UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q


(Mark
one)


x
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934
              
              For
      the quarterly period ended March 31,
2008




OR




[
      ]
            Transition
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934 for the transition period from _____________ to
      _____________




Commission
file number: 000-51561









HEALTHCARE
PROVIDERS DIRECT, INC.


(Exact
name of registrant as specified in its charter)




Nevada
              (State
      or other jurisdiction
              of
      incorporation or organization)
            
            20-1063591
              (IRS
      Employer
              Identification
      No.)





3371
Route One, Suite 200


Lawrenceville,
New Jersey 08648


(Address
and zip code of principal executive offices)




Telephone
Number: (609) 919-1932


(Registrant’s
telephone number, including area code)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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:   [X] Yes   [ ] No




Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act:


Large
accelerated filer
                                                                                                Accelerated
filer


Non-accelerated
filer(Do not check if a smaller reporting
company)    Smaller reporting company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]




As
of May 15, 2008, there were 44,911,538 outstanding shares of the Issuer’s Common
Stock, par value $0.001 per share.











HEALTHCARE
PROVIDERS DIRECT, INC.


Index












PagePART
      I. FINANCIAL
      INFORMATION
            3Item
      1. Financial
      Statements
            3Consolidated
      Condensed Balance Sheets as of March 31, 2008 (unaudited)  and
      December 31, 2007 (audited)
            3Consolidated
      Condensed Statements of Operations for the three months ended March 31,
      2008 and 2007 (unaudited)
            4Consolidated
      Condensed Statements of Cash Flows for the three months ended March 31,
      2008 and 2007 (unaudited)
            5Notes
      to the Consolidated Condensed Financial Statements
            6Item
      2. Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            12Item
      3. Quantitative
      and Qualitative Disclosures about Market Risk
            16Item
      4T.Controls
      and Procedures
            16PART
      II OTHER
      INFORMATION
            17Item
      1. Legal
      Proceedings
            17Item
      1a. Risk
      Factors
            17Item
      2. Unregistered
      Sales of Equity Securities and  Use of
      Proceeds
            17Item
      3. Defaults
      Upon Senior Securities
            17Item
      4. Submission
      of Matters to a Vote of Security Holders
            17Item
      5. Other
      Information
            17Item
      6. Exhibits
            17SIGNATURES
            18





2





PART
I - FINANCIAL INFORMATION




Item
1. Financial Statements






HEALTHCARE
PROVIDERS DIRECT, INC.
 CONSOLIDATED
CONDENSED BALANCE SHEETS




ASSETS
            
            March
      31,
            
            
            December
      31,2008
            
            
            2007(unaudited)
            
            
            (audited)Current
      assets:Cash
      and cash equivalents
            
            $
            15,654
            
            
            $
            277,530Accounts
      receivable, net of allowance for doubtful accounts of
    $9,833
            
            
            35,722
            
            
            
            26,726Other
      receivables – related party, net of allowance for doubtful accounts
      of
              $23,512
            
            
            -
            
            
            
            -Inventories
            
            
            207,379
            
            
            
            236,477Prepaid
      and other current assets
            
            
            19,147
            
            
            
            28,713Total
      current assets
            
            
            277,902
            
            
            
            569,446Equipment,
      net
            
            
            14,756
            
            
            
            16,210Deferred
      financing costs
            
            
            358,333
            
            
            
            394,281Intangible
      assets, net
            
            
            16,667
            
            
            
            19,444Total
      assets
            
            $
            667,658
            
            
            $
            999,381


LIABILITIES AND SHAREHOLDERS’
      EQUITYCurrent
      liabilities:Accounts
      payable
            
            $
            478,093
            
            
            $
            202,056Accrued
      expenses and other current liabilities
            
            
            368,056
            
            
            
            303,865Accrued
      royalties
            
            
            114,344
            
            
            
            108,961Convertible
      notes payable, net of discounts of $1,627,662 and $1,869,911,
              respectively
            
            
            372,338
            
            
            
            280,089Total
      current liabilities
            
            
            1,332,831
            
            
            
            894,971Note
      payable – related party
            
            
            90,000
            
            
            
            90,000Total
      liabilities
            
            
            1,422,831
            
            
            
            984,971Commitments
            
            
            -
            
            
            
            -Shareholders'
      equity:Common
      stock, $0.001 par value per share; 375,000,000 shares authorized;
      44,911,538 and 44,906,538 shares issued and outstanding for 2008 and 2007,
      respectively
            
            
            44,912
            
            
            
            44,907Additional
      paid-in capital
            
            
            8,556,884
            
            
            
            8,516,305Accumulated
      deficit
            
            
            (9,356,969
            )
            
            
            (8,546,802
            )Total
      shareholders' equity
            
            
            (755,173
            )
            
            
            14,410Total
      liabilities and shareholders' equity
            
            $
            667,658
            
            
            $
            999,381




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




3




HEALTHCARE
PROVIDERS DIRECT, INC.
 CONSOLIDATED
CONDENSED STATEMENTS OF INCOME
 (UNAUDITED)






For the Three Months Ended March
      31,2008
            
            
            2007Revenues,
      net
            
            $
            137,796
            
            
            $
            138,898Cost
      of revenues
            
            
            84,889
            
            
            
            61,821Gross
      profit
            
            
            52,907
            
            
            
            77,077Operating
      expenses:Research  and
      development
            
            
            9,242
            
            
            
