<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

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

                 For the quarterly period ended: MARCH 31, 2006

                                       OR

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

          For the transition period from ______________ to ______________
                          Commission File No. 000-51731

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

            INDIANA                                               04-3786176
(State or Other Jurisdiction of                                 (IRS Employer
 Incorporation or Organization)                              Identification No.)

                               120 GIBRALTAR ROAD
                                    SUITE 107
                                HORSHAM, PA 19044
                    (Address of Principal Executive Offices)

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

     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 [_]

                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.

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

Yes [_] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: There were 22,814,759 issued
and outstanding shares of the issuer's common stock, $.001 par value per share,
on May 12, 2006.

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
                                     PART I
                              FINANCIAL INFORMATION

Item 1.   Financial Statements...........................................     1
          Consolidated Balance Sheet at March 31, 2006 (Unaudited).......     1
          Consolidated Statements of Operations for the Three Months
             Ended March 31, 2006 and 2005 (Unaudited)...................     2
          Consolidated Statements of Cash Flows for the Three Months Ended
             March 31, 2006 and 2005 (Unaudited).........................     3
          Notes to Consolidated Financial Statements.....................     5
Item 2.   Management's Discussion and Analysis of Financial Condition and
             Results of Operations.......................................    15
Item 3.   Controls and Procedures........................................    26

                                     PART II
                                OTHER INFORMATION

Item 2.   Recent Sales of Unregistered Securities and Use of Proceeds....    26
Item 6.   Exhibits.......................................................    27

<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
                     Consolidated Balance Sheet (Unaudited)

                                                              March 31,
                                                                 2006
                                                             -----------
ASSETS
Current assets:
   Cash and cash equivalents                                 $   245,109
   Prepaid expense                                               487,001
   Deposits                                                       24,909
                                                             -----------
      Total current assets                                       757,019
                                                             -----------
Property and equipment, net                                      112,835
Prepaid expense                                                1,167,994
                                                             -----------
      Total assets                                           $ 2,037,849
                                                             ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Accounts payable                                          $    97,568
   Accounts payable -- related party                              41,952
   Accrued expenses                                               51,355
   Deferred revenue                                               71,651
   Notes payable                                                 171,054
                                                             -----------
      Total current liabilities                                  433,580
                                                             -----------
Lont-term liabilities
   Accrued expenses                                               25,010
                                                             -----------
      Total liabilities                                          458,590
                                                             -----------
Commitments and contingencies
Stockholders' equity:
   Common stock, $0.001 par value, 100,000,000 shares
      authorized, 21,928,825 shares issued and outstanding        21,929
Additional paid-in capital                                    10,923,556
Accumulated deficit                                           (8,827,704)
Deferred compensation                                           (538,522)
                                                             -----------
      Total stockholders' equity                               1,579,259
                                                             -----------
      Total liabilities and stockholders' equity             $ 2,037,849
                                                             ===========

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

<PAGE>

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

                                      For the Three Months Ended
                                               March 31,
                                      --------------------------
                                           2006          2005
                                       -----------   -----------
Net revenue                            $   324,404   $    18,379
Direct costs                               149,087        14,825
                                       -----------   -----------
Gross profit                               175,317         3,554
                                       -----------   -----------
Operating expenses:
   Selling and marketing                   102,337        76,844
   General and administrative            1,026,073       429,227
                                       -----------   -----------
Total operating expenses                 1,128,410       506,071
                                       -----------   -----------
Loss from operations                      (953,093)     (502,517)
                                       -----------   -----------
Other income (expense):
   Interest expense                         (6,431)         (937)
   Gain on recovery of bad debt             12,330            --
   Common stock issued for releases             --      (295,100)
   Other income (expense)                   22,724          (874)
                                       -----------   -----------
Total other income (expense)                28,623      (296,911)
                                       -----------   -----------
Net loss                               $  (924,470)  $  (799,428)
                                       ===========   ===========
Loss per share -- basic and diluted    $     (0.06)  $     (0.08)
                                       ===========   ===========
Weighted average number of shares
   outstanding -- basic and diluted     15,713,668    10,230,768
                                       ===========   ===========

