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

                                   ----------

                                   FORM 10-KSB

                                   ----------

(Mark One)

|X|  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934.

                  For the fiscal year ended: December 31, 2006

|_|  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

             For the transition period from _________ to __________.

                        Commission File Number: 000-51731

                         NATIONAL HEALTH PARTNERS, INC.
                 (Name of Small Business Issuer in Its Charter)

             Indiana                                    04-3786176
  (State or Other Jurisdiction              (I.R.S. Employer Identification No.)
of Incorporation or Organization)

   120 Gibraltar Road, Suite 107
             Horsham, PA                                   19044
(Address of Principal Executive Offices)                 (Zip Code)

                                 (215) 682-7114
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

                                                   NAME OF EACH EXCHANGE
        TITLE OF EACH CLASS                         ON WHICH REGISTERED
        -------------------                        ---------------------
               None                                        None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $.001 par value per share
                                (Title of Class)

          Check whether the issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. |_|

          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 |_|

          Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

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

          The issuer's revenue for its most recent fiscal year were: $1,870,612.

          The aggregate market value of the voting common equity held by
non-affiliates of the issuer computed by reference to the price at which the
common equity was sold on March 20, 2007, was $20,545,528.

          As of March 20, 2007, 32,659,106 shares of the registrant's common
stock were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.

          Transitional Small Business Disclosure Format (check one): Yes |_| No
|X|

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                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I

Item 1.   Description of Business                                              2

Item 2.   Description of Property                                             37

Item 3.   Legal Proceedings                                                   37

Item 4.   Submission of Matters to a Vote of Security Holders                 37

PART II

Item 5.   Market For Common Equity, Related Stockholder Matters and
             Small Business Issuer Purchases of Equity Securities             38

Item 6.   Management's Discussion and Analysis                                42

Item 7.   Financial Statements                                                55

Item 8.   Changes in and Disagreements With Accountants on Accounting
             and Financial Disclosure                                         55

Item 8A.  Controls and Procedures                                             55

Item 8B.  Other Information                                                   55

PART III

Item 9.   Directors, Executive Officers, Promoters, Control Persons
             and Corporate Governance; Compliance With Section 16(a)
             of the Exchange Act                                              56

Item 10.  Executive Compensation                                              59

Item 11.  Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters                       64

Item 12.  Certain Relationships and Related Transactions, and
             Director Independence                                            67

Item 13.  Exhibits                                                            68

Item 14.  Principal Accountant Fees and Services                              74

Index to Financial Statements                                                F-1

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                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

          This report contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical fact
included or incorporated by reference in this report, including, without
limitation, statements regarding our future financial position, business
strategy, budgets, projected revenue and costs, and plans and objectives of
management for future operations, are forward-looking statements. In addition,
forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expects," "intends,"
"plans," "projects," "estimates," "anticipates," or "believes" or the negative
thereof or any variation thereon or similar terminology or expressions.

          These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from results
proposed in such statements. Although we believe that the expectations reflected
in such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from our expectations include, but are
not limited to:

     -    our ability to fund future growth and implement our business strategy;

     -    demand for and acceptance of our CARExpress membership programs;

     -    our dependence on a limited number of preferred provider organizations
          ("PPOs") and other provider networks for healthcare providers;

     -    our dependence upon a limited number of marketing and distribution
          partners for substantially all of our revenue;

     -    our ability to develop and expand the market for our CARExpress
          membership programs;

     -    our ability to market our CARExpress membership programs;

     -    growth and market acceptance of the health savings industry;

     -    competition in the health savings industry and our markets;

     -    our ability to attract and retain qualified personnel;

     -    legislative or regulatory changes in the healthcare industry;

     -    the condition of the securities and capital markets;

     -    general economic and business conditions, either nationally or
          internationally or in the jurisdictions in which we are doing
          business;

and statements of assumption underlying any of the foregoing, as well as any
other factors set forth under "ITEM 1. DESCRIPTION OF BUSINESS - RISKS AND
UNCERTAINTIES" and "ITEM. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS" in this
report.

          All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in
their entirety by the foregoing. Except as required by law, we assume no duty to
update or revise our forward-looking statements based on changes in internal
estimates or expectations or otherwise.

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ITEM 1. DESCRIPTION OF BUSINESS.

OVERVIEW

          National Health Partners, Inc. is a national healthcare savings
organization founded in 1989 and reorganized in 2001 by healthcare professionals
to address the need for affordable healthcare nationwide. We create, market and
sell discount healthcare membership programs to predominantly underserved
markets in the healthcare industry through a national healthcare savings network
called CARExpress ("CARExpress").

          CARExpress is a network of hospitals, doctors, dentists, pharmacists
and other healthcare providers comprised of over 1,000,000 medical professionals
that have agreed to render their services and products to CARExpress members at
discounted prices. CARExpress enables people to engage in point-of-service
transactions directly with these providers and pay discounted prices that are
similar in amount to those paid by insurance companies on behalf of their
insureds.

          Our programs offer savings on healthcare services to persons who are
uninsured, underinsured, or who have elected to purchase only high deductible or
limited benefit medical insurance policies by providing access to the same PPOs
that are utilized by employers that self-fund at least a portion of their
employees' healthcare costs. Our programs are also used to supplement benefit
plans and fill in the gaps created by the need to reduce health benefits to keep
the costs of health insurance reasonable. We sell our programs directly and
indirectly through resellers that privately label or co-brand our programs and
through employers that offer our programs as part of their employee benefits.

BACKGROUND

          We entered the health savings industry in 2001 to address the need for
affordable healthcare nationwide. From 2001 to 2004, we engaged in limited
operations due to our lack of available capital. During that time, our employees
performed relatively limited duties and our operations were focused almost
exclusively on building CARExpress. In early 2004, we took a number of steps to
increase our business and generate revenue, including hiring our current Chief
Executive Officer, raising capital through private placements of our equity
securities, and marketing our CARExpress membership programs to the public
directly through mail, print ad, television and internet campaigns, and
indirectly through marketing representatives, brokers and agents, retail chains
and outlets, small businesses and trade associations, and unions and
associations. We also moved into a larger facility that provides us with 17
offices, a fully equipped state-of-the-art computer and telecommunications room,
and the capacity to expand our customer service base to approximately 80
customer service representatives.

          From late 2004 through 2006, we began to more actively pursue
opportunities to sell our CARExpress membership programs. During 2005, we
engaged in our first test marketing campaign during the second quarter of 2005
and entered into agreements with several consultants and advisors for the
marketing and promotion of our business and CARExpress membership programs,
advice with respect to our marketing strategies, product development and


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business development, and assistance regarding the identification and evaluation
of opportunities for us to engage in joint ventures, strategic partnerships and
alliances with companies offering complementary products and services. During
2006, we continued to enter into agreements with several marketing and
distribution partners to market and sell our CARExpress membership programs and
began to pursue the development of our CARExpress "wrap-around" programs which
combine our CARExpress membership programs with complementary third-party
insurance programs.

          Our strategy is to sustain and expand our position as a provider of
unique healthcare membership programs. We are currently actively engaged in
marketing our CARExpress membership programs to the public and are focused on
generating increased sales of our CARExpress membership programs. The target
market for our programs is comprised of individuals who have either limited
health benefits or no health benefits. We intend to continue to pursue specific
opportunities that we may identify in this target market through our various
marketing and distribution channels. Through product design, competitive
membership pricing and a variety of marketing and distribution partners, we
intend to pursue opportunities in the healthcare market that insurance companies
have not addressed.

HEALTHCARE INDUSTRY

          The U.S. Department of Commerce estimates that 15.9% of all Americans,
or 46.6 million individuals, were without health insurance coverage in 2005, up
from 15.6%, or 45.3 million individuals, in 2004, an increase of 1.3 million
people. According to the National Coalition on Healthcare, the primary reason
for this increase is that rapidly rising health insurance premiums have caused
many employers to reduce or discontinue health insurance coverage. Several
factors have contributed to the increase in the cost of healthcare, including
the following:

          OVER UTILIZATION OF THE HEALTHCARE SYSTEM. American citizens are
utilizing healthcare services at an ever-increasing rate. Behind this phenomenon
is the fact that insurance plans and health maintenance organizations ("HMOs")
are structured to encourage usage. Small co-payments, generally from $10 or $15
per office visit, encourage insured consumers to use the healthcare system more
frequently because they do not perceive themselves as having to pay the full
cost of the medical products and services received.

          STRICT STATE INSURANCE REGULATIONS. A number of insurance companies
have pulled out of certain states due to state regulations that no longer
provide a viable operating environment. As a result of these health coverage
cancellations, those formerly insured individuals and families are required to
pay more for their insurance coverage, cannot obtain any coverage because of
pre-existing conditions, or simply remain uninsured.

          ESCALATING TENSIONS BETWEEN MEDICAL PROVIDERS AND PAYORS. Tensions
between medical providers and payors are escalating. The medical decision is
often no longer in the hands of the doctor and the patient. Rather,
administrators at HMOs and insurance companies determine the procedures to be
performed through their coverage policies. In addition, doctors and hospitals,


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having experienced decreases in their income and profits, and are demanding
higher compensation, particularly from HMOs.

          These increasing costs have led to limitations on reimbursement from
insurance companies, HMOs and government sources and have generated demand for
products and services designed to control healthcare costs. Many employers have
responded to the increased cost of providing health insurance to their employees
by reducing or eliminating available insurance coverage and/or by requiring
employees to contribute heavily to premiums, especially for family members.

          As a result, more Americans are being forced to self-insure and pay a
growing portion of the cost of their healthcare. Some are entirely uninsured.
Others can only afford or choose only a high deductible or limited benefit
health insurance policy. In either case, this patient population increasingly
forgoes medical procedures or relies on emergency care for its healthcare needs
and often incurs prohibitive expenses. Additionally, costs of healthcare (in
doctors' offices and hospitals) for this patient population are often far higher
than the amount an insurance company would pay for the same healthcare services
for its insureds. The uninsured and underinsured patients have had no one to
negotiate healthcare service costs on their behalf.

          We believe market demand is significant for any product that can
accomplish one or more of the following:

     -    provide a low-cost alternative to health insurance for the 90-plus
          million Americans who have either no insurance or only catastrophic
          insurance coverage;

     -    provide small businesses that do not provide health benefits to
          employees with an affordable way to provide benefits to their
          employees;

     -    reduce the cost of claims and re-insurance premiums for large
          corporations, unions and insurance companies;

     -    provide quality care at a price that is both affordable to consumers
          and that will pay providers a reasonable fee for their services; and

     -    provide supplemental benefits, such as dental, vision, elective
          surgery, chiropractic and alternative care, that are not covered by
          insurance plans.

HEALTH SAVINGS INDUSTRY

          The need for solutions to the problems facing the healthcare industry
led to the development of the health savings industry. The health savings
industry is generally comprised of organizations that offer discount health
programs to uninsured and underinsured individuals that enable these individuals
to purchase the healthcare products and services they need at discounted prices.
Discount health programs provide these individuals with a low-cost alternative
to insurance that assist them in reducing their out-of-pocket healthcare costs.
Discount health programs are typically offered to these individuals in the form
of traditional membership service programs.


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OUR CAREXPRESS HEALTHCARE SOLUTION

OVERVIEW

          We offer discount healthcare membership programs designed in response
to the growing number of people who can no longer obtain adequate health
insurance. Our programs provide a lower-cost, non-insurance alternative to
individuals who are seeking to reduce their out-of-pocket healthcare costs not
covered by insurance or who are unable to obtain healthcare insurance due to
their medical history, age or occupation. For a monthly fee, our members are
able to pay discounted prices that are typically between 10% and 50% off the
retail price of participating healthcare provider products and services.
Acceptance into our health programs is unrestricted and our programs may be
utilized by the member's entire household.

OUR CAREXPRESS MEMBERSHIP PROGRAMS

          We design our CARExpress membership programs for uninsured and
underinsured individuals. Our membership programs encompass all aspects of
healthcare, including physicians, hospitals, ancillary services, dentists,
prescription drugs, vision care, hearing aids, chiropractic services,
alternative care, 24-hour nurseline, medical supplies and equipment, and
long-term care facilities, which include skilled nursing facilities, assisted
living facilities, respite care and home health care. We offer our programs
through a national healthcare savings network called "CARExpress." We provide
CARExpress members with access to healthcare providers affiliated with PPOs such
as CareMark, Aetna, Optum, Integrated Health, Three Rivers and HealthFi through
which our members can utilize the products and services of over 1,000,000
healthcare providers in the United States. Our CARExpress membership programs
enable people across the country to obtain just about any type of healthcare
wherever it is available, whether the person needs a comprehensive healthcare
package or simply needs supplemental healthcare benefits, such as dental or
vision care or prescriptions.

          We sell our CARExpress membership programs directly and indirectly
through marketing companies, brokers, agents and other third parties. Our
CARExpress membership programs typically range in price from $9.95 to $39.95 per
month, depending upon the program selected. We also offer features to encourage
potential members to try out our CARExpress membership programs, including
refund guarantees and "trial" periods of free or discounted membership.
Healthcare products and services are bundled, priced and marketed utilizing
relationship marketing strategies to target the profiled needs of our customers.
The discounted prices paid by our members are typically 10% to 50% lower than
our providers' usual and customary fees. Our CARExpress membership programs
require members to pay the provider at the time of service, thereby eliminating
the need to file any insurance claims. These discounts are designed to save the
individual substantially more than the cost of the program itself.

          Our CARExpress membership programs are not insurance. There is no
undertaking by us to pay a portion of any fee for services or prescriptions
purchased using our CARExpress membership cards. Rather, our CARExpress
membership programs provide consumers with access to healthcare providers who,
through their affiliations with PPOs, have agreed in advance to honor our
CARExpress membership cards and accept the discounted fees set by the PPOs.


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CARExpress members simply present their CARExpress membership card to the
participating provider at the time of the service to receive the discounted
price.

          We believe that millions of Americans can benefit in some manner from
joining CARExpress, whether they have health insurance or not. We believe that
our CARExpress membership programs are most attractive to the following people
and organizations:

     -    people without insurance coverage, including self-employed individuals
          and part-time or temporary employees;

     -    people with gaps in their insurance coverage;

     -    people who have been turned down for insurance coverage due to a
          pre-existing condition clause;

     -    people who have been turned down for insurance because of age,
          occupation, medical history, lifestyle or other reasons;

     -    people who have reached the yearly and/or lifetime benefit limits of
          their insurance policy;

     -    people who choose alternative healthcare solutions that are often not
          covered by HMOs, PPOs, or other insurance, or who seek providers not
          covered by their present health plans;

     -    small business owners who want to provide their employees with a
          low-cost healthcare program;

     -    employees whose employers have terminated or curtailed employee health
          benefits;

     -    people who may be underinsured because of restrictions or provisions
          in their managed care plans, such as limited coverage, high
          deductibles or co-insurance limits;

     -    small businesses, chambers of commerce, employers of temporary or
          part-time personnel and other businesses seeking affordable health
          benefits for their employees in order to promote employee loyalty and
          differentiate their companies in the marketplace; and

     -    unions, associations, trade groups and other organizations seeking to
          increase membership and promote member/customer loyalty by providing
          or offering a discount health benefit.

HOW CAREXPRESS WORKS

          People gain access to our network of healthcare providers by paying us
monthly membership fees. Most members pay for our programs on a monthly basis,
either through automatic bank drafts or credit cards. People who do not wish to
use either of these payment methods are required to pay annually at the time of
enrollment. Groups of 20 or more can also choose to be billed on a monthly
basis. Members may cancel their membership at any time. We also offer a 30-day
money-back guarantee so that if a member is not completely satisfied with the
program the purchased, the member may cancel their membership and receive a
refund of the membership fees paid.


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          Upon enrollment, new members receive a membership kit that includes
their CARExpress membership card(s) along with instructions on how to use the
programs purchased and how to access providers in their area. Except with
respect to hospitals, members select a participating provider, make an
appointment with the provider, present their CARExpress membership card to the
provider at the time of service and receive their discount at the time of
service. The provider may verify an individual's membership status by calling a
phone number imprinted on the CARExpress membership card or reviewing electronic
files that we have submitted to the provider. There are no claim forms or bills
to be processed.

          With regard to hospitals, we utilize the services of a hospital
savings company to negotiate discounts with the providers and arrange financing
with the members for the payment of the hospital services. Members may use any
accredited hospital in the United States. Members make no payments to the
hospital at the time services are rendered. Instead, they simply present their
CARExpress membership card to the provider at the hospital at the time of
service. The members contact the hospital savings company prior to or after
their hospital stay and the hospital savings company negotiates a discounted
rate for the hospital services. The hospital savings company then pays the bill
in full for the member and arranges financing with the member directly.

BENEFITS OF USING CAREXPRESS

          Our CARExpress membership programs provide benefits to our members,
unions, associations and businesses, and healthcare providers and provider
networks.

          BENEFITS TO MEMBERS. Our CARExpress membership programs provide
benefits to our members because our programs provide them with access to a
variety of healthcare products and services at discounted prices. Membership in
our CARExpress membership programs is unrestricted and provides benefits to
individuals who, because of their medical history, age or occupation, are unable
to obtain health insurance. Our CARExpress membership programs cover each person
in the member's immediate family and can be used as often as they wish. In
addition, unlike many insurance or managed care programs, members have no
paperwork or claims to prepare and no waiting periods.

          BENEFITS TO UNIONS, ASSOCIATIONS AND BUSINESSES. Our CARExpress
membership programs provide benefits to unions, associations, businesses and
other organizations with large numbers of members or employees because our
programs can assist these organizations in their efforts to attract and retain
members and employees by enabling them to offer a more complete healthcare
benefits package. Similarly, as competition among HMOs for participants
intensifies, we believe that our CARExpress membership programs will enable HMOs
to offer a more complete array of potential healthcare benefits. Due to the
relatively low cost of our CARExpress membership programs, these organizations
may offer our programs to part-time employees who often are not eligible for
healthcare benefits offered to full-time employees. Moreover, because our
CARExpress membership programs are discount health programs and not insurance
products, these organizations can offer discounts to their members or employees
without bearing any economic risk in excess of the annual cost of the program.


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          BENEFITS TO HEALTHCARE PROVIDERS AND PROVIDER NETWORKS. Our CARExpress
membership programs provide benefits to physicians, hospitals and other
healthcare providers because our programs help healthcare providers and provider
networks increase their customer base. While members will pay fees and charges
that are less than those paid by non-members, the incremental business from
members offers an additional source of revenue to the providers, with little or
no increase in their overhead costs. In addition, healthcare providers are paid
at the time of service, reducing the billing procedures and cost associated with
insurance and allowing the provider to immediately collect payment. We believe
that our CARExpress membership programs are also attractive to provider networks
because they increase the likelihood that healthcare providers will affiliate
with the provider networks so as to gain access to a greater number of potential
customers and patients.

STRATEGY

          Our strategy is to sustain and expand our position as a provider of
unique healthcare membership programs. We intend to focus predominantly in
underserved markets where individuals either have limited or no healthcare
benefits. We have developed discount healthcare membership programs that give
individuals access to healthcare providers at reduced fees that offer value and
savings to people throughout the country. Through product design, competitive
membership pricing and strong distribution channel partners, we plan to fill a
significant void in the healthcare market that insurance companies have not
addressed.

          Key elements of our strategy are as follows:

          DEVELOP UNIQUE HEALTHCARE PROGRAMS FOR BROAD MARKETS. Our focus is on
the continued development and introduction of unique programs that address the
health and lifestyle needs of targeted consumer groups. We continually research
our markets to keep abreast of trends in the demand for consumer-paid
healthcare. We intend to further develop and expand our marketing capabilities
by increasing the content currently available on our CARExpress Web site,
developing programs to offer our CARExpress membership programs directly to
affinity groups, such as unions, small businesses, trade associations and
charitable organizations, and expanding our in-house marketing staff. We intend
to enhance our CARExpress membership programs by combining them with insurance
products and programs complimentary to health savings accounts (HSAs).

          RECRUIT MARKETING AND DISTRIBUTION PARTNERS. Growth in sales of our
CARExpress membership programs is dependent upon our marketing and distribution
partners continuing to market our CARExpress membership programs to prospective
customers and recruit additional marketing and distribution partners to market
our CARExpress membership programs to prospective customers. We intend to
continue to focus our efforts on retaining our existing marketing and
distribution partners and obtaining new marketing and distribution partners
through our direct sales team. We also intend to continue to support our
marketing and distribution partners by training our customer service staff to
completely and accurately explain the benefits, limitations, and use of our
CARExpress membership programs. We also plan to


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improve the productivity of our marketing and distribution partners through lead
development, marketing support, sales assistance and training.

          LEVERAGE ADDITIONAL PPOS AND PROVIDER NETWORKS. We intend to negotiate
agreements with additional PPOs and other provider networks. While we currently
have contractual relationships with several PPOs, we need to continuously assess
the capabilities of our PPOs and work towards making alternative healthcare
solutions available to our members. We believe that our large provider base
enhances our CARExpress membership programs with market credibility, and we
intend to leverage this credibility to further our market penetration.

          PROVIDE HIGH QUALITY CUSTOMER SERVICE. In order to achieve our
anticipated growth and to ensure member, healthcare provider and marketing and
distribution partner loyalty, we continue to develop and invest significantly in
our customer service systems. Our customer service center provides cardholders
and healthcare providers with prompt, courteous, and complete information about
all aspects of our CARExpress membership programs. We have also developed a
proprietary computer database system that provides customer service
representatives with immediate access to provider demographic data and member
information, including the components of each member program or plan and the
details a member requires to properly utilize the program.

          DEVELOP A CORPORATE-LEVEL SALES TEAM. To complement individual and
group sales and lead generation accomplished through our marketing and
distribution partners, we are attempting to promote sales of our CARExpress
membership programs to groups and self-funded employers through a
corporate-level sales team with experience in group insurance market and the
operations of third-party administrators.

CUSTOMERS

          The target customers of our CARExpress membership programs are
individuals who are uninsured or underinsured.

          Our primary target customer group is comprised of the 46 million
Americans who have no health insurance of any kind. This group includes
self-employed individuals and part-time or temporary employees, and people who
have been turned down for insurance because of age, occupation, medical history,
lifestyle or other reasons. For this group, our programs are an effective and
low-cost alternative to health insurance.

          Our secondary target customer group includes the approximately 61
million Americans who lack complete health insurance coverage. This group
includes people with gaps in their insurance coverage, employees paying large
deductibles or premiums, and employees who do not receive adequate insurance
coverage through their employers. It also includes people who are underinsured
because of restrictions or provisions in their managed care plans, such as
limited coverage, high deductibles or co-insurance limits, people who have been
turned down for insurance coverage for a medical procedure due to a pre-existing
condition clause, and people who have been turned down for insurance because of
age, occupation, medical history, lifestyle


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or other reasons. Our CARExpress supplementary programs allow individuals to
purchase whatever benefits they need to fill the gaps in their insurance
coverage.

PROGRAMS

          We offer several different CARExpress membership programs that provide
members with access to a wide range of discounted healthcare products and
services. We are also designing healthcare membership programs for unions,
associations, businesses and other organizations that are comprised of our
CARExpress membership programs and third-party insurance products that will be
offered to their members and employees on a co-branded basis.

CAREXPRESS MEMBERSHIP PROGRAMS

          We currently offer five standard programs that provide benefits that
range from prescription drug and vision care to comprehensive physician,
hospital, vision, dental and other care. A description of each of our five
standard programs is provided below.

          COMPREHENSIVE CARE PROGRAM. This program is designed for individuals
and families with no health insurance. It provides members with access to all of
our CARExpress products and services, including physician, hospital and
ancillary care, dental and vision care, retail and mail order pharmacy, 24-hour
nurseline, hearing care, chiropractic and complementary alternative care,
medical supplies and equipment, and long-term care facilities. Our comprehensive
care program targets those with little or no insurance, or those with only
catastrophic coverage. We believe that our comprehensive care program will be of
particular interest to consumers who are not covered by group health or
individual benefit plans. The monthly retail price for this membership program
is $39.95 per family.

          SUPPLEMENTAL CARE PROGRAM. This program is designed for individuals
and families who are underinsured and offers everything our comprehensive care
program offers, except for access to doctors and hospitals. Our supplemental
care program generally presumes the member has some level of basic medical
insurance coverage. It offers services that are typically not covered under a
traditional health insurance plan or an insurance plan that may have certain
coverage limits. This program typically is marketed as an add-on service
alongside an existing health plan or as a stand-alone product for those who have
health insurance but with minimal benefits for prescription or other ancillary
services. The monthly retail price for this membership program is $29.95 per
family.

          PREFERRED PROGRAM. This program is designed for individuals and
families who are underinsured and need to save on the basic health services not
covered under a traditional health insurance plan. It offers savings on
prescriptions, vision and dental care, and a 24-hour nurseline. The monthly
retail price for this membership program is $19.95 per family.

          DENTAL & VISION CARE PROGRAM. This program is designed for individuals
and families who typically have health insurance, but who do not have either
dental care or vision care. The monthly retail price for this membership program
is $14.95 per family.


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          PRESCRIPTION & VISION CARE PROGRAM. This program is designed to offer
members an inexpensive way to save money on prescriptions and vision care. This
program is our low-cost entry program. The monthly retail price for this program
is $9.95 per family.

CAREXPRESS WRAP-AROUND PROGRAMS

          We are designing healthcare membership programs for unions,
associations, businesses and other organizations that are comprised of our
CARExpress membership programs and third-party insurance products that will be
offered to their members and employees on a co-branded basis. The use of these
products in conjunction with our CARExpress membership programs can provide an
affordable solution to individuals and groups who previously could not afford
fully inclusive medical plans, and can provide greater assurance of payment to
the healthcare providers. These "wrap-around" programs are bundled, priced and
marketed utilizing relationship marketing strategies or direct marketing to
target the profiled needs of the clients' particular member base.

          Insurance products that are suitable for combination with our
CARExpress membership programs include:

          LIMITED BENEFIT PROGRAMS. Limited benefit programs are insurance
programs offered by insurance companies that reimburse the member a
pre-determined amount of money for a specific medical occurrence based upon the
plan design. For example, the amount of reimbursement that would be payable to
an individual for a particular outpatient hospital procedure could be at the
rate of $1,000 per day and would vary based upon plan design. Our CARExpress
membership programs can be an excellent complement to insurance companies'
limited benefit programs. The consumer would use the CARExpress membership
program component to reduce their out-of-pocket costs and use the limited
benefit program component to reimburse them a fixed amount of money per
occurrence.

          CATASTROPHIC HEALTH INSURANCE. Catastrophic Health Insurance is
typically a high deductible major medical policy under which an insurance
company pays nothing until expenditures reach a threshold that is typically
between $2,500 and $20,000. A consumer may use the CARExpress membership
programs component to reduce his or her out-of-pocket costs until he or she
reaches the deductible amount and then use the insurance component for all
additional expenses.

          We intend to sell Our CARExpress wrap-around programs directly through
National Health Brokerage Group, Inc., our wholly-owned subsidiary, and
indirectly, through insurance companies and independent third parties. We plan
to operate National Health Brokerage Group like an insurance brokerage with
respect to sales of our CARExpress wrap-around programs. We plan to obtain the
necessary licenses in all states in which National Health Brokerage Group may
sell these wrap-around programs and intend to offer these wrap-around programs
for sale through marketing and distribution partners that are licensed insurance
agents.


                                       11

<Page>

HEALTHCARE PROVIDERS

          We do not contract directly with any of the physicians, dentists,
hearing care specialists, eye care specialists or other healthcare providers
that participate in our CARExpress health savings network. Instead, we contract
with PPOs or their affiliates and other provider networks for access to the
discounted rates they have negotiated with their healthcare providers. We only
select and utilize those provider networks that we believe can deliver adequate
savings to our members while providing adequate support for our CARExpress
membership programs with the healthcare providers. We typically pay a per member
per month fee for use of a provider network that is determined in part based on
the number of providers participating in the network, the number of CARExpress
members accessing the network, and the particular products and services utilized
by the CARExpress members. We only pay fees for those members authorized to
utilize the network. The agreements through which we have contracted for access
to the PPO or other provider networks are generally for a term of between one
and two years, may be terminated by either party on between 45 and 180 days'
prior written notice, and renew automatically for additional terms unless so
terminated. Most of these agreements are not exclusive as it is not customary in
the health savings industry for PPOs to agree to work exclusively with a single
healthcare savings organization, and most contain provisions maintaining the
confidentiality of the terms of the agreement.

          The principal suppliers of the over 1,000,000 healthcare providers
that comprise CARExpress are CareMark, Aetna, Optum, Integrated Health, Three
Rivers and HealthFi. Under our various agreements with these PPOs or their
respective affiliates, our members are provided with access to their network of
healthcare providers in varying combinations of specialties and at varying
discounts from the scheduled prices for covered products and services. Although
we have arrangements in place with several secondary networks, these PPOs
currently supply the provider commitments for almost all of our members. If we
lose our arrangement with any of these PPOs for any reason, we would attempt to
establish a primary relationship with one of our secondary suppliers. If we are
unable to replace the lost arrangement with a similar arrangement with another
provider network, however, our business may be adversely affected.

          CAREMARK. CareMark provides CARExpress with access to the Caremark
pharmacy network at discounted rates and provides pharmacy benefit management
services, including the electronic maintenance of prescription, price,
eligibility and plan information, the negotiation of discounts and rebates on
pharmaceutical products with pharmaceutical companies, and the preparation of
reports of services performed. The Caremark pharmacy network is comprised of an
aggregate of 45,000 retail pharmacies plus a mail order pharmacy option. Our
agreement with CareMark was entered into on July 1, 2001 and may be terminated
by either party on 60 days' prior written notice.

          AETNA. National Benefit Builders provides CARExpress with access to
the Aetna dental network at discounted rates. The Aetna dental network is
comprised of an aggregate of approximately 65,000 dentists and other dental
service providers. We make monthly payments to National Benefit Builders equal
to the greater of a flat fee or a monthly rate based on the number of CARExpress
members utilizing the Aetna dental network. Our agreement with National Benefit
Builders is for a two-year term that commenced March 1, 2004 and renews


                                       12

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automatically for additional one-year terms unless terminated by either party
pursuant to written notice provided at least 60 days prior the expiration of the
then current term.

          OPTUM. United HealthCare Services provides CARExpress with access to
the network of nurses of Optum at discounted rates. The Optum nurses provide a
nurseline 24 hours per day for general health information, the identification of
specific health-related concerns and the provision of educational information
regarding those concerns. Optum also provides an audiotape library covering over
1,100 healthcare topics that are accessible by CARExpress members. We make
monthly payments to United HealthCare Services equal to the greater of a flat
fee or a monthly rate based on the number of CARExpress members utilizing the
Optum services and the type of Optum services utilized. Our agreement with
United HealthCare Services is for a one-year term that commenced October 1, 2001
and renews automatically for additional one-year terms unless terminated by
either party on 90 days' prior written notice.

