The following discussion and analysis should be read in conjunction with the financial statements and the accompanying notes thereto and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere. See "Financial Statements."

Results of Operations

The following table presents, as a percentage of sales, certain selected financial data for the two fiscal years ended March 31, 2007 and March 31, 2006.

                               Years Ended 3-31
                               2007          2006
Sales                            100.0 %      100.0 %
Cost of sales                     80.0         52.5
Gross margin                      20.0         47.5
Selling, general and
  administrative
  expenses                    (1,685.0 )     (253.7 )
Interest income (expense)       (827.0 )     (103.4 )
Net income (loss) before
income taxes                  (2,394.0 )      (94.9 )

Sales

Sales decreased by $36,692 from $42,103 in the fiscal year ended March 31, 2006 to $5,411 in the fiscal year ended March 31, 2007, a decrease of 87 percent. The decrease in sales was attributable primarily to a lack of orders from one customer.

Gross Margin

Gross margin decreased by 95 percent in fiscal year 2006 to $1,082 in fiscal year 2007. The decrease in gross margin was attributable to lack of orders.

Selling, General and Administrative Expense

Selling, general and administrative expenses decreased by $15,668 from $106,819, in fiscal year 2006, to $91,151 in fiscal year 2007. A breakdown of the changes is:

· Consulting fees to related party decreased to $6,000 in fiscal year 2007 from $16,500 in 2006

· Professional fees decreased to $34,059 in fiscal year 2007 from $39,645 in 2006

· Other expenses increased to $20,440 in fiscal year 2007 from $20,022 in 2006

· Salaries and related expense remained the same for fiscal year 2007 and 2006.

Net Profit (Loss)

We had a net loss from operations, after a provision for income taxes, in the fiscal year ended March 31, 2006 of $40,753, or $0.00 a share of our common stock. In the fiscal year ended March 31, 2007 we had a net loss, after a provision for income taxes, of $130,344, or $0.001 a share of common stock. The loss increased primarily due to a reduction in sales.

Balance Sheet Items

The net loss of $130,344 for the fiscal year ended March 31, 2007 increased the retained earnings deficit from $1,587,169 on March 31, 2006 to $1,717,513 on March 31, 2007. Our cash position increased from $1,225 for the fiscal year ended March 31, 2006 to $1,263 for the fiscal year ended March 31, 2007. Accounts receivable net of allowance for doubtful accounts from non affiliates remains unchanged at $0 at the end of fiscal year 2006 and 2007, while inventory remained unchanged at zero for the fiscal year ended March 31, 2006 and 2007.

Outlook

The statements made in this Outlook are based on current plans and expectations. These statements are forward-looking, and actual results may vary considerably from those that are planned.

We have been able to stay in operation only (1) from the cash flow generated from the sale of authoring and mastering electronic media products, and (2) because George Morris personally advanced funds to our Company when needed.

Internet Infinity, Inc. management believes that it will not generate sufficient cash flow to support operations during the twelve months ended March 31, 2008. Although sales and expenses could continue to decline and even if our company can generate a net profit and positive cash flow from operations, additional funds will be necessary for continued operation of the company.

Our auditors have issued a going concern statement in Note 3 of the attached financial statements.

In addition to cash provided from operations, loans from George Morris can provide additional cash to Internet Infinity.

The payment record of our existing customers has been good with low bad-debt losses for over two years from authoring and mastering service customers. Accordingly, management believes the risk of non-payment in the future is manageable if the company extends credit to our existing customers.

Off-Balance Sheet Arrangements

Our company has not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under which we have

· an obligation under a guarantee contract,

· a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets,

· an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or

· an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging, or research and development services with, us.

Contractual obligations

The following table sets forth, as of the end of the latest fiscal year-end balance sheet, information with respect to our known contractual obligations.

                                        Payments Due-by Period
            Contractual             Less Than                     More Than
            Obligations     Total    1 Year   1-3 Years 3-5 Years  5 Years
          Long-Term Debt     None
          Obligations
          Capital Lease      None
          Obligations
          Operating Lease    None
          Obligations
          Other Long-Term
          Liabilities
          Reflected on Our
          Balance Sheet
          under GAAP       $714,606 $714,606

          Total            $714,606 $714,606

Our future results of operations and the other forward-looking statements contained in this report, in particular the statements regarding projected operations in the present fiscal year, involve a number of risks and uncertainties