SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





[X]
      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act
      of 1934


For
      the
      quarterly period ended June 30, 2007





OR





[
      ]
      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 0-21384





KAIRE
      HOLDINGS INCORPORATED


(Exact
      name of registrant as specified in its charter)








Delaware
            
            13-3367421(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)








7700
                Irvine Center Drive, suite 870, Irvine, California
            92608(Address
                of principal executive offices)
            (Zip
                code)





Registrant's
      Telephone number, including area code: (949) 861-3560





__________________________________________________________________


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





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





State
      the
      number of shares outstanding of each of the Registrant's classes of common
      stock, as of the latest practicable date.





Class
      of Common
      Stock                                                                                     Outstanding
      at July 31, 2007


$.001
      par
      value                                                                                     42,616,806shares





Indicate
      by check mark whether the registrant is a shell company (as defined
      in


Rule
      12b-2 of the Exchange Act). (Check one): Yes [ ] No [X]











Transitional
      Small Business Disclosure
      Format                                                                                                Yes
           No
X





FORM
      10-QSB


Securities
      and Exchange Commission


Washington,
      D.C. 20549





KAIRE
      HOLDINGS INCORPORATED








PART
      I -
      FINANCIAL INFORMATION





Item
      1.
      Consolidated Financial Statements





Condensed
      Consolidated Balance Sheets at


December
      31,
      2006 and June 30, 2007 (unaudited)




Condensed
      Consolidated Statements of Operations (Unaudited)


for
      the three months ended June 30, 2006 and 2007




Condensed
      Consolidated Statements of Operations (Unaudited)


for
      the six months
      ended June 30, 2006 and 2007





Condensed
      Consolidated Statements of Cash Flows (Unaudited)


for
      the six months ended June 30, 2006 and 2007


Notes to Condensed Consolidated Financial Statements





Item
      2.  Management's Discussion and Analysis of Financial Condition
      and


Results
      of Operations.


Item
      3.  Controls and
      Procedures





PART
      II.
      - OTHER INFORMATION





Item
      1.  Legal Proceedings





Item
      2   Changes in Securities and Use of Proceeds





Item
      3   Defaults Upon Senior Securities





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





Item
      5   Other
      Information





Item
      6.  Exhibits and Reports on Form 8-K





SIGNATURES









































**Kaire
      Holdings Incorporated**


**and
      Subsidiaries**





**Consolidated
      Financial Statements**


**for
      the Three and Six Months Ended**


**June
      30, 2007**





**Kaire
      Holdings Incorporated**


**and
      Subsidiaries**





**Consolidated
      Financial Statements**


**For
      the Three and Six Months Ended**


**June
      30, 2007**











**C  O  N  T  E  N  T  S**











Consolidated
                Balance Sheets
            1Consolidated
                Statements of Operations
            2Consolidated
                Statements of Cash Flows
            3Notes
                to Consolidated Financial Statements
            4
–
                31





**Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Consolidated
            Balance Sheets**
 **As
            of June 30, 2007, and December 31, 2006**



























June
                30, 2007
            
            December
                31, 2006ASSETS
            (unaudited)
            
            (audited)Cash
            
            
            
            $
            53,918
            
            $
            -Deferred
                financing costs (net of amortization)
            
            -
            
            
            6,906Total
                Assets
            $
            53,918
            
            $
            6,906LIABILITIES
                AND STOCKHOLDERS' DEFICITCurrent
                LiabilitiesAccounts
                payable and accrued expenses
            $
            236,304
            
            $
            334,767Advances
                from shareholders
            
            149,266
            
            
            99,266Notes
                payable - related parties
            
            6,021
            
            
            6,021Notes
                payable
            
            200,000
            
            
            -Convertible
                notes
            
            2,098,009
            
            
            1,946,939Derivative
                liability
            
            975,260
            
            
            1,700,412Warrant
                liability
            
            107,823
            
            
            137,458Accrued
                interest - convertible notes
            
            472,594
            
            
            472,594Liabilities
                of discontinued operations - Sespe
            
            238,219
            
            
            324,240Total
                Current Liabilities
            
            4,483,496
            
            
            5,021,697Total
                Liabilities
            
            4,483,496
            
            
            5,021,697Stockholders'
                DeficitCommon
                stock, $0.001 par value, 900,000,000 sharesauthorized;
                42,616,806 shares issued and outstanding
            
            42,617
            
            
            42,617Additional
                paid in capital
            
            40,139,231
            
            
            40,139,231Accumulated
                deficit
            
            (44,611,426)
            
            
            (45,196,639)Total
                Stockholders' Deficit
            
            (4,429,578)
            
            
            (5,014,791)Total
                Liabilities and Stockholders' Deficit
            $
            53,918
            
            $
            6,906








See
            accompanying notes.
 -
            1
            -
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Consolidated
            Statements of Operations**
 **For
            the Three and Six Months Ended June 30, 2007 and 2006**














Three
                Months Ended June 30,
            
            Six
                Months Ended June 30,2007
            
            2006
            
            2007
            
            2006(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)Net
                revenues
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Cost
                of goods sold
            
            -
            
            
            -
            
            
            -
            
            
            -Gross
                Profit
            
            -
            
            
            -
            
            
            -
            
            
            -Operating
                ExpensesSalaries
                and related expenses
            
            -
            
            
            25,000
            
            
            -
            
            
            49,950General
                and administrative
            
            18,511
            
            
            73,183
            
            
            51,281
            
            
            352,063Total
                Operating Expenses
            
            18,511
            
            
            98,183
            
            
            51,281
            
            
            402,013Loss
                from Operations
            
            (18,511)
            
            
            (98,183)
            
            
            (51,281)
            
            
            (402,013)Other
                Income (Expense)Interest
                expense
            
            -
            
            
            (43,031)
            
            
            -
            
            
            (83,520)Gain/(loss)
                from change in warrant liability
            
            (27,655)
            
            
            61,292
            
            
            29,635
            
            
            156,293Gain/(loss)
                from change in derivative liability
            
            135,386
            
            
            86,283
            
            
            725,152
            
            
            (45,991)Accretion
                of convertible debt discount
            
            (66,956)
            
            
            (120,295)
            
            
            (151,070)
            
            
            (251,543)Other
                income
            
            -
            
            
            21,298
            
            
            -
            
            
            21,298Debt
                issuance costs
            
            (1,447)
            
            
            (13,252)
            
            
            (6,906)
            
            
            (25,355)Total
                Other Income (Expense)
            
            39,328
            
            
            (7,705)
            
            
            596,811
            
            
            (228,818)Gain/(loss)
                from continuing operations before income taxes
            
            20,817
            
            
            (105,888)
            
            
            545,530
            
            
            (630,831)Provision
                for income taxes
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                income (loss) from continuing operations
            
            20,817
            
            
            (105,888)
            
            
            545,530
            
            
            (630,831)Discontinued
                operationsLoss
                from discontinued operations - Classic Care
            
            (1,600)
            
            
            -
            
            
            (1,600)
            
            
            -Income
                (loss) from discontinued operations - Sespe
            
            23,679
            
            
            (85,728)
            
            
            41,284
            
            
            (133,929)Gain/(loss)
                from discontinued operations
            
            22,079
            
            
            (85,728)
            
            
            39,684
            
            
            (133,929)Net
                Loss
            $
            42,896
            
            $
            (191,616)
            
            $
            585,214
            
            $
            (764,760)(Loss)
                earnings per weighted average share ofcommon
                stock outstanding - basic and dilutedFrom
                continuing operations
            $
            0.00
            
            $
            (0.00)
            
            $
            0.01
            
            $
            (0.02)From
                discontinued operations
            
            0.00
            
            
            (0.00)
            
            
            0.00
            
            
            (0.00)Total
                (loss) earnings per share - basic and diluted
            $
            0.00
            
            $
            (0.00)
            
            $
            0.01
            
            $
            (0.02)Weighted-average
                shares outstanding - basic and diluted
            
            42,616,806
            
            
            41,143,479
            
            
            42,616,806
            
            
            38,941,539







See
            accompanying notes.
 -
            2
            -
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Consolidated
            Statements of Cash Flows**
 **For
            the Six Months Ending June 30, 2007 and 2006**





2007
            
            2006Increase
                (decrease) in cash and cash equivalents:Net
                loss
            $
            585,214
            
            $
            (764,760)Adjustments
                to reconcile net loss to net cash usedin
                operating activities:Accretion
                of convertible debt discount
            
            151,070
            
            
            251,543(Gain)/loss
                from change in derivative liability
            
            (725,152)
            
            
            45,991Gain
                from change in warrant liability
            
            (29,635)
            
            
            (156,293)Non-cash
                interest associated with derivative liabilities
            
            -
            
            
            14,977Consulting
                expense related to warrants granted
            
            -
            
            
            222,606Common
                stock issued for professional services and compensation
            
            -
            
            
            139,659Gain
                (loss) from discontinued operations - Sespe
            
            (87,837)
            
            
            12,064Amortization
                of deferred financing costs
            
            6,906
            
            
            26,505Changes
                in operating assets and liabilities:Increase
                (decrease) in accrued interest on convertible notes
            
            -
            
            
            67,392Increase
                (decrease) in accounts payable and accrued expenses
            
            (98,464)
            
            
            (55,027)Increase
                (decrease) in liabilities of discontinued - Sespe
            
            1,816
            
            
            (14,056)Net
                cash used in operating activities
            
            (196,082)
            
            
            (209,399)Cash
                flow from investing activities:Net
                cash used in investing activities
            
            -
            
            
            -Cash
                flow from financing activities:Proceeds
                from notes payable - shareholders
            
            50,000
            
            
            14,304Proceeds
                from loans
            
            200,000
            
            
            -Proceeds
                from convertible notes payable
            
            -
            
            
            200,000(Increase)
                decrease in deferred financing costs
            
            -
            
            
            (3,013)Net
                cash generated by financing activities
            
            250,000
            
            
            211,291Net
                increase in cash and cash equivalents
            
            53,918
            
            
            1,892Cash
                and cash equivalents at beginning of year
            
            -
            
            
            -Cash
                and cash equivalents at end of period
            $
            53,918
            
            $
            1,892**Supplementary
                disclosures of cash flow information**Cash
                paid during the year forInterest
            $
            -
            
            $
            -Taxes
            $
            -
            
            $
            -








**Supplementary
      disclosures of non-cash transactions:**





During
      the six months ended June 30, 2007, the Company entered into the no non-cash
      transactions.





During
      the six months ended June 30, 2006, the Company entered into the following
      non-cash transactions:


·
            Issued
                1,576,545 shares of common stock for the payment of interest on a
                convertible note, valued at
                $14,977;


·
            Issued
                5,586,364 shares of common stock for professional services valued
                at
                $139,659;


·
            Issued
                a warrant to purchase 12,000,000 shares of the Company's common stock
                in
                exchange for professional services valued at
                $222,606.


See
            accompanying notes.
 -
            3
            -
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.                          Summary
      of Significant Accounting Policies**







Organization
      and Line of Business





Kaire
      Holdings Incorporated (“Kaire” or “the Company”), a Delaware corporation, was
      incorporated on June 2, 1986.  Effective February 3, 1998, Kaire
      changed its name to Kaire Holdings Incorporated from Interactive Medical
      Technologies, Ltd.  In November 2002, the Company, through its
      subsidiary Effective Health, Inc., purchased certain assets of Sespe Pharmacy,
      a
      privately-held company located in Fillmore, California.  The asset
      acquisition was concluded on January 26, 2003.





On
      January 23, 2007, Kaire Holdings Incorporated and its wholly-owned subsidiary
      YesRx.com executed a Letter of Intent whereby YesRx.com will acquire all of
      the
      outstanding stock of H&H Glass Corporation, an Illinois
      corporation.  As part of its change in business direction, on February
      4, 2007, Kaire Holdings discontinued its pharmacy business, and Effective
      Health, Inc. has been voluntarily shut down.