          INTEGRATED HEALTH, THREE RIVERS AND HEALTHFI. Competitive Health, Inc.
provides CARExpress with access to the network of healthcare providers of
Integrated Health, Three Rivers and HealthFi at discounted rates, and services
consisting of price negotiation, re-pricing of claims, financing arrangements,
claim resolution and healthcare provider relations. The healthcare provider
networks of Integrated Health, Three Rivers and HealthFi are comprised of an
aggregate of approximately 500,000 physicians, all accredited U.S. hospitals and
acute care facilities, and 50,000 ancillary healthcare providers, including
laboratory, radiology, rehabilitation, mental health and physical therapy
providers. We make monthly payments to Competitive Health equal to the greater
of a flat fee or a monthly rate based on the number of CARExpress members
utilizing these networks. Our agreement with Competitive Health is for an
approximate 15-month term that commenced September 1, 2002 and continues
indefinitely unless terminated by either party on 90 days' prior written notice.

          We can provide no assurance that our contracts with these PPOs and
their affiliates will not expire or be terminated by us or them, nor can we
provide any assurance that we will be able to replace the services available to
our CARExpress members under these agreements in the event they do expire or are
terminated. In addition, we can provide no assurance that these organizations
will refrain from partnering with one of our competitors or competing directly
with our CARExpress membership programs. Accordingly, the expiration or
termination of these relationships, or the decision by any of these
organizations to partner with one of our competitors or compete directly with
us, may have a material adverse effect on our business, financial performance
and results of operations.

MARKETING AND DISTRIBUTION

          We market our CARExpress membership programs directly to individual
consumers through television, radio, newspapers, magazines and the Internet. We
also market and support our CARExpress membership programs through our
CARExpress Web site at www.carexpresshealth.com. Our CARExpress Web site enables
consumers to review our CARExpress membership programs, our healthcare providers
and their locations, the products and services available through our healthcare
providers, and the discounts and special promotions available to members for
their products and services. Consumers can also purchase


                                       13

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our CARExpress membership programs through our CARExpress Web site by filling
out an application online. Direct sales to consumers provide us with higher
long-term margins on sales because we do not have to pay commissions to any
intermediary organization of which the consumer is a member. In addition, the
advertising and marketing campaigns that we engage in to target consumers
provide us with increased market awareness and support for the retail chains,
outlets, unions and associations comprising our other marketing and distribution
channels.

          We also market our CARExpress membership programs indirectly through
marketing companies, brokers and agents, small businesses and trade
associations, and unions and associations.

          MARKETING COMPANIES. We utilize the services of marketing companies to
market our CARExpress membership programs to prospective customers, such as
individual consumers and employers typically having less than 50 employees.
Marketing companies are groups of sales persons that market our CARExpress
membership programs directly to prospective customers through face-to-face
contact and such media as television, radio, internet and print ads. We estimate
that a total of between 150 and 200 such sales persons currently market our
CARExpress membership programs to prospective customers. The marketing companies
that we utilize typically offer and sell our CARExpress membership programs on a
part-time basis, and may engage in other related or unrelated business
activities, including selling the products or services of our competitors. Most
of the prospective customers to whom marketing companies market our programs are
current clients of the marketing companies who have purchased products or
services through the marketing companies in the past. The other prospective
customers are new clients that the marketing companies have identified through
their own efforts. To receive the right to market and sell our CARExpress
membership programs, marketing companies sign a standard services agreement.
These agreements are typically for a term of one year and renew automatically
for additional one-year terms unless written notice of termination is delivered
by either party at least 30 days prior to the then-current term. Our marketing
companies are not required to be licensed insurance agents.

          We pay our marketing companies fees that are typically comprised of a
commission on the sale price of the CARExpress membership program and/or an
up-front fee per member generated. The amount of the commissions and up-front
fees that we pay to marketing companies are determined based on the type of
membership programs being sold by the marketing companies and the number of
members being generated over a set period of time by the marketing companies. We
typically pay marketing companies the up-front fee for obtaining a new member
only if the member becomes a paying member, and we only pay marketing companies
commissions for membership periods during which we are receiving membership
fees. Marketing companies are paid these commissions for the life of the
members' enrollment with CARExpress. Our obligation to pay a marketing company a
commission for a particular month accrues on the date we receive payment of the
monthly membership fee from the member for that month. Typically, a minimum
member retention period of at least one to two months is required for a
commission payment to be earned by our marketing companies for paying members.


                                       14

<Page>

          BROKERS AND AGENTS. We sell our CARExpress membership programs through
brokers and agents by entering into commission-sharing arrangements with them
under which they market and sell our CARExpress membership programs to
individual consumers through large employer groups, insurance brokers and
associations. Our CARExpress membership programs are not competitive with the
insurance products they sell, but instead are complementary program offerings.
Brokers and agents typically offer our CARExpress membership programs as a
complementary value-added program to the traditional insurance products that
they sell.

          SMALL BUSINESSES AND TRADE ASSOCIATIONS. We use small businesses,
trade associations, charitable organizations and similar organizations to market
our CARExpress membership programs to their members and employees. Under these
types of arrangements, we customize our CARExpress membership cards by adding
the sponsoring organization name and/or logo on the card and provide access to
our networks as well as all required fulfillment services. We believe that these
private label cards are attractive to these organizations because the cards will
enable them to more closely identify themselves with the benefits provided to
their members. Moreover, we believe that the preexisting relationship between
the sponsor and its employees or members will enhance the likelihood that the
employee or member will purchase our CARExpress membership cards. These
organizations may purchase our CARExpress membership programs for their
employees or members, or subsidize a portion of the monthly membership fees of
our programs for their employees or members. No fee will typically be paid by us
to such organizations if the organizations opt to purchase or subsidize our
programs. Alternatively, these organizations may simply offer their employees or
members the opportunity to purchase our programs directly from us or through a
payroll deduction plan. In this event, we will typically pay such organizations
a marketing fee for each membership sold.

          UNIONS AND ASSOCIATIONS. We market our CARExpress membership programs
to unions, associations, corporations and similar organizations. These
organizations provide us with the opportunity to acquire a large group of
members. Group accounts provide us with higher retention rates for memberships
because of factors such as organization sponsorship of its members or employees,
subsidizing of monthly membership fees by such organizations, and lower cost
memberships to members or employees resulting from significantly lower prices
charged to the organization. These organizations may purchase our CARExpress
membership programs for their employees or members, or subsidize a portion of
the monthly membership fees of our programs for their employees or members. We
do not typically pay a marketing fee to the organizations if the organizations
opt to purchase or subsidize our programs. Alternatively, these organizations
may simply offer their employees or members the opportunity to purchase our
programs directly from us or through a payroll deduction plan. In this case, we
typically pay the organizations a marketing fee for each membership sold.

CUSTOMER SERVICE, TRAINING AND SUPPORT

          We believe that providing superior customer support is critical to our
business. Currently, we maintain a call center at our corporate headquarters in
Horsham, Pennsylvania, where we employ full-time customer service
representatives and utilize the services of temporary customer service
representatives on an as-needed basis. Our call center is available to members
and may be accessed via e-mail or toll-free numbers, Monday through Friday, from
9:00 a.m. to 11:00


                                       15

<Page>

p.m. Eastern Standard Time. We also utilize an outside call center for
after-hours calls so that we are able to provide full 24-hour toll-free coverage
for our members. Our call center provides dependable and timely resolution of
customer technical inquiries and is available to customers by telephone and
e-mail. Our call center staff delivers education, training and pre-sales support
to our members, employers and other sponsoring organizations, and healthcare
providers and provider networks. We also offer online training to our customers
and resellers to provide them with the knowledge and skills to successfully
deploy, use and maintain our products. Our customer service team is responsible
for handling general customer inquires, answering questions about the ordering
process, updating and maintaining customer account information, investigating
the status of orders and payments, as well as processing customer orders. In
addition, our customer service team proactively updates customers on a variety
of topics, including release dates of new products and updates to existing
products.

          In order to achieve our anticipated growth and to ensure client,
member and marketing and distribution partner loyalty, we intend to continue to
develop and invest in our customer service systems and staff. In 2004, we moved
into a fully-equipped facility with a state-of-the-art computer and
telecommunications room that is wired to handle our growing needs and provides
us with the capacity to expand our customer service base to approximately 80
customer service agents. Our proprietary computer database system provides our
customer service representatives with immediate access to provider demographic
data and member information, including the components of each member program or
plan and the details a member requires to properly utilize the program. All new
customer service representatives are required to complete a training course
before beginning to take calls and attend on-the-job training thereafter.
Through our training programs, systems and software, we seek to provide members
with friendly, rapid and effective answers to questions. We continue to work
closely with our healthcare providers and organizations to ensure that their
representatives are knowledgeable about our CARExpress membership programs.

          We provide extensive training to our sales representatives to assure
that they accurately represent our products and services. This training is
available in a variety of forms, including a training manual, audiotapes and
videotapes, local and regional training meetings and weekly conference calls.
The training encompasses both product training as well as marketing training and
sales techniques. We have also implemented policies and procedures in place to
control any advertising or promotions that are utilized by our sales
representatives. We believe these policies and procedures are necessary to
assure the proper representation of the program at all times and include the
pre-approval of all advertising, adherence to anti-spamming and anti-fax
blasting rules, and limits where the representatives can advertise our programs.
The failure of a representative to follow these rules can result in termination
of the representative's relationship with us.

TECHNOLOGY

          In 2004, we completed the installation of a state-of-the-art
telecommunication network and purchased additional computers for our customer
service department. Our management information systems were designed in-house
and are used in most aspects of our business, including:


                                       16

<Page>

     -    maintaining member eligibility and demographic information;

     -    maintaining representative information;

     -    paying commissions;

     -    maintaining a database of all providers and offering provider locator
          services;

     -    drafting members' accounts on a monthly basis; and

     -    tracking of cash receipts and revenue.

          We have also created an extensive CARExpress Web site for our
CARExpress membership programs that provides information about the various
services, allows for provider searches, answers questions, provides savings
schedules, and allows new members and representatives to enroll online. It also
allows representatives to access support and training files and to view their
genealogy and commission information through a password-protected area.

COMPETITION

          The medical savings industry is rapidly evolving and competition for
members is becoming increasingly intense. Competitors vary in size and in scope
and breadth of the products and services they offer. We offer membership
programs that provide products and services similar to or directly in
competition with products and services offered by PPOs, HMOs, healthcare
membership programs, retail pharmacies, mail order prescription companies, and
other ancillary healthcare insurance organizations. Competition for new
representatives is also intense, as these individuals have a variety of products
that they can choose to market, whether competing with us in the healthcare
market or not.

          We believe that success in the health savings industry is dependent
upon the ability of companies to:

     -    identify retail markets and outlets, unions and associations, and
          consumers that may benefit from healthcare membership programs;

     -    maintain contracts with reputable PPO networks that offer substantial
          healthcare savings;

     -    identify, develop and market unique healthcare membership programs;

     -    develop and implement effective marketing campaigns;

     -    provide programs comparable or superior to those of competitors at
          competitive prices;

     -    enhance the quality and breadth of the membership programs offered;

     -    maintain and improve the quality and extent of customer service
          offered to providers and members;

     -    offer substantial savings on the major-medical costs such as hospital
          and surgical costs;

     -    combine the programs with affordable insurance plans that have high
          deductibles or set pre-defined payment for hospitalization;


                                       17

<Page>

     -    adapt quickly to evolving industry trends or changing market
          requirements;

     -    satisfy investigations on the part of state attorney generals,
          insurance commissioners and other regulatory bodies; and

     -    hire and retain marketing and distribution partners and finance
          promotions for the recruiting of new members.

          Our principal competitors include Best Benefits, Care Entree, Family
Care, People's Benefit Services, AmeriPlan, Full Access Medical and New
Benefits, Inc. People's Benefit Services, AmeriPlan and New Benefits focus
generally on the provision of retail and mail order pharmacy services and vision
and dental care, and thus compete with only a portion of our CARExpress
membership programs. Best Benefits, Care Entree, Family Care and Full Access
Medical provide a broader range of products and services including hospital,
physician, 24-hour nurseline, chiropractic and nursing home care, and thus
compete with our full range of CARExpress membership programs. Our principal
competitors generally offer their discount health membership programs at a
monthly or annual fee that is equal to or greater than the monthly fees that we
charge for comparable CARExpress membership programs, and offer cancellation
privileges, refund guarantees, and "trial" periods of free or discounted
memberships similar in nature and amount to those that we offer.

          We also face current and potential competition from insurance
carriers, third-party administrators, retail pharmacies, financial institutions,
federal and state governments, PPOs, HMOs and other healthcare networks. In
addition, a number of companies offer medical discount programs that are
localized geographically, or specialized in certain service categories such as
dental, chiropractic, or pharmacy only. Recently, several of the major drug
manufacturers have begun, or announced plans to begin, offering prescription
discount cards for their own drug brands.

          Some of our current and potential competitors have longer operating
histories and significantly greater financial, technical, marketing,
administrative and other resources than we do. They may have significantly
greater name recognition, established marketing relationships and access to a
larger installed base of customers. In addition, current and potential
competitors have established or may establish cooperative relationships among
themselves or with third parties to design customized products to better address
customer needs. Accordingly, new competitors or alliances among competitors may
emerge and rapidly acquire significant market share. Increased competition may
result in price reductions, reduced gross margins and loss of market share, any
of which could have a material adverse affect on our business, financial
condition and results of operations.

REGULATORY AND LEGISLATIVE ISSUES

          We are subject to a variety of laws and regulations applicable to
companies engaged in the healthcare industry. Because the nature of our services
is relatively new and the health savings industry is rapidly evolving, we may
not be able to accurately predict which regulations will be applied to our
business and we may become subject to new or amended regulations.


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          INSURANCE REGULATIONS. The sale of our CARExpress membership programs
is subject to federal, state and local regulation, including the prohibition of
business corporations from providing medical care, the fraud and abuse
provisions of the Medicare and Medicaid statutes, state laws that prohibit
referral fees and fee splitting, and regulations applicable to insurance
companies and organizations that provide healthcare services. Our CARExpress
membership programs are not insurance programs and we are not subject to
regulation as an insurance company or as a seller of insurance in connection
with the sale of our CARExpress membership programs. However, a few states, such
as Florida, Illinois and Kansas, currently regulate or restrict companies
offering health discount programs by requiring such companies to obtain a
license or register with them prior to offering such programs there. Compliance
with such regulations or legislation could have a material adverse affect on our
operations and financial condition.

          Occasionally, we receive inquires from insurance commissioners in
various states that require us to supply information about our CARExpress
membership programs to the insurance commissioner or other state regulatory
agency. To date, these agencies have concurred with our view that these programs
are not a form of insurance and are being sold in a proper manner. We can
provide no assurance that this situation will not change in the future, or that
an insurance commissioner will not successfully challenge our ability to offer
our CARExpress membership programs without compliance with state insurance
regulations. Furthermore, states may adopt regulations or enact legislation that
may affect the manner by which we sell our CARExpress membership programs or
restrict or prohibit the sale of our CARExpress membership programs. If we do
not comply with the regulations or legislation of these states, we may be
prevented from selling our programs in these states or may be subject to fines
and penalties that could have a material adverse affect on our operations and
financial condition.

          We intend to begin selling our CARExpress wrap-around programs
directly through National Health Brokerage Group and indirectly through
insurance brokers. The sale of insurance products and licensing of insurance
brokers and agents are subject to regulation and supervision predominantly by
state authorities. While the scope of regulation and form of supervision may
vary from state to state, insurance laws relating to the sale of insurance
products and licensing of insurance brokers and agents are often complex and
generally grant broad discretion to supervisory authorities in adopting
regulations. States have broad powers over the granting, renewing and revoking
of licenses and approvals, marketing activities and the receipt of commissions.
While we have obtained insurance licenses for National Health Brokerage Group in
some states, we have not yet engaged in the sale of our CARExpress wrap-around
programs through National Health Brokerage Group. In the event we decide to sell
our wrap-around programs in the future, we will need to comply with the
insurance brokerage laws and regulations of each state in which we wish to sell
the wrap-around programs. If we do not comply with the rules and regulations of
any of these states, the regulatory authorities of the applicable state may
revoke our license to sell our wrap-around programs in that state and may
subject us to fines and penalties.

          Our failure to comply with current, as well as newly enacted or
adopted, federal and state regulations could have a material adverse effect upon
our business, financial condition and results of operations in addition to the
following:


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     -    non-compliance may cause us to become the subject of a variety of
          enforcement or private actions;

     -    compliance with changes in applicable regulations could materially
          increase the associated operating costs;

     -    non-compliance with any rules and regulations enforced by a federal or
          state consumer protection authority may subject us or our management
          personnel to fines or various forms of civil or criminal prosecution;
          and

     -    non-compliance or alleged non-compliance may result in negative
          publicity potentially damaging our reputation, network relationships,
          client relationships and the relationship with program members,
          representatives and consumers in general.

          PRODUCT CLAIMS AND ADVERTISING LAWS. The Federal Trade Commission and
certain states regulate advertising, product claims, and other consumer matters.
The Federal Trade Commission may institute enforcement actions against companies
for false and misleading advertising of consumer products. In addition, the
Federal Trade Commission has increased its scrutiny of the use of testimonials,
similar to those used by us and the marketing companies, brokers and agents
marketing our CARExpress membership programs. We have not been the target of
Federal Trade Commission enforcement action since entering the health savings
industry in 2001. We can provide no assurance, however, that:

     -    the Federal Trade Commission will not question our advertising or
          other operations in the future;

     -    a state will not interpret product claims presumptively valid under
          federal law as illegal under that state's regulations; or

     -    future Federal Trade Commission regulations or decisions will not
          restrict the permissible scope of such claims.

          We are also subject to the risk of claims by marketing companies,
brokers and agents and their respective customers who may file actions on their
own behalf, as a class or otherwise, and may file complaints with the Federal
Trade Commission or state or local consumer affairs offices. These agencies may
take action on their own initiative against us for alleged advertising or
product claim violations, or on a referral from marketing companies, brokers,
agents, customers or others. Remedies sought in these actions may include
consent decrees and the refund of amounts paid by the complaining marketing
companies, brokers, agents or consumer, refunds to an entire class of marketing
companies, brokers, agents or customers, client refunds, or other damages, as
well as changes in our method of doing business. A complaint based on the
practice of one marketing company, broker or agent, whether or not we authorized
the practice, could result in an order affecting some or all of the marketing
companies, brokers and agents that we use in a particular state. Also, an order
in one state could influence courts or government agencies in other states
considering similar matters. Proceedings resulting from these complaints could
result in significant defense costs, settlement payments or judgments and could
have a material adverse effect on us.


                                       20

<Page>

          MARKETING LAWS AND REGULATIONS. While we do not employ any network
marketing personnel and do not intend to employ any such personnel in the
future, we utilize the services of marketing companies, brokers and agents to
market our CARExpress membership programs to the public. The marketing
activities of the marketing companies, brokers and agents that we utilize may be
subject to scrutiny by various state and federal governmental regulatory
agencies to ensure compliance with securities, franchise investment, business
opportunity, marketing and criminal laws prohibiting the use of "pyramid" or
"endless chain" types of selling organizations. These regulations are generally
directed at ensuring that advancement within a network marketing organization is
based on sales of the organization's products rather than investment in the
organization or other non-sales related criteria. For instance, some of these
regulations place limits on the extent to which marketing companies, brokers and
agents may receive commissions on sales of products or services generated by
marketing companies, brokers and agents that were not directly recruited by the
marketing companies, brokers and agents. The compensation structure of these
selling organizations can be very complex, and compliance with all of the
applicable laws is uncertain in light of evolving interpretation of existing
laws and the enactment of new laws and regulations pertaining to this type of
product distribution. We are not aware of any legal actions pending or
threatened by any governmental authority against us regarding the legality of
the marketing operations of the marketing companies, brokers and agents that we
utilize.

          HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT. In December 2000,
The Department of Health and Human Services issued final privacy regulations
pursuant to the Health Insurance Portability and Accountability Act of 1996
("HIPAA") that became effective in April 2003. HIPAA and the applicable
regulations impose extensive restrictions on the use and disclosure of
individually identifiable health information by certain entities. Also as part
of HIPAA, the Department of Health and Human Services has issued final
regulations standardizing electronic transactions between health plans,
providers and clearinghouses. Health plans, providers and clearinghouses are
required to conform their electronic and data processing systems with HIPAA's
electronic transaction requirements. We believe that we are not currently
required to comply with HIPAA since our CARExpress membership programs are not
insurance. However, in the event we obtain the necessary insurance licenses for
National Health Brokerage Group and decide to sell our CARExpress wrap-around
programs directly through National Health Brokerage Group, we may in the future
be required to comply with HIPAA. In the event we do become subject to HIPAA, we
will be subject to HIPAA's extensive restrictions on the use and disclosure of
individually identifiable health information by certain entities. This may
subject us to increased costs of compliance which may have a negative impact on
our business and operations. Sanctions for failing to comply with standards
issued pursuant to HIPAA include criminal penalties and civil sanctions.

         FRANCHISE LAWS AND REGULATIONS. The Federal Trade Commission, as well
as the securities regulators in states that have franchise laws, may assert that
our relationships with marketing companies, brokers and agents are subject to
the registration, disclosure and reporting requirements applicable to
franchises. Although we structure our relationships with marketing companies,
brokers and agents so as to avoid application of franchise laws, we may from
time to time have to expend resources in refuting such franchise law claims, and
if we are found to be in


                                       21

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violation may have to pay civil penalties, be enjoined from doing business in
the jurisdiction, or expend funds to bring our operations into compliance with
those laws.

INTELLECTUAL PROPERTY RIGHTS

          Our intellectual property rights are important to our business. We
rely upon confidentiality procedures and contractual provisions to protect our
business, proprietary technology and CARExpress brand. Our general policy is to
enter into confidentiality agreements with our employees and consultants, and
nondisclosure agreements with all other parties to whom we disclose confidential
information. We have obtained registered trademarks from the United States
Patent and Trademark Office for the word "CARExpress" and our CARExpress brand
and may apply for legal protection for certain of our other intellectual
property in the future. We can provide no assurance, however, that we will
receive such legal protection or that, if received, such legal protection will
be adequate to protect our intellectual property rights.

EMPLOYEES

          As of March 20, 2007, we had 19 employees. Of this number, 16 were
full-time employees, comprised of our management and full-time customer service
personnel, and three were part-time employees. We utilize the services of
approximately ten consultants and advisors as well as after-hours call center
representatives and temporary customer service representatives. We do not employ
the individuals working for our after-hours call center or the temporary
customer service representatives. None of our employees are represented by a
labor union, and we have never experienced a work stoppage. We believe that our
relations with our employees are good.

RISKS AND UNCERTAINTIES

          An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors in addition to other
information in this report before purchasing our common stock. The risks and
uncertainties described below are those that we currently deem to be material
and that we believe are specific to our company, our industry and our stock. In
addition to these risks, our business may be subject to risks currently unknown
to us. If any of these or other risks actually occurs, our business may be
adversely affected, the trading price of our common stock may decline and you
may lose all or part of your investment.

RISKS ASSOCIATED WITH OUR BUSINESS

WE ARE AN EARLY-STAGE COMPANY WITH AN UNPROVEN BUSINESS MODEL, WHICH MAKES IT
DIFFICULT FOR US TO EVALUATE OUR CURRENT BUSINESS AND FUTURE PROSPECTS.

          We entered the health savings industry in 2001 to address the need for
affordable healthcare nationwide. From 2001 to 2004, we engaged in relatively
limited operations due to our lack of available capital and focused our
operations almost exclusively on building CARExpress. During 2005 and 2006, we
entered into agreements with marketing companies, brokers, agents and other
third parties that are generating an increasing number of members and


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sales of our programs. While we are actively engaged in marketing our CARExpress
membership programs to the public and are experiencing rapid growth in members
and sales of our CARExpress membership programs, we have generated only a small
amount of revenue to date. In addition, since we have only been offering our
CARExpress membership programs to the public since 2003, we have very limited
historical data with respect to sales of our CARExpress membership cards. As a
result of these factors, the revenue and income potential of our business is
unproven, and we have only a limited operating history upon which to base an
evaluation of our current business and future prospects. Because of our limited
operating history and because the health savings industry is rapidly evolving,
we have limited insight into trends that may emerge and affect our business. We
may make errors in predicting and reacting to relevant business trends, which
could harm our business.

          Before purchasing our common stock, you should consider an investment
in our common stock in light of the risks, uncertainties and difficulties
frequently encountered by early-stage companies in new and rapidly evolving
markets such as ours, including those described herein. We may not be able to
successfully address any or all of these risks. Failure to adequately address
such risks could cause our business, financial condition and results of
operations to suffer.

WE HAVE A HISTORY OF LOSSES AND DO NOT EXPECT TO BEGIN GENERATING POSITIVE CASH
FLOWS FROM OPERATIONS UNTIL THE SECOND QUARTER OF 2007.

          We have experienced net losses in each fiscal quarter since our
inception and as of December 31, 2006, had an accumulated deficit of
approximately $17.9 million. We incurred net losses to common shareholders of
approximately $10 million for the year ended December 31, 2006 and approximately
$4.5 million for the year ended December 31, 2005. While we expect that our net
losses from operations will decrease for the foreseeable future and that we will
begin generating positive cash flows from operations during the second quarter
of 2007, we can provide no assurance that these expectations will be met. As a
result, we may continue to generate losses for the foreseeable future.

WE HAVE SIGNIFICANT LONG-TERM CONTRACTUAL OBLIGATIONS THAT WE MUST SATISFY AND
OPERATING EXPENSES THAT WE MUST PAY OVER THE NEXT SEVERAL YEARS AND MAY NEED TO
RAISE ADDITIONAL CAPITAL IF WE EXPERIENCE A SUBSTANTIAL DOWNTURN IN OUR BUSINESS
OR INCUR SUBSTANTIAL EXPENSES IN CONNECTION WITH UNFORESEEN EVENTS.

          We have significant long-term contractual obligations that we must
satisfy over the next several years. We are a party to employment agreements
with David M. Daniels, Alex Soufflas and Patricia S. Bathurst pursuant to which
we are currently paying them an annualized base salary of $348,000, $264,000 and
$159,720. We are also a party to an employment agreement with David A. Taylor.
On March 15, 2007, we terminated the employment of Mr. Taylor and, in accordance
with the terms of his employment agreement, are currently obligated to pay Mr.
Taylor $178,200 over a period of 12 months commencing on the date of
termination.

          We must also make payments under the operating lease for our office
space in Horsham, Pennsylvania in the aggregate amount of approximately $160,000
over the next 12 months. A


                                       23

<Page>

summary of the material terms of these employment agreements and the lease and
our financial obligations thereunder is provided below under "ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTRACTUAL OBLIGATIONS." If we are
unable to satisfy these obligations as they become due, our business may be
materially and adversely affected.

          We also expect to continue to incur significant operating expenses
over the next 12 months as we:

     -    develop new CARExpress membership programs and CARExpress wrap-around
          programs;

     -    recruit additional marketing and distribution partners and hire
          additional personnel, including customer service and support staff;

     -    leverage and develop relationships with additional preferred provider
          organizations ("PPOs") and provider networks;

     -    upgrade our operational and financial systems, procedures and
          controls; and

     -    comply with state and federal laws governing our business operations,
          comply with Securities and Exchange Commission ("SEC") reporting
          requirements and fulfill the other responsibilities that we have as a
          public company.

          While we believe that our current cash resources will be sufficient to
sustain our current operations for the next 12 months, we may need to raise
additional capital in the future in the event we experience a substantial
downturn in our business or incur substantial expenses in connection with
unforeseen events. We have not made arrangements to obtain additional financing
and we can provide no assurance that additional financing will be available in
an amount or on terms acceptable to us, if at all. If we cannot raise funds when
they are needed or if such funds cannot be obtained on acceptable terms, we may
not be able to pay our costs and expenses as they are incurred, sell or create
new CARExpress membership programs and CARExpress wrap-around programs, take
advantage of future business opportunities or respond to competitive pressures
or unanticipated events. This may seriously harm our business, financial
condition and results of operations.

WE MUST DEVELOP AND EXPAND OUR USE OF MARKETING AND DISTRIBUTION PARTNERS TO
INCREASE REVENUE AND IMPROVE OUR OPERATING RESULTS.

          Our success will depend in large part upon our ability to attract,
retain and motivate the marketing and distribution partners that market our
CARExpress membership programs. We will need to expand our existing
relationships and enter into new relationships with marketing and distribution
partners in order to increase our current and future market share and revenue.
We compete with all types of retail product and service companies throughout the
United States and overseas for marketing and distribution partners. We can
provide no assurance that we will be able to maintain and expand our existing
relationships or enter into new relationships, or that any new relationships
will be available on commercially reasonable terms. If we are unable to maintain
and expand our existing relationships or enter into new relationships with
marketing and distribution partners, we may lose customer introductions,
co-marketing benefits and sales, and our operating results may suffer.


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<Page>

OUR RELIANCE ON MARKETING COMPANIES, BROKERS AND AGENTS COULD RESULT IN REDUCED
REVENUE GROWTH BECAUSE WE HAVE LITTLE CONTROL OVER THEM OR THEIR
REPRESENTATIVES.

          Marketing companies, brokers and agents currently account for
substantially all of our revenue. None of these parties is obligated to continue
selling our CARExpress membership programs. Our ability to generate increased
revenue depends significantly upon the ability and willingness of these parties
to market and sell our CARExpress membership programs throughout the United
States. If they are unsuccessful in their efforts or are unwilling or unable to
market and sell our programs, our operating results may suffer.

          We cannot control the level of effort these marketing companies,
brokers and agents expend or the extent to which any of them will be successful
in marketing and selling our CARExpress membership programs. These parties
typically offer and sell our programs on a part-time basis, and may engage in
other business activities. These parties may give higher priority to the
products or services of our competitors and reduce the amount of effort they
devote to marketing our programs. We may not be able to prevent these parties
from devoting greater resources to support our competitors' products and
reducing or eliminating their efforts to sell our programs.

DEVELOPING AND MAINTAINING RELATIONSHIPS WITH PPOs ARE CRITICAL TO OUR SUCCESS
AND THE LOSS OF ANY SUCH RELATIONSHIPS COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS.

          As part of our business operations, we must develop and maintain
relationships with PPOs and other provider networks within each market area that
our services are offered. Developing and maintaining relationships with PPOs and
provider networks is based in part on professional relationships and the
reputation of our management and marketing personnel. Our PPO and provider
network relationships may be adversely affected by events beyond our control,
including departures of key personnel and alterations in professional
relationships. The loss of a PPO or provider network within a geographic market
area that is not be replaced on a timely basis, or at all, could have a material
adverse effect on our business, financial condition, and results of operations.

WE CURRENTLY RELY ON A SMALL NUMBER OF PPOs AND OTHER PROVIDER NETWORKS, THE
LOSS OF ANY ONE OF WHICH OR THE CHANGE IN OUR RELATIONSHIP WITH ANY ONE OF WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.

