unity Inc. purchased Cosmo/Mazel Temps Corporations (Cosmo/Mazel) for the purpose of acquiring the rights to their current business activity and trade name. The Company did not assume any liabilities of the business and all of its transactions from the date of acquisition are included as part of these consolidated statements.

F-4



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 2-  ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)



On April 27, 2007 the Companys wholly owned subsidiary INfe Human Resources of New York purchased all of the outstanding shares of Gilsor Technology Holdings, Inc. (Gilsor), all of whose transactions from the date of acquisition are included as part of these consolidated statements.



NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Principles of Consolidation



The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, INFe Human Resources  Unity, Cosmo Temp and Mazel Temp (Cosmo/Mazel), INFe Human Resources of New York, Monarch Human Resources (Monarch), Express Employment Agency Corporation (Express), Empire Staffing Inc. (Empire), Gilsor Technology Holdings, Inc. (Gilsor), and Daniels Corporate Advisory Company (Daniels).  All significant inter-company accounts and transactions have been eliminated in consolidation.



Use of Estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.



Cash and Cash Equivalents



For financial statement presentation purposes, short-term, highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The Company maintains it cash accounts at several financial institutions, and the funds are insured at each institution to the maximum limit of $100,000 set by the Federal Savings and Loan Association.  At May 31, 2007 there were no uninsured balances.



F-5



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006





NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Revenue Recognition



The Company records its transactions under the accrual method of accounting whereby income is recognized when the services are rendered and collection is reasonably assured.



Investments



Marketable securities are classified as available-for-sale. Accordingly, they are carried at fair value with unrealized gains and losses reported, net of deferred income taxes, in accumulated other comprehensive income, a separate component of stockholders equity.



Fair Value of Financial Instruments



The carrying amounts reported in the condensed consolidated balance sheets for cash, deposits, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term maturity of the financial instruments. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms.



Allowance for Bad Debts



The Company establishes an allowance for bad debts through a review of several factors, including historical collection experience, current aging status of the customer accounts, financial condition of our customers, and whether the receivables involve retentions.



Fixed Assets



Fixed assets are reported at cost less accumulated depreciation, which is generally provided on the straight-line method over the estimated useful lives of the assets. Upon sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized.



F-6

INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Goodwill



The reported amounts of goodwill for each business reporting unit are reviewed for impairment on an annual basis and more frequently when negative conditions such as significant current or projected operating losses exist. The annual impairment test for goodwill is a two-step process and involves comparing the estimated fair value of each business reporting unit to the business reporting unit's carrying value, including goodwill. If the fair value of a business reporting unit exceeds its carrying amount, goodwill of the business reporting unit is not considered impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of

impairment loss to be recorded, if any.  The Companys annual impairment tests resulted in no goodwill impairment.



Evaluating Impairment of Long-lived Assets



When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an evaluation is performed. For an asset classified as held for use, the estimated future undiscounted cash flows associated with the asset are compared to the asset's carrying amount to determine if a write-down to fair value is required. When an asset is classified as held for sale, the asset's book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition, depreciation and amortization is ceased while it is classified as held for sale.



Income Taxes



The Company recognizes the amount of taxes payable or refundable for the year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized.



In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is



F-7

INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 2-  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.



The Company is in the process of bringing its tax filings current.





NOTE 3-    ACCOUNTS RECEIVABLE



In 2006 the Company entered into an agreement with a financial institution to sell its trade receivables on a limited recourse basis.  Under the terms of the agreement financial institution makes advances in reliance on the collectibility of the assigned receivables value upon sale.  The financial institution has been granted security interests in all of the Companys receivables.  As collections reduce previously sold receivables, the Company may replenish these with new receivables. At May 31, 2007, trade receivables of $234,443 had been sold to a financing company and the Company has received advances of $212,539 against those receivables. The risk from bad debt losses on trade receivables sold is retained by the Company.  The Company addresses its risk of loss on trade receivables in its allowance for doubtful accounts.