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


                                        2

<PAGE>

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

<TABLE>
<CAPTION>
                                                            For the Three Months Ended
                                                                     March 31,
                                                            --------------------------
                                                                 2006        2005
                                                              ---------   ---------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                   $(924,470)  $(799,428)
   Adjustments to reconcile net loss to net cash used by
      operating activities:
         Common stock issued for services                        53,128          --
         Warrants issued for services                            12,055          --
         Options issued for services                            442,490          --
         Common stock issued for releases                            --     295,100
         Depreciation                                            14,428      11,805
   Changes in operating assets and liabilities:
      Increase in deposits                                       (5,909)         --
      Decrease (increase) in other current assets                 4,042        (650)
      Increase in accounts payable and accrued expenses          27,546      64,763
      Increase in accounts payable -- related party              25,579          --
      Increase (decrease) in deferred revenue                     3,010      (3,984)
      Decrease in notes payable                                 (14,688)    (14,063)
      Decrease in deferred compensation                         (29,000)         --
                                                              ---------   ---------
         Net cash provided (used) by operating activities      (391,790)   (446,457)
                                                              ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES
      Increase in notes receivable                                   --     (25,000)
      Decrease (increase) in certificates of deposit             35,717     (35,000)
                                                              ---------   ---------
         Net cash provided (used) by investing activities        35,717     (60,000)
                                                              ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from sale of common stock                             --     122,800
      Proceeds from exercise of warrants                        509,375          --
      Proceeds from issuance of notes payable                    12,000          --
      Payments on notes payable                                 (30,000)         --
                                                              ---------   ---------
         Net cash provided by financing activities              491,375     122,800
                                                              ---------   ---------
Net increase (decrease) in cash                                 135,302    (383,657)
Cash at beginning of quarter                                    109,807     421,915
                                                              ---------   ---------
Cash at end of quarter                                        $ 245,109   $  38,258
                                                              =========   =========
</TABLE>

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


                                        3

<PAGE>

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

<TABLE>
<CAPTION>
                                                   For the Three Months Ended
                                                            March 31,
                                                   --------------------------
                                                         2006        2005
                                                       --------   --------
<S>                                                    <C>        <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   Cash paid for taxes                                 $     --   $     --
   Cash paid for interest                              $  1,125   $     --

SCHEDULE OF NON-CASH FINANCING ACTIVITIES
      Common stock issued for services                 $ 53,128   $     --
      Warrants issued for services                       12,055         --
      Options issued for services                       442,490         --
      Common stock issued for releases                 $     --   $295,100
</TABLE>

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


                                        4

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

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.

NOTE 2. BASIS OF PRESENTATION

          The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and in conformity with the instructions to Form 10-QSB
and Article 10 of Regulation S-X and the related rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, the disclosures included in these financial statements
are adequate to make the information presented not misleading.

          The unaudited consolidated financial statements included in this
document have been prepared on the same basis as the annual consolidated
financial statements and in management's opinion, reflect all adjustments,
including normal recurring adjustments, necessary to present fairly the
Company's financial position, results of operations and cash flows for the
interim periods presented. The unaudited consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and the notes thereto for the year ended December 31, 2005 included in the
Company's Annual Report on Form 10-KSB. The results of operations for the three
months ended March 31, 2006 are not necessarily indicative of the results that
the Company will have for any subsequent quarter or full fiscal year.

          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. 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. Certain amounts in the financial statements for
2005 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.

          Except as described in Note 3 below, as of March 31, 2006, the
Company's significant accounting policies and estimates, which are detailed in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006,
have not changed materially.


                                       5

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 3. STOCK 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 three-month period ended March 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 its stock options
under the recognition and measurement provisions of APB 25 for all stock options
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.

          As a result of adopting SFAS 123R on January 1, 2006, the Company
recognized $442,490 of stock option expense that it would not have otherwise
recognized during the three-months ended March 31, 2006 under APB 25. As a
result, the Company's net loss for the three months ended March 31, 2006 was
$(924,470) and its basic and diluted net loss per share was $(0.06). Had the
Company continued to account for stock options under APB 25, its net loss for
the three months ended March 31, 2006 would have been $(481,980) and its basic
and diluted net loss per share would have been $(0.03).

          The following table illustrates the effect on net loss and net loss
per share for the three months ended March 31, 2006 had the Company adopted
SFAS 123R on January 1, 2005:


                                       6

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 3. STOCK COMPENSATION EXPENSE (CONTINUED)

                                           For the Three
                                           Months Ended
                                          March 31, 2005
                                          --------------
Net loss as reported                        $(799,428)
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                         --
                                            ---------
Pro forma net income (loss)                 $(799,428)
                                            =========
Earnings (loss) per share:
   Basic & diluted - as reported            $   (0.08)
   Basic & diluted - pro forma              $   (0.08)

NOTE 4. 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 three-month
period, and is calculated by dividing the reported net loss for the applicable
three-month period by the weighted average number of shares of common stock
outstanding during the applicable three-month period. The Company calculates
diluted loss per share by dividing the reported net loss for the applicable
three-month period by the weighted average number of shares of common stock
outstanding during the applicable three-month period as adjusted to give effect
to the exercise of all potentially dilutive options and warrants outstanding at
the end of the applicable three-month period. An aggregate of 24,529,629 and
12,429,251 shares of common stock underlying options and warrants that were
outstanding on March 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
three-month period.