On
      July
      2, 2007 an Agreement and Plan of Merger was executed between Kaire Holdings
      Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass, whereby
      YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.  H&H Glass was formed in
      1989 and distributes Asian glass to North America.  The audit of the
      financial statements for H&H Glass Corporation is still in
      process.














History







In
      1999,
      the Company formed YesRx.Com, Inc., an Internet drugstore focused on
      pharmaceuticals, health, wellness and beauty products.  The Company
      focuses on selling drugs for chronic care as opposed to emergency needs and
      works mainly with the patient who has regular medication needs and requires
      multiple refills.  This business was phased out during the year ended
      December 31, 2001.









In
      May
      2000, the Company acquired Classic Care, Inc. (“Classic Care”), a California
      company, organized in April 1997.  Classic Care was a distributor of
      pharmaceutical products and prescription drugs to consumers at senior assisted
      living and retirement centers in the Los Angeles area.  These drug
      sales were primarily paid for and billed to Medi-Cal, and the balances of the
      sales that were not covered by Medi-Cal were paid directly by
      individuals.  In January 2003, the Company voluntarily dissolved
      Classic Care.














Principles
      of Consolidation





The
      consolidated financial statements include the accounts of Kaire and its wholly
      owned subsidiaries (collectively the “Company”).  The Company’s
      subsidiaries include Effective Health, Inc. (dba Sespe Pharmacy), and
      YesRx.com.  Intercompany accounts and transactions have been
      eliminated upon consolidation.




See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**









Basis
      of Presentation







The
      accompanying unaudited interim consolidated financial statements represent
      the
      financial activity of Kaire Holdings Incorporated and its
      subsidiaries.  The consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles in the
      US.  The Company’s fiscal year ends on December 31 each
      year.  The financial statements and notes are representations of the
      management and the Board of Directors, who are responsible for their integrity
      and objectivity.





The
      accompanying unaudited interim consolidated financial statements represent
      the
      financial activity of Kaire Holdings Incorporated and its
      subsidiaries.  The consolidated financial statements for the three and
      six months ended June 30, 2007, have been prepared in accordance with generally
      accepted accounting principles for interim financial information in the US
      and
      in accordance with the instructions to Form 10-QSB and Rule 10-01 of Regulation
      S-X.  Accordingly, the financial statements do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements.  In the opinion of management, all
      adjustments (consisting of normal recurring accruals) considered necessary
      for a
      fair presentation have been included.  For further information, refer
      to consolidated financial statements and footnotes thereto for the fiscal
      quarter ended June 30, 2007, included herein.  The consolidated
      financial statements include the accounts of the Company and its majority-owned
      subsidiaries.  All inter-company transactions were
      eliminated.  The financial statements and notes are representations of
      the management and the Board of Directors who are responsible for their
      integrity and objectivity.





The
      results of operations for such periods are not necessarily indicative of the
      results expected for the full fiscal year or for any future
      period.  The financial statements should be read in conjunction with
      the consolidated financial statements and related notes included in the
      Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2006.












Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and the disclosures of
      contingent assets and liabilities at the date of the financial statements,
      as
      well as the those estimates.  Significant estimates include valuation
      of derivative and warrant liabilities, allowance for doubtful accounts and
      third-party contractual agreements, and the net realizable value of assets
      of
      discontinued operations.














Cash
      and Cash Equivalents







For
      purpose of the statements of cash flows, cash equivalents include amounts
      invested in a money market account with a financial institution.  The
      Company considers all highly liquid investments with an original maturity of
      three months or less to be cash equivalents.  Cash equivalents are
      carried at cost, which approximates market.




See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**







Revenue
      Recognition





The
      Company recognizes revenue at the time the product is shipped to the customer
      or
      services are rendered.  Outbound shipping and handling charges are
      included in net sales.







Net
      Client Revenue





In
      the
      Pharmaceutical business, net client revenue represents the estimated net
      realizable amounts from clients, third-party payors and others for sale of
      products or services rendered.  For revenue recognition, revenue is
      recorded when the prescription is filled or when services are
      performed.








Third-Party
      Contractual Adjustments





Contractual
      adjustments represent the difference between the pharmacy’s established billing
      rate for covered products and services and amounts reimbursed by third-party
      payors, pursuant to reimbursement agreements.







For
      the
      period ended June 30, 2007, there were no gross revenues of discontinued
      operations (Sespe).







For
      the
      three and six months ended June 30, 2006, gross revenues were $135,743 and
      $440,311, less approximately $76,592 and $96,610, respectively, of contractual
      adjustments based on reimbursement contracts, resulting in net third-party
      contract revenues of approximately $59,151 and $343,701
      respectively.







All
      revenues of Sespe Pharmacy are reported in the accompanying financial statements
      as components of “Net loss from discontinued operations (Sespe)” (see Note
      13).







Net
      Loss per Share





Loss
      per
      common share is computed on the weighted average number of common shares
      outstanding during each year.  Basic loss per share is computed as net
      loss applicable to common stockholders divided by the weighted average number
      of
      common shares outstanding for the period.  Diluted loss per share
      reflects the potential dilution that could occur from common shares issuable
      through stock options, warrants and other convertible securities when the effect
      would be dilutive.









Inventory





Inventory
      consists primarily of pharmaceuticals and health care products and is stated
      at
      the lower of cost or market on a first-in-first-out basis.  Sespe had
      no inventory as of June 30, 2007.  Inventory as of December 31, 2006,
      is reported in the accompanying financial statements as a component of
“Liabilities of discontinued operations (Sespe)” (see Note 13).










6




**1.           Summary
      of Significant Accounting Policies (continued)**







Property
      and Equipment





Property
      and equipment are stated at cost.  Depreciation is computed for
      financial reporting purposes using the straight-line method over the estimated
      useful lives of the assets.  Amortization of leasehold improvements is
      computed using the straight-line method over the shorter of the remaining lease
      term or the estimated useful lives of the improvements.  The Company
      uses other depreciation methods (generally accelerated) for tax
      purposes.  Repairs and maintenance that do not extend the useful life
      of property and equipment are charged to expense as incurred.  When
      property and equipment are retired or otherwise disposed of, the asset and
      its
      accumulated depreciation are removed from the accounts and the resulting profit
      or loss is reflected in income.  As of December 31, 2006, Sespe
      Pharmacy had disposed of all its property and equipment.










Stock
      Warrants Issued to Third Parties





The
      Company accounts for stock warrants issued to third parties, including
      customers, in accordance with the provisions of the Emerging Issues Task Force
      (EITF) Issue No. 96-18, *Accounting for Equity Instruments That Are Issued to
      Other Than Employees for Acquiring, or in Conjunction with Selling Goods or
      Services*, and EITF 01-9, *Accounting for Consideration Given by a Vendor
      to a Customer (Including a Reseller of the Vendor’s
      Products)*.  Under the provisions of EITF 96-18, because none of
      the Company’s agreements have a disincentive for nonperformance, the Company
      records a charge for the fair value of the portion of the warrants earned from
      the point in time when vesting of the warrants becomes
      probable.  Final determination of fair value of the warrants occurs
      upon actual vesting.  EITF 01-9 requires that the fair value of
      certain types of warrants issued to customers be recorded as a reduction of
      revenue to the extent of cumulative revenue recorded from that
      customer.








Income
      Taxes





The
      Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns.  Under this method, deferred income taxes are recognized
      for the tax consequences in future years of differences between the tax bases
      of
      assets and liabilities and their financial reporting amounts at each period
      end
      based on enacted tax laws and statutory tax rates applicable to the periods
      in
      which the differences are expected to affect taxable
      income.  Valuation allowances are established, when necessary, to
      reduce deferred tax assets to the amount expected to be realized.  The
      provision for income taxes represents the tax payable for the period and the
      change during the period in deferred tax assets and liabilities.




See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**







Fair
      Value of Financial Instruments





The
      Company measures its financial assets and liabilities in accordance with
      generally accepted accounting principles.  SFAS NO. 107, “Disclosure
      about Fair Value of Financial Instruments,” requires certain disclosures
      regarding the fair value of financial instruments.  For certain of the
      Company’s financial instruments, including cash and cash equivalents and
      accounts payable and accrued liabilities, the carrying amounts approximate
      fair
      value due to their short maturities.  The amounts shown for notes
      payable also approximate fair value because current interest rates offered
      to
      the Company for debt of similar maturities are substantially the
      same.










Convertible
      Debt Financing and Derivative Liabilities





The
      Company has issued convertible debt securities with non-detachable conversion
      features and detachable warrants.  The Company accounts for such
      securities in accordance with Emerging Issues Task Force Issue Nos. 98-5, 00-19,
      00-27, 05-02, 05-04 and 05-08, and Statement of Financial Accounting Standards
      No. 133, “Accounting for Derivative Instruments and Hedging Activities” as
      amended (“SFAS 133”).







In
      accordance with SFAS 133, the holder’s conversion right provision, interest rate
      adjustment provision, liquidated damages clause, cash premium option, and the
      redemption option (collectively, the debt features) contained in the terms
      governing the Notes are not clearly and closely related to the characteristics
      of the Notes.  Accordingly, the features qualified as embedded
      derivative instruments at issuance and, because they do not qualify for any
      scope exception within SFAS 133, they were required by SFAS 133 to be accounted
      for separately from the debt instrument and recorded as derivative financial
      instruments.









At
      each
      balance sheet date, the Company adjusts the derivative financial instruments
      to
      their estimated fair value and analyzes the instruments to determine their
      classification as a liability or equity.  As of June 30, 2007, the
      estimated fair value of the Company’s derivative liability was $975,260, as well
      as a warrant liability of $107,823.  As of December 31, 2006, the
      estimated fair value of the Company’s derivative liability was $1,700,412, as
      well as a warrant liability of $137,458.  The estimated fair value of
      the debt features was determined using the probability weighted averaged
      expected cash flows / Lattice Model.  The model uses several
      assumptions including: historical  stock  price volatility
      (utilizing a rolling 120 day period), risk-free interest rate (3.50%), remaining
      maturity, and the closing price of the Company’s common stock to determine
      estimated fair value of the derivative asset.  In valuing the debt
      features at December 31, 2006, the Company used the closing price of $0.010
      and
      the respective conversion and exercise prices for the warrants.  For
      the period ended June 30, 2007, there was an increase in the market value of
      the
      Company’s common stock to $0.016 from $0.010 at December 31, 2006.










Deferred
      Financing Costs





Costs
      relating to obtaining debt financing are capitalized and amortized over the
      term
      of the related debt using the effective interest method.  When a loan
      is paid in full, any unamortized financing costs are removed from the related
      accounts and charged to operations.


See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**







Stock-Based
      Compensation





Effective
      January 1, 2005, the Company has adopted the fair-value-based method of
      accounting prescribed in Financial Accounting Standards Board Statement No.
      123R
      (Accounting for Stock-Based Compensation) for its employee stock option
      plans.





Specifically,
      the Company adopted SFAS No. 123R using the “prospective method” This statement
      replaced FAS-123, *Accounting for Stock-Based Compensation*, supersedes
      APB Opinion No. 25, *Accounting for Stock Issued to Employees*, and
      amends FAS-95, *Statement of Cash Flows*.  FAS-123R requires
      companies to apply a fair-value-based measurement method in accounting for
      shared-based payment transactions with employees and to record compensation
      cost
      for all stock awards granted after the required effective date and for awards
      modified, repurchased or cancelled after that date.  The scope of
      FAS-123R encompasses a wide range of share-based compensation arrangements,
      including share options, restricted share plans, performance-based awards,
      share
      appreciation rights, and employee share purchase plans.  All employee
      stock option grants made since the beginning of fiscal 2005 have been expensed
      over the related stock option vesting period based on the fair value at the
      date
      the options are granted.  Prior to fiscal 2005, the Company applied
      Accounting Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued
      to Employees,” and related interpretations in accounting for stock
      options.  The Company did not have any unvested employee stock options
      or warrants outstanding as of the six-month period ending June 30,
      2007.





The
      Company issued a warrant to purchase 12,000,000 shares of the Company’s common
      stock to a consultant during the year ended December 31, 2006, which had an
      estimated aggregate fair value of $222,606, and was immediately
      vested.  The warrant was a five-year warrant with an exercise price of
      $0.05 per share.  This warrant was cancelled in January
      2007.