Accounts receivable not financed consisted of the following at May 31, 2007 and November 30, 2006:



|                                |          |  |         
|------------------------------- | -------- |  | --------
|                                |          |  |         
|                                | 2007     |  | 2006    
|Accounts receivable             | $272,244 |  | $360,632
|Allowance for doubtful accounts | (14,500) |  | (45,150)
|                                | $257,744 |  | $315,482
|                                |          |  |         



F-9



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 4-INVESTMENTS



Investments consist of a portfolio of common stocks trading on the OTC: BB. The fair market values of the investments were $24,791 and $82,211 at May 31, 2007 and November 30, 2006, respectively.  Net unrealized gains(losses) for the three months ended May 31, 2007, and twelve months ended November 30, 2006 were $16,062 and ($40,380) respectively.



NOTE 5-    ACQUISITIONS AND INTANGIBLE ASSETS



In December 2005, the Company acquired Monarch, in June 2006 acquired Cosmo/Mazel and in April 2007 the Company acquired Gilsor.  The acquisitions were accounted for as business purchases and recorded at the estimated fair values of the net tangible and identifiable intangible assets acquired, with the excess of the purchase prices over the amounts of those items recorded as goodwill.  Valuations were determined by an independent valuation expert for Monarch and Cosmo/Mazel.  A summary of the assets acquired for each of these business purchases is as follows:



[note002.gif]



Amortization of intangible assets were $55,701 and $0 for the six months ended May 31, 2007 and 2006 respectively. Accumulated amortization at May 31, 2007 was $ 120,429. In the quarter ended February 28, 2007 the Company renegotiated one of the notes issued in the acquisition and the note was reduced by $30,000 which reduced the goodwill.

F-10



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 6-    CONVERTIBLE NOTES PAYABLE



The Company executed a Securities Purchase Agreement to issue 8% secured convertible notes payable in the amount of $3,000,000.  The notes are convertible at anytime by the holder of the security into shares of common stock, par value $.001 per share.  In addition, the Company issued warrants enabling the buyer to purchase 800,000 shares of common stock at an exercise price of $1.50 per share.  The Company has issued $2,000,000 of convertible notes in two tranches, one tranche of $1,250,000 was issued on November 29th, 2005 and the second tranche of $750,000 was issued on February 14th, 2006.  The notes mature 3 years from their date of issue.  The warrants value, relative to the corresponding notes has been accounted for as a debt discount, being amortized over the life of the corresponding convertible notes. The value of the warrants has been determined using the Black-Scholes pricing model using the following assumptions:





|                                |              |             
|------------------------------- | ------------ | ------------
|                                |              |             
|                                | February 14, | November 29,
|Issue date                      | 2006         | 2005        
|Valuation assumptions:          |              |             
|Expected term (in years)        | 5            | 5           
|Expected stock price volatility | 125%         | 132%        
|Expected stock dividend yield   | 0%           | 0%          
|Risk-free interest rate         | 4.6%         | 4.4%        
|Fair value per warrant          | $0.351       | $0.543      
|Number of warrants              | 300,000      | 500,000     
|Value of warrants               | $105,263     | $271,458    
|Relative value of warrants      | $92,308      | $223,025    
|                                |              |             



The Company paid finance fees of $265,000 in association with the convertible notes.  The fees are being amortized over the life of the notes.  Amortization of $44,266 was recorded for each of the six months ended May 31, 2007 and 2006, respectively.

F-11



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 6-    CONVERTIBLE NOTES PAYABLE (CONTINUED)



These notes have a conversion price of 25¢ per underlying common share.  On the issue date of the first tranche of convertible notes of $1,250,000 the market price of the Companys common stock was 69¢ per share and on the issue date of the second tranche of $750,000 the market price was 45¢ per share.  Because the conversion was in-the-money at the date of issue of each tranche, interest expense of $1,026,975 was recorded as of November 29th, 2005 and interest expense of $8,994 was recorded as of February 14th, 2006 due to the beneficial conversion rights. The amount of shares which can be converted is limited to 4.99% of the total of the then existing outstanding shares plus the shares to be received on conversion. The financial statements for the year ended November 30, 2005 did not reflect the debt discount above on the notes issued in 2005 or the charge of $1,026,975.  In addition, finance fees related to the first tranche of convertible notes was overstated by $100,000.  Therefore, the 2005 financial statements were restated to correct these items.  Although the Company has not met some of the terms of the agreement, the lender has stated that the notes will not be considered as being in default.  However, if the agreement were strictly followed there would be substantial penalties for interest due for the inability to satisfy stock registration rights under the agreement, which the lender could impose in the future.