                                      For the Three Months Ended
                                              March 31,
                                      -------------------------
                                          2006          2005
                                      -----------   -----------
Net Loss                              $  (924,470)  $  (799,428)
Weighted average shares outstanding    15,713,668    10,230,768
                                      -----------   -----------
Earnings (loss) per share -
   basic and diluted                  $     (0.06)  $     (0.09)
                                      ===========   ===========


                                       7

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 5. PROPERTY AND EQUIPMENT

          Property and equipment consisted of the following at March 31, 2006
and 2005, respectively:

                                         March 31,
                                    -------------------
                                      2006       2005
                                    --------   --------
Computers                           $ 43,012   $ 22,024
Software                               2,762         --
Furniture                             11,322      7,572
Telephone                             52,262     43,153
Website                               89,207     89,207
   Less: accumulated depreciation    (85,730)   (31,307)
                                    --------   --------
   Property and equipment, net      $112,835   $130,649
                                    --------   --------

Depreciation expense for the three months ended March 31, 2006 and 2005 was
$14,428 and $11,805, respectively.

NOTE 6. ACCRUED EXPENSES

          Accrued expenses consist of amounts due to an unrelated third party
for its payment of certain Company liabilities in 2001 and 2002. In conjunction
with the note payable bearing interest at 5% discussed in Note 7 below, the
third party agreed to accept payments of $5,000 per month until all amounts are
paid in full. The balance of accrued expenses at March 31, 2006 and 2005,
respectively, was $75,955.

NOTE 7. NOTES PAYABLE

          Notes payable outstanding at March 31, 2006 and 2005 consisted of
the following:

Note payable bearing interest
at 5.00% per annum requiring
monthly payments of $5,000          $  9,054

Notes payable bearing interest at
15% per annum and due during
the second quarter of 2006           162,000
                                    --------
   Total                            $171,054
                                    ========

NOTE 8. COMMITMENTS AND CONTINGENCIES

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


                                       8

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 8. COMMITMENTS AND CONTINGENCIES (CONTINUED)

OPERATING LEASES

          The Company has entered into operating leases for its executive
offices in Horsham, Pennsylvania and its office space in Sarasota, Florida.

Pennsylvania Facility

          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 lease payments under this facility lease are as follows:

Fiscal Year    Amount
-----------   --------
2006          $118,767
2007            66,598
              --------
              $185,365
              ========

Florida Facility

          The Company entered into a lease for a facility located in Sarasota,
Florida on July 1, 2005. This lease is a five-year lease expiring on June 30,
2010. This lease required a security deposit of $18,000. The starting monthly
payment is $8,186.

     Future minimum lease payments under this facility lease are as follows:

Fiscal   YearAmount
------   ----------
2006      $ 73,673
2007       104,205
2008       108,373
2009       112,708
2010        59,757
          --------
          $485,240
          ========


                                        9

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 9. 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
-----------   ----------
2006          $  642,000
2007             848,430
2008             933,273
2009             655,252
2010              48,718
              ----------
              $3,127,673
              ==========

NOTE 10. 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 such other equity-based or equity-related awards.
As of March 31, 2006, awards for an aggregate of 4,323,250 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.

NOTE 11. COMMON STOCK AND WARRANTS

          The Company's authorized capital consisted of 100,000,000 and
10,000,000 shares of common stock, $0.001 par value per share, at March 31, 2006
and 2005, respectively, of which 21,928,825 and 10,680,950 shares of common
stock were outstanding at March 31, 2006 and 2005, respectively. Warrants
exercisable into an aggregate of 16,484,629 and 5,414,251 shares of the
Company's common stock were outstanding on March 31, 2006 and 2005,
respectively.

          The Company estimates the fair value of its warrants 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 during the three months ended March 31, 2006: a dividend
yield of zero percent, an expected volatility of 278%, a risk-free interest rate
of 3.5% and a remaining contractual term of 4.05 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.