The
      Company issued a warrant to purchase 12,000,000 shares of the Company’s common
      stock to its Chairman and CEO, Steve Westlund, during the year ended December
      31, 2005, which had an estimated aggregate fair value of $192,000, and was
      immediately vested.  The warrant is a five-year warrant with an
      exercise price of $0.05 per share.








Comprehensive
      Income (Loss)





Statement
      of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”
(SFAS 130) established standards for reporting and display of comprehensive
      income (loss) and its components in a full set of general-purpose financial
      statements.  Comprehensive income consists of net income and
      unrealized gains (losses) on available-for-sale securities; foreign currency
      translation adjustments; changes in market values of future contracts that
      qualify as a hedge; and negative equity adjustments recognized in accordance
      with SFAS No. 87.  The Company, however, does not have any components
      of comprehensive income (loss) as defined by SFAS 130 and therefore, for the
      six-month periods ended June 30, 2007 and 2006, comprehensive loss is equivalent
      to the Company’s net loss.







Reclassifications





Certain
      amounts in the 2006 financial statements have been reclassified to conform
      to
      the 2007 presentations.  These reclassifications had no effect on
      previously reported results of operations or retained earnings.


See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**







Advertising
      Costs





The
      Company expenses advertising and marketing costs as they are
      incurred.  There were no advertising and marketing costs for the
      periods ended June 30, 2007 and 2006.










Long–Lived
      Assets





In
      accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets” the Company
      periodically evaluates the carrying value of long-lived assets to be held and
      used, including intangible assets, when events and circumstances warrant such
      a
      review.  The carrying value of a long-lived asset is considered
      impaired when the anticipated discounted cash flow from such asset is separately
      identifiable and is less than its carrying value.  In that event, a
      loss is recognized based on the amount by which the carrying value exceeds
      the
      fair market value of the long-lived asset.  Fair market value is
      determined primarily using the anticipated cash flows discounted at a rate
      commensurate with the risk involved.  Losses on long-lived assets to
      be disposed of are determined in a similar manner, except that fair market
      values are reduced for the cost to dispose.








Recent
      Accounting Pronouncements





In
      February 2007, the FASB issued SFAS No. 159, *“The Fair Value
      Option for Financial Assets and Financial Liabilities—Including an amendment of
      FASB Statement No. 115”* (“SFAS 159”).  SFAS 159 expands the
      use of fair value accounting but does not affect existing standards which
      require assets or liabilities to be carried at fair value.  Under SFAS
      159, a company may elect to use fair value to measure accounts and loans
      receivable, available-for-sale and held-to-maturity securities, equity method
      investments, accounts payable, guarantees and issued debt.  Other
      eligible items include firm commitments for financial instruments that otherwise
      would not be recognized at inception and non-cash warranty obligations where
      a
      warrantor is permitted to pay a third party to provide the warranty goods or
      services.  If the use of fair value is elected, any upfront costs and
      fees related to the item must be recognized in earnings and cannot be deferred,
      e.g., debt issue costs.  The fair value election is irrevocable and
      generally made on an instrument-by-instrument basis, even if a company has
      similar instruments that it elects not to measure based on fair
      value.  At the adoption date, unrealized gains and losses on existing
      items for which fair value has been elected are reported as a cumulative
      adjustment to beginning retained earnings.  Subsequent to the adoption
      of SFAS 159, changes in fair value are recognized in earnings.  SFAS
      159 is effective for fiscal years beginning after November 15, 2007 and is
      required to be adopted by the Company in the first quarter of fiscal
      2009.  The Company is currently determining whether fair value
      accounting is appropriate for any of its eligible items and cannot estimate
      the
      impact, if any, which SFAS 159 will have on its consolidated results of
      operations and financial condition.


See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**1.           Summary
      of Significant Accounting Policies (continued)**







Recent
      Accounting Pronouncements (continued)





In
      June
      2007, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 06-11,
“*Accounting for Income Tax Benefits of Dividends on Share-Based Payment
      Awards.*”  EITF 06-11 provides for the recognition and
      classification of deferred taxes associated with dividends or dividend
      equivalents on non-vested equity shares or non-vested equity share units
      (including restricted stock units (RSUs)) that are paid to employees and charged
      to retained earnings.   This issue is effective for annual
      periods beginning after September 15, 2007.   Also in June 2007,
      the EITF ratified EITF Issue No. 07-3*,*“*Accounting for Advance
      Payments for Goods or Services to Be Used in Future Research and Development
      Activities*.”  EITF 07-3 provides that nonrefundable advance payments
      made for goods or services to be used in future research and development
      activities should be deferred and capitalized until such time as the related
      goods or services are delivered or are performed, at which point the amounts
      would be recognized as an expense.  This issue is effective for fiscal
      years beginning after December 15, 2007.  The Company anticipates that
      these Issues will have no material impact on its financial position and results
      of operations.




Other
      recent accounting pronouncements issued by the FASB (including its EITF), the
      American Institute of Certified Public Accountants (“AICPA”), and the SEC did
      not or are not believed by management to have a material impact on the Company’s
      present or future financial statements.











**2.           Going
      Concern**







The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern.  However, although the Company has a
      profit for the six months ended June 30, 2007 of $585,214 mainly due to gains
      in
      warrant and derivative liabilities, it has experienced a loss of $764,760 for
      the same period prior year.  The Company has also experienced net
      losses of $1,313,551 and $2,160,123 for the years ended December 31, 2006 and
      2005, respectively.  The Company also had a net working deficit of
      $4,429,578 and $5,014,791 for the periods ended June 30, 2007, and December
      31,
      2006, respectively.  Additionally, the Company must raise additional
      capital to meet its working capital needs.  These factors raise
      substantial doubt about the Company’s ability to continue as a going
      concern.  In view of the matters described above, recoverability of a
      major portion of the recorded asset amounts shown in the accompanying balance
      sheet is dependent upon the Company’s ability to generate sufficient sales
      volume to cover its operating expenses and to raise sufficient capital to meet
      its payment obligations.  The financial statements do not include any
      adjustments relating to the recoverability and classification of recorded asset
      amounts, or amounts and classification of liabilities that might be necessary
      should the Company be unable to continue in existence.




See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**2.           Going
      Concern (continued)**





Management
      has previously relied on equity financing sources and debt offerings to fund
      operations.  The Company’s reliance on equity and debt financing will
      continue, and the Company will continue to seek to enter into strategic
      acquisitions.  On March 29, 2005, Kaire issued a $125,000, 8% interest
      per annum, one-year convertible note to the Longview Fund LP.  On June
      23, 2005, Kaire issued three two-year convertible notes for an aggregate of
      a
      $350,000, 8% interest per annum, to the following: 1) $100,000 to the Longview
      Fund LP., $175,000 to the Longview Equity Fund LP, and 3) $75,000 to the
      Longview International Equity Fund, LP.  On December 13, 2005 Kaire
      issued a $150,000, 12% interest per annum, two-year convertible note to the
      Longview Fund LP.  Kaire also issued the following: 1) On March 13,
      2006 Kaire issued a $100,000, 12% interest per annum, two-year convertible
      note
      to the Longview Fund LP, and 2) On April 11, 2006 Kaire issued a $100,000,
      12%
      interest per annum, two-year convertible note to the Longview Fund
      LP.





On
      February 16, 2007, Kaire issued two promissory notes, 8% interest per annum
      to
      the following: 1) $200,000 to the Longview Fund LP, and 2) $50,000 to Naccarato
      & Associates.  These notes mature on October 1, 2007.





Also,
      on
      July 2, 2007 an Agreement and Plan of Merger was executed between Kaire Holdings
      Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass, whereby
      YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.





**3.           Accounts
      Receivable – Trade**







In
      the
      six months ended June 30, 2007 and 2006, approximately 0% and 33.4% of net
      revenues of continuing operations respectively were derived under federal and
      state insurance reimbursement programs with 0% and 56.4% respectively coming
      from private party reimbursements and other third parties.  For the
      six-month period ending June 30, 2007 and 2006, the breakout is as
      follows:





2007
            
            2006Medi-Cal
            0%
            
            17.2%Medi-Care
            0%
            
            0%Private
                Party
            0%
            
            36.1%Other
                third-parties
            0%
            
            46.6%








These
      revenues are based, in part, on cost
      reimbursement principles and are subject to audit and retroactive adjustment
      by
      the respective third-party fiscal intermediaries.  In the opinion of
      management, retroactive adjustments, if any would not be material to the
      financial position, results of operations or cash flows of the
      Company.





The
      Company provides an allowance for doubtful accounts based upon its estimation
      of
      uncollectible accounts.  The Company bases this estimate on historical
      collection experience and a review of the current status of trade accounts
      receivable.  The Company determined that a $166,942 and a $160,000
      allowance for doubtful accounts was needed as of June 30, 2007, and December
      31,
      2006, respectively.





Accounts
      receivable, net of Reserve for doubtful accounts, are reported as components
      of
“Liabilities of discontinued operations (Sespe)” in the accompanying financial
      statements (see Note 13).  As of June 30, 2007, 100% of Sespe
      Pharmacy’s accounts receivable were reserved as doubtful.





12


**4.           Convertible
      Notes Payable**





During
      the six months ended June 30, 2007, and during the years ended December 31,
      2006, 2005, 2004 and 2003, the Company issued convertible notes to third
      parties.  As part of several of the financing transactions, the
      Company also issued warrants to purchase shares of stock at various exercise
      prices.









Date
                of Note
            
            Amount
                of Notes
            
            Conversion
                Price
            
            Term
                of NoteDecember
                12, 2003 (2)
            
            $
            676,576
            
            $
                0.04 or 70% (1)
            
            3
                yearsMay
                3, 2004
            
            
            650,000
            
            $
                0.09 or 85% (1)
            
            3
                yearsMarch
                29, 2005
            
            
            125,000
            
            $
                0.04 or 85% (1)
            
            1
                yearJune
                23, 2005
            
            
            350,000
            
            $
                0.03 or 80% (1)
            
            2
                yearsDecember
                13, 2005 (2)
            
            
            150,000
            
            70%
            
            2
                yearsMarch
                13, 2006 (2)
            
            
            100,000
            
            70%
            
            2
                yearsApril
                11, 2006 (2)
            
            
            100,000
            
            70%
            
            2
                yearsTotal
                convertible notes
            
            
            2,151,576Less
                unamortized bond discount
            
            
            (53,567)Net
                convertible notes
            
            $
            2,098,009












Date
                of Warrants Issued
            
            Number
                of Warrants
            
            Exercise
                Price
            
            Term
                of WarrantsMay
                3, 2004
            
            1,666,667
            
            $
            0.147
            
            5
                yearsMarch
                29, 2005
            
            694,444
            
            $
            0.042
            
            5
                yearsMarch
                29, 2005
            
            3,000,000
            
            $
            0.040
            
            5
                yearsJune
                23, 2005
            
            1,666,667
            
            $
            0.040
            
            5
                years







(1)  the
      conversion price is the lower of the set price or the % of market closing
      price.


(2)  no
      warrants issued with this financing transaction.







The
      Company determined that the appropriate method of accounting for these notes
      is
      to include the entire debt as a current liability on the balance sheet, since
      the debt is immediately convertible at the option of the holder.









The
      Company filed the convertible note and warrant documents for the May 3, 2004
      funding in the Form SB-2, on June 21, 2004, which was declared effective on
      February 14, 2006.  The Notes were entered into









13







**4.           Convertible
      Notes Payable (continued)**







pursuant
      to the terms of a subscription agreement between the Company and the Holders,
      which was also included in the respective filings.




The
      notes
      contain provisions on interest accrual at the “prime rate” published in The Wall
      Street Journal from time to time, plus three percent (3%).  The
      Interest Rate shall not be less than eight percent (8%).  Interest
      shall be calculated on a 360 day year.  Interest on the Principal
      Amount shall be payable monthly, commencing 120 days from the closing and on
      the
      first day of each consecutive calendar month thereafter (each, a “Repayment
      Date”) and on the Maturity Date.