          CareMark, Aetna, Optum, Integrated Health, Three Rivers and HealthFi
are the principal PPOs and provider networks through which our members receive
savings on healthcare products and services through our CARExpress membership
programs. Our agreements with these parties are not exclusive, so they may
choose to partner with one of our competitors or compete directly with our
programs. In addition, these agreements may be terminated by either party on
between 45 and 180 days' prior written notice. While we currently have a good
relationship with each of these parties, we can provide no assurance that we
will continue to have a good relationship with any of them in the future. If
these organizations choose to partner with our competitors or compete directly
with our programs, our business could be adversely affected. In addition, if,
for any reason, we should lose a provider relationship and be unable to promptly
replace it with a


                                       25

<Page>

new one, we may be unable to offer certain benefits to members, which could have
a negative impact on our sales.

WE CURRENTLY GENERATE ALMOST ALL OF OUR REVENUE THROUGH A LIMITED NUMBER OF
MARKETING AND DISTRIBUTION PARTNERS.

          A limited number of marketing and distribution partners currently
generate almost all of our revenue for us. Although we are attempting to expand
the number of marketing and distribution partners selling our CARExpress
membership programs, we can provide no assurance that we will be successful in
doing so. In the event any of our significant marketing and distribution
partners stops selling our programs to prospective members, or if prospective
members do not purchase our programs through these marketing and distribution
partners, our business, financial condition and results of operations could be
materially and adversely affected.

BECAUSE WE EXPECT TO DERIVE SUBSTANTIALLY ALL OF OUR FUTURE REVENUE FROM OUR
CAREXPRESS MEMBERSHIP PROGRAMS AND CAREXPRESS WRAP-AROUND PROGRAMS, ANY FAILURE
OF THESE PROGRAMS TO SATISFY CUSTOMER DEMANDS OR TO ACHIEVE MEANINGFUL MARKET
ACCEPTANCE MAY SERIOUSLY HARM OUR BUSINESS.

          Substantially all of our revenue comes from monthly membership fees
that we receive from the sale of our CARExpress membership programs and
CARExpress wrap-around programs. We expect our CARExpress membership programs
and CARExpress wrap-around programs to continue to account for substantially all
of our revenue for the foreseeable future. If, for any reason, revenue derived
from sales of our CARExpress membership programs and CARExpress wrap-around
programs decline or do not grow as rapidly as we anticipate, our operating
results and our business may be significantly impaired. If our CARExpress
membership programs and CARExpress wrap-around programs fail to meet the needs
of our target customers, or if they do not compare favorably in breadth and
price to competing products, our growth may be limited. We cannot assure you
that our CARExpress membership programs and CARExpress wrap-around programs will
achieve any meaningful market acceptance. If we cannot develop a market for
these programs, or if a market develops more slowly than expected, our business,
financial condition and results of operations may suffer.

WE MAY NOT BE ABLE TO DEVELOP ACCEPTABLE NEW CAREXPRESS MEMBERSHIP PROGRAMS AND
CAREXPRESS WRAP-AROUND PROGRAMS AT A RATE REQUIRED BY OUR RAPIDLY CHANGING
MARKET.

          Our future success depends on our ability to develop new CARExpress
membership programs and CARExpress wrap-around programs that keep pace with the
rapidly evolving health savings industry and that address the changing needs of
our customers. We may not be successful in either developing such programs or
achieving market acceptance of any new programs that we develop. Uncertainties
about the timing and nature of changes to healthcare regulations and the
evolution of the health savings industry could delay our development of new
programs or increase the expenses in developing them. The failure of our
CARExpress membership programs and CARExpress wrap-around programs to satisfy
the needs of our customers may limit or reduce the market for these programs,
result in customer dissatisfaction, and seriously harm our business, financial
condition and results of operations.


                                       26

<Page>

WE MAY BECOME SUBJECT TO GOVERNMENT REGULATION MUCH LIKE AN INSURANCE COMPANY,
WHICH MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS.

          We offer and sell our CARExpress membership programs without a license
by any federal, state, or local regulatory licensing agency or commission. In
addition, we intend in the future to sell our CARExpress wrap-around programs
through National Health Brokerage Group. By comparison, companies that provide
insurance benefits and operate healthcare management organizations ("HMOs") and
PPOs are regulated by federal and state licensing agencies and commissions and
are subject to federal and state legislation, such as the Health Insurance
Portability and Accountability Act of 1996. These regulations cover operations,
including scope of benefits, rate formula, delivery systems, utilization review
procedures, quality assurance, enrollment requirements, claim payments,
marketing and advertising. Federal and state insurance regulatory agencies and
commissions may, in the future, determine that our programs are subject to
governmental regulation, which may adversely affect or limit our future
operations. Compliance with these statutes and regulations is costly and may
limit our operations. Statutes and regulations applicable to other healthcare
organizations with which we have contracted or may contract, such as patient
freedom of choice laws and anti-discrimination laws, may force our healthcare
PPOs to withdraw as our provider networks.

WE MAY NEED TO COMPLY WITH INSURANCE BROKERAGE LAWS IN THE EVENT WE SELL OUR
CAREXPRESS WRAP-AROUND PROGRAMS.

          We intend in the future to sell our CARExpress wrap-around programs
through National Health Brokerage Group. While we have obtained insurance
licenses for National Health Brokerage Group in some states, we have not yet
engaged in the marketing or sale of these wrap-around programs. The sale of
insurance products and the licensing of insurance brokers and agents are subject
to regulation and supervision, predominantly by state authorities. While the
scope of regulation and form of supervision may vary from state to state,
insurance laws relating to the sale of insurance products and licensing of
insurance brokers and agents are often complex and generally grant broad
discretion to supervisory authorities in adopting regulations. States have broad
powers over the granting, renewing and revoking of licenses and approvals,
marketing activities and the receipt of commissions. In the event we decide to
market and sell our these wrap-around programs in the future through National
Health Brokerage Group, we will need to comply with the insurance brokerage laws
and regulations of each state in which we wish to engage in these activities.
Our failure to comply with the rules and regulations of any of these states may
result in the revocation of our license to sell these wrap-around programs in
that state and may subject us to fines and penalties.

OUR OPERATIONS MAY BE AFFECTED BY FUTURE CHANGES IN INSURANCE LAWS AND
REGULATIONS.

          Our CARExpress membership programs are not regulated as insurance
products, and our marketing and distribution partners are not required to be
licensed as insurance brokers to be able to sell our CARExpress membership
programs. Congress or state legislatures may in the future seek to bring our
CARExpress membership programs and sales activities under the jurisdiction of
insurance regulators through changes to insurance laws and regulations. Should
that occur,


                                       27

<Page>

we may face material costs of compliance with the new laws and regulations, and
if we cannot comply, we may be prohibited from selling our health discount
programs in certain jurisdictions.

          If we become subject to any insurance licensing or regulatory
requirements, whether as a result of changes in insurance laws bringing our
CARExpress membership programs under the jurisdiction of federal and state
insurance agencies or as a result of National Health Brokerage Group becoming
licensed to sell our CARExpress wrap-around programs and engaging in sales of
these wrap-around programs, our failure to comply with any such requirements
could lead to a revocation, suspension or loss of licensing status, termination
of contracts, and legal and administrative enforcement actions. In addition, the
use of the internet in the marketing and distribution of our CARExpress
membership programs and CARExpress wrap-around programs is relatively new and
presents certain regulatory issues, such as whether internet service providers,
gateways or cybermalls are engaged in the solicitation or sale of insurance
policies or otherwise transacting business requiring licensure under the laws of
one or more states. Regulatory requirements are subject to change from time to
time and may become more restrictive in the future, thereby making compliance
more difficult or expensive or otherwise affecting or restricting our ability to
conduct our business as now conducted or proposed to be conducted.

OUR USE OF MARKETING COMPANIES, BROKERS AND AGENTS COULD SUBJECT US TO
ENFORCEMENT ACTIONS, PENALTIES AND NEGATIVE PUBLICITY IF ANY SUCH PARTIES DO NOT
COMPLY WITH APPLICABLE FEDERAL AND STATE REGULATIONS.

          The marketing companies, brokers and agents that we utilize and the
manner by which such parties may recruit additional parties to market our
CARExpress membership programs and CARExpress wrap-around programs are subject
to federal and state laws and regulations administered by the Federal Trade
Commission and various state agencies. These laws and regulations include
securities, franchise investment, business opportunity, and criminal laws
prohibiting the use of "pyramid" or "endless chain" types of selling
organizations. These regulations are generally directed at ensuring that product
and service sales are ultimately made to consumers (as opposed to other
marketing companies, brokers and agents) and that advancement within these
parties is based on sales of products and services, rather than on investment in
the party or other non-retail sales related criteria. Compliance with all of the
applicable regulations and laws is uncertain because of the evolving
interpretations of existing laws and regulations, and the enactment of new laws
and regulations pertaining in general to marketing companies, brokers and agents
and product and service distribution. Accordingly, there is the risk that the
marketing companies, brokers and agents that we use may be found to be in
violation with applicable laws and regulations. Such a finding could:

     -    result in an enforcement action and imposition of a penalty against us
          or the marketing companies, brokers or agents;

     -    require the marketing companies, brokers or agents to modify their
          network of representatives; or

     -    result in negative publicity to us or the marketing companies, brokers
          or agents.


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<Page>

Any of these consequences could have a material adverse effect on our business,
financial condition and results of operations.

OUR CONTINUED GROWTH COULD STRAIN OUR PERSONNEL AND INFRASTRUCTURE RESOURCES,
AND IF WE ARE UNABLE TO IMPLEMENT APPROPRIATE CONTROLS AND PROCEDURES TO MANAGE
OUR GROWTH, WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS PLAN.

          We are experiencing rapid growth in our operations, which is placing,
and will continue to place, a significant strain on our management,
administrative, operational and financial infrastructure. Our future success
will depend in part upon the ability of our management to manage growth
effectively. This may require us to hire and train additional personnel to
manage our expanding operations. In addition, we will be required to continue to
improve our operational, financial and management controls and our reporting
systems and procedures. If we fail to successfully manage our growth, we may be
unable to execute upon our business plan.

WE FACE INCREASING COMPETITION FROM MORE ESTABLISHED COMPANIES THAT HAVE
SIGNIFICANTLY GREATER RESOURCES THAN WE DO THAT MAY PLACE PRESSURE ON OUR
PRICING AND THAT COULD PREVENT US FROM INCREASING REVENUE OR ATTAINING
PROFITABILITY.

          The health savings industry is rapidly evolving and competition for
members is becoming increasingly intense. Our CARExpress membership programs and
CARExpress wrap-around programs are similar to or directly in competition with
products and services offered by many of our direct and potential competitors.
Some of our healthcare providers may provide, either directly or through third
parties, programs that directly compete with our programs. If discount
healthcare membership programs become standard features of healthcare companies,
the demand for our CARExpress membership programs and CARExpress wrap-around
programs may decrease. In addition, the PPOs and provider networks that we use
may decide to develop or sell competing products instead of our CARExpress
membership programs and CARExpress wrap-around programs. Moreover, even if our
CARExpress membership programs and CARExpress wrap-around programs provide a
greater breadth of products and services and greater price discounts than
programs offered by other companies operating in the health savings industry,
potential customers might accept this limited offering in lieu of purchasing our
CARExpress membership programs and CARExpress wrap-around programs due to their
lack of familiarity with our programs.

          Some of our competitors enjoy substantial competitive advantages, such
as:

     -    programs that are functionally similar or superior to our membership
          programs;

     -    established reputations relating to membership programs;

     -    greater name recognition and larger marketing budgets and resources;

     -    established marketing relationships and access to larger customer
          bases; and

     -    substantially greater financial, personal and other resources.

          We compete with numerous well-established companies that design,
market and sell healthcare membership programs. Our current principal
competitors include companies that


                                       29

<Page>

offer healthcare products and services through membership programs much like our
CARExpress membership programs, as well as insurance companies, PPOs, provider
networks, and other organizations that offer health benefit programs to their
customers. Some of our competitors may be companies that have programs that are
functionally similar or superior to our health membership programs. Most of our
competitors possess substantially greater financial, marketing, personnel and
other resources than us.

          We can provide no assurance that our current or future competitors
will not:

     -    provide healthcare membership programs comparable or superior to our
          programs at lower membership prices;

     -    adapt more quickly to evolving healthcare industry trends or changing
          industry requirements;

     -    respond more quickly and effectively to new or changing opportunities,
          technologies, standards or customer requirements;

     -    increase their emphasis on programs similar to ours to more
          effectively compete with us; or

     -    successfully recruit marketing companies, brokers and agents by
          offering more attractive compensation plans.

For these and other reasons, we may not be able to compete successfully against
our current and future competitors. Increased competition may result in price
reductions, reduced gross margins, and loss of market share, any of which could
have a material, adverse effect on our business, financial condition and results
of operations.

OUR FAILURE TO ADEQUATELY PROTECT OUR CAREXPRESS BRAND AND OTHER INTELLECTUAL
PROPERTY COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS.

          Intellectual property is important to our success. We rely upon
confidentiality procedures and contractual provisions to protect our business,
proprietary technology and CARExpress brand. Our general policy is to enter into
confidentiality agreements with our employees and consultants, and nondisclosure
agreements with all other parties to whom we disclose confidential information.
We have obtained registered trademarks from the United States Patent and
Trademark Office for the word "CARExpress" and our CARExpress brand and may
apply for legal protection for certain of our other intellectual property in the
future. These trademarks and any additional legal protection we may obtain in
the future may be challenged by others or invalidated through administrative
process or litigation. As a result, our means of protecting our proprietary
technology and brands may be inadequate. Furthermore, despite our efforts, we
may be unable to prevent third parties from infringing upon or misappropriating
our intellectual property. Any such infringement or misappropriation could have
a material adverse effect on our business, financial condition and results of
operations.


                                       30

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OUR SYSTEMS MAY BE VULNERABLE TO SECURITY RISKS OR SERVICE DISRUPTIONS THAT
COULD HARM OUR BUSINESS.

         Although we have taken measures to secure our systems against security
risks and other causes of disruption of electronic services, our servers are
vulnerable to physical or electronic break-ins and service disruptions, which
could lead to interruptions, delays, loss of data or the inability to process
customer requests. Such events could be very expensive to remedy, could damage
our reputation and could discourage existing and potential customers from
purchasing our CARExpress membership programs. Any such events could
substantially harm our business, results of operations and financial condition.

WE ARE DEPENDENT ON OUR MANAGEMENT TEAM, AND THE LOSS OF ANY KEY MEMBER OF THIS
TEAM MAY PREVENT US FROM IMPLEMENTING OUR BUSINESS PLAN IN A TIMELY MANNER.

          Our success depends largely upon the continued services of our
executive officers and other key management and development personnel. While we
have entered into employment agreements with each of our executive officers,
they may each terminate their employment with us at any time without penalty. We
do not maintain key person life insurance policies on any of our employees. The
loss of one or more of our key employees could seriously harm our business,
financial condition or results of operations. In such an event we may be unable
to recruit personnel to replace these individuals in a timely manner, or at all,
on acceptable terms.

BECAUSE COMPETITION FOR OUR TARGET EMPLOYEES IS INTENSE, WE MAY NOT BE ABLE TO
ATTRACT AND RETAIN THE HIGHLY-SKILLED EMPLOYEES THAT WE NEED TO SUPPORT OUR
PLANNED GROWTH.

          To execute our growth plan, we must attract and retain
highly-qualified personnel. We need to hire additional personnel in virtually
all operational areas, including selling and marketing, operations and technical
support, customer service and administration. Competition for these personnel
remains intense, especially for individuals with high levels of experience in
designing and developing health savings programs. We may not be successful in
attracting and retaining qualified personnel. Many of the companies with which
we compete for experienced personnel have greater resources than we have. If we
fail to attract new personnel or retain and motivate our current personnel, our
business and future growth prospects could be severely harmed.

IF WE ACQUIRE ANY HEALTHCARE COMPANIES OR PRODUCTS IN THE FUTURE, SUCH COMPANIES
AND PRODUCTS COULD PROVE DIFFICULT TO INTEGRATE, DISRUPT OUR BUSINESS, DILUTE
STOCKHOLDER VALUE AND ADVERSELY AFFECT OUR OPERATING RESULTS.

          We may acquire or make investments in complementary healthcare
companies, businesses, assets, products and services in the future. We have not
made any such acquisitions or investments to date, and therefore, our ability to
make acquisitions or investments is unproven. Acquisitions and investments
involve numerous risks, including:

     -    difficulties in integrating operations, technologies, services and
          personnel;

     -    the diversion of financial and management resources from existing
          operations;


                                       31

<Page>

     -    the risk of entering new markets;

     -    the potential loss of key employees; and

     -    the inability to generate sufficient revenue to offset acquisition or
          investment costs.

          In addition, if we finance any acquisitions by issuing convertible
debt or equity securities, our existing stockholders may be diluted which could
affect the market price of our stock. As a result, if we fail to properly
evaluate and execute any acquisitions or investments, our business and prospects
may be seriously harmed.

RISKS ASSOCIATED WITH OUR INDUSTRY

THE HEALTH SAVINGS INDUSTRY IS RAPIDLY EVOLVING AND IF WE ARE NOT SUCCESSFUL IN
PROMOTING THE BENEFITS OF OUR CAREXPRESS MEMBERSHIP PROGRAMS, CAREXPRESS
WRAP-AROUND PROGRAMS AND CAREXPRESS BRAND, OUR GROWTH MAY BE LIMITED.

          Based on our experience with consumers, we believe that many consumers
are not familiar with the health savings industry and the benefits provided by
health discount membership programs. In addition, there may be a limited-time
opportunity to achieve and maintain a significant share of the market for health
discount membership programs due in part to the rapidly evolving nature of the
health savings industry and the substantial resources available to our existing
and potential competitors. If people do not recognize or acknowledge these
benefits, the market for our CARExpress membership programs and CARExpress
wrap-around programs may develop more slowly than we expect, which could
adversely affect our operating results.

          Developing and maintaining awareness of our CARExpress brand is
critical to achieving widespread acceptance of our CARExpress membership
programs and CARExpress wrap-around programs. Furthermore, we believe that the
importance of brand recognition will increase as competition in our market
develops. Successful promotion of our CARExpress brand will depend largely on
the effectiveness of our marketing efforts and on our ability to develop
reliable and useful CARExpress membership programs and CARExpress wrap-around
programs at competitive prices. If we fail to successfully promote our
CARExpress brand, or if our expenses to promote and maintain our CARExpress
brand are greater than anticipated, our financial condition and results of
operations could suffer.

THE SUCCESS OF OUR BUSINESS DEPENDS UPON THE CONTINUED GROWTH AND ACCEPTANCE OF
DISCOUNT HEALTHCARE MEMBERSHIP PROGRAMS AS A SUITABLE ALTERNATIVE OR SUPPLEMENT
TO TRADITIONAL HEALTH INSURANCE.

          Growth in sales of our CARExpress membership programs depends on the
acceptance of discount healthcare membership programs as a suitable alternative
or supplement to traditional health insurance. Health discount membership
programs could lose their viability as an alternative to health insurance due to
changes in healthcare laws and regulations, an inadequate number of healthcare
providers participating in the programs, customer dissatisfaction with the
method of making payments and receiving discounts, and new alternative
healthcare solutions. If health discount membership programs do not gain
widespread market acceptance, the demand


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for our CARExpress membership programs could be significantly reduced, which
could have a material adverse effect on our business, financial condition and
results of operations.

EVOLVING REGULATION OF THE HEALTH SAVINGS INDUSTRY MAY AFFECT US ADVERSELY.

          As the health savings industry continues to evolve, increasing
regulation by federal and state agencies becomes more likely. The marketing and
sale of discount healthcare membership programs is subject to federal, state and
local regulation, including the prohibition of business corporations from
providing medical care, the fraud and abuse provisions of the Medicare and
Medicaid statutes, state laws that prohibit referral fees and fee splitting, and
regulations applicable to insurance companies and organizations that provide
healthcare services. Compliance with changes in applicable regulations could
materially increase the associated operating costs. Non-compliance with these
laws and regulations could cause us to become the subject of a variety of
enforcement or private actions, subject us or our management personnel to fines
or various forms of civil or criminal prosecution, and result in negative
publicity potentially damaging our reputation, our PPO and network
relationships, and our relationships with members and consumers in general. Our
failure to comply with current, as well as newly enacted or adopted federal and
state regulations, could have a material adverse effect upon our business,
financial condition and results of operations.

RISKS ASSOCIATED WITH OUR STOCK

FUTURE SALES OF OUR COMMON STOCK MAY CAUSE OUR STOCK PRICE TO DECLINE.

          As of March 20, 2007, we had 32,659,106 shares of common stock
outstanding. Of this amount, 16,810,101 are freely tradable without restriction
or further registration under the Securities Act, unless the shares are
purchased by our affiliates. The remaining 15,849,005 shares of common stock
outstanding are "restricted securities" as that term is defined under Rule 144
of the Securities Act. None of our directors, executive officers, or employees
is subject to lock-up agreements or market stand-off provisions that limit their
ability to sell shares of our common stock. In addition, only 1,181,250 shares
of our common are subject to lock-up agreements or market stand-off provisions.
The sale of a large number of shares of our common stock, or the belief that
such sales may occur, could cause a drop in the market price of our common
stock.

WHILE WE BELIEVE THAT OUR CURRENT CASH RESOURCES WILL BE SUFFICIENT TO SUSTAIN
OUR CURRENT OPERATIONS FOR THE NEXT 12 MONTHS, IT IS POSSIBLE THAT WE MAY NEED
TO RAISE ADDITIONAL FUNDS IN THE FUTURE THROUGH ISSUANCES OF SECURITIES AND SUCH
ISSUANCE COULD BE DILUTIVE TO STOCKHOLDERS.

          While we believe that our current cash resources will be sufficient to
sustain our current operations for the next 12 months, we may need to raise
additional capital in the future in the event we experience a substantial
downturn in our business or incur substantial expenses in connection with
unforeseen events. If such an event occurs, we may need to raise such capital
through issuances of shares of our common stock or securities convertible into
shares of our common stock, as well as issuances of debt. Such additional
financing may be dilutive to our stockholders, and debt financing, if available,
may involve restrictive covenants which may limit our operating flexibility. If
additional capital is raised through the issuances of shares of our


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common stock or securities convertible into shares of our common stock, the
percentage ownership of existing stockholders will be reduced. These
stockholders may experience additional dilution in net book value per share and
any additional equity securities may have rights, preferences and privileges
senior to those of the holders of our common stock.

THE MARKET PRICE OF OUR COMMON STOCK IS LIKELY TO BE HIGHLY VOLATILE AND SUBJECT
TO WIDE FLUCTUATIONS.

          The market price of our common stock is likely to be highly volatile
and could be subject to wide fluctuations in response to a number of factors
that are beyond our control, including:

     -    announcements of new programs or services by our competitors;

     -    demand for our CARExpress membership programs and CARExpress
          wrap-around programs; and

     -    fluctuations in revenue from the marketing and distribution partners
          that we use.

          In addition, the market price of our common stock could be subject to
wide fluctuations in response to:

     -    quarterly variations in our revenue and operating expenses;

     -    announcements of new healthcare membership programs by us; and

     -    our ability to accommodate future growth in our operations.

          In addition, the stock market has experienced significant price and
volume fluctuations that have particularly affected the market price of the
stock of many early-stage companies and that often have been unrelated or
disproportionate to the operating performance of these companies. Market
fluctuations such as these may seriously harm the market price of our common
stock. Further, securities class action suits have been filed against companies
following periods of market volatility in the price of their securities. If such
an action is instituted against us, we may incur substantial costs and a
diversion of management attention and resources, which would seriously harm our
business, financial condition and results of operations.

OUR OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, AND THESE FLUCTUATIONS MAY
CAUSE OUR STOCK PRICE TO FALL.

          Our operating results will likely vary in the future primarily as the
result of fluctuations in our billings, revenue and operating expenses. We
expect to continue to incur significant operating expenses in the future as we
continue engaging in selling and marketing activities, develop new discount
healthcare membership programs, hire additional personnel and comply with state
and federal laws applicable to our business and SEC reporting requirements. If
our results of operations do not meet the expectations of our shareholders or
the investment community, the price of our common stock may decline.


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OUR SHARES OF COMMON STOCK ARE NOT LISTED FOR TRADING ON A NATIONAL SECURITIES
EXCHANGE OR THE NASDAQ STOCK MARKET.

          Our common stock began trading on the OTC Bulletin Board on March 30,
2006. While our common stock currently trades on the OTC Bulletin Board, it does
not trade on any national securities exchange or the Nasdaq Stock Market.
Investments in securities trading on the OTC Bulletin Board are generally less
liquid than investments in securities trading on a national securities exchange
or the Nasdaq Stock Market. While we intend to submit an application to a
national securities exchange or the Nasdaq Stock Market to list our shares of
common stock for trading thereon, we can provide no assurance that we will
submit such an application, that such application will be accepted, or that our
shares of common stock will be approved for trading thereon. The failure of our
shares to be approved for trading on a national securities exchange or the
Nasdaq Stock Market may have the effect of limiting the trading activity of our
common stock and reducing the liquidity of an investment in our common stock.

COMPLIANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 MAY RESULT IN
SUBSTANTIAL COSTS TO US AND A DIVERSION OF MANAGEMENT ATTENTION AND RESOURCES,
AND FAILURE TO COMPLY IN A TIMELY MANNER COULD RESULT IN OUR BUSINESS BEING
HARMED AND OUR STOCK PRICE DECLINING.

          Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley
Act of 2002 will require management to complete an annual assessment of our
internal control over financial reporting and will require our independent
registered public accounting firm to complete an attestation report of our
assessment. The SEC has extended the compliance dates for smaller public
companies, including us, on several occasions. Accordingly, we believe that the
first annual assessment of our internal controls that our management will need
to complete will be required in connection with the preparation of our annual
report for our fiscal year ending December 31, 2007 and that the first
attestation report of our assessment that our independent registered public
accounting firm will need to complete will be required in connection with the
preparation of our annual report for our fiscal year ending December 31, 2008.

          The standards that must be met for management to assess the internal
control over financial reporting are new and complex, and will require
significant documentation, testing and possible remediation to meet the detailed
standards. In addition, the attestation process that must be performed by our
independent registered public accounting firm is also new and complex. We may
encounter problems or delays in completing the activities necessary to make an
assessment of our internal control over financial reporting, completing the
implementation of any requested improvements, or receiving an unqualified
attestation of our assessment by our independent registered public accountants.
Compliance with these new rules could require us to incur substantial costs and
may require a significant amount of time and attention of management, which
could seriously harm our business, financial condition and results of
operations. If we are unable to assess our internal control over financial
reporting as effective, or if our independent registered public accounting firm
is unable to provide an unqualified attestation report on our assessment,
investors may lose confidence in us and our stock may be negatively impacted.


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WE ARE NOT SUBJECT TO CERTAIN OF THE CORPORATE GOVERNANCE PROVISIONS OF THE
SARBANES-OXLEY ACT OF 2002 AND, WITHOUT VOLUNTARY COMPLIANCE WITH SUCH
PROVISIONS, WILL NOT RECEIVE THE BENEFITS AND PROTECTIONS THEY WERE ENACTED TO
PROVIDE.

          Since our common stock is not listed for trading on a national
securities exchange, we are not subject to certain of the corporate governance
rules established by the national securities exchanges pursuant to the
Sarbanes-Oxley Act of 2002. These rules relate to independent director
standards, director nomination procedures, audit and compensation committees
standards, the use of an audit committee financial expert, and the adoption of a
code of ethics.

          Our board of directors currently consists of David M. Daniels, who is
our Chief Executive Officer. Mr. Daniels is not an "independent director" as
such term is defined by any of the national securities exchanges. Our board of
directors has not created a separately-designated standing audit committee and
we do not have an individual who qualifies as an "audit committee financial
expert," as that term is defined in Item 407(d)(5)(ii) of Regulation S-B
promulgated under the Securities Act, on our board of directors. Unless we
voluntarily elect to fully comply with all of these rules, we will not receive
the benefits and protections they were enacted to provide.

          While intend to file an application to have our securities listed for
trading on a national securities exchange in the future. which would require us
to fully comply with those obligations, we cannot assure you that we will file
such an application, that we will be able to satisfy applicable listing
standards, or, if we did satisfy such standards, that we will be successful in
receiving approval of our application by the governing body of the applicable
national securities exchange.

WE HAVE ISSUED A SIGNIFICANT NUMBER OF SECURITIES TO BUSINESS PARTNERS, SERVICE
PROVIDERS, CONSULTANTS AND ADVISORS AND MAY ISSUE ADDITIONAL SECURITIES TO SUCH
PERSONS IN THE FUTURE.

          Since January 1, 2004, we have issued 6,217,325 shares of our common
stock, options exercisable into 400,000 shares of our common stock and warrants
exercisable into 4,629,000 shares of our common stock to business partners,
service providers, consultants and advisors as compensation for services
rendered or to be rendered in the future. We may issue additional shares of our
common stock or securities convertible or exercisable into shares of our common
stock to such persons in the future as compensation for services rendered or to
be rendered. The issuance of additional securities to such persons will result
in dilution to existing stockholders since the percentage ownership of such
stockholders will be reduced.

IF OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS CHOOSE TO ACT
TOGETHER, THEY MAY BE ABLE TO INFLUENCE OUR MANAGEMENT AND OPERATIONS, WHICH MAY
PREVENT US FROM TAKING ACTIONS THAT MAY BE FAVORABLE TO YOU.

          Our executive officers, directors and principal stockholders, and
their respective affiliates, beneficially own approximately 37.8% of our
outstanding common stock. These stockholders, acting together, have the ability
to exert substantial influence over any matters requiring approval by our
stockholders, including the election and removal of directors and any proposed
merger, consolidation or sale of all or substantially all of our assets. In
addition, they could dictate the


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<Page>

management of our business and affairs. This concentration of ownership could
have the effect of delaying, deferring or preventing a change in control of us
or impeding a merger or consolidation, takeover or other business combination
that could be favorable to you.

APPLICABLE SEC RULES GOVERNING THE TRADING OF "PENNY STOCKS" MAY LIMIT THE
TRADING AND LIQUIDITY OF OUR COMMON STOCK WHICH MAY AFFECT THE TRADING PRICE OF
OUR COMMON STOCK.

          Our common stock is a "penny stock" as defined under Rule 3a51-1 of
the Securities Exchange Act and is accordingly subject to SEC rules and
regulations that impose limitations upon the manner in which our common stock
can be publicly traded. These regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the associated risks. Under these regulations, certain
brokers who recommend such securities to persons other than established
customers or certain accredited investors must make a special written
suitability determination regarding such a purchaser and receive such
purchaser's written agreement to a transaction prior to sale. These regulations
may have the effect of limiting the trading activity of our common stock and
reducing the liquidity of an investment in our common stock.

ITEM 2. DESCRIPTION OF PROPERTY.