NOTE 7-    COMPLETED ACQUISITIONS



On April 27, 2007 INFE- Human Resources, Inc. purchased 100% of the outstanding stock of Gilsor in exchange for 150,000 fully vested shares of restricted common stock of IFHR. Additionally, the shareholders are hereby granted, subject to the vesting provisions set forth in the warrants, 4,000,000 warrants to acquire stock of IFHR. Warrants may not be vested unless IFHR achieves $7.5 million in additional quarterly revenue as reported in its periodic SEC filings and $720,000 in additional quarterly EBITDA also as reported in its SEC filings and IFHR successfully refinances its existing debt on terms suitable to IFHRs Chairman. The warrants are convertible at various excise prices as benchmarks are reached and the warrants become vested.



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 8-    LONG-TERM LIABILITIES

| |                                                                                                                                                                                                                                                  |  |           |  |             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------- |  | ------------
| | Long Term debt consist of the following:                                                                                                                                                                                                        |  | May
31,   |  | November 30,
| |                                                                                                                                                                                                                                                  |  | 2007      |  | 2006        
| | Bank revolving line of credit of up to $75,000 expiring in three-years and having an annual interest rate of 9.25%. The loan is secured by the Companys assets.                                                                                 |  | $57,796   |  | $70,535     
| | Loan outstanding with an employee and former owner of an acquired Company, Cosmo/Mazel.  The loan is a twelve month unsecured loan with an interest rate of 5% per annum.                                                                        |  | 118,580   |  | 283,580     
| | Loan outstanding with the former owner of an acquired Company, Monarch.  The loan is a twelve-month unsecured loan with an interest rate of 5% per annum.
A $30,000 reduction in the loan was negotiated in the
quarter ended February 28, 2007. |  | 15,000    |  | 60,000      
| | Loan outstanding with an employee and former owner of an acquired Company, Cosmo/Mazel.  The loan is payable on demand without a stated interest rate.                                                                                           |  | 10,000    |  | 10,000      
| | Total Long-Term Liabilities                                                                                                                                                                                                                      |  | 201,376   |  | 423,935     
| | Less Unamortized Discount                                                                                                                                                                                                                        |  | (1,792)   |  | (6,273)     
| | Total Long-Term Liabilities                                                                                                                                                                                                                      |  | 199,584   |  | 417,662     
| | Less Current Portion                                                                                                                                                                                                                             |  | (157,785) |  | (336,313)   
| |                                                                                                                                                                                                                                                  |  |           |  |             
| | Net Long-Term Liabilities                                                                                                                                                                                                                        |  | $41,799   |  | $84,349     



F-12



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 8-    LONG-TERM LIABILITIES (CONTINUED)



Principal maturities of the long-term liabilities over the next five years are as follows:



|                            |  |        
|--------------------------- |  | -------
|                            |  |        
|Year Ending November 30     |  | Amount 
|2007                        |  | $22,389
|2008                        |  | 19,410 
|2009                        |  | ---    
|2010                        |  | ---    
|2011                        |  | ---    
|Total Long-Term Liabilities |  | $41,799





NOTE 9-    LOANS PAYABLE TO SHAREHOLDERS



The $276,670 loan from a shareholder is to be used for working capital. The loan is non-interest bearing, and has no specific repayment terms. The Company has been told that there will not be a demand payment within the next 12 months; therefore, the loan has been classified as a long-term liability.



NOTE 10-    GOING CONCERN



The accompanying consolidated financial statements have been presented in accordance with accounting principles generally accepted in the United States of America, which assume the continuity of the Company as a going concern.  As reflected in the financial statements, the Company has incurred cumulative net losses, which has resulted in an increase to its accumulated deficit.  However, the Company has realized its first revenue stream and emerged out of the development stage.  Presently, with the acquisitions, management believes that the Company has the revenue streams necessary to operate and develop its business.  Since they are newly acquired businesses, the Company cannot currently ascertain the consistency of the revenue stream with any degree of certainty. This raises substantial doubt about the Companys ability to continue as a going concern. The accompanying consolidated



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 10-    GOING CONCERN (CONTINUED)



financial statements do not include any adjustments that might result from the eventual outcome of the risks and uncertainties described above.