          On February 8, 2006, the Company issued 300,000 shares of common stock
to Roger H. Folts 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


                                       10

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 11. COMMON STOCK AND WARRANTS (CONTINUED)

consideration of $120,000. The company recognized $5,620 of expense during the
three months ended March 31, 2006 in connection with the issuance of these
shares.

          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 gives 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 warrant, 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 $43,586 of expense during the three months ended March 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 three months ended March 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 $1,478 of expense during the
three months ended March 31, 2006 in connection with the issuance of these
shares.

NOTE 12. STOCK OPTIONS

          Stock options exercisable into an aggregate of 8,045,000 shares of the
Company's common stock were outstanding on March 31, 2006, of which 3,695,000
were vested. The weighted average exercise price of the stock options
outstanding on March 31, 2006 was $0.41. 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 options issued
during the three months ended March 31, 2006: a dividend yield of zero percent,
an expected volatility of 282%, a risk-free interest rate of 3.5 percent and a
remaining contractual life of 8.51 years.

NOTE 13. RELATED-PARTY TRANSACTIONS

          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


                                       11

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 13. RELATED-PARTY TRANSACTIONS (CONTINUED)

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.

          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.

NOTE 14. 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 15. SUBSEQUENT EVENTS

          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 Property, LLC. Mr. Westman
beneficially owns approximately 26% of the Company's common


                                       12

<PAGE>

                  NATIONAL HEALTH PARTNERS, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Unaudited)
                                 March 31, 2006

NOTE 15. SUBSEQUENT EVENTS (CONTINUED)

stock and served as a member of the Company's board of directors from June 29,
2005 to September 26, 2005.

          Between April 1, 2006 and May 12, 2006, the Company received $790,660
in connection with sales of its common stock and the exercise of warrants held
by certain of the Company's security holders.


                                       13

<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

          This report contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. 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 revenues, projected 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:

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

     o    demand for and acceptance of our CARExpress membership programs;

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

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

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

     o    our ability to market our CARExpress membership programs;

     o    growth and market acceptance of the health savings industry;

     o    competition in the health savings industry and our markets;

     o    our ability to attract and retain qualified personnel;

     o    legislative or regulatory changes in the healthcare industry;

     o    the condition of the securities and capital markets;

     o    general economic and business conditions in the jurisdictions in which
          we are doing business;

and statements of assumption underlying any of the foregoing, as well as those
set forth under the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our Annual Report
on Form 10-KSB filed with the Securities and Exchange Commission ("SEC").

          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.


                                       14

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

          Unless otherwise indicated or the context otherwise requires, all
references to the "Company," "we," "us" or "our" and similar terms refer to
National Health Partners, Inc. (d/b/a "International Health Partners, Inc.") and
its subsidiaries.

          This Management's Discussion and Analysis of Financial Condition and
Results of Operations 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 captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report on Form 10-KSB filed with the Securities and
Exchange Commission. The following should be read in conjunction with our
consolidated financial statements included above in Item 1 of Part I 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 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. We intend to continue to pursue
specific opportunities that we may identify in this market through our various
marketing and distribution channels. Through product design, competitive
membership pricing and a variety of distribution channel partners, we are
pursuing opportunities in the healthcare market that insurance plans have not
addressed.


                                       15

<PAGE>

RECENT DEVELOPMENTS

          We have experienced a substantial increase in our membership base and
revenues over the past 12 months. As of March 31, 2006, we had approximately
3,850 CARExpress members, compared to approximately 350 members at March 31,
2005. We achieved revenues of $324,404 for the three-month period ended March
31, 2006, compared to revenues of $18,379 for the three-month period ended March
31, 2005. We have entered into agreements with several marketing and
distribution partners and are currently engaging in test marketing campaigns
with some of them. In addition, we are currently in negotiations with several
other companies regarding the sale of our CARExpress membership programs.

          Hispanic Advertising Campaign Featuring Lucia Mendez. We are
initiating a national advertising campaign targeting the Hispanic marketplace.
Lucia Mendez, an international superstar entertainer, will be starring in
television and radio commercials that are currently in production as our
spokeswoman for the campaign. She will also be starring in print ads and other
directed marketing campaigns focused on the Hispanic community. We will be
airing the television commercials on Telemundo and Univision, which are the two
largest Hispanic television networks in the United States, and will be airing
the radio commercials on radio stations focused on the Hispanic community. We
intend to start broadcasting the commercials in May 2006 in major metropolitan
cities nationwide.