Following
      the occurrence and during the continuance of an Event of Default (as discussed
      in the Note), the annual interest rate on the Note shall automatically be
      increased by two percent (2%) per month until such Event of Default is
      cured.




The
      Notes
      also provide for liquidated damages on the occurrence of several
      events.  As of December 31, 2006, no liquidating damages have been
      incurred by the Company.









*Redemption
      Option -* The Company will have the option of prepaying the outstanding
      Principal Amount (“Optional Redemption”), in whole or in part, by paying to the
      Holder a sum of money equal to one hundred twenty percent (120%) of the
      Principal Amount to be redeemed, together with accrued but unpaid interest
      thereon









*Debt
      features -*The Holder shall have the right, but not the obligation, to
      convert all or any portion of the then aggregate outstanding Principal Amount
      of
      this Note, together with interest and fees due hereon, into shares of Common
      Stock.









The
      proceeds from the financing transactions were allocated to the debt features
      and
      to the warrants based upon their fair values.  After the latter
      allocations, the remaining value, if any, is allocated to the Note on the
      financial statements.









The
      debt
      discount is being accreted using the effective interest method over the term
      of
      the note.  The value of the discount on the converted notes on the
      books is being accreted over the term of the note (three years).  For
      the six months ended June 30, 2007 and 2006, the Company accreted $151,070
      and
      $251,543, respectively, of debt discount related to the Notes.









On
      January 23, 2007 the Company entered into a Letter of Intent whereby all of
      the
      note holders (the Longview Funds and Alpha Capital) agree to stop accruing
      interest and freeze all conversions and any exercise of warrants plus all
      penalties and default interest accrued are to be waived.














14












**4.           Convertible
      Notes Payable (continued)**







Warrants
      Issued





The
      estimated fair values of the warrants at issuance were as follows:









Date
                of Warrants Issued
            
            Number
                of Warrants
            
            Value
                at Issuance
            
            Initial
                Volatility FactorMay
                3, 2004
            
            1,666,667
            
            $
            92,711
            
            188
            %March
                29, 2005
            
            694,444
            
            $
            21,387
            
            104
            %March
                29, 2005
            
            3,000,000
            
            $
            93,080
            
            104
            %June
                23, 2005
            
            1,666,667
            
            $
            49,340
            
            101
            %February
                28, 2006
              (cancelled
                in January 2007)
            
            12,000,000
            
            $
            222,606
            
            122
            %







These
      amounts have been classified as a derivative instrument and recorded as a
      liability on the Company’s balance sheet in accordance with current
      authoritative guidance.  The estimated fair value of the warrants was
      determined using the Black-Scholes option-pricing model with the closing price
      on the date of issuance and the respective exercise price, a 5 year term, and
      the volatility factor relative to the date of issuance.  The model
      uses several assumptions including: historical stock price volatility (utilizing
      a rolling 120 day period), risk-free interest rate (3.50%), remaining time
      till
      maturity, and the closing price of the Company’s common


stock
      to
      determine estimated fair value of the derivative liability.  In
      valuing the warrants at December 31, 2005, the Company used the closing price
      of
      $0.025, the respective exercise price, the remaining term on each warrant,
      and a
      volatility of 113%.  In accordance with the provisions of SFAS No.
      133, Accounting for Derivative Instruments, the Company is required to adjust
      the carrying value of the instrument to its fair value at each balance sheet
      date and recognize any change since the prior balance sheet date as a component
      of Other Income (Expense).  The warrant derivative liability at
      December 31, 2005, had increased to a fair value of $126,095, due in part to
      a
      decrease in the market value of the Company’s common stock to $0.025 from $0.055
      at December 31, 2004 which resulted in Other Income of $105,771 on the Company’s
      books.





On
      February 28, 2006, the Company granted a five-year warrant to purchase up to
      12,000,000 shares of the Company’s common stock at an exercise price of
      $0.05.  The warrant was issued to a consultant as compensation for
      certain functions to be performed.  The Company recorded $222,606 of
      consulting expense in connection with this warrant.  The fair value of
      this warrant was estimated at the date of grant using the Black-Scholes
      option-pricing model with the following weighted-average assumptions; dividend
      yield of 0%; expected volatility of 153%; risk-free interest rate of 3.5%;
      and
      expected life of 5 years.  This warrant was cancelled on January 9,
      2007.





For
      the
      year ended December 31, 2006, the warrant derivative liability had increased
      to
      a value of $137,458, due to the issuance of the warrant in February 2006 with
      a
      valuation at issuance of $222,606 offset by a decrease in warrant values due
      to
      a decrease in the market value of the Company’s common stock to $0.010 from
      $0.025 at December 31, 2005, which resulted in an “Other Income” item of
      $211,243 for the year ended







15




**4.           Convertible
      Notes Payable (continued)**







Warrants
      continued







December
      31, 2006.  The Company used a closing price of $0.010, the respective
      exercise prices, remaining time till maturity and a 153% volatility
      factor.







For
      the
      six months ended June 30, 2007, the warrant derivative liability had decreased
      to a value of $107,823, due to the cancellation of warrant issued in February
      2006 with a valuation at issuance of $222,606 offset by increases in warrant
      values due to an increase in the market value of the Company’s common stock to
      $0.016 from $0.010 at December 31, 2006, which resulted in an “Other Income”
item of $29,635 for the six-month period ended June 30, 2007.  The
      Company used a closing price of $0.016, the respective exercise prices,
      remaining time till maturity and a 196% volatility factor.









The
      recorded value of such warrants can fluctuate significantly based on
      fluctuations in the market value of the underlying securities of the issuer
      of
      the warrants, as well as in the volatility of the stock price during the term
      used for observation and the term remaining for the warrants.







Debt
      Features







In
      accordance with Statement of Financial Accounting Standards No. 133, “Accounting
      for Derivative Instruments and Hedging Activities,” as amended (“SFAS 133”), the
      debt features provision (collectively, the features) contained in the terms
      governing the Notes are not clearly and closely related to the characteristics
      of the Notes.  Accordingly, the features qualified as embedded
      derivative instruments at issuance and, because they do not qualify for any
      scope exception within SFAS 133, they were required by SFAS 133 to be accounted
      for separately from the debt instrument and recorded as derivative financial
      instruments.
















16













**4.           Convertible
      Notes Payable (continued)**







Debt
      Features (continued)







Pursuant
      to the terms of the Notes, these notes are convertible at the option of the
      holder, at anytime on or prior to maturity.  There is an additional
      interest rate adjustment feature, a liquidated damages clause, a cash premium
      option as well as the redemption option.  The debt features represents
      an embedded derivative that is required to be accounted for apart from the
      underlying Notes.  At issuance of the Notes, the debt
      features




had
      an
      estimated initial fair value as follows, which was recorded as a discount to
      the
      Notes and a derivative liability on the consolidated balance sheet.







Date
                of Note
            
            Amount
                of Notes
            
            Debt
                Features Value at Issuance
            
            Initial
                Carrying ValueDecember
                12, 2003
            
            $
            676,576
            
            $
            338,642
            
            $
            337,934May
                3, 2004
            
            $
            650,000
            
            $
            516,920
            
            $
            -March
                29, 2005
            
            $
            125,000
            
            $
            33,850
            
            $
            -June
                23, 2005
            
            $
            350,000
            
            $
            73,964
            
            $
            226,696December
                13, 2005
            
            $
            150,000
            
            $
            76,150
            
            $
            73,850March
                13, 2006
            
            $
            100,000
            
            $
            50,767
            
            $
            49,233April
                11, 2006
            
            $
            100,000
            
            $
            50,189
            
            $
            49,811












In
      subsequent periods, if the price of the security changes, the embedded
      derivative financial instrument related to the debt features will be adjusted
      to
      the fair value with the corresponding charge or credit to Other Expense or
      Income.  The estimated fair value of the debt features was determined
      using the probability weighted averaged expected cash flows / Lattice Model
      with
      the closing price on original date of issuance, a conversion price based on
      the
      terms of the respective contract, a period based on the terms of the notes,
      and
      a volatility factor on the date of issuance.  The model uses several
      assumptions including: historical stock price volatility (utilizing a rolling
      120-day period), risk-free interest rate (3.50%), remaining maturity, and the
      closing price of the Company’s common stock to determine estimated fair value of
      the derivative liability.  In valuing the debt features at June 30,
      2007 the Company used the closing price of $0.016 and the respective conversion
      price, a remaining term coinciding with each contract, and a volatility of
      196%.  For the six months ended June 30, 2007, the estimated value of
      the debt features decreased to $975,260, thus the Company recorded Other Income
      on the consolidated statement of operations for the change in fair value of
      the
      debt features related to these notes of $725,152 for the six months ended June
      30, 2007.







Pursuant
      to the terms of the Notes, the Company has the option of prepaying the
      outstanding Principal Amount in whole or in part, by paying to the Holder a
      sum
      of money equal to one hundred twenty percent (120%) of the Principal Amount
      to
      be redeemed, together with accrued but unpaid interest thereon and any and
      all
      other sums due.









17







**4.           Convertible
      Notes Payable (continued)**







Debt
      Features (continued)







The
      recorded value of the debt features related to the Notes can fluctuate
      significantly based on fluctuations in the fair value of the Company’s common
      stock, as well as in the volatility of the stock price during the term used
      for
      observation and the term remaining for the warrants.




The
      significant fluctuations can create significant income and expense items on
      the
      financial statements of the Company.









Because
      the terms of the 2003 - 2006 convertible notes (“notes”) require such
      classification, the accounting rules required additional convertible notes
      and
      non-employee warrants to also be classified as liabilities, regardless of the
      terms of the new notes and / or warrants.  This presumption has been
      made due to the Company no longer having the control to physical or net share
      settle subsequent convertible instruments because it is tainted by the terms
      of
      the notes.  Were the notes to not have contained those terms or even
      if the transactions were not entered into, it could have altered the treatment
      of the other notes and the conversion features of the latter agreement may
      have
      resulted in a different accounting treatment from the liability
      classification.  These notes and warrants, as well as any subsequent
      convertible notes or warrants, will be treated as derivative liabilities until
      all such provisions are settled.

















18






**4.           Convertible
      Notes Payable (continued)**





Debt
      Features (continued)







For
      the
      six months ended June 30, 2007, the Company recorded Other Income of $725,152
      and $29,635 related to the decrease in value of the debt features and decrease
      in value of the warrants, respectively.  A tabular reconciliation of
      this adjustment follows:




For
      the
      six months ended June 30, 2007:









$
            29,635
            income,
                decrease in value of 2003, 2004, 2005, 2006 and 2007 warrant
                liability725,152
            income,
                decrease in value of 2003, 2004, 2005, 2006 and 2007 derivative
                liability$
            754,787
            other
                income related to convertible debt







For
      the
      six months ended June 30, 2006:









$
            156,293
            income,
                decrease in value of 2003, 2004, 2005 and 2006 and warrant
                liability(45,991)
            expense,
                increase in value of 2003, 2004, 2005 and 2006 derivative
                liability$
            110,302
            other
                income related to convertible debt







For
      the
      six months ended June 30, 2007:









$
            0
            of
                interest expense related to accretion of 2003 convertible
                debt79,938
            of
                interest expense related to accretion of 2004 convertible
                debt45,876
            of
                interest expense related to accretion of 2005 convertible
                debt25,256
            of
                interest expense related to accretion of 2006 convertible
                debt$
            151,070
            of
                interest expense related to convertible
                debt







For
      the
      six months ended June 30, 2006:









$
            51,888
            of
                interest expense related to accretion of 2003 convertible
                debt102,514
            of
                interest expense related to accretion of 2004 convertible
                debt83,873
            of
                interest expense related to accretion of 2005 convertible
                debt13,268
            of
                interest expense related to accretion of 2006 convertible
                debt$
            251,543
            of
                interest expense related to convertible
                debt







See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**4.           Convertible
      Notes Payable (continued)**







Debt
      Features (continued)