          Our corporate headquarters and principal offices are located at 120
Gibraltar Road, Suite 107, Horsham, Pennsylvania 19044, where we lease
approximately 7,100 square feet of space for a monthly rent payment of
approximately $13,000. This lease expires on May 30, 2007. We recently entered
into an amendment to this lease pursuant to which we extended the lease for a
period of three years commencing June 1, 2007 and expiring May 30, 2010.

          We believe that our office space is adequate to support our current
operations and that adequate additional space is available to support projected
growth in our operations over the next 12 months.

ITEM 3. LEGAL PROCEEDINGS.

          We are not currently a party to any material legal proceedings.

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

          None.


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                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

          Our common stock currently trades on the OTC Bulletin Board under the
symbol "NHPR". The first reported trade of our common stock on the OTC Bulletin
Board occurred on March 30, 2006. The following table sets forth the range of
high and low bid prices for shares of our common stock on the OTC Bulletin Board
for the periods indicated, as reported by Nasdaq. The quotations represent
inter-dealer prices, without retail mark-up, markdown or commission, and may not
represent actual transactions.

FISCAL YEAR ENDED DECEMBER 31, 2006    HIGH    LOW
-----------------------------------   -----   -----
Quarter ended March 31, 2006          $0.85   $0.40
Quarter ended June 30, 2006           $2.15   $0.65
Quarter ended September 30, 2006      $1.61   $0.52
Quarter ended December 31, 2006       $1.44   $0.71

          The last reported trading price of our common stock as reported on the
OTC Bulletin Board on March 20, 2007 was $0.72 per share.

HOLDERS

          As of March 20, 2007, the number of stockholders of record of our
common stock was 129.

DIVIDENDS

         We have not paid any cash dividends on our common stock to date, nor do
we intend to pay any cash dividends on our common stock in the foreseeable
future. We intend to retain future earnings, if any, to finance the operation
and development of our business.

RECENT SALES OF UNREGISTERED SECURITIES

          During our fiscal year ended December 31, 2006, we sold the following
securities without registration under the Securities Act:

          In February 2006, we issued 300,000 shares of common stock to Roger H.
Folts, our former Chief Financial Officer and Secretary, in partial
consideration for accounting and related services to be provided to us. Of this
amount, 250,000 shares were not registered under the Securities Act. The
securities were issued to an accredited investor in a private placement
transaction exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act directly by us without engaging
in any advertising or general


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<Page>

solicitation of any kind and without payment of underwriting discounts or
commissions to any person.

          In April 2006, we issued 10,000 shares of common stock to Centerpointe
Property, LLC in connection with the termination of the Commercial Office Lease
dated June 13, 2005 with respect to the office space located in Sarasota,
Florida in consideration for which all rent and other expenses that were due and
payable under the lease were deemed paid in full, and we and Centerpointe
released each other from any and all claims that we may now hold or may in the
future hold arising out of the lease. These securities were issued to one
accredited investor in a private placement transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act directly by us without engaging in any advertising or general
solicitation of any kind and without payment of underwriting discounts or
commissions to any person.

          In April 2006, we issued 350,000 shares of common stock to an
accredited investor in exchange for consulting and advisory services. These
securities were issued to one accredited investor in a private placement
transaction exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act directly by us without engaging
in any advertising or general solicitation of any kind and without payment of
underwriting discounts or commissions to any person.

          In May 2006, we completed a private offering of 211,934 shares of
common stock, Class A warrants to acquire 105,967 shares of our common stock,
and Class B warrants to acquire 105,967 shares of our common stock for aggregate
cash consideration of $127,160. These securities were sold in units comprised of
two shares of common stock, one Class A warrant and one Class B warrant. The
units were sold at a purchase price of $1.20 per unit. The Class A warrants are
initially exercisable into one share of our common stock at an exercise price of
$.60 per share, are exercisable for a period of 18 months commencing on the date
of issuance, and expire at the end of the exercise period. The Class B warrants
are initially exercisable into one share of our common stock at an exercise
price of $.80 per share, are exercisable for a period of 36 months commencing on
the date of issuance, and expire at the end of the exercise period. We issued
these securities to a limited number of accredited investors in a private
offering exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act without engaging in any
advertising or general solicitation of any kind and without payment of
underwriting discounts or commissions to any person.

          In August 2006, we completed a private offering of 1,705,000 shares of
common stock, Class A warrants to acquire 1,705,000 shares of our common stock,
and Class B warrants to acquire 1,705,000 shares of our common stock for
aggregate cash consideration of $1,364,000. These securities were sold in units
comprised of one share of common stock, one Class A warrant and one Class B
warrant. The units were sold at a purchase price of $0.80 per unit. The Class A
warrants were initially exercisable into one share of our common stock at an
exercise price of $.80 per share, were exercisable until August 31, 2006, and
expired at the end of the exercise period. The Class B warrants were initially
exercisable into one share of our common stock at an exercise price of $1.00 per
share, were exercisable until November 30, 2006, and expired at the end of the
exercise period. We paid placement agent fees consisting of 248,000


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<Page>

units identical to the units sold in the offering. We agreed to use our
reasonable best efforts to file a registration statement with the SEC to
register all shares of common stock issued by us upon the exercise of the
warrants. We issued these securities to a limited number of accredited investors
in a private offering exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act without engaging
in any advertising or general solicitation of any kind.

          In September 2006, we issued 100,000 shares of common stock to an
accredited investor in exchange for sales and marketing services. We agreed to
use our reasonable best efforts to file a registration statement with the SEC to
register all of the shares of common stock. These securities were issued to one
accredited investor in a private placement transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act directly by us without engaging in any advertising or general
solicitation of any kind and without payment of underwriting discounts or
commissions to any person.

          In September 2006, we completed a private offering of 710,000 shares
of common stock, Class A warrants to acquire 710,000 shares of our common stock,
and Class B warrants to acquire 710,000 shares of our common stock for aggregate
cash consideration of $355,000. These securities were sold in units comprised of
one share of common stock, one Class A warrant and one Class B warrant. The
units were sold at a purchase price of $0.50 per unit. The Class A warrants were
initially exercisable into one share of our common stock at an exercise price of
$0.50 per share, were exercisable until October 16, 2006, and expired at the end
of the exercise period. The Class B warrants are initially exercisable into one
share of our common stock at an exercise price of $0.50 per share, are
exercisable until August 31, 2007, and expire at the end of the exercise period.
We paid finder fees consisting of 106,500 units identical to the units sold in
the offering. We agreed to use our reasonable best efforts to file a
registration statement with the SEC to register all shares of common stock
issued in this offering and all shares of common stock issued by us upon the
exercise of the warrants by November 30, 2006. We issued these securities to a
limited number of accredited investors in a private offering exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act without engaging in any advertising or general solicitation of
any kind.

          In September 2006, we issued 200,000 shares of common stock, Class A
warrants to acquire 200,000 shares of our common stock, Class B warrants to
acquire 200,000 shares of our common stock, and Class C warrants to acquire
200,000 shares of our common stock to an accredited investor for aggregate cash
consideration of $100,000. These securities were sold in units comprised of two
shares of common stock, two Class A warrants, two Class B warrants and two Class
C warrants. The units were sold at a purchase price of $1.00 per unit. The Class
A warrants were initially exercisable into one share of our common stock at an
exercise price of $0.50 per share, were exercisable until November 30, 2006, and
expired at the end of the exercise period. The Class B warrants are initially
exercisable into one share of our common stock at an exercise price of $0.50 per
share, are exercisable until August 31, 2007, and expire at the end of the
exercise period. The Class C warrants are initially exercisable into one share
of our common stock at an exercise price of $0.80 per share, are exercisable
until November 30, 2007, and expire at the end of the exercise period. We paid
finder fees consisting of 15,000 units identical to the units sold in the
offering. We agreed to use our reasonable best efforts to file a


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<Page>

registration statement with the SEC to register all shares of common stock
issued in this offering and all shares of common stock issued by us upon the
exercise of the warrants by November 30, 2006. These securities were issued to
one accredited investor in a private placement transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act directly by us without engaging in any advertising or general
solicitation of any kind.

          In October 2006, we completed a private offering of 510,000 shares of
common stock, Class A warrants to acquire 510,000 shares of our common stock,
Class B warrants to acquire 510,000 shares of our common stock, Class C warrants
to acquire 510,000 shares of our common stock, and Class D warrants to acquire
510,000 shares of our common stock for aggregate cash consideration of $255,000.
These securities were sold in units comprised of one share of common stock, one
Class A warrant, one Class B warrant, one Class C warrant and one Class D
warrant. The units were sold at a purchase price of $0.50 per unit. The Class A
warrants were initially exercisable into one share of our common Stock at an
exercise price of $0.50 per share, were exercisable until October 16, 2006, and
expired at the end of the exercise period. The Class B warrants were initially
exercisable into one share of our common stock at an exercise price of $0.50 per
share, were exercisable until November 30, 2006 and expired at the end of the
exercise period. The Class C warrants are initially exercisable into one share
of our common stock at an exercise price of $0.50 per share, are exercisable
until August 31, 2007, and expire at the end of the exercise period. The Class D
warrants are initially exercisable into one share of our common stock at an
exercise price of $0.80 per share, are exercisable until November 30, 2007, and
expire at the end of the exercise period. We paid finder fees consisting of
76,500 units identical to the units sold in the offering. We agreed to use our
reasonable best efforts to file a registration statement with the SEC to
register all shares of common stock issued in this offering and all shares of
common stock issued by us upon the exercise of the warrants by November 30,
2006. We issued these securities to a limited number of accredited investors in
a private offering exempt from the registration requirements of the Securities
Act pursuant to Section 4(2) of the Securities Act without engaging in any
advertising or general solicitation of any kind.

          In October 2006, we completed a private offering of Class A warrants
to acquire 1,500,000 shares of our common stock and Class B warrants to acquire
1,500,000 shares of our common stock for aggregate cash consideration of $3,000.
These securities were sold in units comprised of 50,000 Class A warrants and
50,000 Class B warrants. The units were sold at a purchase price of $100 per
unit. The Class A warrants were initially exercisable into one share of our
common Stock at an exercise price of $0.60 per share, were exercisable until
November 30, 2006, and expired at the end of the exercise period. The Class B
warrants are initially exercisable into one share of our common stock at an
exercise price of $0.80 per share, are exercisable until November 30, 2007, and
expire at the end of the exercise period. We paid finder fees consisting of 1.5
units identical to the units sold in the offering. We agreed to use our
reasonable best efforts to file a registration statement with the SEC to
register: (i) all shares of common stock issued by us upon the exercise of the
warrants if the holder exercises all of its warrants in full by November 30,
2006, or (ii) 50% of the shares of common stock issued by us upon the exercise
of the warrants if the holder does not exercise all of its warrants in full by
November 30, 2006. We issued these securities to a limited number of accredited
investors in a private offering exempt from the registration requirements of the
Securities Act pursuant to


                                       41

<Page>

Section 4(2) of the Securities Act without engaging in any advertising or
general solicitation of any kind.

          In November 2006, we issued a total of 225,000 shares of common stock
to accredited investors in exchange for consulting and advisory services. These
securities were issued to two accredited investors in private placement
transactions exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act directly by us without engaging
in any advertising or general solicitation of any kind and without payment of
underwriting discounts or commissions to any person.

          During the period beginning January 1, 2006 and ending December 11,
2006, we issued 6,855,397 shares of common stock upon the exercise of warrants
at exercise prices ranging between $0.50 and $2.00 per share for aggregate gross
cash proceeds of $4,749,713. We issued these securities to a limited number of
accredited investors in private offerings exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act without engaging in any advertising or general solicitation of any kind.

          We have issued stock options and restricted stock awards to each of
David M. Daniels, Alex Soufflas, Patricia S. Bathurst and David A. Taylor. A
description of the stock options and restricted stock awards is set forth under
"ITEM 10. EXECUTIVE COMPENSATION -- EMPLOYMENT CONTRACTS AND ARRANGEMENTS" of
this report. The securities were issued to a limited number of accredited
investors in private placement transactions exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act directly by us without engaging in any advertising or general solicitation
of any kind and without payment of underwriting discounts or commissions to any
person.

ITEM 6. MANAGEMENT'S DISCUSSIONS AND ANALYSIS.

          This Management's Discussion and Analysis and other parts of this
report contain forward-looking statements that involve risks and uncertainties.
All forward-looking statements included in this report are based on information
available to us on the date hereof, and, except as required by law, we assume no
obligation to update any such forward-looking statements. Our actual results may
differ materially from those anticipated in these forward-looking statements as
a result of a number of factors, including those set forth under the caption
"ITEM 1. DESCRIPTION OF BUSINESS - RISKS AND UNCERTAINTIES" of this report and
elsewhere in this report. The following should be read in conjunction with our
audited consolidated financial statements beginning on page F-1 of this report.

OVERVIEW

          We are a national healthcare savings organization that was formed by
healthcare professionals to address the need for affordable healthcare
nationwide. We create, market and sell discount healthcare membership programs
to predominantly underserved markets in the healthcare industry through a
national healthcare savings network called CARExpress ("CARExpress"). CARExpress
is a network of hospitals, doctors, dentists, pharmacists and other healthcare
providers comprised of over 1,000,000 medical professionals that have agreed to
render their services and products to CARExpress members at discounted prices.
CARExpress


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<Page>

enables people to engage in point-of-service transactions directly with these
providers and pay discounted prices that are similar in amount to those paid by
insurance companies on behalf of their insureds. Our programs offer savings on
healthcare services to persons who are uninsured and underinsured and to those
who purchase only high deductible or limited benefit medical insurance policies
by providing access to the same PPOs that are utilized by employers that
self-fund at least a portion of their employees' healthcare costs. Our programs
are also used to supplement benefit plans and fill in the gaps created by the
need to reduce health benefits to keep the costs of health insurance reasonable.
We sell our programs directly and indirectly through resellers that privately
label or co-brand our programs and employers that offer our programs to their
employees.

          We are actively engaged in marketing our CARExpress membership
programs to the public and our primary strategic objectives are to generate
increased sales of our CARExpress membership programs and sustain and expand our
position as a provider of unique healthcare membership service programs. The
target market for our programs is comprised of individuals who have either
limited health benefits or no health benefits. Our market share of this market
is currently less than one percent and has been less than one percent since our
inception. Since we are not currently large enough to pursue and support the
entire market, we intend to continue to pursue specific opportunities that we
identify in this market through our various marketing and distribution channels.
Through product design, competitive membership pricing and a variety of
marketing and distribution partners, we are pursuing opportunities in the
healthcare market that insurance companies have not addressed.

RECENT DEVELOPMENTS

          We have experienced a substantial increase in our revenue and
membership base over the past 12 months. We achieved revenue of $1,870,612 for
the year ended December 31, 2006, compared to revenue of $245,973 for the year
ended December 31, 2005, an increase of over 660%. We have entered into
agreements with several marketing and distribution partners that are selling our
CARExpress membership programs to the public and are currently in negotiations
with several other companies regarding the sale of our CARExpress membership
programs.

          We are currently in the process of creating our first CARExpress
"wrap-around" programs. We plan to offer several programs that will consist of
our CARExpress comprehensive discount health program and various insurance
products. Members of our CARExpress wrap-around programs will be able to use the
insurance component of the programs to cover healthcare costs up to the amount
of the coverage limit, and then use the health discount component to obtain
discounts on healthcare costs not covered by the insurance component. Each
wrap-around program will provide coverage for the member's full family or, at
the member's option, coverage limited exclusively to the primary insured. We
intend to expand our CARExpress wrap-around programs in the future to include
programs designed to complement Health Savings Accounts (HSAs). We intend to
market and sell our CARExpress wrap-around programs initially through brokers,
agents and other independent third parties and, in the future, directly through
National Health Brokerage Group.


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OPERATIONAL METRICS

          Our revenue consists almost exclusively of recurring monthly
membership fees that we receive from members of our CARExpress membership
programs. To generate revenue, we engage in marketing campaigns offering
money-back guarantees and free-trial periods as an incentive for prospective
members to try our CARExpress membership programs. Upon becoming paying members,
the members pay us membership fees each month for the duration of their
membership. The average membership fee per member per month that we receive is
approximately $35. Approximately 95% of the CARExpress membership programs that
we have sold to our current members consist of our Comprehensive Care Program
which is sold at a monthly retail price of $39.95. The remaining CARExpress
membership programs that we have sold to our current members consist of a mix of
our less expensive programs.

          We receive each member's initial monthly payment and billing
information at the beginning of the first monthly membership period. Monthly
payments for subsequent periods are received at the beginning of the applicable
period. For those memberships sold in connection with our free-trial offers, we
receive the member's billing information at the beginning of the free-trial
period. After the free-trial period has expired, the member is charged for the
next monthly membership period unless the member cancels the membership prior to
the expiration of the free-trial period. The monthly membership fees that we
receive are recognized as revenue evenly over the applicable monthly membership
period. As a result, there is a delay of four weeks between the date we receive
a monthly membership fee and the date we recognize the entire fee as revenue.

          A key metric that we use to evaluate our success is our member
retention rates. Member retention rates represent the percentage of new members
that we acquire that we are able to retain for a specified period of time. Since
we incur a large portion of our costs up front and receive recurring membership
fees throughout the term of the membership, the longer we are able to retain the
members we acquire, the greater the revenue potential of the CARExpress
membership programs that we sell. We believe that the key to obtaining a high
member retention rate is to target our marketing campaigns towards those
individuals and organizations that are most in need of our programs, most
capable of paying for our programs, and most loyal to us and our programs.
Member retention rates can be influenced by a variety of factors, including:

     -    the type of CARExpress membership programs being sold;

     -    the marketing campaign being used to sell our CARExpress membership
          programs;

     -    the financial condition and loyalty of our members;

     -    the distribution channel selling our CARExpress membership programs;
          and

     -    the type and amount of compensation being paid to our marketing and
          distribution partners to sell our CARExpress membership programs.

          We have obtained valuable information regarding member demographics
through the marketing and advertising campaigns that we have conducted over the
last 12 months and are focusing our marketing and advertising campaigns on
members and member groups that we have


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identified as being most suitable for our CARExpress membership programs. As a
result, we expect our retention rates to continue to improve over the next 12
months as we pursue these opportunities through our various marketing and
distribution channels.

OUTLOOK

          Our strategy is to continue to expand our position as a provider of
unique healthcare membership service programs. We implemented several strategic
growth initiatives during 2006 through which we achieved new contracts and
strategic partnerships with a number of marketing and distribution companies. We
have also initiated several measures in anticipation of our future growth,
including hiring additional customer service staff and transitioning our current
customer service staff from one shift to two shifts to ensure adequate coverage
for our members. We expect to generate future revenue and members primarily
through our marketing and distribution partners and our various marketing and
advertising campaigns. We expect to further increase revenue and members through
the rollout of our CARExpress "wrap-around" programs to the public. We intend to
finance each of these projects through cash on hand and internally generated
cash flows from operating activities. We will use any additional investments
that we receive to accelerate the expansion of each of our advertising campaigns
and programs and increase sales of our membership programs.

          We expect the number of CARExpress members generated each month to
increase for the foreseeable future. We expect our retention rates to improve
over the next 12 months as we obtain additional information regarding member
demographics and target our marketing and advertising campaigns at prospective
members and member groups that are most suitable for our CARExpress membership
programs. As a result, we expect our net losses from operations to decrease for
the foreseeable future and expect to begin generating positive cash flow from
operations during the second quarter of 2007 as the recurring membership fees
from our increasing membership base overtake the costs associated with obtaining
the new members we are generating. We can provide no assurance, however, that
our membership base will increase as projected, that our member retention rates
will improve over the next 12 months, that our net losses from operations will
decrease during future periods, or that we will begin generating positive cash
flow from operations during the second quarter of 2007.

CRITICAL ACCOUNTING POLICIES

          Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements and accompanying
notes, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue and expenses, and related
disclosure of contingent assets and liabilities. When making these estimates and
assumptions, we consider our historical experience, our knowledge of economic
and market factors and various other factors that we believe to be reasonable
under the circumstances. Actual results may differ under different estimates and
assumptions.


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          The accounting estimates and assumptions discussed in this section are
those that we consider to be the most critical to an understanding of our
financial statements because they inherently involve significant judgments and
uncertainties.

REVENUE RECOGNITION

          We sell discount healthcare membership cards in return for monthly
membership fees. We recognize these membership fees as revenue when persuasive
evidence of an arrangement exists, delivery or performance has occurred, the
sales price is fixed and determinable, and collectibility is reasonably assured.
At the beginning of each membership period, the membership fee is charged to the
member's credit card, resulting in deferred revenue. We then recognize the
membership fees as revenue as the services are rendered. Shipping and handling
fees that we receive for the shipment of membership packages to new members are
included in our membership fees and recorded as deferred revenue. These fees are
then recognized as revenue on a straight-line basis over the longer of the
initial contractual term or the expected period during which the services will
be performed if the relationship with the member is expected to extend beyond
the initial contractual term and the member continues to benefit from the
payment of the fees.

STOCK-BASED COMPENSATION

          We account for employee stock-based compensation using the fair value
recognition provisions of Financial Statement of Financial Accounting Standards
No. 123 (revised 2004), "SHARE-BASED PAYMENT" ("SFAS 123R"). We adopted SFAS
123R on January 1, 2006 using the modified prospective transition method. Under
this method, compensation cost recognized for the year ended December 31, 2006
includes: (a) compensation cost for all share-based payments granted, but not
yet vested as of January 1, 2006, based on the grant-date fair value estimated
in accordance with the original provisions of SFAS 123, and (b) compensation
cost for all share-based payments granted subsequent to January 1, 2006, based
on the grant-date fair value estimated in accordance with the provisions of SFAS
123R. Such amounts have been reduced by our estimate of forfeitures of all
unvested awards.

          Prior to January 1, 2006, we accounted for our employee stock-based
compensation under the recognition and measurement provisions of Accounting
Principles Board Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES"
("APB 25"). Under APB 25, when the exercise price of stock-based compensation
granted to employees equals the market price of the common stock on the date of
grant, no compensation expense is recorded. When the exercise price of
stock-based compensation granted to employees is less than the market price of
the common stock on the date of grant, compensation expense is recognized over
the vesting period. Since all of our currently issued employee stock-based
compensation had been issued prior to January 1, 2006 at an exercise price equal
to or greater than the market price of our common stock on the date of grant, we
did not previously recognize any expense as a result of the issuances.

          We account for non-employee stock-based compensation in accordance
with Statement of Financial Accounting Standards No. 123, "ACCOUNTING FOR
STOCK-BASED COMPENSATION" ("SFAS 123") and Emerging Issues Task Force No. 96-18
"ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR
ACQUIRING OR IN CONJUNCTION WITH SELLING GOODS OR


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SERVICES" ("EITF 96-18"). SFAS 123 and EITF 96-18 require that we account for
our stock-based compensation grants to non-employees based on the fair value of
the stock-based compensation on the date of grant.

          We use the Black-Scholes pricing model to determine the fair value of
the stock-based compensation that we grant to employees and non-employees. We
are required to make certain assumptions in connection with this determination,
the most important of which involves the calculation of volatility with respect
to the price of our common stock. The computation of volatility is intended to
produce a volatility value that is representative of our expectations about the
future volatility of the price of our common stock over an expected term. We
used our past share price history to determine volatility and cannot predict how
the price of our shares of common stock will react on the open market in the
future since our common stock has only been trading on the OTC Bulletin Board
since March 30, 2006. As a result, the volatility value that we calculated may
differ from the future volatility of the price of our shares of common stock.

          For a more complete discussion of our accounting policies and
procedures, see our Notes to Consolidated Financial Statements beginning on page
F-7.

RECENT ACCOUNTING PRONOUNCEMENTS

          In June 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 48, "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, AN
INTERPRETATION OF FASB STATEMENT NO. 109" ("FASB Interpretation 48"). FASB
Interpretation 48 clarifies the accounting for uncertainty in income taxes
recognized in a company's financial statements in accordance with SFAS No. 109,
ACCOUNTING FOR INCOME TAXES. FASB Interpretation 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. It
also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. FASB
Interpretation 48 becomes effective for us for the fiscal year ending December
31, 2007. We adopted this standard in January 2007. We do not expect the
adoption of FASB Interpretation 48 to have a material impact on our consolidated
financial statements.

          In September 2006, the SEC issued Staff Accounting Bulletin No. 108,
Section N to Topic 1, "CONSIDERING THE EFFECTS OF PRIOR YEAR MISSTATEMENTS WHEN
QUANTIFYING MISSTATEMENTS IN CURRENT YEAR FINANCIAL STATEMENTS" ("SAB 108"). SAB
108 requires the evaluation of prior-year misstatements using both the balance
sheet approach and the income statement approach. In the initial year of
adoption, should either approach result in quantifying an error that is material
in light of quantitative and qualitative factors, SAB 108 guidance allows for a
one-time cumulative-effect adjustment to beginning retained earnings. In years
subsequent to adoption, previously undetected misstatements deemed material
shall result in the restatement of previously issued financial statements in
accordance with FAS No. 154, "ACCOUNTING CHANGES AND ERROR CORRECTIONS," a
replacement of APB Opinion No. 20, "ACCOUNTING CHANGES," and Statement No. 3,
"REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS." SAB 108 became
effective for us for the year ended December 31, 2006. The implementation of SAB
108 did not have a material impact on our financial statements.


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<Page>

          In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157 - "FAIR VALUE MEASUREMENTS" ("SFAS 157"). This standard
establishes a framework for measuring fair value and expands disclosures about
fair value measurement of a company's assets and liabilities. This standard also
requires that the fair value measurement should be determined based on the
assumptions that market participants would use in pricing the asset or
liability. SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and, generally, must be applied
prospectively. We expect to adopt this standard beginning in January 2008. We
are currently evaluating the impact that this new standard will have on our
financial position and results of operations.

          On February 15, 2007, the FASB issued Statement of Financial
Accounting Standards No. 159, "THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND
FINANCIAL LIABILITIES" ("SFAS 159"). SFAS 159 provides companies with an option
to report selected financial assets and liabilities at fair value. Its objective
is to reduce both complexity in accounting for financial instruments and the
volatility in earnings caused by measuring related assets and liabilities
differently. It also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of assets and liabilities. SFAS 159
requires companies to provide additional information that will help investors
and other users of financial statements to more easily understand the effect of
the company's choice to use fair value on its earnings. It also requires
entities to display the fair value of those assets and liabilities for which the
company has chosen to use fair value on the face of the balance sheet. SFAS 159
does not eliminate disclosure requirements included in other accounting
standards, including requirements for disclosures about fair value measurements
included in SFAS 157, discussed above, and Statement of Financial Accounting
Standards No. 107 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. SFAS
159 is effective as of the beginning of an entity's first fiscal year beginning
after November 15, 2007. Early adoption is permitted as of the beginning of the
previous fiscal year provided that the company makes that choice in the first
120 days of that fiscal year and also elects to apply the provisions of SFAS No.
157. We are currently reviewing the effects of SFAS 159.

COMPARISON OF THE YEARS ENDED DECEMBER 31, 2006 AND 2005

REVENUE

          Revenue consists of the monthly membership fees that we receive from
members of our CARExpress membership programs and fees that we receive from the
sale of CARExpress membership programs sold in combination with third-party
insurance products. To date, revenue has consisted almost exclusively of the
monthly membership fees we receive from members of our CARExpress membership
programs. Revenue increased $1,624,639 to $1,870,612 for the year ended December
31, 2006 from $245,973 for the year ended December 31, 2005. The increase of
$1,624,639 resulted primarily from sales of our CARExpress membership programs
to new members. Approximately 95% of the revenue that we generated during the
years ended December 31, 2006 and 2005, respectively, was derived from sales of
our CARExpress membership programs to first-time members. The remainder of the
revenue that we generated during these periods was derived from existing
members. We expect revenue to increase over


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<Page>

the next 12 months as a result of increased sales of our CARExpress membership
programs by our marketing and distribution partners and through our various
marketing and advertising campaigns, and as a result of the rollout of our
CARExpress "wrap-around" programs to the public.

DIRECT COSTS

          Direct costs consist of sales commissions that we pay to our marketing
and distribution partners and fees that we pay to our PPOs and provider networks
for access to their networks. Direct costs increased $1,087,139 to $1,437,805
for the year ended December 31, 2006, from $350,666 for the year ended December
31, 2005. The increase of $1,087,139 was due primarily to an increase of
$868,498 for sales commissions and $218,641 for PPO and provider network costs.
We expect cost of sales to increase over the next 12 months as increased sales
of our CARExpress membership programs result in higher overall sales commission
expenses and provider networks costs.

SELLING AND MARKETING EXPENSES

          Selling and marketing expenses consist of advertising expenses,
marketing expenses, salaries and other compensation paid to employees selling
and marketing our CARExpress membership programs, rent expense allocated to our
selling and marketing activities, depreciation and amortization expense
allocated to our selling and marketing activities, and all other selling and
marketing expenses incurred by us. Selling and marketing expenses increased
$2,797,756 to $3,039,448 for the year ended December 31, 2006, from $241,692 for
the year ended December 31, 2005. The increase of $2,797,756 was due primarily
to an increase of $2,392,252 for our advertising and marketing campaigns and
activities and $454,468 for sales-related cash and equity-based compensation
resulting primarily from our adoption of SFAS 123R on January 1, 2006, partially
offset by decreases in other selling and marketing expenses. We expect selling
and marketing expenses to decrease during the next 12 months as we engage in
more targeted and cost-efficient marketing and advertising campaigns and
activities.

GENERAL AND ADMINISTRATIVE EXPENSES

          General and administrative expenses consist primarily of employee
compensation expense, professional fees, rent expense, and other general and
administrative expenses.

          EMPLOYEE COMPENSATION EXPENSE. Employee compensation expense consists
of all salaries and related compensation that we pay to our employees and the
related payroll taxes that are not associated with our selling and marketing
activities. Employee compensation expense increased $2,660,002 to $3,557,839 for
the year ended December 31, 2006, from $897,837 for the year ended December 31,
2005. The increase of $2,660,002 was due to an increase of $2,175,858 in stock
option expense resulting primarily from our acceleration of certain stock
options previously issued to our executive officers and employees and the
recognition of non-cash equity-based compensation expense in connection with our
adoption of SFAS 123R on January 1, 2006, an increase of $376,819 in salary and
payroll tax expense associated primarily with annual increases in the salaries
payable to our executive officers in 2006 under their


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respective employment agreements, and an increase of $107,325 in expense
associated with restricted stock awards granted to our executive officers in
2006. We are party to employment agreements with David M. Daniels, Alex
Soufflas, Patricia S. Bathurst and David A. Taylor. A summary of the material
terms of these employment agreements and our financial obligations thereunder is
provided below under "ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTRACTUAL
OBLIGATIONS" AND "ITEM 10. EXECUTIVE COMPENSATION." We intend to retain
additional executive management personnel and other employees in connection with
the anticipated growth of our business. As a result, we expect employee
compensation expense to increase over the next 12 months.