Management believes that the Companys capital requirements will depend on many factors including the success of the Companys product development efforts. With the business plan being followed along with working capital being raised management believes that the operations and sales will make the Company a viable entity over the next twelve months.



The financial statements also do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern.



F-13

NOTE 11-    RELATED PARTY TRANSACTIONS



During the periods ended May 31, 2007 and 2006, The Company has utilized office space provided by its President, Mr. Arthur Viola at no charge. Loans payable to shareholders at May 31, 2007 totaled $276,670.



NOTE 12-    COMMITMENTS AND CONTINGENCIES



Commitments



The Company leases office space under a non-cancelable operating lease that expires May 31, 2009.



Future minimum lease payments are as follows:



For the year ending November 30,                            Amount



2007                                                                          $22,200

2008                                                                            31,824

2009                                                                            16,224



TOTAL                                                                       $70,248

===========

F-14



INFe- HUMAN RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006



NOTE 12-    COMMITMENTS AND CONTINGENCIES (CONTINUED)



Contingencies



Under the registration rights agreement with the Holders of our Convertible Notes, if the registration statement relating to the securities is not declared effective by the SEC within 120 days of March 30, 2006, Infe is obligated to pay a registration default fee to the note holders equal to the principal of the Convertible Notes outstanding multiplied by .02 multiplied by the sum of the number of months that the registration statement is not yet effective, on a pro rata basis. Although the Holders of the Convertible Notes have not notified Infe of a default to date, this failure to notify us does not act as a waiver of the default. Accordingly, the Companys failure to make a registration effective could result in the assessment of liquidation damages in the amount of $40,000 per month against Infe beginning from July 30, 2006.



NOTE 13-    RESTATEMENT OF PRIOR PERIODS



The financial statements for the year ended November 30, 2005 were restated to reflect the cost associated with its convertible debt financing done in November of 2005. In addition the Company incurred new financing in February 2006. The financial statements for the six months ended May 31, 2006 are being restated to include interest expense on these notes, to properly reflect the accretion of the debt discount and to restate the amortization of deferred financing costs incurred and to record beneficial conversion on the notes issued in fiscal year 2006. The effect of the restatements were to reduce equity at May 31, 2006 by  $1,318,168 and to reduce the net income for the six months ended May 31, by $213,102 and $106,032, respectively.





F-15



Item 2.

Management's Discussion and Analysis or Plan of Operation.



THE  FOLLOWING  DISCUSSION  SHOULD  BE READ  IN  CONJUNCTION WITH  THE COMPANY'S  FINANCIAL STATEMENTS  AND THE  NOTES TO THOSE  STATEMENTS  AND OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS REPORT.



OVERVIEW

General



INFe-Human Resources, Inc. was incorporated in the State of Nevada on March 31, 2000. The Company was a subsidiary of INFe, Inc. a publicly trading entity on the over the counter bulletin board through October 31, 2003.  On October 21, 2003, the Company purchased all of the common stock of Daniels Corporate Advisory Company, Inc. (Daniels), a Nevada company formed on May 2, 2002. Daniels Corporate Advisory Company, Inc. has thereafter been a wholly owned subsidiary of Infe.  On December 14, 2005, we formed Infe-Human Resources of New York, Inc., in Nevada to operate a staffing services division.  Infe-Human Resources of New York, Inc. is a wholly owned subsidiary.  On January 19, 2006, we formed Infe-Human Resources Unity, Inc. in Nevada to operate additional staffing services.  Infe-Human Resources Unity, Inc is a wholly owned subsidiary.  In addition, Monarch Human Resources, Inc. is a wholly owned subsidiary of Infe Human Resources of New York, Inc. and Empire Staffing, Inc. is a wholly owned subsidiary of Monarch Human Resources, Inc.  On April 27, 2007, we purchased all of the issued and outstanding equity of Gilsor Technology Holdings, Inc. resulting in Gilsor becoming a wholly owned subsidiary.



4



Through our wholly owned subsidiary, Daniels Corporate Advisory Company, Inc., we offer: (a) corporate financial consulting and (b) merchant banking. Our corporate financial consulting provides advisory services to client companies.  Merchant banking includes equity funding of the growth of client and payroll service companies, as well as funding equity of small public companies.



We are considering divesting ourselves of Daniels through a dividend to our shareholders of all of the Daniels capital stock in a transaction known as a spin-off.