The
      balance of the carrying value of the convertible debt as of December 31, 2006
      and June 30, 2007 is:









$
            1,373,570
            December
                31, 2005 value99,044
            original
                carrying value on 2006 convertible debt474,325
            accretion
                of convertible debt$
            1,946,939
            December
                31, 2006 carrying value of debt







$
            1,946,939
            December
                31, 2006 value0
            original
                carrying value on 2007 convertible debt151,070
            accretion
                of convertible debt$
            2,098,009
            June
                30, 2007 carrying value of debt







The
      balance of the carrying value of the derivative liability as of December 31,
      2006 and June 30, 2007 is:









$
            1,497,659
            December
                31, 2005 value of derivative liability100,956
            original
                values of 2006 derivative liability44,454
            increase
                in values of 2003 derivative liability(11,470)
            increase
                in values of 2004 derivative liability64,090
            increase
                in values of 2005 derivative liability4,723
            increase
                in values of 2006 derivative liability$
            1,700,412
            December
                31, 2006 value of derivative
                liability










$
            1,700,412
            December
                31, 2006 value of derivative liability0
            original
                values of 2007 derivative liability(321,326)
            decrease
                in values of 2003 derivative liability(138,916)
            decrease
                in values of 2004 derivative liability(178,747)
            decrease
                in values of 2005 derivative liability(86,163)
            decrease
                in values of 2006 derivative liability$
            975,260
            June
                30, 2007 value of derivative
                liability









20


**4.           Convertible
      Notes Payable (continued)**







Debt
      Features (continued)





The
      balance of the carrying value of the warrant liability as of December 31, 2006
      and June 30, 2007 is:









$
            126,095
            December
                31, 2005 value of warrant liability222,606
            original
                carrying values of 2006 warrant liability(11,302)
            income,
                decrease in value of 2004 warrant liability(70,038)
            income,
                decrease in value of 2005 warrant liability(129,903)
            income,
                decrease in values of 2006 warrant liability$
            137,458
            December
                31, 2006 value of warrant liability










$
            137,458
            December
                31, 2006 value of warrant liability0
            original
                carrying values of 2006 warrant liability8,935
            expense,
                increase in value of 2004 warrant liability34,226
            expense,
                increase in value of 2005 warrant liability(72,796)
            income,
                decrease in values of 2006 warrant liability$
            107,823
            June
                30, 2007 value of warrant liability











**5.           Common
      Stock Transactions**







Common
      stock transactions during the six months ending June 30, 2007







None.












Common
      stock transactions during the six months ending June 30, 2006





The
      Company issued 1,576,545 shares of common stock for conversion of $14,978 of
      note interest.





The
      Company issued 5,586,364 shares of common stock for professional services valued
      at $139,659.















21









**6.           Related
      Party Transactions**







None.












**7.           Property
      and Equipment**









Property
      and equipment included in “Liabilities of discontinued operations - Sespe” at
      June 30, 2007, and December 31, 2006, consisted of the following:









June
            
            December2007
            
            2006Furniture
                and fixtures
            $
            -
            
            $
            85,000Vehicles
            
            -
            
            
            14,712Computers
                and equipment
            
            -
            
            
            22,094-
            
            
            121,806Less
                accumulated depreciation and amortization
            
            (-)
            
            
            (103,719)-
            
            
            18,087Less
                expense for disposal of assets
            
            -
            
            
            (18,087)Total
            $
            -
            
            $
            -












The
      Company disposed of all property and equipment in the discontinuation of
      operations at Sespe Pharmacy and recorded $18,087 expense in connection with
      the
      disposal of these assets at December 31, 2006.









Depreciation
      and amortization expense for the six months ended June 30, 2007 and 2006, was
      $0
      and $12,064, respectively.  Depreciation expenses are reported as
      Other Expenses in “Loss from discontinued operations (Sespe)” in the
      accompanying financial statements (see Note 13).

















22











**8.           Accounts
      Payable and Accrued Expenses**









Accounts
      payable and accrued expenses at June 30, 2007 and December 31, 2006 consisted
      of
      the following:









June
                30, 2007
            
            December
                31, 2006Accounts
                payable
            $
            20,669
            
            $
            75,982Accrued
                professional and related fees
            
            71,800
            
            
            114,950Accrued
                officer’s compensation
            
            118,143
            
            
            118,143Accrued
                settlements
            
            25,692
            
            
            25,692Total
            $
            236,304
            
            $
            334,767





Accounts
      payable and accrued expenses of Sespe are reported as components of “Liabilities
      of discontinued operations (Sespe)” in the accompanying financial statements
      (see Note 13) and consisted of the following:.





2007
            
            2006Accounts
                payable
            $
            225,198
            
            $
            327,963Accrued
                liabilities
            
            1,175
            
            
            1,175Accrued
                payroll and related liabilities
            
            4,853
            
            
            37,340Accrued
                settlements
            
            7,024
            
            
            7,024Sales
                tax payable
            
            -
            
            
            43Total
            $
            238,250
            
            $
            373,545






**9.           Commitments
      and Contingencies**







Litigation





*Department
      of Health Services - Medi-Cal Action against Classic Care
      Pharmacy*





On
      April
      17, 2002 the Department of Health Services (“DHS”) notified the management of
      Classic Care Pharmacy that the Medi-Cal Program intended to withhold 100% of
      payments and temporarily suspend and deactivate the Classic Care Pharmacy
      Medi-Cal provider number.





The
      Department of Health Services (“DHS”) took this action after having reviewed the
      prescriptions on record at Classic Care Pharmacy.  The DHS stated that
      they had reviewed thirty-two prescriptions, and that two of the ten prescribing
      physicians had denied treating the patients and writing the
      prescriptions.  The DHS cited Classic Care Pharmacy for violations of
      CCR, Title 22, Sec.51476.1, (a) and 51476.1(a) (2), which states that written
      prescriptions must contain the name of the prescribing physician and their
      provider number.  Based on its findings the DHS and the Medical
      Program concluded that Classic Care Pharmacy might have intentionally committed
      fraud.





Classic
      Care management retained outside counsel shortly after receiving the DHS notice
      to review the Department of Health Services findings.  After reviewing
      the supporting DHS material, outside counsel






23





**9.           Commitments
      and Contingencies (continued)**







Litigation
      (continued)





informed
      Classic Care management that it believed the facts presented by the DHS were
      inaccurate and that its position was unfounded.  Classic Care
      management and its principle shareholders obtained written affidavits from
      most
      of the physicians whose prescriptions had been reviewed by the DHS confirming
      that they had treated the patients and did prescribe the
      medications.





On
      April
      29, 2002, outside counsel contacted the DHS to discuss its findings and present
      the documentation supporting their position.  DHS informed outside
      counsel that they would have to follow the standard appeal process, which
      normally requires two or more months to complete.  Classic Care
      Pharmacy instructed outside counsel to seek an ex parte temporary restraining
      order against the DHS for their failure to show cause regarding their
      actions.  On May 8, 2002, in the Superior Court for the state of
      California, the Court granted Classic Care’s ex parte request issuing a
      preliminary injunction against the DHS and reinstated Classic Care Pharmacy’s
      medical provider number.  The Court set May 24, 2002 as the date for
      the DHS to show cause.  On May 24, 2002, the DHS was still not
      prepared to show cause.  The court granted a 30-day
      extension.





Classic
      Care, Inc. and Classic Care Pharmacy administrative appeal
      failed.  Once the appeal took place the Superior court could no longer
      uphold our lack for due process claim and the DHS canceled Classic Care
      Pharmacy’s medical provider number.  The justice department took no
      further action against Classic Care Pharmacy.  The Company dissolved
      Classic Care, Inc. and Classic Care Pharmacy.





Kaire
      believes that it does not have any liability in this matter and has not provided
      any reserve for this matter.  The basis for this belief is the
      following: 1) the California Department of Health Services (“DHS”) claim is
      directed to Classic Care Pharmacy which was owned by Classic Care,
      Inc.  2) Classic Care Inc. is a separate legal entity and was operated
      by the prior owners, whom Kaire believes perpetrated the actions leading to
      the
      alleged claims, 3) Kaire was not involved nor was Kaire aware of the alleged
      overpayment to Classic Care Inc., 4) the alleged claim includes a period of
      time
      before Kaire was involved with Classic Care, Inc., thus precluding Kaire of
      any
      claim in that time period and 5) Kaire did not benefit in any way from the
      alleged overpayment.










See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**9.           Commitments
      and Contingencies (continued)**







Litigation
      (continued)





*H.D.
      Smith Wholesale Drug Company – Action for breach of contact and other various
      causes of action*





On
      April
      2, 2003, H.D. Smith filed a complaint against Classic Care, Inc., Kaire
      Holdings, Inc., Sarit Rubenstein, Steven Oscherowitz and Larisa Vernik for
      various causes of action relating amounts owed for certain drugs that were
      delivered to Classic Care.  H.D. Smith was seeking $430,205 plus
      interest.  On December 30, 2004, a settlement was reached where Kaire
      is obligated to pay the plaintiff $50,000.  Kaire’s payment obligation
      will mature upon court approval of the settlement, with $10,000 due immediately
      (paid July 8, 2005) and the balance paid based on 12 monthly installments of
      $3,077 (which includes interest of 7.50%) to commence shortly
      thereafter.  The balance owed as of December 31, 2006, and June 30,
      2007, was $25,692.  Kaire is currently in breach under this settlement
      agreement.








*McKesson
      Medical – Surgical Inc. v. Effective Health*





On
      January 20, 2005, McKesson Medical-Surgical, Inc. (“Plaintiff”) filed a
      complaint against Effective Health, Inc., a subsidiary of Kaire, for failure
      to
      pay the principal sum of $17,466 for goods and/or services.  A
      settlement was reached in October 2005 calling for Effective Health to pay
      $2,000 upon execution and $1,300 a month until the balance is paid
      off.  The balance owed as of December 31, 2006, and June 30, 2007, was
      $1,375, and is included in the accompanying financial statements as a component
      of “Liabilities of discontinued operations (Sespe)” (see Note 13).








*Ventura
      County Superior Court, Case No. CIV234713*





On
      June
      27, 2005, Independent Pharmacy Cooperative (“IPC”) filed a complaint in the
      Superior Court of California, County of Ventura, Case No. CIV234713, against
      EHI.  IPC alleged that EHI failed to pay the principal sum of $12,587
      for staffing services rendered.





The
      parties to that action entered into a settlement and mutual release agreement
      in
      October 2005, wherein EHI agreed to pay the aggregate sum of $12,587 in
      accordance with structured terms spanning over approximately eight (8)
      months.  Although most of that sum has been paid, EHI defaulted and,
      on or about October 5, 2006, IPC obtained a default judgment against EHI for
      the
      principal sum.  The balance owed as of December 31, 2006, and June 30,
      2007, was $5,649, and is included in the accompanying financial statements
      as a
      component of “Liabilities of discontinued operations (Sespe)” (see Note
      13).








*Medical
      License*







The
      Department of Health Services (“DHS”) denied Sespe’s application (including a
      subsequent appeal) for a MediCal provider number and on February 22,
      2006.  Sespe billed MediCal using the prior owner’s provider number
      pursuant through a power of attorney.  The prior owner’s number was
      cancelled on May 1, 2006.  Going forward, Kaire focused on signing up
      non Medi-Cal clients.  However, ramping sales up to a break-even point
      was taking too long and management decided to take Kaire in a new
      direction.  The pharmacy’s operations were shut down on February 4,
      2007.


See
            accompanying notes.
 25
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**9.           Commitments
      and Contingencies (continued)**







Litigation
      (continued)





*Pharm-Aid,
      Inc. v. Effective Health, Inc., et al.*





On
      October 2, 2006, Pharm-Aid, Inc. (“Pharm-Aid”) filed a complaint in the Superior
      Court of California, County of San Diego, Case No. GIN056019, against
      EHI.