          PROFESSIONAL FEES. Professional fees consist of fees paid to our
independent accountants, lawyers and other professionals. Professional fees
decreased $445,744 to $2,160,621 for the year ended December 31, 2006 from
$2,606,365 for the year ended December 31, 2005. The decrease of $445,744 was
due primarily to a decrease in the amount of cash and equity-based compensation
paid to our service providers and consultants for various services, partially
offset by increases in the amortization of equity-based expense due to the early
termination of the agreements with certain of our consultants and services
providers and increases in other professional fees. We expect professional fees
to decrease over the next 12 months as we recognize less stock compensation
expense associated with the equity-based compensation previously paid to our
consultants and service providers, such decrease to be partially offset by
increases in accounting and legal fees that we will incur in connection with the
general expansion of our business and operations.

          OTHER GENERAL AND ADMINISTRATIVE EXPENSES. Other general and
administrative expenses consist of costs for supplies, computer hardware and
system costs, costs for non-employee customer service representatives, rent
expense, health insurance costs, financial printer costs, transfer agent costs,
the costs of investor relations campaigns and activities, general business
expenses, severance expense and miscellaneous general and administrative
expenses that are not associated with our selling and marketing activities.
Other general and administrative expenses increased $1,341,090 to $1,719,148 for
the year ended December 31, 2006 from $378,058 for the year ended December 31,
2005. The increase of $1,341,090 resulted primarily from an increase of $165,369
for bank service charges associated with new and recurring member transactions,
$511,754 for investor relations campaigns and activities, $178,489 for
non-employee customer service representatives, $131,654 for supplies, and
$70,189 for financial printing costs. We expect other general and administrative
expenses to remain relatively constant over the next 12 months as we continue to
incur expenses for financial printer services, investor relations campaigns and
activities, transfer agent fees, health insurance, rent, non-employee customer
service representatives, supplies, computer hardware and systems, and other
miscellaneous items associated with the general operation of and growth in our
business.

GAIN ON THE EXTINGUISHMENT OF DEBT

          Gain on the extinguishment of debt consists of the gain that we
recognized in connection with our termination of the lease for our office space
in Sarasota, Florida upon the issuance of common stock to Centerpointe Property,
LLC on April 1, 2006 in full payment of all rent and other expenses that were
due and payable under the lease and a mutual release from any and all


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claims arising out of the lease. We recognized a gain on the extinguishment of
debt of $35,932 during the year ended December 31, 2006 in connection with the
issuance of these shares. We did not recognize any such gain during the year
ended December 31, 2005. We do not expect to recognize any additional gains or
losses on the extinguishment of debt in the foreseeable future.

COMMON STOCK ISSUED FOR RELEASES

          Common stock issued for releases consists of the cost of the shares of
common stock issued to previous investors in consideration for an amendment to
their securities purchase agreements and a release from certain potential claims
thereunder. We incurred expenses for common stock issued for releases of
$295,100 during the year ended December 31, 2005. We did not incur any such
expenses during the year ended December 31, 2006. The expenses for common stock
issued for releases in 2005 resulted from our issuance of 737,750 shares of our
common stock to previous investors in exchange for their execution of an
amendment to their securities purchase agreements for the securities that they
purchased from us in private offerings that we completed in August 2004 and
September 2004 and a release from any potential claims thereunder. We do not
expect to incur any additional expenses for common stock issued for releases in
the foreseeable future.

NET LOSS

          Our net loss increased $5,436,676 to $9,965,428 for the year ended
December 31, 2006, from $4,528,752 for the year ended December 31, 2006. The
increase of $5,436,676 was primarily the result of increases of $1,087,139 for
direct costs incurred in connection with the sale of our membership programs,
$2,392,252 for advertising and marketing campaigns and activities, $3,114,470
for employee compensation expense (of which $2,567,135 consisted of non-cash
equity-based compensation expense that we recognized in connection with our
adoption of SFAS No. 123R on January 1, 2006), and $511,754 for investor
relations campaigns and activities, partially offset by an increase of
$1,624,639 in revenue and decreases in other expenses. We expect our net losses
from operations to decrease substantially in 2007 as the recurring membership
fees from our increasing membership base overtake the costs associated with
obtaining the new members we are generating, we engage in more targeted
marketing and advertising campaigns and activities, and we recognize less stock
compensation expense associated with the equity-based compensation previously
paid to our employees, consultants and service providers.

LIQUIDITY AND CAPITAL RESOURCES

          Since our inception, we have funded our operations primarily through
private sales of equity securities and the use of short-term debt. As of
December 31, 2006, we had cash and cash equivalents of approximately $1,597,000
and working capital of approximately $1,485,000.

          Net cash used by operating activities was $5,215,208 for the year
ended December 31, 2006 compared to $1,915,381 for the year ended December 31,
2005. The $3,299,827 increase in cash used by operating activities was due
primarily to an increase in net loss of $5,436,676, partially offset by
increases of $2,525,855 in non-cash stock option expense resulting primarily
from our acceleration of stock options previously issued to certain of our
executive officers and


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<Page>

employees and the recognition of this expense in connection with our adoption of
SFAS 123R on January 1, 2006 and $80,403 in deferred revenue, and a decrease in
non-cash expense associated with the issuance of common stock for releases of
$295,100.

          Net cash used by investing activities was $47,761 for the year ended
December 31, 2006 compared to net cash provided by investing activities of
$223,180 for the year ended December 31, 2005. The $270,941 difference in cash
flows from investing activities was due to a decrease of $320,506 in proceeds
from the sale of marketable securities, a decrease of $35,717 in certificates of
deposit acquired in 2005 and disposed of in 2006, and an increase of $46,869 in
property and equipment, partially offset by a decrease of $25,000 in notes
receivable.

          Net cash provided by financing activities was $6,750,131 for the year
ended December 31, 2006 compared to $1,380,093 for the year ended December 31,
2005. The $5,370,038 increase in cash provided by financing activities was due
primarily to increases of $902,016 in proceeds from the sale of common stock and
$4,749,713 in proceeds received upon the exercise of outstanding warrants,
partially offset by an increase of $146,491 in the payment of notes payable and
a decrease in proceeds from the issuance of notes payable of approximately
$180,000.

          Our primary sources of capital over the past 12 months are set forth
below.

          In May 2006, we completed a private offering of 211,934 shares of
common stock, Class A warrants to acquire 105,967 shares of our common stock,
and Class B warrants to acquire 105,967 shares of our common stock for aggregate
cash consideration of $127,160. These securities were sold in units comprised of
two shares of common stock, one Class A warrant and one Class B warrant. The
units were sold at a purchase price of $1.20 per unit. The Class A warrants are
initially exercisable into one share of our common stock at an exercise price of
$0.60 per share, are exercisable for a period of 18 months commencing on the
date of issuance, and expire at the end of the exercise period. The Class B
warrants are initially exercisable into one share of our common stock at an
exercise price of $0.80 per share, are exercisable for a period of 36 months
commencing on the date of issuance, and expire at the end of the exercise
period.

          In August 2006, we completed a private offering of 1,705,000 shares of
common stock, Class A warrants to acquire 1,705,000 shares of our common stock,
and Class B warrants to acquire 1,705,000 shares of our common stock for
aggregate cash consideration of $1,364,000. These securities were sold in units
comprised of one share of common stock, one Class A warrant and one Class B
warrant. The units were sold at a purchase price of $0.80 per unit. The Class A
warrants were initially exercisable into one share of our common Stock at an
exercise price of $0.80 per share until August 31, 2006, and expired at the end
of the exercise period. The Class B warrants were initially exercisable into one
share of our common stock at an exercise price of $1.00 per share, were
exercisable until November 30, 2006, and expired at the end of the exercise
period.

          In September 2006, we completed a private offering of 710,000 shares
of common stock, Class A warrants to acquire 710,000 shares of our common stock,
and Class B warrants to


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acquire 710,000 shares of our common stock for aggregate cash consideration of
$355,000. These securities were sold in units comprised of one share of common
stock, one Class A warrant and one Class B warrant. The units were sold at a
purchase price of $0.50 per unit. The Class A warrants were initially
exercisable into one share of our common stock at an exercise price of $0.50 per
share until October 16, 2006, and expired at the end of the exercise period. The
Class B warrants are initially exercisable into one share of our common stock at
an exercise price of $0.50 per share, are exercisable until August 31, 2007, and
expire at the end of the exercise period.

          In October 2006, we completed a private offering of 510,000 shares of
common stock, Class A warrants to acquire 510,000 shares of our common stock,
Class B warrants to acquire 510,000 shares of our common stock, Class C warrants
to acquire 510,000 shares of our common stock, and Class D warrants to acquire
510,000 shares of our common stock for aggregate cash consideration of $255,000.
These securities were sold in units comprised of one share of common stock, one
Class A warrant, one Class B warrant, one Class C warrant and one Class D
warrant. The units were sold at a purchase price of $0.50 per unit. The Class A
warrants were initially exercisable into one share of our common Stock at an
exercise price of $0.50 per share, were exercisable until October 16, 2006, and
expired at the end of the exercise period. The Class B warrants were initially
exercisable into one share of our common stock at an exercise price of $0.50 per
share, were exercisable until November 30, 2006 and expired at the end of the
exercise period. The Class C warrants are initially exercisable into one share
of our common stock at an exercise price of $0.50 per share, are exercisable
until August 31, 2007, and expire at the end of the exercise period. The Class D
warrants are initially exercisable into one share of our common stock at an
exercise price of $0.80 per share, are exercisable until November 30, 2007, and
expire at the end of the exercise period.

          During the period beginning January 1, 2006 and ending December 11,
2006, we issued 6,855,397 shares of common stock upon the exercise of warrants
at exercise prices ranging between $0.50 and $2.00 per share for aggregate gross
cash proceeds of $4,634,413.

          To date, our capital needs have been met principally through the sales
of our equity and debt securities and proceeds received upon the exercise of
outstanding warrants by our security holders. We do not currently maintain a
line of credit or term loan with any commercial bank or other financial
institution. We have used the proceeds from the exercise of warrants and our
private offerings of securities to pay virtually all of the costs and expenses
we have incurred. These costs and expenses were comprised of operating expenses,
which consisted of the salary expenses, professional fees, rent expenses and
other general and administrative expenses discussed above, and the costs of
sales discussed above to the extent such costs of sales exceeded our revenue.

          Although we believe that our current cash resources will be sufficient
to sustain our current operations for the next 12 months, we may need to obtain
additional cash resources during the next 12 months if we experience a
substantial downturn in our business or incur substantial expenses in connection
with unforeseen events. In the event such funds are needed, we may engage in
additional sales of debt or equity securities. The sale of additional equity or
convertible debt securities would result in additional dilution to our
shareholders. The issuance


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of additional debt would result in increased expenses and could subject us to
covenants that may have the effect of restricting our operations. We have not
made arrangements to obtain additional financing and we can provide no assurance
that additional financing will be available in an amount or on terms acceptable
to us, if at all. If we are unable to obtain additional funds when they are
needed or if such funds cannot be obtained on terms favorable to us, we may be
unable to execute upon our business plan or pay our costs and expenses as they
are incurred, which could have a material, adverse effect on our business,
financial condition and results of operations.

CONTRACTUAL OBLIGATIONS

          The following summarizes our material long-term contractual
obligations as of December 31, 2006:

<Table>
<Caption>
CONTRACTUAL
OBLIGATIONS           TOTAL         2007         2008        2009       2010     2011
-----------------   ----------   ----------   ----------   --------   --------   ----
<S>                 <C>          <C>          <C>          <C>        <C>         <C>
Employment
Agreements (1)      $2,799,254   $  949,920   $1,044,912   $748,107   $ 56,315    -0-
Office Leases (2)      557,830      159,022      162,699    166,232     69,877    -0-
                    ----------   ----------   ----------   --------   --------    ---
     Total          $3,357,084   $1,108,942   $1,207,611   $914,339   $126,192    -0-
                    ==========   ==========   ==========   ========   ========    ===
</Table>

(1)  At December 31, 2006, we were a party to employment agreements with David
     M. Daniels, Alex Soufflas, David A. Taylor and Patricia S. Bathurst. On
     March 15, 2007, we terminated the employment of David A. Taylor. In
     accordance with the terms of his employment agreement, we are currently
     obligated to pay Mr. Taylor $178,200 over a period of 12 months commencing
     on the date of termination. This table does not reflect the discontinuation
     of payments to Mr. Taylor over the term of his employment agreement as the
     result of our termination of his employment or the payments to be made to
     him during this 12-month period. A summary of these employment agreements
     and arrangements is provided under "ITEM 10. EXECUTIVE COMPENSATION -
     EMPLOYMENT CONTRACTS AND ARRANGEMENTS."

(2)  At December 31, 2006, we were a party to an operating lease for our office
     space in Horsham, Pennsylvania. On March 13, 2007, we entered into an
     amendment to this lease to extend the lease by a period of three years
     beginning June 1, 2007. Pursuant to this amendment, we will make aggregate
     annual payments of approximately $160,640, $164,170 and $167,705,
     respectively, during the term of the amendment. This table does not reflect
     the payments due under the amendment to the lease. A summary of this office
     lease and the amendment thereto is provided under "ITEM 2. DESCRIPTION OF
     PROPERTIES."

          To date, we have made payments under these obligations with proceeds
received from sales of our equity and debt securities, proceeds received upon
the exercise of outstanding warrants by our security holders and internally
generated cash flows from operating activities. We intend to make future
payments due under these obligations primarily through internally generated cash
flows from operating activities.

OFF-BALANCE SHEET ARRANGEMENTS

          As of December 31, 2006, we did not have any relationships with
unconsolidated entities or financial partners, such as entities often referred
to as structured finance or special purpose entities, that had been established
for the purpose of facilitating off-balance sheet arrangements


                                       54

<Page>

or other contractually narrow or limited purposes. As such, we are not
materially exposed to any financing, liquidity, market or credit risk that could
arise if we had engaged in such relationships.

ITEM 7. FINANCIAL STATEMENTS.

          Our audited consolidated financial statements at December 31, 2006 and
for each of the years ended December 31, 2006 and 2005, respectively, begin on
page F-1 of this report located immediately after the signature page.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

          None.

ITEM 8A. CONTROLS AND PROCEDURES.

          As of December 31, 2006, we carried out the evaluation of the
effectiveness of our disclosure controls and procedures required by Rule
13a-15(e) under the Exchange Act under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, as of December 31, 2006, our disclosure
controls and procedures were effective to provide reasonable assurance that
information we are required to disclose in reports that we file or submit under
the Exchange Act is: (i) recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and (ii) accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure. There has been no change in our internal control over financial
reporting identified in connection with this evaluation that occurred during our
fiscal year ended December 31, 2006 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B. OTHER INFORMATION.

          None.


                                       55

<Page>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
        GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

          The following chart sets forth certain information about each of our
directors and executive officers.

NAME                   AGE                     POSITIONS HELD
--------------------   ---   -------------------------------------------------
David M. Daniels        49   Chairman of the Board of Directors,
                             Chief Executive Officer and President

Alex Soufflas           32   Chief Financial Officer, Executive Vice President
                             and Secretary

Patricia S. Bathurst    52   Vice President - Marketing

          The following is a brief summary of the business experience of each of
the above-named individuals:

          DAVID M. DANIELS has served as our Chief Executive Officer and a
member of our board of directors since February 2004, and has served as our
President since February 2005. From 1998 to February 2004, Mr. Daniels provided
financing and management consulting services to several companies operating in
the manufacturing, technology and services industries, including Market Pathways
Financial Relations, Inc., a financial consulting firm, from April 2000 until
February 2004, The Research Works, Inc., an equity research firm, from April
2001 until December 2003, and XRAYMEDIA, Inc., an advertising agency, from
September 2001 until February 2004. Mr. Daniels served as the Chief Financial
Officer of North American Technologies Group, Inc., a research and development
company, from 1994 to 1995, and served as the President and Chief Operating
Officer from 1995 to 1998. Mr. Daniels founded Industrial Pipe Fittings, Inc., a
manufacturer of industrial fittings for the high density polyethylene market, in
1994 and served as the Chairman, President and Chief Executive Officer until
1998. Prior to 1994, Mr. Daniels served in several capacities with Morgan
Stanley Dean Witter, achieving the position of First Vice President of the
company in 1986. Mr. Daniels is a graduate of the Georgia Military Academy and
the University of Houston, where he received a B.A. in finance.

          ALEX SOUFFLAS has served as our Chief Financial Officer and Secretary
since February 2006 and has served as our Executive Vice President since August
2005. Mr. Soufflas served as our General Counsel from August 2005 until February
2006. From May 2004 to August 2005, Mr. Soufflas was an attorney at Duane Morris
LLP, a national law firm, where he specialized in public and private securities
offerings, mergers & acquisitions, contracts and corporate counseling. Prior to
that, Mr. Soufflas specialized in general corporate law as an attorney at
Spector Gadon & Rosen, P.C., a Philadelphia-based law firm, from April 2003 to
May 2004, and at Sullivan & Worcester, LLP, a Boston-based law firm, from
September 2000 to October 2002.


                                       56

<Page>

Mr. Soufflas received a B.S. in accounting from Purdue University and a juris
doctor from Boston College Law School.

          PATRICIA S. BATHURST has served as our Vice President - Marketing
since March 2001. From 1989 to 2000, Ms. Bathurst served as the Vice President
of Marketing for National Health and Safety Corporation, where she was
responsible for all of the marketing, advertising and promotional functions for
the company. From 1985 to 1989, Ms. Bathurst served as the Director of Marketing
for Horizon Healthcare Group, Inc., a provider of healthcare services utilizing
national provider networks that she co-founded in 1985. Prior to 1985, Ms.
Bathurst served as the Director of Administration and Customer Service for
Phoenix International Corporation, a provider of healthcare services utilizing
national provider networks. Ms. Bathurst is a graduate of Temple University with
a B.A. in business administration.

BOARD OF DIRECTORS

          David M. Daniels, our Chief Executive Officer and President, is the
sole member of our board of directors. Mr. Daniels will serve until the next
annual meeting of shareholders or until his successor is duly elected and
qualified. Officers are elected annually by our board of directors and serve at
the discretion of our board of directors. We do not currently have any
committees of our board of directors.

SHAREHOLDER COMMUNICATIONS

          We have not implemented any formal procedures for shareholder
communication with our board of directors. Any matter intended for our board of
directors, or for any individual member or members of our board of directors,
should be directed to our corporate secretary at National Health Partners, Inc.,
120 Gibraltar Road, Suite 107, Horsham, PA 19044. In general, all shareholder
communication delivered to the corporate secretary for forwarding to the board
of directors or specified members of the board of directors will be forwarded in
accordance with the shareholder's instructions. However, the corporate secretary
reserves the right to not forward to members of the board of directors any
abusive, threatening or otherwise inappropriate materials.

AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

          Our board of directors has not created a separately-designated
standing audit committee or a committee performing similar functions.
Accordingly, our full board of directors acts as our audit committee. We
currently have a small number of employees and have generated only a small
amount of revenue to date. In light of the foregoing, our board of directors
concluded that the benefits of retaining an individual who qualifies as an
"audit committee financial expert," as that term is defined in Item
407(d)(5)(ii) of Regulation S-B promulgated under the Securities Act, would be
outweighed by the costs of retaining such a person. As a result, no member of
our board of directors is an "audit committee financial expert."

CODE OF BUSINESS CONDUCT AND ETHICS

          We have adopted a Code of Business Conduct and Ethics that applies to
our principal executive officer, principal financial officer, principal
accounting officer or controller, and


                                       57

<Page>

persons performing similar functions. Our Code of Business Conduct and Ethics is
designed to deter wrongdoing and promote: (i) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships; (ii) full, fair, accurate,
timely and understandable disclosure in reports and documents that we file with,
or submit to, the SEC and in other public communications that we make; (iii)
compliance with applicable governmental laws, rules and regulations; (iv) prompt
internal reporting of violations of the code to an appropriate person or persons
identified in the code; and (v) accountability for adherence to the code.

          A copy of our Code of Business Conduct and Ethics is available on our
corporate website at www.nationalhealthpartners.com.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

          Section 16(a) of the Exchange Act requires that our officers and
directors and persons who beneficially own more than 10% of our common stock
file initial reports of ownership and reports of changes in beneficial ownership
of our common stock with the SEC. They are also required to furnish us with
copies of all Section 16(a) forms that they file with the SEC. Based solely on
our review of the copies of such forms received by us, or written
representations from such persons that no reports were required for those
persons, we believe that all Section 16(a) filing requirements were satisfied in
a timely fashion during our fiscal year ended December 31, 2006.


                                       58

<Page>

ITEM 10. EXECUTIVE COMPENSATION.

          The following table provides certain summary information concerning
compensation earned by the executive officers named below during the fiscal year
ended December 31, 2006.

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
NAME AND                                                            STOCK           OPTION
PRINCIPAL POSITION             YEAR   SALARY ($)   BONUS ($)   AWARDS ($) (2)   AWARDS ($) (2)   TOTAL ($)
----------------------------   ----   ----------   ---------   --------------   --------------   ---------
<S>                            <C>      <C>          <C>           <C>             <C>           <C>
David M. Daniels               2006     338,202      50,000        49,535          969,988       1,407,725
PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Alex Soufflas                  2006     224,100      30,000        33,023          481,994         769,117
CHIEF FINANCIAL OFFICER,
EXECUTIVE VICE PRESIDENT AND
SECRETARY

David A. Taylor (1)            2006     165,500         -0-        41,279          349,998         556,777
SENIOR VICE PRESIDENT -
NATIONAL SALES

Patricia S. Bathurst           2006     145,200      10,000        24,767          343,997         523,964
VICE PRESIDENT -- MARKETING
</Table>

(1)  We terminated the employment of Mr. Taylor on March 15, 2007.

(2)  A summary of the assumptions made in the valuation of these awards is
     provided under "ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS - CRITICAL
     ACCOUNTING POLICIES" and "ITEM 10. EXECUTIVE COMPENSATION - EMPLOYMENT
     CONTRACTS AND ARRANGEMENTS" and in our Notes to Consolidated Financial
     Statements beginning on page F-7 of this report.

EXECUTIVE COMPENSATION OVERVIEW

          We are a party to employment agreements with each of David M. Daniels,
Alex Soufflas, David A. Taylor and Patricia M. Bathurst. Under these agreements,
we are currently paying Messrs. Daniels and Soufflas and Ms. Bathurst an
annualized base salary of $348,000, $264,000, $159,720, respectively. We
terminated the employment of Mr. Taylor on March 15, 2007. In accordance with
the terms of his employment agreement, we are currently obligated to pay Mr.
Taylor $178,200 over a period of 12 months commencing on the date of
termination.

          We have issued stock options to Messrs. Daniels, Soufflas and Taylor
and Ms. Bathurst to acquire 2,750,000, 1,150,000, 1,000,000 and 1,050,000 shares
of our common stock, respectively. In addition, we have issued restricted stock
awards to each of Messrs. Daniels, Soufflas and Taylor and Ms. Bathurst with
respect to 450,000, 300,000, 375,000 and 225,000 shares of our common stock,
respectively.

          A summary of the material terms of these employment agreements and the
stock options and restricted stock awards granted to each of these individuals
is provided below.


                                       59

<Page>

EMPLOYMENT CONTRACTS AND ARRANGEMENTS

DAVID M. DANIELS

          On May 13, 2005, we entered into an employment agreement with David M.
Daniels to serve as our Chief Executive Officer effective February 1, 2005. The
agreement is for an initial term of five years and renews automatically for
successive one-year periods unless earlier terminated or prior notice of
non-renewal is provided by either party. Under the agreement, Mr. Daniels is
entitled to an annual base salary of $231,000 with annual increases on January 1
of each year of a minimum of 10% of the annual base salary for the immediately
preceding year, and is eligible for an annual bonus and incentive compensation
awards in an amount and form to be determined by our board of directors in its
sole discretion. Pursuant to the agreement, Mr. Daniels received an option to
acquire 2,500,000 shares of our common stock. On March 28, 2006, we granted Mr.
Daniels a restricted stock award with respect to 450,000 shares of our common
stock and on December 12, 2006, we granted Mr. Daniels an option to acquire
250,000 shares of our common stock.

ALEX SOUFFLAS

          On March 29, 2006, we entered into an employment agreement with Alex
Soufflas to serve as our Chief Financial Officer and Executive Vice President
effective February 1, 2006. The agreement is for an initial term of three years
and renews automatically for successive one-year periods unless earlier
terminated or prior notice of non-renewal is provided by either party. Under the
agreement, Mr. Soufflas is entitled to an annual base salary of $210,000 with
annual increases on January 1 of each year of a minimum of 10% of the annual
base salary for the immediately preceding year, and is eligible for an annual
bonus and incentive compensation awards in an amount and form to be determined
by our board of directors in its sole discretion. On August 15, 2005, we granted
Mr. Soufflas an option to acquire 1,000,000 shares of our common stock. On March
28, 2006 we granted Mr. Soufflas a restricted stock award with respect to
300,000 shares of our common stock and on December 12, 2006, we granted Mr.
Soufflas an option to acquire 150,000 shares of our common stock.

DAVID A. TAYLOR

          On March 29, 2006, we entered into an employment agreement with David
A. Taylor to serve as our Senior Vice President - National Sales effective
February 1, 2006. The agreement is for an initial term of three years and renews
automatically for successive one-year periods unless earlier terminated or prior
notice of non-renewal is provided by either party. Under the agreement, Mr.
Taylor is entitled to an annual base salary of $162,000 with annual increases on
January 1 of each year of a minimum of 10% of the annual base salary for the
immediately preceding year, and is eligible for an annual bonus and incentive
compensation awards in an amount and form to be determined by our board of
directors in its sole discretion. On August 15, 2005, we granted Mr. Taylor an
option to acquire 1,000,000 shares of our common stock and on March 28, 2006, we
granted Mr. Taylor a restricted stock award with respect to 375,000 shares of
our common stock.


                                       60

<Page>

          On March 15, 2007, we terminated the employment of Mr. Taylor. In
accordance with the terms of his employment agreement, we are currently
obligated to pay Mr. Taylor $178,200 over a period of 12 months commencing on
the date of termination.

PATRICIA S. BATHURST

          On May 13, 2005, we entered into an employment agreement with Patricia
S. Bathurst to serve as our Vice President - Marketing effective February 1,
2005. The agreement is for an initial term of five years and renews
automatically for successive one-year periods unless earlier terminated or prior
notice of non-renewal is provided by either party. Under the agreement, Ms.
Bathurst is entitled to an annual base salary of $132,000 with annual increases
on January 1 of each year of a minimum of 10% of the annual base salary for the
immediately preceding year, and is eligible for an annual bonus and incentive
compensation awards in an amount and form to be determined by our board of
directors in its sole discretion. Pursuant to the agreement, Ms. Bathurst
received an option to acquire 1,000,000 shares of our common stock. On March 28,
2006, we granted Ms. Bathurst a restricted stock award with respect to 225,000
shares of our common stock and on December 12, 2006, we granted Ms. Bathurst an
option to acquire 50,000 shares of our common stock.

TERMINATION PROVISIONS OF EMPLOYMENT AGREEMENTS

          The employment agreements with Mr. Daniels and Ms. Bathurst provide
that if we terminate the employment of the applicable executive officer without
"cause" or the officer terminates his or her employment with us for "good
reason," as such terms are defined in the agreements, the officer is immediately
entitled to two years' annual base salary, the full annual base salary to which
the officer would otherwise have been entitled during the remainder of the
initial term, and all other compensation and benefits to which the officer would
have been entitled had the officer been employed by us for the remainder of the
initial term. "Good reason" includes a "change in control," which includes: (i)
the acquisition by any person of 30% or more of the combined voting power of our
outstanding securities; (ii) a change in the majority of our board of directors
that was not approved by at least 50% of our board of directors; (iii) the
completion of a reorganization, merger or consolidation of us, or the sale or
other disposition of at least 80% of our assets; or (iv) approval by our
stockholders of a liquidation or dissolution of us.

          The employment agreements with Messrs. Soufflas and Taylor provide
that if we terminate the employment of the applicable executive officer without
"cause" or the officer terminates his or her employment with us for "good
reason," as such terms are defined in the agreements, the officer is entitled to
receive an amount equal to the annual base salary such officer was receiving on
the date of termination to be paid over a period of 12 months. "Good reason"
includes a "change in control," which includes: (i) the acquisition by any
person of 50% or more of the combined voting power of our outstanding
securities; (ii) a change in the majority of our board of directors that was not
approved by at least 50% of our board of directors; (iii) the completion of a
reorganization, merger or consolidation of us, or the sale or other disposition
of all or substantially all of our assets; or (iv) approval by our stockholders
of a liquidation or dissolution of us.


                                       61

<Page>

TERMS OF OPTIONS

          The options we granted to Mr. Daniels and Ms. Bathurst in 2005 are for
a term of 10 years, have an exercise price of $.40 per share, and vest in four
equal installments commencing on the date of grant and continuing on February
1st of each of the following three years. In the event the employment of the
applicable executive officer is terminated for any reason other than for
"cause," as such term is defined in the employment agreements, the officer's
option vests in full immediately and may be exercised at any time prior to the
expiration date of the option. In the event we terminate the employment of the
applicable executive officer without "cause" or the officer terminates his or
her employment with us for "good reason" (including a "change in control"), as
such terms are defined in the employment agreements, we are required to use our
best efforts to prepare and file a registration statement with the SEC within
180 days of the date of termination to register the public resale of the shares
underlying the officer's option. In the event the employment of the applicable
executive officer is terminated for "cause," the option terminates immediately.
On December 12, 2006, we accelerated the vesting schedule of the options so that
they vested in full on that date.

          The options granted to Mr. Soufflas and Mr. Taylor in 2005 are for a
term of 10 years, have an exercise price of $.40 per share, and vest in four
equal annual installments commencing on February 1, 2006. In the event the
employment of the applicable executive officer is terminated for any reason
other than for "cause," as such term is defined in the option, the officer's
option may be exercised to the extent exercisable on the date of such
termination of employment until the earlier of the date that is 90 days after
the date of such termination of employment or the expiration date of the option.
In the event the employment of the applicable executive officer is terminated
for "cause," the option terminates immediately. On December 12, 2006, we
accelerated the vesting schedule of the options so that they vested in full on
that date.

          The options granted to Messrs. Daniels and Soufflas and Ms. Bathurst
in 2006 are for a term of 10 years, have an exercise price of $.88 per share,
and were vested in full on the date of grant. In the event the employment of the
applicable executive officer is terminated for any reason other than for
"cause," as such term is defined in the option, the officer's option may be
exercised to the extent exercisable on the date of such termination of
employment until the earlier of the date that is 90 days after the date of such
termination of employment (one year in the case of termination due to retirement
or disability) or the expiration date of the option. In the event the employment
of the applicable executive officer is terminated for "cause," the option
terminates immediately.