Through our wholly owned subsidiary, Infe-Human Resources of New York, Inc., we conduct part of our employment staffing services. The staffing services includes both temporary and permanent placement for both professional and nonprofessional employment.  Infe Human Resources of New York, Inc. operates through two wholly owned subsidiaries, Monarch Human Resources, Inc. and Empire Staffing, Inc.  Also, through our wholly owned subsidiary, Infe-Human Resources Unity, Inc. we conduct additional employment staffing services.



On June 1, 2006 Infe-Human Resources Unity, Inc. purchased the assets and business operations of Cosmo Temp, Inc. and Mazel Temp, Inc. both of which are employee staffing companies.  The Company formed Infe-Human Resources Unity, Inc. to acquire Cosmo Temp and Mazel Temp, rather than utilize the already operating Infe Human Resources of New York, due to certain future performance based provisions (earn-out provisions) related to the consideration to be paid for the assets and business operations of Cosmo Temp and Mazel Temp.



The staffing business, through both Infe-Human Resources Unity and Infe-Human Resources of New York, is our primary source of revenue.



Daniels developed and implemented the Staffing Company Rollup for its parent, INfe Human Resources, Inc., as a pilot project in order to advance and publicize in-house consulting and senior management expertise.  In general, Corporate Consulting Assignments have as a primary aim  for a client company to advance from the OTC:BB to the American Stock Exchange through a leveraged acquisition/rollup strategy. Daniels has not yet achieved this goal, but is still working towards this end.



It is our plan that the future profits from Corporate Consulting Assignments will be invested in the In-house Fund of the Merchant Bank Division for investment in client companies needing equity for down payment amounts in leveraged transaction(s) to meet exchange listing requirements andin the expansion of the wholly-owned Consolidated Staffing Companies through direct acquisition of additional, diversified companies in specific growth niches and through the development of add on services that can be marketed down the same client/employee pipeline.



Our newly developed website address is Infehumanresources.com



Future Plans



We intend to look at potential acquisitions in complementary areas of staffing services and grow through internal sales and development initiatives as well.



Due to our physical presence in New York, we expect to expand our current New Jersey  New York concentration down the east coast.  We are currently developing a working relationship with several sales professionals in the Staffing Industry that will use their expertise and networks to aid in this East Coast Expansion.  We expect to expand down the East Coast to Florida, during the current fiscal year.  This growth should come from the internal generic growth opportunities mentioned herein, as well as further execution on select acquisition opportunities, as they become available.



Management believes that Florida is fast growing due to its (i) above average population growth; (ii) a low tax regulatory climate; (iii) a favorable climate for small businesses including such things as State funded business incubators; and (iv) a diverse population, all of which lead, in management's view, to greater small business formation and correspondingly greater potential demand for our services.



6



We are considering divesting ourselves of Daniels through a dividend to our shareholders of all of the Daniels capital stock in a transaction known as a spin-off.



RESULTS OF OPERATIONS



THREE MONTHS ENDED MAY 31, 2007

COMPARED TO THREE MONTHS ENDED MAY 31, 2006



Revenues



Revenues were $2,397,640 for the three months ended May 31, 2007, as compared to $1,124,571 for the three months ended May 31, 2006.  Our primary source of revenue is through the staffing industry.  Our revenues increased by $1,273,069 or 113%.  The increase in revenue is primarily due to the Cosmo/Mazel acquisition.



Cost Of Revenues



Cost of revenues was $1,875,491 for the three months ended May 31, 2007, as compared to $965,564 for the three months ended May 31, 2006. Our cost of revenues increased by $909,927 or 84% all of which increase was in the staffing business and related to the Cosmo/Mazel acquisition.



Gross Profits



Gross profits was $522,149 for the three months ended May 31, 2007 and $159,007 for the three months ended May 31, 2006. Gross profit increased by $363,142 or 228% and relates to a decrease in workers compensation costs and the replacing of lower margin business with higher margin business.



Operating Expenses



Operating expenses for the three months ended May 31, 2007 were $399,790 compared to $89,668 for the three months ended May 31, 2006. This increase was primarily attributed to the Companys growth, mainly as a result of acquisitions.  The Company completed several staffing business acquisitions since December 2005.  The Companys largest expense is its compensation, which is generally associated with the staffing subsidiaries.  Moreover, the Company now incurs significant selling, general and administrative expenses.