Pharm-Aid
      alleges that EHI has failed to pay the principal sum of $25,279 for staffing
      services rendered.  Given the fact that EHI was served on October 26,
      2006, the Company’s counsel feels that they have not gathered sufficient facts
      in order to render an opinion as to the validity of Pharm-Aid’s
      claim.  The Company had recorded a liability which was included in the
      accompanying financial statements as a component of “Liabilities of discontinued
      operations (Sespe)” as of December 31, 2006.  However, Pharm-Aid
      withdrew the Judgment.  The recorded liability has been removed
      accordingly, and the Company recorded $25,279 other income related to
      forgiveness of debt, which is included in the accompanying financial statements
      as a component of “Income (loss) from discontinued operations – Sespe” (see Note
      13).





Except
      as
      otherwise specifically indicated above, management believes that the Company
      does not have any material liability for any lawsuits, settlements, judgments,
      or fees of defense counsel which have not been paid or accrued as of December
      31, 2006, or June 30, 2007.








Leases





*Operating
      leases*





In
      January 2003, Kaire entered into an operating lease agreement for the pharmacy
      in Fillmore, California, which served as its corporate
      headquarters.  At the time the pharmacy facility was approximately 843
      square feet with a monthly payment of $1,170.  In May 2004 Kaire
      expanded its space to approximately 1,115 square feet, with a monthly payment
      of
      $1,520 and in March 2005 Kaire expanded its space to approximately 1,800 square
      feet, with a monthly payment of $2,245 a month.  The lease was to
      continue through the original initial lease term of five years.  Kaire
      had options to renew the lease for two five-year periods and to purchase the
      facility at its estimated fair market value at any time during the lease
      term.  However, Santa Paula Memorial Hospital, the holder of the
      master lease, filed for chapter 11 Bankruptcy protection, and the court rejected
      including the lease in bankruptcy.  Kaire decided not to sign a new
      lease and assumed a month-to-month lease.  As of February 4, 2007,
      Kaire vacated this facility.





Rent
      expense for the six months ended June 30, 2007 and 2006, was $5,000 and $16,285,
      respectively, and is included in the accompanying financial statements as a
      component of “Loss from discontinued operations (Sespe)” (see Note
      13).


See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**9.           Commitments
      and Contingencies (continued)**







Employment
      Agreements





*Chief
      Executive Officer Compensation*





Effective
      April 1, 2005, Kaire agreed to a new three year agreement with its Chief
      Executive Officer, Mr. Steven Westlund.  The agreement calls for a
      monthly salary of $8,333 per month, with annual increases equaling 15% of the
      base salary.  In addition, on November 1, 2005 he received a 5 year
      option to purchase 12 million shares of the Company’s common stock, at an option
      price of $0.05 per share.









Mr.
      Westlund also receives a commission of 3% of the merger price for any mergers
      or
      acquisitions completed by the Company during the term of the
      agreement.





This
      agreement was cancelled pursuant to the Letter Of Intent executed with H&H
      Glass on January 23, 2007.








Consulting
      Agreements





The
      Company has various consulting agreements that provide for issuance of the
      Company’s common stock and/or stock options/stock purchase warrants in exchange
      for services rendered by the consultants.  These agreements relate
      primarily to raising of capital, accounting services, legal services, and
      professional services rendered in connection with the Company’s acquisition
      efforts.  The Company has no amounts due under these agreements as of
      June 30, 2007 and December 31, 2006.











**10.           Stock
      Options and Warrants**







In
      January 2005, the Company adopted the provisions of SFAS Nos. 123R using the
      prospective method.





The
      Company did not grant any options to employees for the periods ending June
      30,
      2007 and December 31, 2006.  No employee stock options were
      outstanding or exercisable at June 30, 2007 and December 31, 2006.





Options
      and warrants are granted at prices that are equal to the current fair value
      of
      the Company’s common stock at the date of grant.  The Company records
      compensation expense on options granted at prices below the current fair market
      value.  The vesting period is usually related to the length of
      employment or consulting contract period.





In
      2005
      the Company granted warrants convertible into the Company’s common stock
      pursuant to the issuance of convertible debentures.  The fair value of
      these warrants was estimated at the date of grant using the Black-Scholes
      option-pricing model with the following weighted-average assumptions for the
      years ended December 31, 2006; dividend yield of 0%; expected volatility of
      250%; risk-free interest rate of 5.5%; and expected life of 5
      years.  December 31, 2005; dividend yield of 0%; expected volatility
      of 250%; risk-free interest rate of 5.5%; and expected life of 5
      years.


See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**10.           Stock
      Options and Warrants (continued)**





The
      Black-Scholes option valuation model was developed for use in estimating the
      fair value of traded options, which have no vesting restrictions and are fully
      transferable.  In addition, option valuation models require the input
      of highly subjective assumptions including the expected stock price
      volatility.  Because the Company’s employee stock options have
      characteristics significantly different from those of traded options, and
      because changes in the subjective input assumptions can materially affect the
      fair value estimate, in management’s opinion, the existing models do not
      necessarily provide a reliable single measure of the fair value of its stock
      options.  The weighted-average fair value of warrants granted during
      the year ended December 31, 2006 and 2005, were $0.06 and $0.06,
      respectively.





In
      February 2006, the Company granted a five-year warrant to purchase up to
      12,000,000 shares of the Company’s common stock at an exercise price of
      $0.05.  The warrant was issued to a consultant as compensation for
      certain functions to be performed.  The Company recorded $222,606 of
      consulting expense in connection with this warrant.  The warrant was
      cancelled on January 9, 2007.  The fair value of this warrant was
      estimated at the date of grant using the Black-Scholes option-pricing model
      with
      the following weighted-average assumptions; dividend yield of 0%; expected
      volatility of 153%; risk-free interest rate of 3.5%; and expected life of 5
      years.  This warrant was cancelled in January 2007.





The
      following table summarizes information with respect to stock warrants
      outstanding and exercisable at June 30, 2007:







Warrants
                Outstanding
            
            Warrants
                ExercisableRange
                of Exercise
              Prices
            
            Number
              Outstanding
                as of June 30, 2007
            
            Weighted
              Average
              Remaining
                Contractual Life
            
            Weighted
              Average
              Exercise
              Price
            
            Number
                Exercisable as of June 30, 2007
            
            Weighted
              Average
              Exercise
              Price$0.03
                - $0.17
            
            25,972,221
            
            2.83
            
            $
            0.06
            
            25,972,221
            
            $
            0.0625,972,221
            
            2.21
            
            $
            0.06
            
            25,972,221
            
            $
            0.06








The
      following table summarizes information with respect to stock warrants
      outstanding and exercisable at December 31, 2006:







Warrants
                Outstanding
            
            Warrants
                ExercisableRange
                of Exercise
              Prices
            
            Number
              Outstanding
                as of December 31, 2006
            
            Weighted
              Average
              Remaining
                Contractual Life
            
            Weighted
              Average
              Exercise
              Price
            
            Number
                Exercisable as of December 31, 2006
            
            Weighted
              Average
              Exercise
              Price$0.03
                - $0.17
            
            37,972,221
            
            3.21
            
            $
            0.06
            
            37,972,221
            
            $
            0.0637,972,221
            
            3.21
            
            $
            0.06
            
            37,972,221
            
            $
            0.06







See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**10.           Stock
      Options and Warrants (continued)**







The
      following summarizes the Company’s stock option and warrants
      activity:









Warrants
              And
              Stock
                Options
              Outstanding
            
            Weighted
              Average
              Exercise
              PriceOutstanding
                December 31, 2005
            25,972,221
            
            $
            0.06Granted
                February 28, 2006
            12,000,000
            
            $
            0.05Exercised
            -
            
            $
            -Expired/Cancelled
            -
            
            $
            -Outstanding
                December 31, 2006
            37,972,221
            
            $
            0.06Granted
                2007
            -
            
            $
            -Exercised
            -
            
            $
            -Expired/Cancelled
            (12,000,000)
            
            $
            0.05Outstanding
                June 30, 2007
            25,972,221
            
            $
            0.06








The
      Company has 25,972,221 warrants outstanding as of June 30, 2007, and 37,972,221
      as of December 31, 2006.  The weighted exercise price of the
      outstanding warrants as of June 30, 2007 is $0.06.  The outstanding
      warrants have a clause that causes the exercise price can be adjusted down
      by
      the Company upon certain Company actions.  The warrants expire 5 years
      from the original date of grant.  The Company has not repriced any
      warrants as of June 30, 2007.











**11.           Loss
      per Share**









Earnings
      per share have been calculated using the weighted average number of shares
      outstanding during each period.  As of June 30, 2007 and 2006,
      potentially dilutive securities consist of convertible debentures convertible
      into 179,298,000 and 179,298,000 common shares and warrants convertible into
      25,972,221 and 37,972,221 shares respectively.  Earnings per
      share-dilutive does not include the effect of potentially dilutive securities
      for the periods ended June 30, 2007 and 2006.  The loss from
      operations for the period ended June 30, 2007, and the loss from operations
      and
      the net loss for the period ended June 30, 2006, make these securities
      anti-dilutive.





See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**


**12.           Discontinued
      Operations – Classic Care, Inc.**





In
      December 2002, the Company decided to voluntarily dissolve Classic Care, Inc.
      dba Classic Care Pharmacy as a result of sanctions by the pharmacy management
      of
      the Department of Health Services and the subsequent suspension of the Medi-Cal
      license.  The Company ceased all operations of Classic Care effective
      January 2003 and the disposal date of Classic Care was May 2003.  The
      results of Classic Care’s operations have been reported separately as
      discontinued operations in the Statements of Operations.





In
      January 2003, after a failed effort to rebuild Classic Care Pharmacy, all
      operations at Classic Care Pharmacy ceased and Classic Care, Inc was
      dissolved.  Additionally, the logistical issues created by moving the
      pharmacy operations to Fillmore, California, made it difficult to provide the
      level of personal attention required to service individual HIV clients in the
      Health Advocate HIV program.  The combination of a declining HIV
      client base due to the logistical problems of providing the level of personal
      attention required to service each HIV client (i.e. clients were transferring
      their business to a more conveniently located pharmacy) lead to the decision
      to
      phase out the Health Advocate HIV program.





There
      was
      no income or loss related to the discontinued operations of Classic Care during
      the six months ended June 30, 2006.  During the three months ended
      June 30, 2007, the Company recorded $1,600 expense for the payment of fees
      to
      the Franchise Tax Board.













**13.           Discontinued
      Operations – Sespe Pharmacy (Effective Health, Inc.)**





In
      November 2002, the Company, through its subsidiary Effective Health, Inc.,
      purchased certain assets of Sespe Pharmacy, a privately-held company located
      in
      Fillmore, California.  The asset acquisition was concluded on January
      26, 2003.  In February 2007, the Company decided to voluntarily
      dissolve Sespe Pharmacy.  The Company ceased all operations of Sespe
      effective February 4, 2007.  The results of operations of Sespe have
      been reported separately as discontinued operations.  For financial
      reporting purposes, the assets and liabilities of Sespe have been classified
      in
      the accompanying Balance Sheets as of June 30, 2007 and December 31, 2006,
      under
“Liabilities of discontinued operations (Sespe)” and comprise the
      following:





June
                30, 2007
            
            December
                31, 2006Assets:Cash
            $
            31
            
            $
            43Accounts
                receivable
            
            -
            
            
            7,168Inventory
            
            -
            
            
            46,454Total
                assets
            $
            31
            
            $
            53,665Liabilities:Accounts
                payable and accrued expenses
            $
            (238,250)
            
            $
            (373,545)Note
                payable – related party
            
            -
            
            
            (4,360)Total
                liabilities
            $
            (238,250)
            
            $
            (377,905)Net
                Assets (Liabilities) of Discontinued Operations
            $
            (238,219)
            
            $
            (324,240)





See
            accompanying notes.
 