TERMS OF RESTRICTED STOCK AWARDS

          The restricted stock awards that we granted to Messrs. Daniels,
Soufflas and Taylor and Ms. Bathurst in 2006 vest in three equal annual
installments commencing on the first anniversary of the date of grant. In the
event we terminate the employment of the applicable executive officer without
"cause" or the officer terminates his or her employment with us for "good
reason," as such terms are defined in such officer's respective employment
agreement, the officer's restricted stock award vests in full immediately. "Good
reason" includes a "change in control," which includes: (i) the acquisition by
any person of 50% or more of the combined voting power of our outstanding
securities; (ii) a change in the majority of our board of directors


                                       62

<Page>

that was not approved by at least 50% of our board of directors; (iii) the
completion of a reorganization, merger or consolidation of us, or the sale or
other disposition of all or substantially all of our assets; or (iv) approval by
our stockholders of a liquidation or dissolution of us. In the event the
employment of the applicable executive officer is terminated for "cause," any
shares of common stock that have not vested as of the date of termination are
forfeited to us and cancelled.

DIRECTOR COMPENSATION

          We provide our non-employee directors with a standard compensation
package for serving as a member of our board of directors. Non-employee
directors receive an option to acquire 350,000 shares of our common stock, and
$1,000 plus reasonable travel expenses for attendance in person at any meetings
of the board of directors for which attendance in person was specifically
requested by the chairman of the board of directors. The options have a
five-year term, an exercise price of $.40 per share, and vest as follows: (i)
100,000 shares on the date of grant, and (ii) 250,000 shares on the first
anniversary of the date of grant if the director remains a member of our board
of directors continuously during the period commencing on the date of grant and
ending on the first anniversary of the date of grant. We do not provide any
compensation to our employee directors.

          We did not have any non-employee directors on our board of directors
during 2006 and, thus, did not pay any director compensation to any non-employee
directors during 2006.

                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

          The following table sets forth, for each named executive officer,
information regarding unexercised options, stock that had not vested, and equity
incentive plan awards as of the end of our fiscal year ended December 31, 2006.

<Table>
<Caption>
                                     OPTION AWARDS                                    STOCK AWARDS
                       -----------------------------------------   -------------------------------------------------
                        NUMBER OF
                       SECURITIES
                       UNDERLYING
                       UNEXERCISED    OPTION                         NUMBER OF SHARES OR      MARKET VALUE OF SHARES
                       OPTIONS (#)   EXERCISE        OPTION          UNITS OF STOCK THAT      OR UNITS OF STOCK THAT
NAME                   EXERCISABLE   PRICE ($)   EXPIRATION DATE   HAVE NOT VESTED (#) (1)   HAVE NOT VESTED ($) (2)
--------------------   -----------   ---------   ---------------   -----------------------   -----------------------
<S>                     <C>             <C>         <C>                      <C>                      <C>
David M. Daniels        2,500,000       .40          8/14/15                 450,000                  364,500
                          250,000       .88         12/11/16
Alex Soufflas           1,000,000       .40          8/14/15                 300,000                  243,000
                          150,000       .88         12/11/16
David A. Taylor         1,000,000       .40          8/14/15                 375,000                  303,750
Patricia S. Bathurst    1,000,000       .40          5/12/15                 225,000                  182,250
                           50,000       .88         12/11/16
</Table>

(1)  These restricted stock awards vest in three equal annual installments
     commencing on the first anniversary of the date of grant, which was March
     28, 2006.


                                       63

<Page>

(2)  The market value of these shares was calculated based on $0.81, the last
     reported sales price for our shares of common stock on the OTC Bulletin
     Board on December 29, 2006.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTS AND
         RELATED STOCKHOLDER MATTERS.

          The following table sets forth, as of March 20, 2007, information with
respect to the securities holdings of all persons that we have reason to
believe, pursuant to filings with the SEC, may be deemed the beneficial owner of
more than 5% of our outstanding common stock. The following table also sets
forth, as of such date, the beneficial ownership of our common stock by all
executive officers and directors, individually and as a group.

          The beneficial owners and amount of securities beneficially owned have
been determined in accordance with Rule 13d-3 under the Exchange Act and, in
accordance therewith, includes all shares of our common stock that may be
acquired by such beneficial owners within 60 days of March 20, 2007 upon the
exercise or conversion of any options, warrants or other convertible securities.
Unless otherwise indicated, each person or entity named below has sole voting
and investment power with respect to all common stock beneficially owned by that
person or entity, subject to the matters set forth in the footnotes to the table
below, and has an address of 120 Gibraltar Road, Suite 107, Horsham,
Pennsylvania 19044.

<Table>
<Caption>
                                                    AMOUNT AND NATURE
                                                      OF BENEFICIAL     PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER                  OWNERSHIP (1)    OF CLASS (1)
-------------------------------------------------   -----------------  ------------
<S>                                                    <C>                <C>
David M. Daniels                                       4,198,050 (2)      12.9%
Patricia S. Bathurst                                   1,382,600 (3)       4.2%
Alex Soufflas                                          1,450,000 (4)       4.4%
Ronald F. Westman                                      5,313,000 (5)      16.3%
Jesus Lozano                                           1,650,000 (6)       5.1%
All officers and directors as a group (3 persons)      7,030,650 (7)      21.5%
</Table>

----------
* Less than 1%.

(1)  This table has been prepared based on 32,659,106 shares of our common stock
     outstanding on March 20, 2007.

(2)  Includes 2,500,000 shares issuable upon the exercise of options that have
     an exercise price of $.40 per share, 250,000 shares issuable upon the
     exercise of options that have an exercise price of $.88 per share and
     450,000 shares underlying restricted stock awards.

(3)  Includes 1,000,000 shares issuable upon the exercise of options that have
     an exercise price of $.40 per share, 50,000 shares issuable upon the
     exercise of options that have an exercise price of $.88 per share and
     225,000 shares underlying restricted stock awards.

(4)  Includes 1,000,000 shares issuable upon the exercise of options that have
     an exercise price of $.40 per share, 150,000 shares issuable upon the
     exercise of options that have an exercise price of $.88 per share and
     300,000 shares underlying restricted stock awards.


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<Page>

(5)  Includes 100,000 shares issuable upon the exercise of options that have an
     exercise price of $.40 per share, 1,860,000 shares issuable upon the
     exercise of warrants that have an exercise price of $.60 per share, and
     1,860,000 shares issuable upon the exercise of warrants that have an
     exercise price of $.80 per share.

(6)  Includes 550,000 shares issuable upon the exercise of warrants that have an
     exercise price of $.60 per share and 550,000 shares issuable upon the
     exercise of warrants that have an exercise price of $.80 per share.

(7)  Includes 4,500,000 shares issuable upon the exercise of options that have
     an exercise price of $.40 per share, 450,000 shares issuable upon the
     exercise of options that have an exercise price of $.88 per share and
     975,000 shares underlying restricted stock awards.

                      EQUITY COMPENSATION PLAN INFORMATION

          The following table sets forth information regarding the number of
stock options, warrants, rights and similar securities that were outstanding at
December 31, 2006 under equity compensation plans that have not been approved by
our security holders. None of our securities were outstanding at December 31,
2006 under plans that have been approved by our security holders.

<Table>
<Caption>
                                              NUMBER OF           WEIGHTED-       NUMBER OF SECURITIES
                                           SECURITIES TO BE   AVERAGE EXERCISE     REMAINING AVAILABLE
                                             ISSUED UPON          PRICE OF         FOR FUTURE ISSUANCE
                                             EXERCISE OF         OUTSTANDING          UNDER EQUITY
                                             OUTSTANDING          OPTIONS,         COMPENSATION PLANS
                                          OPTIONS, WARRANTS     WARRANTS AND     (EXCLUDING SECURITIES
                                              AND RIGHTS           RIGHTS          REFLECTED IN COLUMN(a))
                                                 (a)                (b)                      (c)
                                          -----------------   ----------------   -------------------------
<S>                                           <C>                  <C>                   <C>
Equity compensation plans approved
   by security holders                              -0-              -0-                    -0-
Equity compensation plans not
   approved by security holders:
      2006 Stock Incentive Plan                 360,000            $0.60                 103,425(1)
      Stock options issued to directors
         and employees                        8,095,000            $0.43                     -0-
      Warrants issued to consultants
         and advisors                           795,450            $0.71                     -0-
                                              ---------            -----                 -------
            Total                             9,250,450            $0.46                     -0-
                                              =========            =====                 =======
</Table>

(1)  Under the terms of the 2006 Stock Incentive Plan, these shares of common
     stock may be awarded in the form of stock options, warrants, stock
     appreciation rights, restricted stock, restricted stock units, unrestricted
     stock, and other equity-based or equity-related awards.


                                       65

<Page>

2006 STOCK INCENTIVE PLAN

          On February 2, 2006, our board of directors adopted the National
Health Partners, Inc. 2006 Stock Incentive Plan. Awards may be made under the
plan for up to 4,500,000 shares of our common stock in the form of stock
options, warrants, stock appreciation rights, restricted stock, restricted stock
units, unrestricted stock, and other equity-based or equity-related awards.
Awards may be made to our employees, officers or directors as well as our
consultants or advisors. The plan is administered by our board of directors
which has full and final authority to interpret the plan, select the persons to
whom awards may be granted, and determine the amount, vesting and all other
terms of any awards. To the extent permitted by applicable law, our board of
directors may delegate any or all of its powers under the plan to one or more
committees or subcommittees of the board. The plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and is not a "qualified plan" under Section 401(a) of the Internal Revenue Code
of 1986, as amended. The plan has not been approved by our shareholders. As a
result, "incentive stock options" as defined under Section 422 of the Internal
Revenue Code may not be granted under the plan until such approval is received
for the plan. The plan terminates on February 1, 2016.

          Unless otherwise determined by the Board, awards may not be
transferred except by will or the laws of descent and distribution and terminate
90 days after termination of employment with us, whether voluntarily by either
party or by disability, or death or retirement. In the event that termination of
employment or association is for "cause," as that term is defined in the plan,
awards terminate immediately upon such termination. The plan provides for the
immediate vesting or awards or the assumption of awards in the event of certain
"change in control" and "reorganization events," which are defined generally
under the plan to include the acquisition by any person of 30% or more of the
combined voting power of our outstanding securities, a change in the majority of
our board of directors that was not approved by at least a majority of our board
of directors, the completion of a reorganization, merger, share exchange or
consolidation of us, the sale or other disposition of all or substantially all
of our assets, or our liquidation or dissolution.

          As of March 20, 2007, we have issued awards under the plan with
respect to 4,396,575 shares of our common stock.

STOCK OPTIONS ISSUED TO EMPLOYEES

          A description of the stock options issued to our directors and
employees that were outstanding at December 31, 2006 is set forth in Note 8 to
our audited consolidated financial statements beginning on page F-1 of this
report.

WARRANTS ISSUED TO CONSULTANTS AND ADVISORS

          A description of the warrants issued to certain of our consultants and
advisors that were outstanding at December 31, 2006 is set forth in Note 7 to
our audited consolidated financial statements beginning on page F-1 of this
report.


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<Page>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
         INDEPENDENCE.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          In April 2005, we issued 1,800,000 shares of our common stock, Class A
warrants to acquire 1,800,000 shares of our common stock, and Class B warrants
to acquire 1,800,000 shares of our common stock to Ronald F. Westman for
aggregate consideration consisting of 2,740,000 shares of common stock of
Infinium Labs, Inc., a Delaware corporation, that Mr. Westman owned and that
were then valued at $720,000. Under the terms of the agreement, in the event we
obtained less than $720,000 from the sale of the Infinium Labs shares, Mr.
Westman was required to pay the difference to us in cash or additional shares of
Infinium Labs common stock. We completed the sale of the last of our shares of
common stock of Infinium Labs on September 7, 2005, resulting in aggregate gross
proceeds from the sale of all 2,740,000 shares of $320,506. Mr. Westman paid the
remaining funds to us in cash on September 16, 2005. Mr. Westman beneficially
owns approximately 16.3% of our common stock and served as a member of our board
of directors from June 29, 2005 to September 26, 2005. We sold the shares of our
common stock and warrants to Mr. Westman at a price per share of $.40, which is
the same price we received for shares of our common stock sold in the private
offerings we conducted immediately prior to and after the date of the
transaction with Mr. Westman.

          In June 2005, we entered into a lease for additional office space in
the Centerpointe Office Building located at 2033 Main Street, Suite 501,
Sarasota, Florida 34237. The lease is for approximately 4,000 square feet of
space for a monthly rent payment of approximately $7,500, commenced on July 1,
2005 and expires on July 1, 2010. Centerpointe Office Building is owned by
Centerpointe Property, LLC. Ronald F. Westman owns all of the outstanding
membership interests in Centerpointe Property, LLC jointly with his wife,
beneficially owns approximately 16.3% of our common stock, and served as a
member of our board of directors from June 29, 2005 to September 26, 2005. The
rent per square foot that we pay for this office space is the same price per
square foot that the other tenants in the building pay for office space in this
building.

          On February 8, 2006, Roger H. Folts resigned as our Chief Financial
Officer and Secretary. Concurrently therewith, we entered into a termination and
mutual release with Mr. Folts effective February 1, 2006 pursuant to which his
employment agreement was terminated effective February 1, 2006, and we and Mr.
Folts agreed to release each other from any and all claims that they may now
hold or may in the future hold arising out of the employment agreement or Mr.
Folts' employment with or separation from us. We also entered into a consulting
agreement with Mr. Folts on February 8, 2006 pursuant to which Mr. Folts agreed
to provide accounting and related services to us on a full-time basis until June
30, 2006 and thereafter on a part-time basis until February 1, 2009, and in
exchange for which we agreed to issue him 300,000 shares of our common stock and
continue paying him the salary he was receiving under his employment agreement
until March 31, 2006.

          On April 1, 2006, we terminated the lease for our facility in
Sarasota, Florida. Under the termination and release agreement: (i) the
Commercial Office Lease dated June 13, 2005 between us and Centerpointe
Property, LLC was terminated effective April 1, 2006; (ii) we


                                       67

<Page>

issued 10,000 shares of our common stock to Centerpointe Property, LLC in full
payment of all rent and other expenses that were due and payable under the lease
on April 1, 2006; and (iii) both parties agreed to release each other from any
and all claims that they may now hold or may in the future hold arising out of
the lease. We did not incur any material early termination penalties in
connection with the termination of the lease. Ronald F. Westman owns all of the
outstanding membership interests in Centerpointe Property, LLC jointly with his
wife, beneficially owns approximately 16.3% of our common stock, and served as a
member of our board of directors from June 29, 2005 to September 26, 2005.

          We have entered into employment agreements with each of David M.
Daniels, Alex Soufflas, Patricia S. Bathurst and David A. Taylor and have issued
stock options and restricted stock awards to each of them. A description of the
employment agreements, stock options and restricted stock awards is set forth
under "ITEM 10. EXECUTIVE COMPENSATION -- EMPLOYMENT CONTRACTS AND ARRANGEMENTS"
of this report.

DIRECTOR INDEPENDENCE

          Our board of directors currently consists of David M. Daniels.
Pursuant to Item 407(a)(1)(ii) of Regulation S-B of the Securities Act, our
board of directors has adopted the definition of "independent director" as
set forth in the American Stock Exchange ("AMEX") Company Guide. In applying
this definition, our board of directors has determined that Mr. Daniels does
not qualify as an "independent director" pursuant to AMEX Company Guide
Section 121 and is not "independent" for purposes of Section 10A(m)(3) of the
Exchange Act. As of the date of the report, we do not maintain a separately
designated audit, compensation or nominating committee. In applying the
"independence standards" established by AMEX, our board of directors has
determined that Mr. Daniels is not "independent" for purposes of Section 803
of the AMEX Company Guide, applicable to audit, compensation and nominating
committee members.

ITEM 13. EXHIBITS

          The following exhibits are filed as part of this report:

EXHIBIT NO.                               EXHIBIT
-----------   ------------------------------------------------------------------
    3.1       Restated Articles of Incorporation (incorporated by reference to
              Exhibit 3.1 to the registration statement on Form SB-2, File No.
              333-126315, initially filed with the Securities and Exchange
              Commission ("SEC") on June 30, 2005, as amended (the "Registration
              Statement")

    3.2       Amended and Restated Bylaws (incorporated by reference to Exhibit
              3.2 to the Registration Statement)

    4.1       Specimen Stock Certificate (incorporated by reference to Exhibit
              4.1 to the Registration Statement)

   10.1       Employment Agreement, dated May 13, 2005, by an between the
              Company and David M. Daniels (incorporated by reference to Exhibit
              10.1 to the Registration Statement)


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<Page>

   10.2       Employment Agreement, dated May 13, 2005, by an between the
              Company and Roger H. Folts (incorporated by reference to Exhibit
              10.2 to the Registration Statement)

   10.3       Employment Agreement, dated May 13, 2005, by an between the
              Company and Patricia S. Bathurst (incorporated by reference to
              Exhibit 10.3 to the Registration Statement)

   10.4       Option to Acquire Shares of Common Stock, dated May 13, 2005,
              issued by the Company to David M. Daniels (incorporated by
              reference to Exhibit 10.4 to the Registration Statement)

   10.5       Option to Acquire Shares of Common Stock, dated May 13, 2005,
              issued by the Company to Roger H. Folts (incorporated by reference
              to Exhibit 10.5 to the Registration Statement)

   10.6       Option to Acquire Shares of Common Stock, dated May 13, 2005,
              issued by the Company to Patricia S. Bathurst (incorporated by
              reference to Exhibit 10.6 to the Registration Statement)

   10.7+      Network Access Agreement, dated April 30, 2001, between the
              Company and Careington International Corporation (incorporated by
              reference to Exhibit 10.7 to the Registration Statement)

   10.8+      Optum Services Agreement, dated October 1, 2001, between the
              Company and United HealthCare Services, Inc. (incorporated by
              reference to Exhibit 10.8 to the Registration Statement)

   10.9+      Network Access and Repricing Agreement, dated September 1, 2002,
              between the Company and First Access, Inc. (incorporated by
              reference to Exhibit 10.9 to the Registration Statement)

  10.10+      Network Leasing Agreement, dated December 18, 2003, between the
              Company and National Benefit Builders, Inc. (incorporated by
              reference to Exhibit 10.10 to the Registration Statement)

  10.11+      AdvancePCS, L.P. Managed Pharmaceutical Benefit Agreement, dated
              July 1, 2001, between the Company and AdvancePCS, L.P.
              (incorporated by reference to Exhibit 10.11 to the Registration
              Statement)

  10.12       Agreement of Lease, dated April 22, 2004, between Liberty Property
              Limited Partnership and the Company (incorporated by reference to
              Exhibit 10.12 to the Registration Statement)

  10.13       Commercial Office Lease, dated June 13, 2005, between Centerpointe
              Property, LLC and the Company (incorporated by reference to
              Exhibit 10.13 to the Registration Statement)

  10.14       Form of Securities Purchase Agreement by and between the Company
              and shareholders participating in the August 2004 Offering,
              September 2004 Offering, March 2005 Offering, February 2005
              Offering, May 2005 Offering and June 2005 Offering (incorporated
              by reference to Exhibit 10.14 to the Registration Statement)


                                       69

<Page>

  10.15       Securities Purchase Agreement, dated April 12, 2005, by and
              between the Company and Ronald F. Westman (incorporated by
              reference to Exhibit 10.15 to the Registration Statement)

  10.16       Option to Acquire Shares of Common Stock, dated June 29, 2005,
              issued by the Company to Ronald F. Westman (incorporated by
              reference to Exhibit 10.16 to the Registration Statement)

  10.17       Option to Acquire Shares of Common Stock, dated June 29, 2005,
              issued by the Company to Jay Rosen (incorporated by reference to
              Exhibit 10.17 to the Registration Statement)

  10.18       Option to Acquire Shares of Common Stock, dated August 15, 2005,
              issued by the Company to Alex Soufflas (incorporated by reference
              to Exhibit 10.18 to the Registration Statement)

  10.19       Option to Acquire Shares of Common Stock, dated August 15, 2005,
              issued by the Company to David A. Taylor (incorporated by
              reference to Exhibit 10.19 to the Registration Statement)

  10.20       Summary of the terms of the Company's employment arrangement with
              Alex Soufflas (incorporated by reference to Exhibit 10.20 to the
              Registration Statement)

  10.21       Summary of the terms of the Company's employment arrangement with
              David A. Taylor (incorporated by reference to Exhibit 10.21 to the
              Registration Statement)

  10.22       Form of Class A Warrant issued by the Company to the shareholders
              participating in the August 2004 Offering, September 2004
              Offering, March 2005 Offering, February 2005 Offering, May 2005
              Offering and June 2005 Offering (incorporated by reference to
              Exhibit 10.22 to the Registration Statement)

  10.23       Form of Class B Warrant issued by the Company to the shareholders
              participating in the August 2004 Offering, September 2004
              Offering, March 2005 Offering, February 2005 Offering, May 2005
              Offering and June 2005 Offering (incorporated by reference to
              Exhibit 10.23 to the Registration Statement)

  10.24       Form of First Amendment to Securities Purchase Agreement and
              Release by and between the Company and the shareholders
              participating in the August 2004 Offering and the September 2004
              Offering (incorporated by reference to Exhibit 10.24 to the
              Registration Statement)

  10.25       Form of Class A Warrant issued by the Company to consultants and
              advisors in June 2005 (incorporated by reference to Exhibit 10.25
              to the Registration Statement)

  10.26       Form of Class B Warrant issued by the Company to consultants and
              advisors in June 2005 (incorporated by reference to Exhibit 10.26
              to the Registration Statement)


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<Page>

  10.27       Form of Class C Warrant issued by the Company to consultants and
              advisors in June 2005 (incorporated by reference to Exhibit 10.27
              to the Registration Statement)

  10.28       CARExpess Broker Agreement, dated March 28, 2005, by and between
              the Company and Trident Marketing International, Inc.
              (incorporated by reference to Exhibit 10.28 to the Registration
              Statement)

  10.29       Marketing Incentive Plan, dated June 24, 2005, by and between the
              Company and Trident Marketing International, Inc. (incorporated by
              reference to Exhibit 10.29 to the Registration Statement)

  10.30       Option, dated June 24, 2005, issued by the Company to Trident
              Marketing International, Inc. (incorporated by reference to
              Exhibit 10.30 to the Registration Statement)

  10.31       CARExpess Broker Agreement, dated August 12, 2005, by and between
              the Company and Hispanic Global LLC (incorporated by reference to
              Exhibit 10.31 to the Registration Statement)

  10.32       Consulting Agreement, dated May 16, 2005, by and between the
              Company and Jose Lozano (incorporated by reference to Exhibit
              10.32 to the Registration Statement)

  10.33       Consulting Agreement, dated June 24, 2005, by and between the
              Company and El CID IV (incorporated by reference to Exhibit 10.33
              to the Registration Statement)

  10.34       Consulting Agreement, dated October 5, 2005, by and between the
              Company and R. Dennis Bowers (incorporated by reference to Exhibit
              10.34 to the Registration Statement)

  10.35       Promissory Note, dated November 11, 2005, issued by the Company to
              Rene Ortega, Jr. (incorporated by reference to Exhibit 10.35 to
              the Registration Statement)

  10.36       Promissory Note, dated November 16, 2005, issued by the Company to
              Uwe Weibel (incorporated by reference to Exhibit 10.36 to the
              Registration Statement)

  10.37       Promissory Note, dated November 16, 2005, issued by the Company to
              Daniel Eggenberger (incorporated by reference to Exhibit 10.37 to
              the Registration Statement)

  10.38       Promissory Note, dated December 7, 2005, issued by the Company to
              Ronda Westman (incorporated by reference to Exhibit 10.38 to the
              Registration Statement)

  10.39       National Health Partners, Inc. 2006 Stock Incentive Plan
              (incorporated by reference to Exhibit 99.1 to the registration
              statement on Form S-8, File No. 333-131589, filed with the SEC on
              February 6, 2006)


                                       71

<Page>

  10.40       Termination and Mutual Release, dated February 8, 2006, by and
              between the Company and Roger H. Folts (incorporated by reference
              to Exhibit 10.1 to the Current Report on Form 8-K filed with the
              SEC on February 15, 2006)

  10.41       Consulting Agreement, dated February 8, 2006, by and between the
              Company and Roger H. Folts (incorporated by reference to Exhibit
              10.2 to the Current Report on Form 8-K filed with the SEC on
              February 15, 2006)

  10.42       Amendment No. 1 to Promissory Note, dated February 17, 2006, by
              and between the Company and Uwe Weibel (incorporated by reference
              to Exhibit 10.1 to the Current Report on Form 8-K filed with the
              SEC on February 23, 2006)

  10.43       Amendment No. 1 to Promissory Note, dated February 17, 2006, by
              and between the Company and Daniel Eggenberger (incorporated by
              reference to Exhibit 10.2 to the Current Report on Form 8-K filed
              with the SEC on February 23, 2006)

  10.44       Amendment No. 1 to Promissory Note, dated March 4, 2006, by and
              between the Company and Ronda Westman (incorporated by reference
              to Exhibit 10.44 to the Annual Report on Form 10-KSB filed with
              the SEC on March 31, 2006)

  10.45       Employment Agreement, dated March 29, 2006, by and between the
              Company and Alex Soufflas (incorporated by reference to Exhibit
              10.45 to the Annual Report on Form 10-KSB filed with the SEC on
              March 31, 2006)

  10.46       Employment Agreement, dated March 29, 2006, by and between the
              Company and David A. Taylor (incorporated by reference to Exhibit
              10.46 to the Annual Report on Form 10-KSB filed with the SEC on
              March 31, 2006)

  10.47       Restricted Stock Award Agreement, dated March 28, 2006, by and
              between the Company and David M. Daniels (incorporated by
              reference to Exhibit 10.47 to the Annual Report on Form 10-KSB
              filed with the SEC on March 31, 2006)

  10.48       Restricted Stock Award Agreement, dated March 28, 2006, by and
              between the Company and Alex Soufflas (incorporated by reference
              to Exhibit 10.48 to the Annual Report on Form 10-KSB filed with
              the SEC on March 31, 2006)

  10.49       Restricted Stock Award Agreement, dated March 28, 2006, by and
              between the Company and Patricia S. Bathurst (incorporated by
              reference to Exhibit 10.49 to the Annual Report on Form 10-KSB
              filed with the SEC on March 31, 2006)

  10.50       Restricted Stock Award Agreement, dated March 28, 2006, by and
              between the Company and David A. Taylor (incorporated by reference
              to Exhibit 10.50 to the Annual Report on Form 10-KSB filed with
              the SEC on March 31, 2006)


                                       72

<Page>

  10.51       Termination and Mutual Release, dated April 1, 2006, by and
              between Centerpointe Property, LLC and the Company (incorporated
              by reference to Exhibit 10.1 to the Quarterly Report on Form
              10-QSB filed with the SEC on March 31, 2006)

  10.52       Option to Acquire Shares of Common Stock, dated December 12, 2006,
              issued by the Company to David M. Daniels (incorporated by
              reference to Exhibit 10.1 to the Current Report on Form 8-K filed
              with the SEC on December 14, 2006)

  10.53       Option to Acquire Shares of Common Stock, dated December 12, 2006,
              issued by the Company to Alex Soufflas (incorporated by reference
              to Exhibit 10.2 to the Current Report on Form 8-K filed with the
              SEC on December 14, 2006)

  10.54       Option to Acquire Shares of Common Stock, dated December 12, 2006,
              issued by the Company to Patricia S. Bathurst (incorporated by
              reference to Exhibit 10.3 to the Current Report on Form 8-K filed
              with the SEC on December 14, 2006)

  10.55       Amendment No. 1 to Option to Acquire Shares of Common Stock, dated
              December 12, 2006, between the Company and David M. Daniels
              (incorporated by reference to Exhibit 10.4 to the Current Report
              on Form 8-K filed with the SEC on December 14, 2006)

  10.56       Amendment No. 1 to Option to Acquire Shares of Common Stock, dated
              December 12, 2006, between the Company and Alex Soufflas
              (incorporated by reference to Exhibit 10.5 to the Current Report
              on Form 8-K filed with the SEC on December 14, 2006)

  10.57       Amendment No. 1 to Option to Acquire Shares of Common Stock, dated
              December 12, 2006, between the Company and Patricia S. Bathurst
              (incorporated by reference to Exhibit 10.6 to the Current Report
              on Form 8-K filed with the SEC on December 14, 2006)

  10.58       Amendment No. 1 to Option to Acquire Shares of Common Stock, dated
              December 12, 2006, between the Company and David A. Taylor
              (incorporated by reference to Exhibit 10.7 to the Current Report
              on Form 8-K filed with the SEC on December 14, 2006)

  10.59       First Amendment to Lease Agreement dated March 13, 2007 by and
              between the Company and Liberty Property Limited Partnership
              (incorporated by reference to Exhibit 10.2 to the Current Report
              on Form 8-K filed with the SEC on March 19, 2007)

  21.1        Subsidiaries of the Company

  23.1        Consent of H J & Associates, LLC

  31.1        Certification of Chief Executive Officer required by Rule
              13a-14(a) under the Securities Exchange Act of 1934, as amended


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<Page>

   31.2       Certification of Chief Financial Officer required by Rule
              13a-14(a) under the Securities Exchange Act of 1934, as amended

   32.1       Certification of Chief Executive Officer and Chief Financial
              Officer required by Rule 13a-14(b) under the Securities Exchange
              Act of 1934, as amended

+    Certain information in this document has been omitted and filed separately
     with the Securities and Exchange Commission. Confidential treatment has
     been requested with respect to the omitted portions.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

          The following table presents fees for professional audit services
performed by HJ & Associates, LLC for the audit of our annual financial
statements for our fiscal years ended December 31, 2006 and 2005, and fees
billed for other services rendered by HJ & Associates during such years.

                                                                 2006      2005
                                                               -------   -------
Audit Fees:                                                    $34,022   $33,131
Audit-Related Fees:                                              2,277    30,398
Tax Fees:                                                        1,175       791
All Other Fees:                                                     --        --
                                                               -------   -------
   Total:                                                      $37,474   $64,320
                                                               =======   =======

          AUDIT FEES consist of fees billed for professional services rendered
by our principal accountant for the audit of our annual consolidated financial
statements and review of our interim consolidated financial statements included
in our quarterly reports and services that are normally provided by our
principal accountant in connection with statutory and regulatory filings or
engagements.

          AUDIT-RELATED FEES consist of fees billed for assurance and related
services rendered by our principal accountant that are reasonably related to the
performance of the audit or review of our consolidated financial statements and
are not reported under "Audit Fees" and relate to services performed in
connection with the review of our Registration Statements on Form SB-2.

          TAX FEES consists of fees billed for professional services rendered by
our principal accountant for tax compliance, tax advice and tax planning. These
services include assistance regarding federal and state tax compliance and
filings.

          ALL OTHER FEES consist of fees billed for products and services
provided by our principal accountant, other than those services described above.