          CARExpress "Wrap-Around" Program. We intend to sell CARExpress
membership programs in combination with low-cost insurance products such as
Mini-Med programs and catastrophic health insurance as part of our unique
"wrap-around" program. We intend to market and sell our "wrap-around" programs
directly through National Health Brokerage Group, Inc., our newly-formed
wholly-owned subsidiary, and indirectly through insurance companies and
independent third parties. The combination of our CARExpress programs with these
low-cost insurance products provides an innovative and affordable solution to
individuals who previously could not afford a comprehensive medical plan. These
products will be bundled, priced and marketed utilizing relationship marketing
strategies or direct marketing to target the profiled needs of the clients'
particular member base.

          CARExpress Visa/MasterCard Program. We are also in the process of
creating a CARExpress Visa/MasterCard program. Many of the people who are
uninsured or underinsured do not have a debit or credit card. As a result, this
program will be ideally suited for them. CARExpress members participating in the
program will place money on their card and use the card to pay their CARExpress
monthly membership fees. They will also be able to use the card for all
healthcare purchases they make through CARExpress. We are currently in
negotiations with a number of merchant processors and expect to begin offering
this program to the public during the second quarter of 2006.

OPERATIONAL METRICS

          Our revenues consist 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


                                       16

<PAGE>

duration of their membership. The average membership fee per member per month
that we receive is approximately $35. Monthly membership payments are recognized
as revenue evenly over the applicable monthly membership period. As a result,
there is a delay of one month between the date we receive a monthly membership
fee and the date we recognize the entire monthly membership fee as revenue.

          A key metric for evaluating 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 income 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 and other parties to sell our CARExpress
membership programs.

          We have obtained valuable information regarding member demographics
through the test marketing 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 identified as being most suitable for our CARExpress
membership programs. As a result, we expect our retention rates to improve
substantially 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 the first quarter of 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 a substantial
increase in revenues and members primarily through our Hispanic advertising
campaign, our CARExpress "wrap-around" program and our CARExpress
Visa/MasterCard program, as well as new strategic collaborations and joint
ventures that we are in the process of negotiating. We intend to finance each of
these projects through cash on hand, internally generated cash flows from
operating activities and proceeds from the exercise of outstanding warrants. We
will use any additional investments that we receive to accelerate the expansion
of each of our advertising campaigns and programs and more quickly realize
recurring monthly membership fees.

          As a result of our Hispanic television and radio advertising campaign
featuring international superstar Lucia Mendez, sales of our "wrap-around"
program and the implementation of our CARExpress Visa/MasterCard program, we
expect the number of CARExpress members generated each month to increase
substantially for the foreseeable future.


                                       17

<PAGE>

We also expect to generate additional members over the next 12 months through
new strategic collaborations and joint ventures that we are in the process of
negotiating. We expect our retention rates to improve over the next 12 months as
we obtain additional information regarding member demographics and target our
test marketing 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 during the next six months and expect to
begin generating positive cash flows from operations during the second half of
2006 as the recurring membership fees from our increasing membership base
overtake the costs associated with obtaining the new members we are generating.

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 principals
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, revenues 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.

          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 revenues 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 three-month period ended March
31, 2006 includes: (a) compensation cost for all share-


                                       18

<PAGE>

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. A summary of SFAS
No. 123R is provided below under "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Recent Accounting
Pronouncements."

          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 recognized 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 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
5 of this report.

RECENT ACCOUNTING PRONOUNCEMENTS

          In December 2004, FASB issued Statement of Financial Accounting
Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"), which
replaces Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"). SFAS 123R establishes standards for
accounting for transactions in which an entity exchanges its


                                       19

<PAGE>

equity instruments for goods or services or incurs liabilities in exchange for
goods or services that are based on the fair value of the entity's equity
instruments. It focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS 123R
requires that entities account for share-based payments using the fair value
based method rather than the intrinsic value method of accounting in APB 25 and
that entities disclose information about the nature of the share-based payment
transactions and the effects of those transactions on the financial statements.
SFAS 123R requires an entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair
value of the award over the period during which an employee is required to
provide service for the award. The grant-date fair value of employee stock
options and similar instruments must be estimated using option-pricing models
adjusted for the unique characteristics of those instruments unless observable
market prices for the same or similar instruments are available. SFAS 123R also
requires an entity to measure the cost of employee services received in exchange
for an award of liability instruments based on its current fair value and that
the fair value of that award be remeasured at each reporting date through the
settlement date. SFAS No. 123R becomes effective for small business issuers as
of the beginning of the first interim or annual reporting period that begins
after December 15, 2005. We adopted SFAS No. 123R on January 1, 2006 using the
modified prospective method. The adoption of SFAS 123R is expected to continue
to have an adverse impact on our results of operations in future periods.