 **Kaire
            Holdings Incorporated**
 **and
            Subsidiaries**
 **Notes
            to Consolidated Financial Statements**
 **june
            30, 2007**





**13.           Discontinued
      Operations – Sespe Pharmacy (Effective Health, Inc.)
      (continued)**







The
      following is a breakdown of the operations of Sespe Pharmacy discontinued
      operations for the six month period ended June 30, 2007 and 2006:







2007
            
            2006Revenues
            $
            -
            
            $
            373,679Cost
                of sales
            
            -
            
            
            (277,372)Operating
                expenses
            
            (51,895)
            
            
            (217,372)Other
                income
            
            94,779
            
            
            -Other
                expense
            
            (1,600)
            
            
            (12,864)Net
                Income (loss)
            $
            41,284
            
            $
            (133,929)











**14.           Subsequent
      Events**







Merger
      with H&H Glass Corporation





On
      January 23, 2007, Kaire Holdings Corporation’s and its wholly-owned subsidiary
      YesRx.com executed a Letter of Intent whereby YesRx.com will acquire all of
      the
      outstanding Stock of H&H Glass Corporation, an Illinois
      corporation.  The terms of the acquisition includes the issuance of
      828,000,000 shares common stock of the Company; appointment of two or more
      additional members to the Company’s Board of Directors; and restructuring of the
      Company’s existing convertible debt into zero coupon fixed rate convertible
      preferred shares with a two year hold on any conversions.  The
      Agreement and Plan of Merger was consummated on July 2, 2007.  The
      audit of the H&H Glass Corporation’s financial statements is still in
      process.









































See
            accompanying notes.


**Item
      2.                      Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.**





Plan
      of Operation





Our
      general operating plan up until December 31, 2006 was focused on delivering
      specialized programs and services targeted areas within the senior and chronic
      health care market.  However, the loss of our Medi-Cal provider number
      and the inability to ramp up non-medical business to a level that would sustain
      a publicly traded entity, we decided that in 2007 we needed to change the
      direction of the business.  Therefore, in 2007 we have done the
      following to date:





·
            On
                January 23, 2007, Kaire Holdings, Inc., through its subsidiary YesRx.com,
                signed a letter of intent to acquire H&H Glass, an Illinois
                corporation, which was formed in 1989 and distributes Asian glass
                to North
                America.  In fiscal year December 31, 2005, H&H Glass had
                net revenues of approximately $13.5 million and net earnings of
                approximately $0.5 million.  This acquisition was consummated on
                July 2, 2007 with the execution of the Agreement and Plan of Merger
                by the
                parties.





·
            On
                February 4, 2007, Kaire Holdings, Inc. discontinued its pharmacy
                business
                and voluntarily terminated its Effective Health, Inc.
                subsidiary.





·
            On
                February 21, 2007, Kaire Holdings, Inc., appointed two members to
                its
                Board of Directors who have the credentials to guide Kaire Holdings,
                Inc.
                in its new direction.





Based
      on
      the above three factors, management will be proceeding with the following
      plan:





Short
      Term





·
            Continue
                growing revenue and profits through the existing
                business;





·
            Expand
                the new business model to include other areas that fall within our
                distribution expertise;





Long
      Term





·
            Once
                our business model is in place and successful, use it to attract
                other
                successful China companies as acquisition
                candidates.





Concerning
      working capital, historically our revenues have been insufficient to cover
      the
      cost of running Kaire Holdings operations and pay its non-operational
      costs.   However as of February 4, 2007, the pharmacy operation
      was shut down and all costs related to that operation were also
      discontinued.   We estimated that an additional $250,000 in funds
      would be needed to carry us through until the acquisition should be in
      place.  Two promissory notes were issued on February 15, 2007 for an
      aggregate of $250,000 to cover those needs.








Results
      of Operations





Three
      and Six Months Ended June 30, 2007 Compared to June 30, 2006





Revenue:





Revenue
      is part of discontinued operations which are discussed below.








32


Cost
      of Goods Sold:





Cost
      of
      goods sold is part of discontinued operation which are discussed
      below.








Gross
      Profit:





Gross
      profit is part of discontinued operation which are discussed below.








Operating
      Expenses:





The
      pharmacy’s operating expenses are part of discontinued operations and will be
      shown below.





Operating
      expenses for the three and six month period ended June 30, 2007 were $18,511
      and
      $51,281 respectively for a decrease of $79,672 (81.2%) and $350,732 (87.2%)
      respectively from the same period prior year.  The $350,732 decrease
      in operating expenses was mostly attributable to decreases in the following:
      1)
      salaries and related expenses of $24,950 (49.9%) and 2) general administration
      of $300,782 (85.4%) a result of the discontinuing of pharmacy operations. The
      $300,782 decrease in general and administrative expense was primarily due to
      consulting expense recorded in 2006 in connection with warrants issued to a
      consultant in exchange for professional services valued at
      $222,606.  These warrants were cancelled in January
      2007.  In addition the decrease in operating expenses included
      decreases in 1) accounting expenses of  $32,133 (46.0%), 2) consulting
      expenses of $22,500 (100.0%), 3) legal expenses of $29,899 (93.4%) offset by
      an
      increase of $6,406 (128.2%) in miscellaneous expenses.





Other
      Income (Expense):





Interest
      expenses for the three and six month period ended June 30, 2007 was $0 and
      $0
      respectively for a decrease of $43,031 (100.0%) and $83,520 (100.0%)
      respectively from the same period prior year due to a freeze on interest charges
      on the convertible debt as part of the acquisition of H&H
      Glass.  Warrant liability income/(expense) for the three and six month
      period ended June 30, 2007 was ($27,655) and $29,635 respectively for a decrease
      of $88,947 (145.1%) and $126,658 (81.0%) respectively over the same period
      prior
      year.  This change was due to an increase in the valuation of the
      warrant liability for the quarter, but a decrease in the valuation for the
      six
      month period due to the cancellation of 12,000,000 warrants in the first
      quarter.  Derivative liability income for the three and six month
      periods ending June 30, 2007 $135,386 and $725,152 for an increase of $49,103
      (56.9%) and $771,143 (1,676.7%) respectively over the same period prior
      year.  This increase was a result of an increase in the valuation of
      the derivative liability.  Accretion of convertible debt discount
      expense for the three and six month periods ending June 30, 2007 was $66,956
      and
      $151,070 for a decrease of $53,339 (44.3%) and $100,473 (39.9%) respectively
      over the same period prior year.  The decrease is a result an increase
      in the valuation of the derivative liability.  Debt issuance costs for
      the three and six month period ending June 30, 2007 was $1,447 and $6,906 for
      a
      decrease of $11,805 (89.1%) and $18,449 (72.8%) respectively over the same
      period prior year, which is a result of the costs associated with the issuance
      of additional debt subsequent to June 30, 2005 becoming fully amortized during
      the current quarter.





Discontinued
      Operations:





Classic
      Care:  During
      the three months ended June 30, 2007, California state franchise taxes for
      the
      year 2005 and 2006 of $800 per year were paid for an aggregate of
      $1,600.  There was no equivalent expense recorded in the same period
      in 2006.








33


Sespe
      Pharmacy (Effective Health,
      Inc.):





Revenue





Net
      revenue from Sespe Pharmacy discontinued operations for the three and six month
      periods ended June 30, 2007 was $0 and $0, respectively, as compared to $87,593
      and $373,679 for the same periods in 2006, or a decrease of $87,593 (100.0%)
      and
      $373,679 (100.0%).   The decrease in sales is a result of the
      discontinuation of the pharmacy business as of February 4, 2007.





Cost
      of Goods Sold





Cost
      of
      goods sold from Sespe Pharmacy discontinued operations for the three- and
      six-month period ended June 30, 2007, was $0 and $0, respectively, as compared
      to $64,008 and $277,372 for the same periods in 2006, or a decrease of $64,008
      (100.0%) and $277,372 (100.0%).  The decrease in cost of goods sold is
      a result of the discontinuation of the pharmacy business as of February 4,
      2007.








Operating
      Expenses:





Operating
      expenses from Sespe Pharmacy discontinued operations for the three- and six-
      month periods ending June 30, 2007 was $51,895 compared to expenses of $102,402
      and $217,372 for the same periods in 2006, respectively, or a decrease of
      $102,402 (100.0%) and $165,477 (76.1%), respectively.   The
      decrease in operating expenses is a result of the discontinuation of the
      pharmacy business as of February 4, 2007.





Other
      Income:





Other
      income from Sespe Pharmacy discontinued operations for the three- and six-month
      periods ending June 30, 2007, was $23,679 and $94,779, respectively, compared
      to
      $0 and $0 for the same periods in 2006.  This other income was
      entirely due to the write off of accounts payable related to services that
      would
      no longer be provided due to the discontinuation of the pharmacy business in
      February 2007 plus the write off of legal reserves for a judgment that was
      released.





Other
      Expense:





Other
      expenses from Sespe Pharmacy discontinued operations for the three- and
      six-month periods ending June 30, 2007, were $1,600 and $1,600 compared to
      $6,911 and $12,864, respectively for the same periods in 2006, or a decrease
      of
      $5,311 (76.9%) and $11,264 (87.6%).  The decrease in other expense is
      entirely due to depreciation expense related to the property, plant and
      equipment which was disposed of as a result of the discontinuation of the
      pharmacy business as of February 4, 2007 offset by the payment of California
      state franchise taxes for the year 2005 and 2006 of $800 per year for an
      aggregate of $1,600.





Federal
      Income Tax





No
      provision was made for Federal income tax since the Company has incurred
      significant net operating losses from inception. Through the six month period
      ending June 30, 2007, the Company incurred a net income after discontinued
      operations for tax purposes of approximately $585,214. The net operating loss
      carry forward may be used to reduce taxable income through the year 2014. The
      Company's tax returns have not been audited by the Internal Revenue Service.
      The
      carry forward amounts may therefore be subject to audit and adjustment. As
      a
      result of the Tax Reform Act, the availability of net operating loss carry
      forwards can be deferred, reduced or eliminated under certain circumstances.
      Net
      operating losses in the State of California were not available for use during
      1992 and the carry forward period has generally been reduced from fifteen years
      to five years








The
      decision to discontinue operations was based on our inability to adequately
      grow
      revenues through none Medi-Cal clients.  That being the case, we
      decided to change business directions in 2007 in an industry that had fewer
      road
      blocks.  That decision resulted in the acquisition of H&H Glass by
      our YesRx.com subsidiary consummated on July 2, 2007.





Liquidity
      and Capital Resources





Cash
      flow
      used in operations for the six month period ending June 30, 2007 amounted to
      ($196,082), which mainly consisted of the following:  1) gain from the
      change in derivative liability of $725,152, 2) gain from the change in warrant
      liability of $29,635, 3) decrease in account payable and accrued expenses of
      $98,464 and 4) a decrease in liabilities of discontinued – Sespe of $87,837
      offset by the following: 1) the net profit for the six months ending June 30,
      2007 of $585,214, 2) accretion of convertible debt discount of $151,070, 3)
      gain
      from discontinued operations – Sespe of $1,816 4) amortization of deferred
      financing costs of $6,906.





Net
      cash
      used in investing activities for the six month period ending June 30, 2007
      was
      $nil.









Net
      cash
      generated from financing activities for the six month period ending June 30,
      2007 was $250,000 which consisted primarily of proceeds from notes payable
–
shareholder of $50,000 and proceeds from a third party loan of
      $200,000.









On
      June
      30, 2007 the Company had total assets of $53,918 compared to $6,906 on December
      31, 2006, an increase of $47,012 or 680.7%.  The Company had a
      total stockholder's deficit of $4,429,578 on June 30, 2007, compared to a
      stockholders deficit of $5,014,791 on December 31, 2006, a decrease of $585,213
      or 11.7%.  As of June 30 , 2007 the Company's working capital position
      increased by $585,213 (11.7%) from a working capital deficit of $5,014,791
      at
      December 31, 2006 to a working capital deficit of $4,429,578 at June 30, 2007.
      This result was attributed primarily to


1)
      increase in cash of $53,918 (no cash at December 31, 2006), 2) decrease in
      accounts payable and accrued expenses of $98,463 (29.4%), 3) decrease in the
      derivative liability of $725,152 (42.6%), 4) decrease in the warrant liability
      of $29,635 (21.6%), and 5) a decrease in discontinued operation liabilities
      of
      $86,021 (26.5%), offset by 1) a decrease in deferred financing costs of $6,906
      (100.0%), 2) an increase in advances from shareholders of $50,000 (50.4%),
      3) an
      increase in notes payable of $200,000 (no such loan at December 31,
      2006),and  4) a decrease in convertible debt discount  of
      $151,070 (7.8%).