                                       74

<Page>

          Our board of directors serves as our audit committee. It approves the
engagement of our independent auditors, and meets with our independent auditors
to approve the annual scope of accounting services to be performed and the
related fee estimates. It also meets with our independent auditors prior to the
completion of our annual audit and reviews the results of their audit and review
of our annual and interim consolidated financial statements, respectively.
During the course of the year, our chairman has the authority to pre-approve
requests for services that were not approved in the annual pre-approval process.
The chairman reports any interim pre-approvals at the following quarterly
meeting. At each of the meetings, management and our independent auditors update
our board of directors regarding material changes to any service engagement and
related fee estimates as compared to amounts previously approved. During 2005
and 2006, all audit and non-audit services performed by our independent
accountants were pre-approved by our board of directors in accordance with the
foregoing procedures.


                                       75

<Page>

                                   SIGNATURES

          In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant cause this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                        NATIONAL HEALTH PARTNERS, INC.


Date: March 23, 2007                    By: /s/ David M. Daniels
                                            ------------------------------------
                                            David M. Daniels
                                            Chief Executive Officer

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

SIGNATURE                  TITLE                                  DATE
---------                  -----                                  -----


/s/ David M. Daniels       Chief Executive Officer, President     March 23, 2007
-------------------------  and Chairman of the Board (Principal
David M. Daniels           Executive Officer)


/s/ Alex Soufflas          Chief Financial Officer, Executive     March 23, 2007
-------------------------  Vice President and Secretary
Alex Soufflas              (Principal Financial and Accounting
                           Officer)

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                        CONSOLIDATED FINANCIAL STATEMENTS

                                Table of Contents

Report of Independent Registered Public Accounting Firm                      F-2

Consolidated Balance Sheet at December 31, 2006                              F-3

Consolidated Statements of Operations for the Years
Ended December 31, 2006 and 2005                                             F-4

Consolidated Statements of Stockholders' Equity (Deficit) for the
Years Ended December 31, 2006 and 2005                                       F-5

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2006 and 2005                                                   F-6

Notes to Consolidated Financial Statements - December 31, 2006 and 2005      F-7


                                      F-1

<Page>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
National Health Partners, Inc. and Subsidiary
Horsham, Pennsylvania

We have audited the accompanying consolidated balance sheet of National Health
Partners, Inc. and Subsidiary as of December 31, 2006 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the years ended December 31, 2006 and 2005. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
National Health Partners, Inc. and Subsidiary as of December 31, 2006 and the
results of their operations and their cash flows for the years ended December
31, 2006 and 2005 in conformity with accounting principles generally accepted in
the United States of America.

HJ & Associates, LLC
Salt Lake City, Utah
March 16, 2007


                                      F-2

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                           Consolidated Balance Sheet

                                                                   DECEMBER 31,
                                                                       2006
                                                                   ------------
ASSETS
Current assets:
   Cash and cash equivalents                                       $  1,596,969
   Prepaid expense                                                      209,992
   Deposits                                                              19,617
                                                                   ------------
      Total current assets                                            1,826,578
                                                                   ------------
Property and equipment, net                                             144,821
Prepaid expense                                                         188,211
                                                                   ------------
      Total assets                                                 $  2,159,610
                                                                   ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                $     22,239
   Accrued expenses                                                     108,489
   Deferred revenue                                                     210,592
                                                                   ------------
      Total current liabilities                                         341,320
                                                                   ------------
      Total liabilities                                                 341,320
                                                                   ------------
Commitments and contingencies
Stockholders' equity:
   Common stock, $0.001 par value, 100,000,000 shares authorized,
      32,659,106 shares issued and outstanding                           32,659
   Additional paid-in capital                                        20,045,689
   Deferred compensation                                               (391,396)
   Accumulated deficit                                              (17,868,662)
                                                                   ------------
      Total stockholders' equity                                      1,818,290
                                                                   ------------
      Total liabilities and stockholders' equity                   $  2,159,610
                                                                   ============

                 The accompanying notes are an integral part of
                    these consolidated financial statements


                                      F-3

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                      Consolidated Statements of Operations

                                                        FOR THE YEARS ENDED
                                                            DECEMBER 31,
                                                     --------------------------
                                                         2006           2005
                                                     ------------   -----------
Net revenue                                          $  1,870,612   $   245,973
Direct costs                                            1,437,805       350,666
                                                     ------------   -----------
Gross profit (deficit)                                    432,807      (104,693)
                                                     ------------   -----------
Operating expenses:
   Selling and marketing                                3,039,448       241,692
   General and administrative                           7,437,608     3,882,260
                                                     ------------   -----------
Total operating expenses                               10,477,056     4,123,952
                                                     ------------   -----------
Loss from operations                                  (10,044,249)   (4,228,645)
                                                     ------------   -----------
Other income (expense):
   Interest income                                         55,019           717
   Interest expense                                       (12,130)       (5,724)
   Gain on extinguishment of debt                          35,932            --
   Common stock issued for releases                            --      (295,100)
                                                     ------------   -----------
Total other income (expense)                               78,821      (300,107)
                                                     ------------   -----------
Net loss                                             $ (9,965,428)  $(4,528,752)
                                                     ============   ===========
Loss per share -- basic and diluted                  $      (0.39)  $     (0.32)
                                                     ============   ===========
Weighted average number of shares
   outstanding -- basic and diluted                    25,487,248    14,397,546
                                                     ============   ===========

                 The accompanying notes are an integral part of
                    these consolidated financial statements


                                      F-4

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
            Consolidated Statements of Stockholders' Equity (Deficit)

<Table>
<Caption>
                                                                       DEFERRED                                       TOTAL
                                    COMMON STOCK        ADDITIONAL       STOCK                                    STOCKHOLDERS'
                                -------------------      PAID-IN     SUBSCRIPTION     DEFERRED      ACCUMULATED      EQUITY
                                  SHARES      AMOUNT     CAPITAL        PAYABLE     COMPENSATION      DEFICIT       (DEFICIT)
                                ----------   -------   -----------   ------------   ------------   ------------   -------------
<S>                             <C>          <C>       <C>             <C>            <C>          <C>             <C>
BALANCE AT DECEMBER 31, 2004     9,636,200     9,637     3,727,874       14,650              --      (3,374,482)       377,679
Common stock issued for stock
   subscription payable             36,625        37        14,613      (14,650)             --              --             --
Common stock issued for cash     2,256,625     2,256       900,395           --              --              --        902,651
Common stock issued to prior
   investors for releases          737,750       737       294,362           --              --              --        295,099
Common stock issued for stock
   exchange -- related party     1,800,000     1,800       718,200           --              --              --        720,000
Common stock issued for
   services                      2,587,000     2,587     1,032,213           --              --              --      1,034,800
Warrants issued for services            --        --     1,239,409           --              --              --      1,239,409
Stock offering costs                    --        --      (209,200)          --              --              --       (209,200)
Net loss                                --        --            --           --              --      (4,528,752)    (4,528,752)
                                ----------   -------   -----------     --------       ---------    ------------    -----------
BALANCE AT DECEMBER 31, 2005    17,054,200    17,054     7,717,866           --              --      (7,903,234)      (168,314)
Common stock issued for
   services                      4,941,575     4,942     2,272,358           --        (391,396)             --      1,885,904
Warrants issued for services            --        --       581,400           --              --              --        581,400
Common stock issued upon
   exercise of warrants          6,855,397     6,855     4,742,858           --              --              --      4,749,713
Options issued for services             --        --     2,525,855           --              --              --      2,525,855
Common stock and warrants
   issued for cash               3,797,934     3,798     2,200,362           --              --              --      2,204,160
Common stock issued for
   extinguishment of debt           10,000        10         4,990           --              --              --          5,000
Net loss                                --        --            --           --              --      (9,965,428)    (9,965,428)
                                ----------   -------   -----------     --------       ---------    ------------    -----------
BALANCE AT DECEMBER 31, 2006    32,659,106   $32,659   $20,045,689     $     --       $(391,396)   $(17,868,662)   $ 1,818,290
                                ==========   =======   ===========     ========       =========    ============    ===========
</Table>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-5

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows

<Table>
<Caption>
                                                                  FOR THE YEARS ENDED
                                                                      DECEMBER 31,
                                                               -------------------------
                                                                   2006          2005
                                                               -----------   -----------
<S>                                                            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                    $(9,965,428)  $(4,528,752)
   Adjustments to reconcile net loss to net cash used by
      operating activities:
         Amortization of common stock issued for services        1,584,414       980,000
         Amortization of warrants issued for services              486,948     1,129,809
         Options issued for services                             2,525,855            --
         Common stock issued for releases                               --       295,100
         Depreciation                                               65,919        51,800
         Bad debt -- note receivable                                    --        25,000
   Changes in operating assets and liabilities:
      Increase in deposits                                            (617)           --
      Increase (decrease) in other current assets                    3,978        (4,042)
      Increase (decrease) in accounts payable and accrued
         expenses                                                  (12,855)       28,783
      Increase (decrease) in accounts payable -- related party     (16,373)       16,373
      Increase in deferred revenue                                 141,951        61,548
      Increase (decrease) in deferred compensation                 (29,000)       29,000
                                                               -----------   -----------
            Net cash used by operating activities               (5,215,208)   (1,915,381)
                                                               -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from sale of marketable securities                       --       320,506
      Increase in notes receivable                                      --       (25,000)
      Decrease (increase) in certificates of deposit                35,717       (35,717)
      Increase in property and equipment                           (83,478)      (36,609)
                                                               -----------   -----------
            Net cash provided (used) by investing activities       (47,761)      223,180
                                                               -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from sale of common stock and warrants            2,204,160     1,302,144
      Payment of stock offering costs                                   --       (44,800)
      Proceeds from exercise of warrants                         4,749,713            --
      Proceeds from issuance of notes payable                           --       180,000
      Payments on notes payable                                   (203,742)      (57,251)
                                                               -----------   -----------
            Net cash provided by financing activities            6,750,131     1,380,093
                                                               -----------   -----------
Net increase (decrease) in cash                                  1,487,162      (312,108)
Cash at beginning of year                                          109,807       421,915
                                                               -----------   -----------
Cash at end of year                                            $ 1,596,969   $   109,807
                                                               ===========   ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
      Cash paid for taxes                                      $        --   $        --
      Cash received from (paid for) interest                   $    42,889   $    (2,722)

SCHEDULE OF NON-CASH FINANCING ACTIVITIES
      Common stock issued for services                         $ 2,277,300   $   980,000
      Warrants issued for services                             $   581,400   $ 1,129,809
      Stock options issued for services                        $ 2,525,855   $        --
      Common stock issued for releases                         $        --   $   295,100
      Common stock issued for stock offering costs             $        --   $   164,400
</Table>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                      F-6

<Page>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 1. DESCRIPTION OF BUSINESS.

          National Health Partners, Inc. (the "Company") was organized on March
10, 1989 as "Spectrum Vision Systems of Indiana, Inc." under the laws of the
State of Indiana. The Company changed its name to "National Health Partners,
Inc." on March 13, 2001. On December 15, 2004, National Health Brokerage Group,
Inc. was organized as a wholly-owned subsidiary of the Company.

          The Company sells membership programs that encompass all aspects of
healthcare, including physicians, hospitals, ancillary services, dentists,
prescription drugs and vision care through a national healthcare savings network
called "CARExpress." The Company markets its programs directly through
infomercials, newspapers, publications and its website, and indirectly through
marketing representatives, brokers and agents, retail chains and outlets, small
businesses and trade associates, and unions and associations. The Company
derives substantially all of its revenue from the monthly membership fees it
receives from members of its membership programs.

          The Company sells substantially all of its membership programs through
marketing representatives, brokers and agents. The Company typically pays these
sellers aggregate commissions of between 10% and 50% of the sale price of the
membership programs and/or an up-front fee of between $5 and $30 per member.
These sellers are paid the commissions for each member they enroll and for the
duration of each such member's membership. They may also recruit other parties
to sell the Company's membership programs and receive a portion of the
commissions earned by the other parties on sales made by those parties. These
sellers do not pay the Company any initial or ongoing fees in connection with
their relationship with the Company. They typically offer and sell the Company's
membership programs on a part-time basis and may engage in other related or
unrelated business activities, including selling the products or services of the
Company's competitors. The Company's agreements with these sellers are generally
for a term of one year and renew automatically for additional one-year terms
unless written notice of termination is delivered by either party to the other
at least 30 days prior to the then-current term. None of the Company's employees
are compensated on a basis similar to these parties.

          The Company contracts with preferred provider organizations ("PPOs")
and other provider networks for access to the discounted rates they have
negotiated with their healthcare providers. The principal suppliers of the
healthcare providers that comprise CARExpress are CareMark, Aetna, Optum,
Integrated Health, Three Rivers and HealthFi. The Company selects and utilizes
only those provider networks that it believes can deliver adequate savings to
its members while providing adequate support for its CARExpress membership
programs with the healthcare providers. The Company typically pays a per member
per month fee for use of a provider network that is determined in part based on
the number of providers participating in the network, the number of CARExpress
members accessing the network, and the particular products or services offered
by the providers. The Company's agreements with provider networks are generally
for a term of between one and two years, may be terminated by either party on
between 45 and 180 days' prior written notice, and renew automatically for
additional terms unless so terminated. Most of these agreements are
non-exclusive and contain confidentiality provisions.


                                       F-7

<Page>


NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

          This summary of significant accounting policies is provided to assist
the reader in understanding the Company's financial statements. The financial
statements and notes thereto are representations of the Company's management.
The Company's management is responsible for their integrity and objectivity.
These accounting policies conform to accounting principles generally accepted in
the United States of America and have been consistently applied in the
preparation of the financial statements.

PRINCIPLES OF CONSOLIDATION

          The financial statements include the balances of National Health
Partners, Inc. and its wholly-owned subsidiary, National Health Brokerage Group,
Inc. All material intercompany balances and transactions have been eliminated in
consolidation.

RECLASSIFICATIONS

          Certain amounts in the 2005 financial statements have been
reclassified to conform to the 2006 presentation. These reclassifications did
not result in any change to the previously reported total assets, net loss or
stockholders' equity.

ESTIMATES

          The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

REVENUE RECOGNITION

          The Company sells discount health care membership programs in return
for monthly membership fees. The date a monthly membership begins varies for
each individual member depending upon when the particular member purchased the
membership. The Company recognizes the membership fees as revenue when
persuasive evidence of an arrangement exists, delivery or performance has
occurred, the sales price is fixed and determinable, and collectibility is
reasonably assured. The fees are recognized as revenue on a straight-line basis
over the longer of the initial contractual term or the expected period during
which the services will be performed if the relationship with the member is
expected to extend beyond the initial contractual term and the member continues
to benefit from the payment of the fees.

          At the beginning of each membership period, the monthly membership fee
is paid by the member and recorded as deferred revenue. The Company then
recognizes revenue as the services are rendered. Shipping and handling fees that
the Company receives for the shipment of membership packages to new members are
included in its membership fees and recorded as deferred revenue. The Company
typically receives cash within five days of the date the membership fee is
charged to a member's credit card. The Company had deferred revenue of $210,592
at December 31, 2006.


                                       F-8

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION (CONTINUED)

          The Company offers a free trial to some of its members. The Company
does not recognize any membership revenue during the free-trial period. In the
event the member continues the membership after the free-trial period expires,
the member pays the monthly membership fee and the Company recognizes revenue as
services are rendered.

          The Company typically offers a 30-day money-back guarantee to its
members. Members can cancel their membership during the first 30 days of their
initial membership period and receive a full refund. After that, members can
cancel their membership at the end of any subsequent monthly membership period.
If a member cancels his or her membership and the member's credit card has
already been processed for the next monthly membership period, a refund check
will be issued to the member and no revenue will be recognized for that period.
The Company had sales refunds of $432,547 and $54,982 that were debited against
sales for the years ended December 31, 2006 and 2005, respectively.

DIRECT COSTS

          The Company's direct costs consist of sales commissions and fees paid
to PPOs and provider networks. The Company incurred sales commission expense of
$1,143,677 and $275,178 and network provider costs of $294,127 and $75,487 for
the years ended December 31, 2006 and 2005, respectively.

SELLING AND MARKETING EXPENSES

          The Company's selling and marketing expenses consist of advertising
expenses, marketing expenses, salaries paid to employees selling and marketing
the Company's CARExpress membership programs to potential customers, rent
expense and depreciation and amortization expense allocated to the Company's
selling and marketing activities, and all other selling and marketing expenses
incurred by the Company. Depreciation and amortization expense included in
selling and marketing expense is derived from the Company's telephones and
website and certain of the Company's computers, all of which are an integral
part of the Company's selling and marketing activities.


                                      F-9

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK-BASED COMPENSATION EXPENSE

          Effective January 1, 2006, the Company adopted the fair value
recognition provisions of Financial Statement of Financial Accounting Standards
No. 123 (revised 2004), "SHARE-BASED PAYMENT" ("SFAS 123R"), using the modified
prospective transition method. SFAS 123R replaced Statement of Financial
Accounting Standards No. 123, "ACCOUNTING FOR STOCK-BASED COMPENSATION" ("SFAS
123") and superseded APB Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES" ("APB 25"). Under the modified prospective transition method,
compensation cost recognized for the year ended December 31, 2006 includes: (a)
compensation cost for all share-based payments granted, but not yet vested as of
January 1, 2006, based on the grant-date fair value estimated in accordance with
the original provisions of SFAS 123, and (b) compensation cost for all
share-based payments granted subsequent to January 1, 2006, based on the
grant-date fair value estimated in accordance with the provisions of SFAS 123R.
Such amounts have been reduced by the Company's estimate of forfeitures of all
unvested awards.

          Prior to January 1, 2006, the Company accounted for stock-based
compensation under the recognition and measurement provisions of APB 25 for all
stock-based compensation granted to employees. Under APB 25, when the exercise
price of stock-based compensation granted to employees equals the market price
of the common stock on the date of grant, no compensation expense is recorded.
When the exercise price of stock-based compensation granted to employees is less
than the market price of the common stock on the date of grant, compensation
expense is recognized over the vesting period.

          For stock-based compensation granted to non-employees, the Company
recognizes compensation expense in accordance with the requirements of Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock Based
Compensation" (Statement 123). Statement 123 requires that companies recognize
compensation expense based on the estimated fair value of options granted to
non-employees over their vesting period, which is generally the period during
which services are rendered by such non-employees.

          The Company uses the Black-Scholes pricing model to determine the fair
value of the stock-based compensation that it grants to employees and
non-employees. The Company is required to make certain assumptions in connection
with this determination, the most important of which involves the calculation of
volatility with respect to the price of its common stock. The computation of
volatility is intended to produce a volatility value that is representative of
the Company's expectations about the future volatility of the price of its
common stock over an expected term.

          The Company used its past share price history to determine volatility.
The Company's shares of common stock began trading on the OTC Bulletin Board on
March 30, 2006. The Company cannot predict how the price of its shares of common
stock will continue to trade on the OTC Bulletin Board. As a result, the
volatility value that the Company calculated may differ from the future
volatility of the price of its shares of common stock.


                                      F-10

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK-BASED COMPENSATION EXPENSE (CONTINUED)

          As a result of adopting SFAS 123R on January 1, 2006, the Company
recognized $2,525,855 of stock option expense that it would not have otherwise
recognized during the year ended December 31, 2006 under APB 25. As a result,
the Company's net loss for the year ended December 31, 2006 was $(9,965,428) and
its basic and diluted net loss per share was $(0.39).

          The following table illustrates the effect on net loss and net loss
per share for the year ended December 31, 2005 had the Company adopted SFAS 123R
on January 1, 2005:

                                                              FOR THE YEAR ENDED
                                                               DECEMBER 31, 2005
                                                              ------------------
Net loss as reported                                              $(4,528,752)
Stock-based employee compensation
cost included in net income (loss) as
reported, net of related tax effects                                       --
Stock-based employee compensation
cost under the fair value based method,
net of related tax effects                                         (1,119,252)
                                                                  -----------
Pro forma net income (loss)                                       $(5,648,004)
                                                                  ===========
Earnings (loss) per share:
   Basic & diluted - as reported                                  $     (0.32)
   Basic & diluted - pro forma                                    $     (0.39)

INCOME TAXES

          The Company uses the liability method of accounting for income taxes
under which deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates in effect for
the year in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized as part of the provision for income taxes in the period that
includes the enactment date. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized in the
future.


                                      F-11

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES (CONTINUED)

          Net deferred tax assets consisted of the following components at
December 31, 2006 and 2005, respectively:

                                                              DECEMBER 31,
                                                      -------------------------
                                                          2006          2005
                                                      -----------   -----------
Deferred tax assets:
   Net operating loss carryforwards                   $ 3,424,400   $ 1,653,900
Deferred tax liabilities:
   Depreciation                                           (13,990)      (22,400)
Valuation allowance                                    (3,410,410)   (1,631,500)
                                                      -----------   -----------
Net deferred tax asset                                $        --     $      --
                                                      ===========   ===========

          At December 31, 2006, the Company had net operating loss
carry-forwards of approximately $8,780,000 that may be offset against future
taxable income from the years 2007 through 2027. No tax benefit has been
reported in the December 31, 2006 financial statements since the potential tax
benefit is offset by a valuation allowance of the same amount.

          Utilization of net operating loss carryforwards may be subject to a
substantial annual limitation due to ownership change limitations provided by
the Internal Revenue Code of 1986, as well as similar state and foreign
provisions. These ownership changes may limit the amount of net operating loss
carryforwards that can be utilized annually to offset future taxable income and
tax, respectively. Subsequent ownership changes could further affect the
limitation in future years. These annual limitation provisions may result in the
expiration of certain net operating losses and credits before utilization.

          In calculating the amount of pretax income from continuing operations
for the years ended December 31, 2006 and 2005, the amount of income tax
calculated under accounting principles generally accepted in the United States
of America differed from the amount of income tax determined under United States
federal and state income tax provisions as follows:

                                                              DECEMBER 31,
                                                      -------------------------
                                                          2006          2005
                                                      -----------   -----------
Book Income                                           $(3,885,880)  $(1,766,000)
Meals and entertainment                                     1,395         2,800
Depreciation                                               (7,235)      (25,677)
Accrued compensation                                           --        29,000
Stock compensation                                      2,099,980     1,002,030
Other                                                        (280)           --
Valuation allowance                                     1,792,020       757,847
                                                      -----------   -----------
                                                      $        --   $        --
                                                      ===========   ===========


                                      F-12

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

LOSS PER SHARE

          Basic loss per share is based on the weighted average number of shares
of the Company's common stock outstanding during the applicable year, and is
calculated by dividing the reported net loss for the applicable year by the
weighted average number of shares of common stock outstanding during the
applicable year. The Company calculates diluted loss per share by dividing the
reported net loss for the applicable year by the weighted average number of
shares of common stock outstanding during the applicable year as adjusted to
give effect to the exercise of all potentially dilutive options and warrants
outstanding at the end of the year. An aggregate of 20,732,686 and 23,681,004
shares of common stock underlying options and warrants that were outstanding on
December 31, 2006 and 2005, respectively, have been excluded from the
computation of diluted earnings per share because they are anti-dilutive. As a
result, basic loss per share was equal to diluted loss per share for each year.

                                                         FOR THE YEARS ENDED
                                                             DECEMBER 31,
                                                      -------------------------
                                                          2006          2005
                                                      -----------   -----------
Net loss, as reported                                 $(9,965,428)  $(4,528,752)
Weighted average number of
shares outstanding - basic and diluted                 25,487,248    14,397,546
                                                      -----------   -----------
Earnings (loss) per share -
   basic and diluted                                  $     (0.39)  $     (0.32)
                                                      ===========   ===========

CASH AND CASH EQUIVALENTS

          The Company considers all highly liquid investments with an original
maturity of three months or less on the date of purchase to be cash equivalents.

FINANCIAL INSTRUMENTS

          The carrying amounts of the Company's cash and cash equivalents,
accounts payable, accrued liabilities, and other short-term liabilities in the
consolidated balance sheet approximate their fair value due to the short-tem
maturity of these instruments and obligations.


                                      F-13

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DERIVATIVE FINANCIAL INSTRUMENTS

          The Company has issued common stock and warrants to certain
consultants to the Company, and has evaluated the terms and conditions of the
common stock and warrants to determine whether the warrants represented embedded
or freestanding derivative instruments under the provisions of Statement of
Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES," and Emerging Issues Task Force No. 00-19, "ACCOUNTING
FOR DERIVATIVE FINANCIAL INSTRUMENTS INDEXED TO, AND POTENTIALLY SETTLED IN, A
COMPANY'S OWN STOCK" ("EITF 00-19"). The Company determined that the warrants
did not represent freestanding derivative instruments and that the warrants did
not meet the requirements for liability classification under EITF 00-19. As a
result, the fair value of the warrants is reflected in the Company's additional
paid-in capital. The fair value of the Company's derivative financial
instruments are estimated using the Black-Scholes pricing model which takes into
consideration the estimated term of the warrants, the volatility of the price of
the Company's common stock, interest rates and the probability that the warrants
will be exercised.

PROPERTY AND EQUIPMENT

          Property and equipment are stated at cost, less accumulated
depreciation and amortization. Depreciation and amortization are calculated
using the straight-line basis over the estimated useful lives of the related
assets. The estimated useful lives of the Company's property and equipment are
as follows:

                         Computer equipment       3 years
                         Computer software        3 years
                         Furniture and fixtures   5 years
                         Telephone equipment      5 years
                         Website equipment        3 years

          The cost of major improvements to the Company's property and equipment
are capitalized. The cost of maintenance and repairs that do not improve or
extend the life of the applicable assets are expensed as incurred. When assets
are retired or otherwise disposed of, the cost and accumulated depreciation and
amortization are removed from the accounts and any resulting gain or loss is
reported in the period realized.

          The Company reviews property and equipment for impairment whenever
events or changes in circumstances indicate that the carrying amount of assets
may not be recoverable. Recoverability is measured by comparison of the carrying
amount of the assets to the future undiscounted net cash flows that the assets
are expected to generate. If the assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of these assets exceeds the fair value of the assets.


                                      F-14

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

          In June 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 48, "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, AN
INTERPRETATION OF FASB STATEMENT NO. 109" ("FASB Interpretation 48"). FASB
Interpretation 48 clarifies the accounting for uncertainty in income taxes
recognized in a company's financial statements in accordance with SFAS No. 109,
ACCOUNTING FOR INCOME TAXES. FASB Interpretation 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. It
also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. FASB
Interpretation 48 becomes effective for the Company for the fiscal year ended
December 31, 2007.

          In September 2006, the SEC issued Staff Accounting Bulletin No. 108,
Section N to Topic 1, "CONSIDERING THE EFFECTS OF PRIOR YEAR MISSTATEMENTS WHEN
QUANTIFYING MISSTATEMENTS IN CURRENT YEAR FINANCIAL STATEMENTS" ("SAB 108"). SAB
108 requires the evaluation of prior-year misstatements using both the balance
sheet approach and the income statement approach. In the initial year of
adoption, should either approach result in quantifying an error that is material
in light of quantitative and qualitative factors, SAB 108 guidance allows for a
one-time cumulative-effect adjustment to beginning retained earnings. In years
subsequent to adoption, previously undetected misstatements deemed material
shall result in the restatement of previously issued financial statements in
accordance with FAS No. 154, "ACCOUNTING CHANGES AND ERROR CORRECTIONS," a
replacement of APB Opinion No. 20, "ACCOUNTING CHANGES," and Statement No. 3,
"REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS." SAB 108 became
effective for the Company for the year ended December 31, 2006.

          In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157 - "FAIR VALUE MEASUREMENTS" ("SFAS 157"). This standard
establishes a framework for measuring fair value and expands disclosures about
fair value measurement of a company's assets and liabilities. This standard also
requires that the fair value measurement should be determined based on the
assumptions that market participants would use in pricing the asset or
liability. SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and, generally, must be applied
prospectively.


                                      F-15

<Page>

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

          On February 15, 2007, the FASB issued Statement of Financial
Accounting Standards No. 159, "THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND
FINANCIAL LIABILITIES" ("SFAS 159"). SFAS 159 provides companies with an option
to report selected financial assets and liabilities at fair value. Its objective
is to reduce both complexity in accounting for financial instruments and the
volatility in earnings caused by measuring related assets and liabilities
differently. It also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of assets and liabilities. SFAS 159
requires companies to provide additional information that will help investors
and other users of financial statements to more easily understand the effect of
the company's choice to use fair value on its earnings. It also requires
entities to display the fair value of those assets and liabilities for which the
company has chosen to use fair value on the face of the balance sheet. SFAS 159
does not eliminate disclosure requirements included in other accounting
standards, including requirements for disclosures about fair value measurements
included in SFAS 157, discussed above, and Statement of Financial Accounting
Standards No. 107 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. SFAS
159 is effective as of the beginning of a company's first fiscal year beginning
after November 15, 2007. Early adoption is permitted as of the beginning of the
previous fiscal year provided that the company makes that choice in the first
120 days of that fiscal year and also elects to apply the provisions of SFAS No.
157.

NOTE 3. PROPERTY AND EQUIPMENT

          Property and equipment consisted of the following at December 31,
2006:

Computers                          $  60,708
Software                               6,109
Furniture                             27,968
Telephone                             80,780
Website                              106,477
  Less: accumulated depreciation    (137,221)
                                   ---------
     Net property and equipment    $ 144,821
                                   =========

Depreciation expense for the years ended December 31, 2006 and 2005 was $65,919
and $51,800, respectively.

NOTE 4. ACCRUED EXPENSES

          Accrued expenses consist primarily of amounts owed to an unrelated
third party for its payment of certain Company liabilities in 2001 and 2002. In
connection with the Company's execution of a note payable for a portion of the
amount owed and the Company's agreement to pay the remaining balance of the
amount owed thereafter, the third party agreed to accept payments of $5,000 per
month until all amounts are paid in full. The note payable was paid off in full
in 2006. The balance of accrued expenses owed to this third party at December
31, 2006 was $40,010.


                                      F-16

<Page>

NOTE 5. COMMITMENTS AND CONTINGENCIES

          The Company's material commitments and contingencies consist of an
operating lease for its office space in Pennsylvania and employment agreements
with its executive officers.

OPERATING LEASES

          The Company entered into a lease for a facility located in Horsham,
Pennsylvania on December 1, 2001, which was amended on April 22, 2004. This is a
three-year lease expiring on May 30, 2007. This lease required a security
deposit of $19,000. The starting monthly payment is $12,579 for the first year
and increases each subsequent year. Future minimum payments under this lease for
the year ended December 31, 2007 will be $65,922.