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Income From Staffing Operations



Income from staffing operations for the three months ended May 31, 2007 increased to $159,941, prior to adjustment for depreciation and amortization, compared to $69,819 for the three months ended May 31, 2006. The increase in income was a result of acquisitions, and in particular the Cosmo/Mazel acquisition.



Loss From Daniels Advisory Consulting Operations



Loss from Daniels Advisory Consulting operations for the three months ended May 31, 2007 was ($426,147) compared to ($123,949) for the three months ended May 31, 2006.  During the quarter, Daniels incurred substantial costs for presenting Corporate Development - Growth Strategies to potential clients that are OTC: BB Companies.  The Strategies presented centered on roll-ups in market niches in their specific industries and the specifics of leveraged transactions and their benefit, including achieving the critical mass to achieve American Stock Exchange Listing.

;



Interest Expense



Interest expense was $155,896 and $93,348 for the three months ended May 31, 2007 and 2006, respectively. This increase was primarily attributable to interest on our outstanding 8% Callable Secured Convertible Notes.



Net Loss Applicable To Common Stock



Net loss applicable to Common Stock was ($495,684) for the three months ended May 31, 2007, compared to ($138,020) for the three months ended May 31, 2006. Net loss per common share was ($0.03) for the three months ended May 31, 2007 and ($0.01) for the three months ended May 31, 2006.



SIX MONTHS ENDED MAY 31, 2007

COMPARED TO SIX MONTHS ENDED MAY 31, 2006



Revenues



Revenues were $4,041,684 for the six months ended May 31, 2007, as compared to $1,812,503 for the six months ended May 31, 2006. Our primary source of revenue is through the staffing industry. Revenues increased by $2,229,282 or 122%.  The increase in revenue is primarily due to the Cosmo/Mazel acquisition which occurred on June 1, 2006.



Cost Of Revenues



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Cost of revenues was $3,215,766 for the six months ended May 31, 2007, as compared to $1,522,789 for the six months ended May 31, 2006. Cost of revenues increased by %1,692,977 or 111% all of which increase was in the staffing business and related to the Cosmo/Mazel acquisition.



Gross Profit



Gross profits were $825,918 for the three months ended May 31, 2007 as compared to $289,714 for the three months ended May 31, 2007. Gross profit increased by $536,204 or 185% and relates to a decrease in workers compensation costs and the replacing of lower margin business with higher margin business.



Operating Expenses



Operating expenses for the six months ended May 31, 2007 were $653,007 compared to $312,7204 for the six months ended May 31, 2006. This increase was primarily attributed to the Companys growth, mainly as a result of acquisitions.  The Company completed several staffing business acquisitions since December 2005.  The Companys largest expense is its compensation, which is generally associated with the staffing subsidiaries.  Moreover, the Company now incurs significant selling, general and administrative expenses.



Income (Loss) From Staffing Operations



Income from staffing operations for the six months ended May 31, 2007 was $244,997, prior to adjustment for depreciation and am-ortization compared to a loss of ($22,070) for the six months ended May 31, 2006.  The increase in income was a result of ac-quisitions, and in particular the Cosmo/Mazel acquisition.



Loss From Daniels Advisory Consulting Operations



Loss from Daniels Advisory Consulting operations for the six months ended May 31, 2007 was ($540,912) compared to ($15,021) for the six months ended May 31, 2006.  Daniels had gains from the sale of stock in 2006 that were not repeated in 2007.  During the quarter, Daniels incurred substantial costs for presenting Corporate Development to potential clients that are OTC: BB Companies.  The Strategies presented centered on roll-ups in market niches in their specific industries and the specifics of leveraged transactions and their benefit, including achieving the critical mass to achieve American Stock Exchange Listing.



Interest Expense



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Interest expense was $287,918 and $182,006 for the six months ended May 31, 2007 and 2006, respectively. The increase was primarily attributable to interest on our outstanding 8% Callable Secured Convertible Notes of which $750,000 was given to the Company in February 2006.



Net Loss Applicable To Common Stock



Net loss applicable to Common Stock was


($655,919)

for the six months ended May 31, 2007, compared to ($209,396) for the six months ended May 31, 2006. Net loss per common share was ($0.04) for the six months ended May 31, 2007 and ($0.02) for the six months ended May 31, 2006.