Estimated
      future cash requirements





Over
      the
      next twelve months, management is of the opinion that sufficient working capital
      will be obtained from operations and external financing to meet our operating
      needs however it is unlikely that there will be sufficient capital to meet
      our
      non operational needs.  Kaire Holdings basically has no operating
      expenses and as of July 2, 2007 it acquired  H&H Glass through its
      subsidiary YesRx.com, which is profitable and has a positive cash
      flow.  More information will be available upon the completion of the
      audit of H&H Glass.  However, management anticipates that H&H
      Glass will have adequate cash flow over the next twelve months without the
      need
      for outside capital.







35


Going
      Concern





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern.  However, though the Company has a profit
      for the six months ended June 30, 2007 of $585,214 as a result of gains in
      warrant and derivative liabilities, it has experienced a loss of $764,760 for
      the same period prior year.  The Company has also experienced net
      losses of $1,313,551 and $2,160,123 for the years ended December 31, 2006 and
      2005, respectively.  The Company also had a net working deficit of
      $4,429,578 and $5,014,791 for the periods ended June 30, 2007 and December
      31,
      2006 respectively.  Additionally, the Company must raise additional
      capital to meet its working capital needs.  These factors raise
      substantial doubt about the Company’s ability to continue as a going
      concern.  In view of the matters described above, recoverability of a
      major portion of the recorded asset amounts shown in the accompanying balance
      sheet is dependent upon the Company’s ability to generate sufficient sales
      volume to cover its operating expenses and to raise sufficient capital to meet
      its payment obligations.  The financial statements do not include any
      adjustments relating to the recoverability and classification of recorded asset
      amounts, or amounts and classification of liabilities that might be necessary
      should the Company be unable to continue in existence.







Management
      has previously relied on equity financing sources and debt offerings to fund
      operations.  The Company’s reliance on equity and debt financing will
      continue, and the Company will continue to seek to enter into strategic
      acquisitions.  On March 29, 2005, Kaire issued a $125,000, 8% interest
      per annum, one-year convertible note to the Longview Fund LP.  On June
      23, 2005, Kaire issued three two-year convertible notes for an aggregate of
      a
      $350,000, 8% interest per annum, to the following: 1) $100,000 to the Longview
      Fund LP., $175,000 to the Longview Equity Fund LP, and 3) $75,000 to the
      Longview International Equity Fund, LP.  On December 13, 2005 Kaire
      issued a $150,000, 12% interest per annum, two-year convertible note to the
      Longview Fund LP.  Kaire also issued the following: 1) On March 13,
      2006 Kaire issued a $100,000, 12% interest per annum, two-year convertible
      note
      to the Longview Fund LP, and 2) On April 11, 2006 Kaire issued a $100,000,
      12%
      interest per annum, two-year convertible note to the Longview Fund
      LP.





On
      February 16, 2007, Kaire issued two promissory notes, 8% interest per annum
      to
      the following: 1) $200,000 to the Longview Fund LP, and 2) $50,000 to Naccarato
      & Associates.  These notes mature on October 1, 2007.





Also,
      on
      July 2, 2007 an Agreement and Plan of Merger was executed between Kaire Holdings
      Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass, whereby
      YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.







ITEM 3.
      CONTROLS AND PROCEDURES




(a)       
      Our Chief Executive Officer and Chief Financial Officer have evaluated the
      effectiveness of our disclosure controls and procedures (as such term is defined
      in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended
      (the “Exchange Act”)) as of the end of the period covered by this quarterly
      report (the “Evaluation Date”). Based on such evaluation, such officers have
      concluded that, as of the Evaluation Date, our disclosure controls and
      procedures are effective in alerting them on a timely basis to material
      information relating to our Company (including our consolidated subsidiaries)
      required to be included in our reports filed or submitted under the Exchange
      Act.





(b)       
      Changes in Internal Controls over Financial Reporting. During the most recent
      fiscal quarter, there have not been any changes in our internal controls over
      financial reporting or in other factors that have materially affected, or are
      reasonably likely to materially affect, our internal controls over financial
      reporting.  The Company removed its independent financial officer in
      February 2007 and has not retained a replacement as of the date of this filing
      which we consider to be a material weakness





36




Disclosure
      controls and procedures, no matter how well designed and implemented, can
      provide only reasonable assurance of achieving an entity's disclosure
      objectives. The likelihood of achieving such objectives is affected by
      limitations inherent in disclosure controls and procedures. These include the
      fact that human judgment in decision-making can be faulty and that breakdowns
      in
      internal control can occur because of human failures such as simple errors
      or
      mistakes or intentional circumvention of the established process.







PART
      II.  OTHER INFORMATION







**Item
      1.                      Legal
      Proceedings**





Department
      of Health Services - Medi-Cal Action Against Classic Care
      Pharmacy





On
      April
      17, 2002 the Department of Health Services (“DHS”) notified the management of
      Classic Care Pharmacy that the Medi-Cal Program intended to withhold 100% of
      payments and temporarily suspend and deactivate the Classic Care Pharmacy
      Medi-Cal provider number.





The
      Department of Health Services ("DHS") took this action after having reviewed
      the
      prescriptions on record at Classic Care Pharmacy. The DHS stated that they
      had
      reviewed thirty-two prescriptions, and that two of the ten prescribing
      physicians had denied treating the patients and writing the prescriptions.
      The
      DHS cited Classic Care Pharmacy for violations of CCR, Title 22, Sec.51476.1,
      (a) and 51476.1(a)(2), which states that written prescriptions must contain
      the
      name of the prescribing physician and their provider number. Based on its
      findings the DHS and the Medical Program concluded that Classic Care Pharmacy
      might have intentionally committed fraud.





Classic
      Care management retained outside counsel shortly after receiving the DHS notice
      to review the Department of Health Services findings. After reviewing the
      supporting DHS material, outside counsel informed Classic Care management that
      it believed the facts presented by the DHS were inaccurate and that its position
      was unfounded. Classic Care management and its principle shareholders obtained
      written affidavits from most of the physicians whose prescriptions had been
      reviewed by the DHS confirming that they had treated the patients and did
      prescribe the medications.





On
      April
      29, 2002, outside counsel contacted the DHS to discuss its findings and present
      the documentation supporting their position. DHS informed outside counsel that
      they would have to follow the standard appeal process, which normally requires
      two or more months to complete. Classic Care Pharmacy instructed outside counsel
      to seek an ex parte temporary restraining order against the DHS for their
      failure to show cause regarding their actions. On May 8, 2002, in the Superior
      Court for the state of California, the Court granted Classic Care’s ex parte
      request issuing a preliminary injunction against the DHS and reinstated Classic
      Care Pharmacy’s medical provider number. The Court set May 24, 2002 as the date
      for the DHS to show cause. On May 24, 2002, the DHS was still not prepared
      to
      show cause. The court granted a 30-day extension.





Classic
      Care, Inc. and Classic Care Pharmacy administrative appeal
      failed.  Once the appeal took place the Superior court could no longer
      uphold our lack for due process claim and the DHS canceled Classic Care
      Pharmacy’s medical provider number.  The justice department has not
      taken any further action against Classic Care Pharmacy.  Subsequently
      we dissolved Classic Care, Inc. and Classic Care. .





Kaire
      believes that it does not have any liability in this matter and has not provided
      any reserve for this matter.  The basis for this belief is the
      following: 1) the California Department of Health Services (“DHS”) claim is
      directed to Classic Care Pharmacy which was owned by Classic Care,
      Inc.  2) Classic Care Inc. is a separate legal entity and was operated
      by the prior owners, whom Kaire believes perpetrated the actions leading to
      the
      alleged claims, 3) Kaire was not involved nor was Kaire aware of the alleged
      overpayment to Classic Care Inc., 4) the alleged claim includes a period of
      time
      before Kaire was involved with Classic Care, Inc., thus precluding Kaire of
      any
      claim in that time period and 5) Kaire did not benefit in any way from the
      alleged overpayment.







37


H.D.
      Smith Wholesale Drug Company – Action for breach of contact and other various
      causes of action





On
      April
      2, 2003, H.D. Smith filed a complaint against Classic Care, Inc., Kaire
      Holdings, Inc., Sarit Rubenstein, Steven Oscherowitz and Larisa Vernik for
      various causes of action relating amounts owed for certain drugs that were
      delivered to Classic Care.   H.D. Barnes is seeking $430,205 plus
      interest.   On December 30, 2004 a settlement was reached where
      Kaire is obligated to pay the plaintiff $50,000.  Kaire’s payment
      obligation will mature upon court approval of the settlement, with $10,000
      due
      immediately (paid July 8, 2005) and the balance paid based on 12 monthly
      installments of $3,077.06 (which includes interest of 7.50%) to commence shortly
      thereafter.  The balance owed as of June 30, 2006 was
      $27,692.   Kaire is currently in breach of this court due to lack
      of funds to make payments.




McKesson
      Medical – Surgical Inc. v. Effective Health





On
      January 20, 2005, McKesson Medical-Surgical, Inc. (“Plaintiff”) filed a
      complaint against Effective Health, Inc., a subsidiary of Kaire, for failure
      to
      pay the principal sum of $17,466 for goods and/or services.   A
      settlement was reached in October 2005 calling for Effective Health to pay
      $2,000 upon execution and $1,300 a month until the balance is paid
      off.





Except
      as
      otherwise specifically indicated above, we believe that we do not have any
      material liability for any lawsuits, settlements, judgments, or fees of defense
      counsel which have not been paid or accrued as of March  31,
      2006.







ITEM
      2.                              Changes
      in Securities and Use of Proceeds






On
      June
      23, 2005, we issued three convertible notes for and aggregate of $350,000,
      8%
      interest per annum.  These notes mature in two years.  The
      Conversion Price per share shall be the lesser of (i) $.03 or (ii) eighty (80%)
      of the average of the closing bid prices for the five (5) trading days prior
      to
      but not including the conversion date for the common stock.   In
      addition we to the investors warrants to purchase   5,833,332
      shares of the common stock at a per share purchase price of
      $0.04.  The proceeds from this convertible note were used for working
      capital needs




On
      April
      25, 2006, we issued 550,000 shares to Roe Serrano pursuant to a labor
      settlement.  The stock was valued at $.032 per share or
      $17,600.





On
      April
      25, 2006, we issued an aggregate of 4,986,364 shares to consultants for services
      rendered, valued at $.028 per share or $139,618.





ITEM
      3.                  Defaults
      Upon Senior Securities





None





ITEM
      4.                  Submission
      of Matters of a Vote to Security Holders





None





ITEM
      5.                  Other
      Information





None





38


ITEM
      6.                  Exhibits
      and Reports on Form 8-K:








a)
      Exhibits





31.1  Certification
      of the Chief Executive Officer pursuant to Rule 13a-14(a)


(
      Section 302 of the
      Sarbanes-Oxley Act of 2002)





31.2  Certification
      of the Chief Financial Officer pursuant to Rule 13a-14(a)


(
      Section 302 of the
      Sarbanes-Oxley Act of 2002)





32.1  Certification
      of the Chief Executive
      Officer pursuant to 18 U.S.C.ss.1350


(Section
      906 of the Sarbanes-Oxley Act
      of 2002)





32.2  Certification
      of the Chief Financial
      Officer pursuant to 18 U.S.C.ss.1350


(Section
      906 of the Sarbanes-Oxley Act
      of 2002)





(b)           Reports
      on Form 8-K:





None

















SIGNATURES











Pursuant
      to the requirements of 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.








KAIRE
      HOLDINGS INCORPORATED.


(Registrant)











Date:  August
      17,
      2007                                                      By:
/s/Steven  R.Westlund


Steven
      Westlund


Chief
      Executive Officer, Chairman



































39