EMPLOYMENT AGREEMENTS

          The Company has entered into employment agreements with each of its
executive officers. Future minimum payments under these employment agreements
are as follows:

                            FISCAL YEAR     AMOUNT
                            -----------   ----------
                               2007       $  949,920
                               2008        1,044,912
                               2009          748,107
                               2010           56,315
                                          ----------
                                          $2,799,254
                                          ==========

NOTE 6. 2006 STOCK INCENTIVE PLAN

          On February 2, 2006, the Company adopted the National Health Partners,
Inc. 2006 Stock Incentive Plan. Under the plan, 4,500,000 shares of common stock
may be granted to employees, officers and directors of, and consultants and
advisors to, the Company under awards that may be made in the form of stock
options, warrants, stock appreciation rights, restricted stock, restricted
units, unrestricted stock and other equity-based or equity-related awards. As of
December 3, 2006, awards for an aggregate of 4,396,575 shares of common stock
had been issued under the plan. The plan terminates on February 1, 2016. On
February 6, 2006, the Company filed a registration statement on Form S-8, File
No. 333-131589, with the SEC covering the public sale of the 4,500,000 shares of
common stock available for issuance under the National Health Partners, Inc.
2006 Stock Incentive Plan.


                                      F-17

<Page>

NOTE 7. COMMON STOCK AND WARRANTS

          The Company's authorized capital consisted of 100,000,000 shares of
common stock, $0.001 par value per share, at December 31, 2006 and 2005,
respectively, of which 32,659,106 and 17,054,200 shares of common stock were
outstanding at December 31, 2006 and 2005, respectively. Warrants exercisable
into an aggregate of 11,437,686 and 15,636,004 shares of the Company's common
stock were outstanding on December 31, 2006 and 2005, respectively.

          The Company estimates the fair value of warrants issued for services
on the date of grant by using the Black-Scholes pricing model. Under this model,
the Company used the following weighted-average assumptions to determine the
fair value of the warrants issued for services during the year ended December
31, 2006: a dividend yield of zero percent, an expected volatility of between
262% and 282%, a risk-free interest rate of 3.5% and a remaining contractual
term of 2 years. The Company follows Emerging Issues Task Force No. 96-18 to
recognize the fair value of warrants granted. Under EITF 96-18, the fair value
of the warrants should be recognized as the services are rendered. The Company
is recognizing the cost of services evenly over the term of the agreements since
the services are being rendered on an ongoing basis during the term of the
agreements.

NON CAPITAL-RAISING TRANSACTIONS

          In June 2005, the Company issued 2,450,000 shares of common stock,
Class A warrants to acquire 600,000 shares, Class B warrants to acquire 600,000
shares, and Class C warrants to acquire 1,625,000 shares to consultants for
services pursuant to several consulting agreements. Each warrant gave the holder
the right to purchase one share of common stock. All Class A warrants have an
exercise price of $.60 per share, are exercisable for a period of 18 months
commencing on the effective date of a registration statement covering certain of
the shares underlying the warrants, and expire on December 31, 2007. All Class B
warrants have an exercise price of $.80 per share, are exercisable for a period
of three years commencing on the effective date of a registration statement
covering certain of the shares underlying the warrants, and expire on December
31, 2008. All Class C warrants had an exercise price of $.60 per share, were
exercisable for a period of 180 days commencing on the effective date of a
registration statement covering certain of the shares underlying the warrants,
and expired on December 31, 2006. The Company granted registration rights
covering 3,537,500 of these shares. The shares, Class A warrants, Class B
warrants and Class C warrants were valued at $0.40 per share for total
consideration of $2,110,000, all of which was recognized as expense during the
year ended December 31, 2005.

          On February 8, 2006, the Company issued 300,000 shares of common stock
to Roger H. Folts, the Company's former Chief Financial Officer, in partial
consideration for certain accounting and related services to be provided to the
Company under a consulting agreement. The shares were valued at $0.40 per share
for total consideration of $120,000, all of which was recognized as expense
during the year ended December 31, 2006.


                                      F-18

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

NON CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          In February and March 2006, the Company issued 2,507,000 shares of
common stock and warrants to acquire 1,530,000 shares to service providers and
consultants for services pursuant to several agreements. Each warrant gave the
holder the right to purchase one share of common stock. All warrants have an
exercise price of $.60 per share, are exercisable for a period of 24 months from
the date of issuance, and expire on March 31, 2008. The shares and warrants were
valued at $0.40 per share for total consideration of $1,584,200. The Company
recognized $1,276,432 of expense during the year ended December 31, 2006 in
connection with the issuance of these shares and warrants.

          On March 24, 2006, the Company issued 36,250 shares of common stock to
employees in partial payment of accrued salaries. The shares were valued at
$0.40 per share for total consideration of $14,500, all of which was recognized
as expense during the year ended December 31, 2006.

          On March 28, 2006, the Company issued restricted stock awards to David
M. Daniels, Alex Soufflas, Patricia S. Bathurst and David A. Taylor for 450,000,
300,000, 225,000 and 375,000 shares of common stock, respectively. The awards
vest in three equal annual installments commencing on the first anniversary of
the date of grant. The shares were valued at $0.40 per share for total
consideration of $540,000. The Company recognized $148,604 of expense during the
year ended December 31, 2006 in connection with the issuance of these shares.

          On April 1, 2006, the Company issued 10,000 shares of common stock to
Centerpointe Property, LLC in connection with the termination of its lease for
the office space in Sarasota, Florida in full payment of all rent and other
expenses that were due and payable, and the Company and Centerpointe agreed to
release each other from any and all claims that they may now hold or may in the
future hold arising out of the lease. The Company did not incur any material
early termination penalties in connection with the termination of the Lease. The
shares were valued at $0.50 per share for total consideration of $5,000, all of
which was recognized as expense during the nine months ended September 30, 2006.
The Company recognized a gain on the extinguishment of debt in the amount of
$35,932 during the year ended September, 2006 in connection with the issuance of
these shares.

          On April 1, 2006, the Company issued 350,000 shares of common stock to
a consultant pursuant to a consulting agreement. The shares were valued at $0.50
per share for total consideration of $175,000, all of which was recognized as
expense during the year ended December 31, 2006.


                                      F-19

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

NON CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          In April, May and June 2006, the Company issued 23,325 shares of
common stock to a consultant pursuant to a consulting agreement. The shares were
issued at the closing price of the Company's common stock on the day immediately
preceding the date of issuance for total consideration of $30,000, all of which
was recognized as expense during the year ended December 31, 2006.

          On September 12, 2006, the Company issued 100,000 shares of common
stock to a business partner pursuant to a sales and marketing agreement. The
shares were issued at the closing price of the Company's common stock on the day
immediately preceding the date of issuance for total consideration of $74,000,
all of which was recognized as expense during the year ended December 31, 2006.

          On September 14, 2006, the Company issued 50,000 shares of common
stock to a consultant pursuant to a consulting agreement. The shares were issued
at the closing price of the Company's common stock on the day immediately
preceding the date of issuance for total consideration of $57,000, all of which
was recognized as expense during the year ended December 31, 2006.

          On October 23, 2006, the Company issued 200,000 shares of common stock
to a consultant pursuant to a consulting agreement. The shares were issued at
the closing price of the Company's common stock on the day immediately preceding
the date of issuance for total consideration of $236,000, all of which was
recognized as expense during the year ended December 31, 2006.

          On October 31, 2006, the Company issued 25,000 shares of common stock
to a consultant pursuant to a consulting agreement. The shares were issued at
the closing price of the Company's common stock on the day immediately preceding
the date of issuance for total consideration of $28,000, all of which was
recognized as expense during the year ended December 31, 2006.


                                      F-20

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

CAPITAL-RAISING TRANSACTIONS

          Between September 2004 and April 2005, the Company issued 2,448,750
shares of common stock for aggregate gross proceeds of $979,500, or $.40 per
share. The Company issued 2,281,250 of these shares for $912,500 during prior to
December 31, 2004. Subsequent to December 31, 2004, the Company issued 36,625 of
these shares for $14,650 that was received prior to December 31, 2004, and
issued 130,875 of these shares for $52,350 that was received subsequent to
December 31, 2004. The shares were sold in units consisting of three shares of
common stock, one Class A warrant and one Class B warrant at a purchase price of
$1.20 per unit. Each warrant gave the holder the right to purchase one share of
common stock. All Class A warrants had an exercise price of $1.00 per share,
were exercisable for a period of 180 days commencing on the effective date of a
registration statement covering certain of the shares underlying the warrants,
and expired on November 30, 2006. All Class B warrants had an exercise price of
$2.00 per share, were exercisable for a period of 360 days commencing on the
effective date of a registration statement covering certain of the shares
underlying the warrants, and expired on November 30, 2006. The Company granted
registration rights covering fifty percent of all shares issued and fifty
percent of all shares underlying the Class A warrants and Class B warrants.

          In March 2005, the Company issued 737,750 shares of common stock to
previous investors participating in the private placements completed in August
and September 2004. In these private placements, the Company had originally
agreed to use its reasonable best efforts to file a registration statement with
the SEC within two months of the date of termination of the private placements
to register 50% of the shares of the common stock that it issued and 50% of the
shares of common stock underlying the Class A warrants and Class B warrants that
it issued. The Company issued the additional shares to these previous investors
in consideration for the investors agreeing to an amendment to their securities
purchase agreements for the private placements pursuant to which: (i) the date
by which the Company agreed to use its reasonable best efforts to file a
registration statement with the SEC was extended to June 30, 2005, and (ii) the
Company was released from any liability for any possible breach of the
securities purchase agreements arising out of the Company's obligation to use
its reasonable best efforts to file a registration statement with the SEC. The
Company ascribed an aggregate value of $295,100 to the shares issued in March
2005, equivalent to $.40 per share. These shares were sold in units consisting
of two shares of common stock, one Class A warrant and one Class B warrant. Each
warrant gave the holder the right to purchase one share of common stock. All
Class A warrants had an exercise price of $1.00 per share, were exercisable for
a period of 180 days commencing on the effective date of a registration
statement covering certain of the shares underlying the warrants, and expired on
November 30, 2006. All Class B warrants had an exercise price of $2.00 per
share, were exercisable for a period of 360 days commencing on the effective
date of a registration statement covering certain of the shares underlying the
warrants, and expired on November 30, 2006. The Company granted registration
rights covering fifty percent of all shares issued and fifty percent of all
shares underlying the Class A warrants and Class B warrants.


                                      F-21

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          In April 2005, the Company issued 1,800,000 shares of common stock,
Class A warrants to acquire 1,800,000 shares of common stock and Class B
warrants to acquire 1,800,000 shares of common stock to Ronald F. Westman, a
related party, in exchange for 2,740,000 shares of Infinium Labs, Inc. then
valued at $720,000. The shares were sold in units consisting of three shares of
common stock, three Class A warrants and three Class B warrants at a purchase
price of $1.20 per unit. Each warrant gave the holder the right to purchase one
share of common stock. All Class A warrants have an exercise price of $.60 per
share, are exercisable for a period of 18 months commencing on the effective
date of a registration statement covering certain of the shares underlying the
warrants, and expire on December 31, 2007. All Class B warrants have an exercise
price of $.80 per share, are exercisable for a period of three years commencing
on the effective date of a registration statement covering certain of the shares
underlying the warrants, and expire on December 31, 2008. The Company granted
registration rights covering fifty percent of all shares issued and fifty
percent of all shares underlying the Class A warrants and Class B warrants. If
the proceeds from the sale of the Infinium shares were less than $720,000, the
investor was required to make up the difference in either additional Infinium
stock or cash. If the proceeds from the sale of the Infinium shares were greater
than $720,000, the Company was required to return the excess proceeds to the
investor. The Company completed the sale of the last of its shares of common
stock of Infinium Labs on September 7, 2005, resulting in aggregate gross
proceeds of $320,506 from the sale of all 2,740,000 shares. The investor paid
the remaining funds to the Company in cash on September 16, 2005.

          Between April and May 2005, the Company issued 635,750 shares of
common stock for aggregate gross proceeds of $254,300 or $.40 per share. The
shares were sold in units consisting of three shares of common stock, one Class
A warrant and one Class B warrant at a purchase price of $1.20 per unit. Each
warrant gave the holder the right to purchase one share of common stock. All
Class A warrants have an exercise price of $.60 per share, are exercisable for a
period of 18 months commencing on the effective date of a registration statement
covering certain of the shares underlying the warrants, and expire on December
31, 2007. All Class B warrants have an exercise price of $.80 per share, are
exercisable for a period of three years commencing on the effective date of a
registration statement covering certain of the shares underlying the warrants,
and expire on December 31, 2008. The Company granted registration rights
covering fifty percent of all shares issued and fifty percent of all shares
underlying the Class A warrants and Class B warrants.


                                      F-22

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          Between May and June 2005, the Company issued 1,490,000 shares of
common stock for aggregate gross proceeds of $596,000 or $.40 per share. The
shares were sold in units consisting of three shares of common stock, three
Class A warrants and three Class B warrants at a purchase price of $1.20 per
unit. Each warrant gave the holder the right to purchase one share of common
stock. All Class A warrants have an exercise price of $.60 per share, are
exercisable for a period of 18 months commencing on the effective date of a
registration statement covering certain of the shares underlying the warrants,
and expire on December 31, 2007. All Class B warrants have an exercise price of
$.80 per share, are exercisable for a period of three years commencing on the
effective date of a registration statement covering certain of the shares
underlying the warrants, and expire on December 31, 2008. Park Financial Group,
Inc., a registered broker-dealer, served as the Company's placement agent for
this offering. The Company paid Park Financial Group a placement agent fee
consisting of $44,800 and 137,000 units that were identical to the units sold in
the offering. The Company granted registration rights covering fifty percent of
all shares issued to the investors and Park Financial Group and fifty percent of
all shares underlying the Class A warrants and Class B warrants issued to the
investors and Park Financial Group.

          In May 2006, the Company completed a private offering of 211,934
shares of common stock. The shares were sold for $0.60 per share for aggregate
gross proceeds of $127,160. The shares were sold in units consisting of two
shares of common stock, one Class A warrant and one Class B warrant at a
purchase price of $1.20 per unit. Each warrant gave the holder the right to
purchase one share of common stock. All Class A warrants have an exercise price
of $0.60 per share, are exercisable for a period of 18 months commencing on the
date of issuance, and expire at the end of the exercise period. All Class B
warrants have an exercise price of $0.80 per share, are exercisable for a period
of 36 months commencing on the date of issuance, and expire at the end of the
exercise period.

          In August 2006, the Company completed a private offering of 1,705,000
shares of common stock. The shares were sold for $0.80 per share for aggregate
gross proceeds of $1,364,000. The shares were sold in units consisting of one
share of common stock, one Class A warrant and one Class B warrant at a purchase
price of $0.80 per unit. Each warrant gave the holder the right to purchase one
share of common stock. All Class A warrants had an exercise price of $0.80 per
share, were exercisable until August 31, 2006, and expired at the end of the
exercise period. All Class B warrants had an exercise price of $1.00 per share,
were exercisable until November 30, 2006, and expired at the end of the exercise
period. The Company granted registration rights covering all shares issued by
the Company upon the exercise of the warrants.


                                      F-23

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          In September 2006, the Company completed a private offering of 710,000
shares of common stock. The shares were sold for $0.50 per share for aggregate
gross proceeds of $355,000. The shares were sold in units consisting of one
share of common stock, one Class A warrant and one Class B warrant at a purchase
price of $0.50 per unit. Each warrant gave the holder the right to purchase one
share of common stock. All Class A warrants had an exercise price of $0.50 per
share, were exercisable until October 16, 2006, and expired at the end of the
exercise period. All Class B warrants have an exercise price of $0.50 per share,
are exercisable until August 31, 2007, and expire at the end of the exercise
period. The Company paid finder fees consisting of 106,500 units identical to
the units sold in the offering. The Company granted registration rights covering
all shares sold in the offering and all shares issued by the Company upon the
exercise of the warrants by November 30, 2006.

          In September 2006, the Company completed a private offering of 200,000
shares of common stock. The shares were sold for $0.50 per share for aggregate
gross proceeds of $100,000. The shares were sold in units consisting of two
shares of common stock, two Class A warrants, two Class B warrants and two Class
C warrants at a purchase price of $0.50 per unit. Each warrant gave the holder
the right to purchase one share of common stock. All Class A warrants had an
exercise price of $0.50 per share, were exercisable until November 30, 2006, and
expired at the end of the exercise period. All Class B warrants have an exercise
price of $0.50 per share, are exercisable until August 31, 2007, and expire at
the end of the exercise period. All Class B warrants have an exercise price of
$0.80 per share, are exercisable until November 30, 2007, and expire at the end
of the exercise period. The Company paid finder fees consisting of 15,000 units
identical to the units sold in the offering. The Company granted registration
rights covering all shares sold in the offering and all shares issued by the
Company upon the exercise of the warrants by November 30, 2006.

          In October 2006, the Company completed a private offering of 510,000
shares of common stock. The shares were sold for $0.50 per share for aggregate
gross proceeds of $255,000. The shares were sold in units consisting of one
share of common stock, one Class A warrant, one Class B warrant, one Class C
warrant and one Class D warrant at a purchase price of $0.50 per unit. Each
warrant gave the holder the right to purchase one share of common stock. All
Class A warrants had an exercise price of $0.50 per share, were exercisable
until October 16, 2006, and expired at the end of the exercise period. All Class
B warrants had an exercise price of $0.50 per share, were exercisable until
November 30, 2006, and expired at the end of the exercise period. All Class C
warrants have an exercise price of $0.50 per share, are exercisable until August
31, 2007, and expire at the end of the exercise period. All Class D warrants
have an exercise price of $0.80 per share, are exercisable until November 30,
2007, and expire at the end of the exercise period. The Company paid finder fees
consisting of 76,500 units identical to the units sold in the offering. The
Company granted registration rights covering all shares sold in the offering and
all shares issued by the Company upon the exercise of the warrants by November
30, 2006.


                                      F-24

<Page>

NOTE 7. COMMON STOCK AND WARRANTS (CONTINUED)

CAPITAL-RAISING TRANSACTIONS (CONTINUED)

          In October 2006, the Company completed a private offering of Class A
warrants to acquire 1,500,000 shares of its common stock and Class B warrants to
acquire 1,500,000 shares of its common stock. The shares were sold in units
consisting of 50,000 Class A warrants and 50,000 Class B warrants. The units
were sold for $100 per unit for aggregate gross proceeds of $3,000. Each warrant
gave the holder the right to purchase one share of common stock. All Class A
warrants had an exercise price of $0.60 per share, were exercisable until
November 30, 2006, and expired at the end of the exercise period. All Class B
warrants have an exercise price of $0.80 per share, are exercisable until
November 30, 2007, and expire at the end of the exercise period. The Company
granted registration rights covering (i) all shares issued by the Company upon
the exercise of the warrants in full by November 30, 2006, or (ii) 50% of the
shares issued by the Company upon the exercise of the warrants if the warrants
are not exercised in full by November 30, 2006.

          During the year ended December 31, 2006, the Company received
aggregate gross proceeds of $4,749,713 from the exercise of warrants held by
certain of the Company's security holders. The Company issued a total of
6,855,397 shares of its common stock in connection therewith at exercise prices
ranging from $0.50 to $2.00.

NOTE 8. STOCK OPTIONS

          Stock options exercisable into an aggregate of 8,095,000 and 8,045,000
shares of the Company's common stock were outstanding on December 31, 2006 and
2005, respectively. The weighted average exercise price of the stock options
outstanding on December 31, 2006 was $0.40. The Company estimates the fair value
of its stock options on the date of grant by using the Black-Scholes pricing
model in accordance with the provisions of Statement of Financial Accounting
Standards No. 148, "ACCOUNTING FOR STOCK-BASED COMPENSATION - TRANSITION AND
DISCLOSURE." Under the Black-Scholes pricing model, the Company used the
following weighted-average assumptions to determine the fair value of the stock
options issued: a dividend yield of zero percent, an expected volatility of
between 262% and 282%, a risk-free interest rate of 3.5 percent and a remaining
contractual life of 8.97 years.

          In May 2005, the Company cancelled stock options previously issued to
R. Dennis Bowers, David M. Daniels, Roger H. Folts and Patricia S. Bathurst in
September 2004 to acquire 2,500,000, 2,500,000, 1,000,000 and 1,000,000 shares
of common stock, respectively. The cancellation was effective February 1, 2005.

          In May 2005, the Company issued stock options to David M. Daniels,
Roger H. Folts and Patricia S. Bathurst to acquire 2,500,000, 1,000,000 and
1,000,000 shares of common stock, respectively. The options have an exercise
price of $0.40 per share and vest as follows: 25% on the date of grant and 25%
per year commencing February 1, 2006. The options have a term of 10 years.


                                      F-25

<Page>

NOTE 8. STOCK OPTIONS

          In May 2005, the Company issued a stock option to acquire 150,000
shares of common stock to a new employee. The option has an exercise price of
$.40 per share, vested in full on the date of grant, and has a term of five
years.

          In June 2005, the Company issued a stock option to acquire up to
400,000 shares of common stock to a business partner. The option has an exercise
price of $0.50, vests upon the achievement of various performance criteria by
December 31, 2005, and has a term of one year. None of the performance criteria
were satisfied. As a result, the option did not vest as to any of the underlying
shares. The option expired in June 2006.

          In June 2005, the Company issued stock options to each of Ronald F.
Westman and Jay Rosen, two non-employee directors of the Company, to acquire
350,000 shares of common stock. The options have an exercise price of $.40 per
share and vest as follows: 100,000 shares on the date of grant and 250,000
shares on the first anniversary of the date of grant if the director remains a
member of the board of directors continuously during the period commencing on
the date of grant and ending on the first anniversary of the date of grant. The
options have a term of five years. Each of these directors discontinued their
service as members of the board of directors prior to the first anniversary of
the date of grant. As a result, these options will not vest as to an aggregate
of 500,000 of the underlying shares.

          In August 2005, the Company issued stock options to each of Alex
Soufflas and David A. Taylor to acquire 1,000,000 shares of common stock. The
options have an exercise price of $0.40 per share, vest in four equal annual
installments commencing February 1, 2006, and have a term of 10 years.

          In September 2005, the Company issued a stock option to acquire
250,000 shares of common stock to a new employee. The option has an exercise
price of $.40 per share and vests as follows: (i) 50,000 shares on the date of
grant, and (ii) the remaining 200,000 shares in four equal annual installments
commencing on June 20, 2006. The option has a term of five years.

          In December 2005, the Company issued stock options for an aggregate of
30,000 shares of common stock to seven of its employees. The options are
exercisable at $0.40 per share, vested in full on the date of grant and have a
term of three years.

          In December 2006, the Company amended each of the stock options
granted to David M. Daniels and Patricia S. Bathurst in May 2005, Alex Soufflas
and David A. Taylor in August 2005, and the employee who joined the company in
September 2005 to accelerate the vesting of the options so that they were vested
in full in December 2006.

          In December 2006, the Company issued stock options to David M.
Daniels, Alex Soufflas and Patricia S. Bathurst to acquire 250,000, 150,000 and
50,000 shares of common stock, respectively. The options have an exercise price
of $0.88 per share, were vested in full on the date of grant, and have a term of
10 years.


                                      F-26

<Page>

NOTE 8. STOCK OPTIONS (CONTINUED)

          A summary of the stock options issued during the year ended December
31, 2006 is set forth below. No stock options were exercised during the year
ended December 31, 2006.

                                                                        WEIGHTED
                                                                         AVERAGE
                                                                        EXERCISE
                                                              SHARES      PRICE
                                                            ---------   --------
Outstanding, January 1, 2006                                8,045,000     $0.40
   Granted                                                    450,000      0.88
   Expired                                                   (400,000)     0.40
                                                            ---------     -----
Outstanding, December 31, 2006                              8,095,000     $0.43
                                                            =========     =====
Exercisable, December 31, 2006                              7,595,000     $0.45
                                                            =========     =====

                                               WEIGHTED
                                                AVERAGE    WEIGHTED
                                 NUMBER        REMAINING    AVERAGE
                RANGE OF       OUTSTANDING   CONTRACTUAL   EXERCISE
             EXERCISE PRICES   AT 12/31/06       LIFE        PRICE
             ---------------   -----------   -----------   --------
              $0.40 - $0.88     8,095,000        8.97       $0.43
                                =========        ====       =====

NOTE 9. RELATED-PARTY TRANSACTIONS

          In May 2005, the Company issued stock options to David M. Daniels,
Roger H. Folts and Patricia S. Bathurst to acquire 2,500,000, 1,000,000 and
1,000,000 shares of common stock, respectively. The options have an exercise
price of $0.40 per share and vest as follows: 25% on the date of grant and 25%
per year commencing February 1, 2006. The options have a term of 10 years.

          In June 2005, the Company entered into a lease for office space in
Sarasota, Florida. The lease is for approximately 4,000 square feet of space,
commenced on July 1, 2005, requires initial monthly payments of $8,186, and
expires on July 1, 2010. The office building is owned by Ronald F. Westman, a
principal stockholder of the Company who served as a member of the Company's
board of directors from June 29, 2005 to September 26, 2005.


                                      F-27

<Page>

NOTE 9. RELATED-PARTY TRANSACTIONS (CONTINUED)

          In June 2005, the Company issued stock options to each of Ronald F.
Westman and Jay Rosen, two non-employee directors of the Company, to acquire
350,000 shares of common stock. The options have an exercise price of $.40 per
share and vest as follows: 100,000 shares on the date of grant and 250,000
shares on the first anniversary of the date of grant if the director remains a
member of the board of directors continuously during the period commencing on
the date of grant and ending on the first anniversary of the date of grant. The
options have a term of five years. Each of these directors discontinued their
service as members of the board of directors prior to the first anniversary of
the date of grant. As a result, these options will not vest as to an aggregate
of 500,000 of the underlying shares.

          In August 2005, the Company issued stock options to each of Alex
Soufflas and David A. Taylor to acquire 1,000,000 shares of common stock. The
options have an exercise price of $0.40 per share, vest in four equal annual
installments commencing February 1, 2006, and have a term of 10 years.

          On February 8, 2006, Roger H. Folts resigned as the Chief Financial
Officer and Secretary of the Company. Concurrently therewith, the Company
entered into a termination and mutual release with Mr. Folts pursuant to which
his employment agreement with the Company was terminated effective February 1,
2006 and the Company and Mr. Folts released each other from any obligations or
claims arising in connection with his employment with the Company. Also on that
date, Mr. Folts entered into a consulting agreement with the Company. Under the
terms of the consulting agreement, Mr. Folts agreed to provide accounting and
related services to the Company on a full-time basis until June 30, 2006, and
thereafter on a part-time basis until February 1, 2009. In exchange for his
services, the Company agreed to continue paying Mr. Folts the salary he was
receiving under his employment agreement until March 31, 2006, and agreed to
issue 300,000 shares of common stock to Mr. Folts, a maximum of 25,000 of which
may be sold per calendar month during the period commencing April 1, 2006 and
ending December 31, 2006.

          On March 28, 2006, the Company issued restricted stock awards to David
M. Daniels, Alex Soufflas, Patricia S. Bathurst and David A. Taylor for 450,000,
300,000, 225,000 and 375,000 shares of common stock, respectively. The awards
vest in three equal annual installments commencing on the first anniversary of
the date of grant.

          On March 29, 2006, the Company entered into an employment agreement
with Alex Soufflas to continue serving as its Chief Financial Officer and
Executive Vice President effective February 1, 2006. The employment agreement is
for an initial term of three years and renews automatically for successive
one-year periods unless earlier terminated or prior notice of non-renewal is
provided by either party. Under the agreement, Mr. Soufflas is entitled to an
annual base salary of $210,000 with annual increases on January 1st of each year
of a minimum of 10% of the annual base salary for the immediately preceding
year, and is eligible for an annual bonus and incentive compensation awards in
an amount and form to be determined by the Company's board of directors.


                                      F-28

<Page>

NOTE 9. RELATED-PARTY TRANSACTIONS (CONTINUED)

          On March 29, 2006, the Company entered into an employment agreement
with David A. Taylor to continue serving as its Senior Vice President - National
Sales effective February 1, 2006. The employment agreement is for an initial
term of three years and renews automatically for successive one-year periods
unless earlier terminated or prior notice of non-renewal is provided by either
party. Under the agreement, Mr. Taylor is entitled to an annual base salary of
$162,000 with annual increases on January 1st of each year of a minimum of 10%
of the annual base salary for the immediately preceding year, and is eligible
for an annual bonus and incentive compensation awards in an amount and form to
be determined by the Company's board of directors.

          On April 1, 2006, the Company entered into a Termination and Mutual
Release with Centerpointe Property, LLC. Under the agreement, the lease between
the Company and Centerpointe with respect to the office space the Company was
leasing in Sarasota, Florida was terminated effective April 1, 2006, the Company
issued 10,000 shares of its common stock to Centerpointe in full payment of all
rent and other expenses that were due and payable under the lease, and the
Company and Centerpointe agreed to release each other from any and all claims
that they may now hold or may in the future hold arising out of the lease. The
Company did not incur any material early termination penalties in connection
with the termination of the Lease. Ronald F. Westman and his wife own all of the
outstanding membership interests in Centerpointe. Mr. Westman beneficially owns
approximately 24% of the Company's common stock and served as a member of the
Company's board of directors from June 29, 2005 to September 26, 2005.

          In December 2006, the Company amended each of the stock options
granted to David M. Daniels and Patricia S. Bathurst in May 2005, Alex Soufflas
and David A. Taylor in August 2005, and the employee who joined the company in
September 2005 to accelerate the vesting of the options so that they were vested
in full in December 2006.

          In December 2006, the Company issued stock options to David M.
Daniels, Alex Soufflas and Patricia S. Bathurst to acquire 250,000, 150,000 and
50,000 shares of common stock, respectively. The options have an exercise price
of $0.88 per share, were vested in full on the date of grant, and have a term of
10 years.

NOTE 10. INITIAL PUBLIC OFFERING

          On January 27, 2006, the Company's registration statement on Form
SB-2, File No. 333-126315, was declared effective by the Securities and Exchange
Commission in connection with the initial public offering of 10,258,135 shares
of common stock to be sold by certain selling security holders. The Company did
not receive any proceeds from the offering.

NOTE 11. SUBSEQUENT EVENTS

          On January 15, 2007, the Company adopted the National Health Partners,
Inc. 401(k) Plan.

          On March 14, 2007, the Company amended the Agreement for Lease of its
office space in Horsham, Pennsylvania to extend the term of the lease by a
period of three years.

          On March 15, 2007, the Company terminated the employment of David A.
Taylor, its Senior Vice President - National Sales.


                                      F-29

<Page>

                                  EXHIBIT INDEX

EXHIBIT                             EXHIBIT DESCRIPTION
-------   ----------------------------------------------------------------------
21.1      Subsidiaries of the Company

23.1      Consent of H J & Associates, LLC

31.1      Certification of Chief Executive Officer required by Rule 13a-14(a)
          under the Securities Exchange Act of 1934, as amended

31.2      Certification of Chief Financial Officer required by Rule 13a-14(a)
          under the Securities Exchange Act of 1934, as amended

32.1      Certification of Chief Executive Officer and Chief Financial Officer
          required by Rule 13a-14(b) under the Securities Exchange Act of 1934,
          as amended