LIQUIDITY AND CAPITAL RESOURCES



Our financial statements are prepared on a going concern basis, which assumes that we will realize assets and discharge liabilities in the normal course of business. With continued efforts to reduce expenses and increase revenues we believe we will generate sufficient cash flow to support current operations through fiscal 2007.  We have cash flow demands on financing we currently have in place, however the interest payments are non-cash items, as they are contracted to be paid in the form of common stock.  Management is currently seeking replacement financing that will be more conducive to achieving long term goals via additional acquisitions using the common stock and other securities packages of the company.



Our commitments for capital expenditures and leasing commitments include our month-to-month lease of our corporate operations office in New York, a monthto-month lease of our Executive Offices/Board Room in New York, a month to month lease for a small office in New Jersey, which was the former Express Employment Agency office and a three year lease for offices in New Jersey which were the former  Mazel Temp and Cosmo Temp offices.  In addition, the Company has obligations associated with its outstanding Secured Convertible Promissory Notes and Notes payable associated with its recent acquisitions.



On June 1, 2006, Infe closed on the acquisition of the assets of Cosmo Temp, Inc. and Mazel Temp, Inc.  At closing Infe utilized $950,000 of its cash.  In addition at Closing Infe was obligated to pay an additional $333,580 over the next twelve months payable $83,395 per quarter. As of May 31, 2007 the outstanding balance owed for the acquisition of Cosmo Temp and Mazel Temp was $118,580.



Additional financing is currently being raised in the form of accounts receivable financing (factoring); while negotiations continue with institutional investors for a private placement of equity securities.



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On November 30, 2005, we sold 8% Secured Convertible Promissory Notes for an aggregate of $1,250,000.  On February 14, 2006, the four investors each purchased additional secured convertible notes for an aggregate of $750,000.  Each of the Notes has a three year term, accordingly $1,250,000 plus interest shall become due and payable on November 30, 2008 and $750,000 shall become due and payable on February 14, 2009.



The funds from the sale of the Convertible Promissory Notes provided the down payment amounts for the Monarch Acquisition and its add-on acquisition of Express Employment, as well as the down payment amount for the Cosmo/Mazel Asset Purchase Acquisition.  The Convertible Note funding also provided working capital for the entire staffing operation, as well as our overall operations.   To date, the Convertible Notes have provided $2 Million.  Management is actively seeking replacement financing and expects to pay off the Convertible Notes over the next 12 months  either by means of outside financing or a combination of outside financing and the use of excess cash flow from all the staffing subsidiaries as well as any consulting cash flows.  The Company does not expect the conversion of a significant portion of the Notes and may provide non-affiliated, friendly buyers for the Notes.



Unlike venture capital funding, the Convertible Note Financing allows management to stay in charge and carryout its business plan without judgmental interference and does not drain corporate liquidity and cash. Unlike conventional venture capital debt, whose debt service comes out of corporate cash flow, the existing Convertible Note Debt is convertible into equity.



Section 4(e) of the Securities Purchase Agreement with the Holders of our Convertible Notes prohibits Infe from obtaining additional equity financing involving the sale of convertible securities, common stock at a discount to market or warrants, without first obtaining the consent of the Holders, for a period ending on the later of 270 days from November 30, 2005 or 180 days from the effectiveness of a registration statement. In ad
dition, Infe granted the Holders a right of first refusal on future offerings for a period in excess of two (2) years.  The right of first refusal is subject to certain exclusions, including, a capital raise involving a firm commitment underwritten public offering for in excess of $15,000,000, issuances associated with mergers, acquisitions and joint ventures, and issuances under stock option plans.



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Section 4(j) of the Securities Purchase Agreement with the Holders of our Convertible Notes provides that so long as a selling stockholder beneficially owns any Notes or Warrants, Infe shall maintain its corporate existence and shall not sell all or substantially all of its assets, except in the event of a merger or consolidation or sale of all or substantially all of the Companys assets, where the surviving or successor entity in such transaction (i) assumes the Companys obligations and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.