          In March 2005, the SEC released Staff Accounting Bulletin No. 107,
"Share-Based Payment" ("SAB 107"), which provides guidance on the implementation
of SFAS 123R. In particular, it provides guidance related to valuation methods,
accounting for income tax effects of share-based payments, modifications of
employee stock options prior to the adoption of SFAS 123R, classification of
compensation expense, capitalization of compensation cost related to share-based
payment arrangements, first-time adoption of SFAS 123R in an interim period, and
other disclosures subject to the adoption of SFAS 123R. We apply the principles
of SAB 107 in conjunction with SFAS 123R.

          In May 2005, the FASB issued FASB Statement No. 154, "Accounting
Changes and Error Corrections" ("SFAS 154"). SFAS 154 replaces APB Opinion No.
20, "Accounting Changes," and SFAS No. 3, "Reporting Accounting Changes in
Interim Financial Statements - An Amendment of APB Opinion 28" and establishes
retrospective application as the required method for reporting a change in
accounting principle. SFAS 154 provides guidance for determining whether
retrospective application of a change in accounting principle is impracticable
and reporting a change when retrospective application is impracticable. The
reporting of a correction of an error by restating previously issued financial
statements is also addressed. SFAS 154 is effective for accounting changes and
correction of errors made in fiscal years beginning after December 15, 2005. The
adoption of SFAS 154 did not have a material impact on our consolidated
financial statements.

COMPARISON OF THE THREE-MONTH PERIODS ENDED MARCH 31, 2006 AND MARCH 31, 2005

Revenues

          Revenues consist of the monthly membership fees that we receive from
members of our CARExpress membership programs and commissions that we receive
from the sale of


                                       20

<PAGE>

CARExpress membership programs sold in combination with third-party insurance
products. To date, revenues have consisted almost exclusively of the monthly
membership fees we receive from members of our CARExpress membership programs.
Revenues increased $306,025 to $324,404 for the three-month period ended March
31, 2006 from $18,379 for the corresponding period in 2005. The increase
resulted from increased sales of our CARExpress membership programs to new
members. Approximately 95% of the revenues that we generated during the
three-month period ended March 31, 2006 was derived from sales of our CARExpress
membership programs to first-time members, compared to approximately 20% during
the corresponding period in 2005. The remainder of the revenues that we
generated during these periods was derived from existing members. We expect
revenues to increase substantially over the next 12 months as we engage in our
Hispanic advertising campaign and implement our CARExpress "wrap-around" program
and our CARExpress Visa/MasterCard program, as well as new strategic
collaborations and joint ventures that we are in the process of negotiating.

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 $134,262 to $149,087 for
the three-month period ended March 31, 2006, from $14,825 for the corresponding
period in 2005. The increase was due primarily to an increase of $106,082 for
sales commissions and $28,181 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 PPO 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
$25,493 to $102,337 for the three-month period ended March 31, 2006, from
$76,844 for the corresponding period in 2005. The increase of $25,493 was due
primarily to an increase of $41,452 for sales salaries, partially offset by a
decrease of $19,738 for general advertising and marketing expenses. We expect
selling and marketing expenses to increase substantially during the remainder of
2006 as we engage in our Hispanic advertising campaign and other marketing and
advertising 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
payroll taxes associated therewith that are not associated with our selling and
marketing activities. Salary expense increased $530,439 to $715,619 for the
three-month period ended March 31, 2006, from


                                       21

<PAGE>

$185,180 for the corresponding period in 2005. The increase of $530,439 was due
to primarily to an increase of $442,490 of stock option expense resulting from
our adoption of Statement of Financial Accounting Standards No. 123R,
"Share-Based Payment" ("SFAS No. 123R"), on January 1, 2006 and an increase of
$82,971 in salary expense associated primarily with our addition of two
executive officers during the third quarter of 2005. 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
increased $2,167 to $117,356 for the three-month period ended March 31, 2006
from $115,189 for the corresponding period in 2005. The increase of $2,167 was
due primarily to an increase of $19,709 in fees paid to our independent
accountant in connection with the preparation of our Registration Statement on
Form SB-2 and our audited financial statements and $71,764 in stock compensation
paid to services providers and consultants for various services, partially
offset by a decrease of $89,539 in legal fees due to a reduction in the amount
of legal work outsourced to third parties. We expect professional fees to
increase over the next 12 months as we recognize expense associated with the
stock compensation paid to service providers and consultants and incur costs
associated with the negotiation and execution of agreements with additional
marketing and distribution partners.

          Rent Expense. Rent expense consists of the rent that we pay under the
lease for our office facilities that is not associated with our selling and
marketing activities. Rent expense increased $9,795 to $50,525 for the
three-month period ended March 31, 2006 from $40,770 for the corresponding
period in 2005. The increase of $9,795 resulted primarily from the annual
increases in our lease payments for our facility in Horsham, Pennsylvania and
rent payments that we began making under the lease for our facility in Sarasota,
Florida on July 1, 2005. We expect rent expense to decrease over the next 12
months due to our decision to terminate the lease for our facility in Sarasota,
Florida.

          Other General and Administrative Expenses. Other general and
administrative expenses consist of costs for supplies, computer hardware and
system costs, costs for temporary customer service representatives, health
insurance costs, financial printer costs, transfer agent costs, 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 $54,485 to $142,573 for the
three-month period ended March 31, 2006 from $88,088 for the corresponding
period in 2005. The increase of $54,485 resulted primarily from an increase of
$50,283 for financial printer costs associated with the preparation of our
filings with the SEC and an increase of $25,771 in bank service charges
resulting from increased billings from members, partially offset by a decrease
of $4,543 in travel and entertainment expense and a decrease of $4,076 in
insurance. We expect other general and administrative expenses to increase over
the next 12 months as we incur additional expenses for financial printer costs,
transfer agent fees, health insurance costs, travel and entertainment, temporary
customer service representatives, supplies, computer hardware and systems, and
other miscellaneous items associated with the general growth in our business.


                                       22

<PAGE>

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 for the three-month period ended March 31, 2005. We did not incur any
such expenses for the three-month period ended March 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 the 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
over the next 12 months because we do not expect to issue any additional
securities to previous investors for amendments and releases to their securities
purchase agreements.

Net Loss

          During the three-month period ended March 31, 2006, our net loss
increased $125,042 to $924,470 as compared to $799,428 during the corresponding
period in 2005. The increase was primarily the result of an increase of $134,262
of direct costs incurred in connection with the sale of our membership programs,
$530,439 in employee compensation expense (of which $442,490 consisted of
non-cash stock option expense associated with our adoption of SFAS No. 123R on
January 1, 2006) and $54,485 in other general and administrative expenses,
partially offset by an increase of $306,025 in revenues and a decrease in
non-cash expense for common stock issued for releases of $295,100. We expect our
net losses from operations to decrease during the next six months and expect to
begin generating positive cash flows from operations during the second half of
2006 as the recurring membership fees from our increasing membership base
overtake the costs associated with obtaining the new members we are generating.

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 May 12,
2006, we had cash and cash equivalents of approximately $790,000.

          Net cash used in operating activities was $391,790 for the three-month
period ended March 31, 2006 compared to $446,457 for the corresponding period in
2005. The $54,667 decrease in cash used in operating activities was due
primarily to an increase in non-cash stock option expense of $442,490 resulting
from our adoption of SFAS No. 123R on January 1, 2006 and non-cash compensation
expense of $65,183 resulting from the recognition of the fair value of
stock-based compensation to employees, service providers and consultants,
partially offset by an increase in net loss of $125,042 and a decrease in
non-cash expense associated with the issuance of common stock for releases of
$295,100.

          Net cash provided by investing activities was $35,717 for the
three-month period ended March 31, 2006 compared to net cash used in investing
activities of $60,000 for the corresponding period in 2005. The 95,717
difference in cash flows from investing


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<PAGE>

activities was due to a decrease of $35,000 in certificates of deposit acquired
in 2005 and disposed of in 2006 and a decrease of $25,000 of notes receivable.

          Net cash provided by financing activities was $491,375 for the
three-month period ended March 31, 2006 compared to $122,800 for the
corresponding period in 2005. The $368,575 increase in cash provided by
financing activities was due to an increase of $509,375 in proceeds received
upon the exercise of outstanding warrants, partially offset by a decrease of
$122,800 in proceeds from the sale of common stock and the net payment of
$18,000 in notes payable.

          Our primary sources of capital since April 1, 2005 are set forth
below.