Under the registration rights agreement with the Holders of our Convertible Notes, if a registration statement relating to the securities is not declared effective by the SEC within 120 days of March 30, 2006, Infe is obligated to pay a registration default fee to the Note holders equal to the principal of the Convertible Notes outstanding multiplied by .02 multiplied by the sum of the number of months that the registration statement is not yet effective, on a pro rata basis.  Although the Holders of the Convertible Notes have not notified Infe of a default to date, this failure to notify us does not act as a waiver of the default.  Accordingly, the Companys failure to make a registration effective could result in the assessment of liquidated damages in the amount of $40,000 per month against Infe beginning from July 30, 2006.



OFF-BALANCE SHEET ARRANGEMENTS



As of May 31, 2007, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, that had been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we were engaged in such relationships.



ITEM 2.  DESCRIPTION OF PROPERTY



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Our New York operational offices, are located in an office service complex located on the 22nd floor of 67 Wall Street, New York, New York 10005-3198.  Our lease is month-to-month with no expiration date.



In addition, we lease approximately 2500 square feet of office space at 1405 Clinton Ave., Irvington, NJ 07111, which lease is for a three year period beginning June 1, 2006.  Our landlord for this property is Ludin Pierre, who is an employee of Infe Human Resources-Unity, Inc. and from whom we purchased Cosmos Temp, Inc. and Mazel Temp., Inc.



In addition, we lease approximately 1,500 square feet of office space at 1027 Hooper Avenue, Toms River, New Jersey for the operational headquarters of the Monarch Human Resources, Inc. Subsidiary of the Company.



In addition, we lease approximately 900 square feet of Executive Office/Board Room space at 106 Central Park South in Manhattan New York.  This space is rented by the Company on a month to month basis from the Chairman and CEO,  Arthur D. Viola, who has personally guaranteed a one year lease on the space.



We believe that our existing facilities are adequate for our needs for the foreseeable future and that if additional space is needed, it would be available on favorable terms at the same location.





ITEM 3.  CONTROLS AND PROCEDURES



We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.



Based upon their evaluation as of the end of May 31 2007, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and re
ported within the time periods specified in the SEC rules and forms.



Our management has taken steps to correct previously disclosed material weaknesses in the preparation, review, presentation and disclosures in our Consolidated Financial Statements.  We are continuing to monitor, evaluate and test the operating effectiveness of these controls.



Other than indicated above, there were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II

OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS



We are not a party to any pending legal proceedings nor is any of our property the subject of any pending legal proceedings.



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



On June 21, 2007 we issued 97,000 shares of restricted common stock to Lloyd Glick as part of the consideration for the acquisition of Gilsor Technology Holdings, Inc.  This issuance was intended to be exempt from registration under section 4(2) of the Securities Act of 1933.



On June 21, 2007 we issued 48,500 shares of restricted common stock to Jay O. Wright as part of the consideration for the acquisition of Gilsor Technology Holdings, Inc.  This issuance was intended to be exempt from registration under section 4(2) of the Securities Act of 1933.



On June 21, 2007 we issued 4,500 shares of restricted common stock to A. David Silver as part of the consideration for the acquisition of Gilsor Technology Holdings, Inc.  This issuance was intended to be exempt from registration under section 4(2) of the Securities Act of 1933.



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On May 8, 2007, the Board of Directors approved the issuance of 50,000 shares of its Series B Preferred Stock to Arthur Viola, the Chief Executive Officer, director and 10% shareholder for services rendered.  The Company valued the Preferred Stock at $50,000.  This issuance was intended to be exempt from registration under section 4(2) of the Securities Act of 1933.





ITEM 3.  DEFAULTS UPON SENIOR SECURITIES



none



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS



none



ITEM 5.  OTHER INFORMATION



We are considering divesting ourselves of Daniels through a dividend to our shareholders of all of the Daniels capital stock in a transaction known as a spin-off.



Item 6.  Exhibits



EXHIBIT

NUMBER

DESCRIPTION

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



31.1

Certification of Principal Executive Officer and Principal Financial Office pursuant to Sarbanes-Oxley Section 302



32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Section 906



SIGNATURES



In accordance with Section 13 or 15(d) 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.



Infe-Human Resources, Inc.



/s/Arthur Viola



By:  Arthur Viola

CHIEF EXECUTIVE OFFICER

CHIEF FINANCIAL OFFICER

Date: July 23, 2007



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/ Arthur Viola

By:  Arthur Viola

Director

Date:  July 23, 2007



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