          In April 2005, we completed a private offering of 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, for
aggregate consideration consisting of 2,740,000 shares of common stock of
Infinium Labs, Inc., a Delaware corporation, that was then valued at $720,000.
These securities were sold in units comprised of three shares of common stock,
three Class A warrants and three Class B warrants. The units were sold at a
purchase price of $1.20 per unit. Each Class A warrant is initially exercisable
into one share of our common Stock at an exercise price of $.60 per share. Each
Class B warrant is initially exercisable into one share of our common stock at
an exercise price of $.80 per share.

          In May 2005, we completed a private offering of 635,750 shares of our
common stock, Class A warrants to acquire 317,875 shares of our common stock,
and Class B warrants to acquire 317,875 shares of our common stock, for
aggregate cash consideration of $254,300. These securities were sold in units
comprised of three 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. Each Class A
warrant is initially exercisable into one and one-half shares of our common
Stock at an exercise price of $.60 per share. Each Class B warrant is initially
exercisable into one and one-half shares of our common stock at an exercise
price of $.80 per share.

          In June 2005, we completed a private offering of 1,490,000 shares of
our common stock, Class A warrants to acquire 1,490,000 shares of our common
stock, and Class B warrants to acquire 1,490,000 shares of our common stock, for
aggregate cash consideration of $596,000. These securities were sold in units
comprised of three shares of common stock, three Class A warrants and three
Class B warrants. The units were sold at a purchase price of $1.20 per unit.
Each Class A warrant is initially exercisable into one share of our common Stock
at an exercise price of $.60 per share. Each Class B warrant is initially
exercisable into one share of our common stock at an exercise price of $.80 per
share.

          In November and December 2005, we issued promissory notes in the
aggregate principal amount of $180,000 to a limited number of accredited
investors for aggregate cash consideration of $180,000. The notes have a
maturity date that is 90 days after the date we received the funds from the
respective investors and accrue interest at the rate of 15% per annum. The
principal and accrued interest are payable by us on the maturity date and may be
prepaid by us in whole or in part at any time prior to the maturity date at our
option without penalty. We extended the maturity date of two of these promissory
notes in the aggregate principal amount of $130,000 until June 30, 2006. We paid
the principal and accrued interest on the remaining promissory notes in
accordance with their terms.


                                       24

<PAGE>

          During the period beginning January 1, 2006 and ending May 12, 2006,
we issued 985,875 shares of common stock upon the exercise of warrants at
exercise prices between $0.60 and $2.00 per share for aggregate gross cash
proceeds of $1,172,875.

          To date, our capital needs have been principally met through the sales
of our equity and debt securities. 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 private offerings we completed in 2004 and 2005 to
pay virtually all of the costs and expenses we incurred during these years.
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 revenues.

          We believe that our current cash resources will not be sufficient to
sustain our current operations for the next 12 months. We will need to obtain
additional cash resources within the next 12 months to enable us to pay our
ongoing costs and expenses as they are incurred, repay our outstanding
indebtedness to third parties in the aggregate amount of approximately $171,000,
all of which is due within the next three months, and finance the growth of our
business. We intend to obtain these funds through internally generated cash
flows from operating activities and proceeds received upon the exercise of
outstanding options and warrants by our security holders. In the event these
funds are insufficient, we may also 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 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.

OFF-BALANCE SHEET ARRANGEMENTS

          As of March 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, which had been established
for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes. As such, we are not materially


                                       25

<PAGE>

exposed to any financing, liquidity, market or credit risk that could arise if
we had engaged in such relationships.

ITEM 3. CONTROLS AND PROCEDURES.

          As of March 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 March 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 quarter ended March 31, 2006 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

                                     PART II
                                OTHER INFORMATION

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

          During the three months ended March 31, 2006, we sold the following
securities without registration under the Securities Act of 1933, as amended
(the "Securities Act"):

          On February 8, 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 solicitation of any kind and without payment of
underwriting discounts or commissions to any person.

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


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<PAGE>

ITEM 6.  EXHIBITS.

          The following exhibits are included herein:

Exhibit No.                                 Exhibit
-----------                                 -------
    10.1      Termination and Mutual Release, dated April 1, 2006, by and
              between Centerpointe Property, LLC and the Company

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

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


                                       27

<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                  NATIONAL HEALTH PARTNERS, INC.


Date: May 15, 2006                                /s/ David M. Daniels
                                                  ------------------------------
                                                  David M. Daniels
                                                  Chief Executive Officer


                                       28

<PAGE>

                                  EXHIBIT INDEX

Exhibit Number   Description
--------------   -----------
     10.1        Termination and Mutual Release, dated April 1, 2006, by and
                 between Centerpointe Property, LLC and the Company

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

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