            47,282Sales
      and marketing costs
            
            
            132,192
            
            
            
            228,118Issuance
      of warrants in connection with reverse merger
            
            
            -
            
            
            
            2,927,285General
      and administrative
            
            
            394,205
            
            
            
            853,755Total
      operating expenses
            
            
            535,639
            
            
            
            4,056,440Loss
      from operations
            
            
            (482,732
            )
            
            
            (3,979,363
            )Interest
      expense
            
            
            327,435
            
            
            
            2,941Net
      loss
            
            $
            (810,167
            )
            
            $
            (3,982,304
            )Net
      Loss Per Common Share - Basic and Diluted
            
            $
            (0.02
            )
            
            $
            (0.09
            )Weighted
      average common shares - Basic and Diluted
            
            
            44,911,538
            
            
            
            43,978,465




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




4




HEALTHCARE
PROVIDERS DIRECT, INC.


CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)













For the Three Months Ended March
      31,2008
            
            
            2007Cash
      flows from operating activities:Net
      loss
            
            $
            (810,167
            )
            
            $
            (3,982,304
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
            
            
            3,220
            
            
            
            3,234Amortization
      of intangible assets
            
            
            2,777
            
            
            
            13,889Amortization
      of debt discount on convertible notes
            
            
            242,249
            
            
            
            -Amortization
      of deferred financing costs
            
            
            35,948
            
            
            
            -Stock-based
      compensation expense
            
            
            23,007
            
            
            
            282,858Issuance
      of common stock for services
            
            
            450
            
            
            
            -Issuance
      of warrants for services
            
            
            17,127
            
            
            
            27,156Issuance
      of warrants in connection with reverse merger
            
            
            -
            
            
            
            2,927,285Provision
      for doubtful accounts
            
            
            -
            
            
            
            (167
            )Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (8,996
            )
            
            
            20,457Inventories
            
            
            29,098
            
            
            
            34,065Prepaid
      expenses and other current assets
            
            
            9,566
            
            
            
            (52,567
            )Accounts
      payable
            
            
            276,037
            
            
            
            (239,407
            )Accrued
      expenses and accrued royalties
            
            
            69,574
            
            
            
            (151,334
            )Net
      cash used in operating activities
            
            
            (110,110
            )
            
            
            (1,116,835
            )Cash
      flows from investing activities:Purchases
      of equipment
            
            
            (1,766
            )
            
            
            (7,104
            )Net
      cash used in investing activities
            
            
            (1,766
            )
            
            
            (7,104
            )Cash
      flows from financing activities:Repayment
      of convertible notes payable
            
            
            (150,000
            )
            
            
            -Repayment
      of notes payable
            
            
            -
            
            
            
            (250,000
            )Proceeds
      from issuance of common stock
            
            
            -
            
            
            
            500,000Proceeds
      from sale of Series B preferred stock, net of issuance costs
      of
              $158,847
            
            
            -
            
            
            
            1,144,153Net
      cash (used in) provided by financing activities
            
            
            (150,000
            )
            
            
            1,394,153Net
      (decrease)increase in cash and cash equivalents
            
            
            (261,876
            )
            
            
            270,214Cash
      and cash equivalents at beginning of period
            
            
            277,530
            
            
            
            263,494Cash
      and cash equivalents at end of period
            
            $
            15,654
            
            
            $
            533,708Supplemental Disclosures Of
      Cash Flow Information:Cash
      paid during the year for:Interest
            
            $
            1,965
            
            
            $
            19,230Taxes
            
            
            -
            
            
            
            -Non-cash
      financing activities:Conversion
      of Series A and B preferred stock into common stock
            
            $
            -
            
            
            $
            2,798,000




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





5




HEALTHCARE
PROVIDERS DIRECT, INC.


NOTES
TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


(UNAUDITED)




NOTE
1 – ORGANIZATION AND BASIS OF PRESENTATION:





The
accompanying consolidated condensed financial statements included herein have
been  prepared  by the  Company  pursuant to the rules
and  regulations  of the Securities and Exchange Commission 
(the  "Commission")  for interim  financial
information.  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  statement  presentation
and should be read in conjunction with the audited  consolidated 
financial  statements and related footnotes  thereto for the
fiscal year ended December 31, 2007  included in the  Company's 
current  report on Form  10-KSB,  filed  with the 
Commission on April 8, 2008. The financial  statements 
presented  in this  quarterly  report are  unaudited 
but include all adjustments  that are of a normal  recurring 
nature that management considers  necessary for the fair 
statement  of the  results  for the  interim periods. 
The condensed balance sheet as of December 31, 2007 has been derived from the
Company’s Audited Financial Statements. Results for interim periods are not
necessarily indicative of results for the full fiscal year. There have been
no changes in significant accounting policies since December 31,
2007.





The
Company was originally incorporated in Nevada in April 2004 as Alpha Motorsport,
Inc. (“Alpha”), a development stage company that attempted to engage in the
business of automobile sales and had minimal business operations prior to the
time of the Share Exchange and Merger. On January 24, 2007, Alpha formed a
wholly-owned subsidiary, Healthcare Providers Direct, Inc., a Nevada corporation
and on January 24, 2007, completed a short-form merger pursuant to the Nevada
Revised Statutes, and effectively changed its name to “Healthcare Providers
Direct, Inc.”, a Nevada corporation.




Healthcare
Providers Direct, Inc. (“HPD”) was formed as a Delaware corporation incorporated
on October 28, 2004 for the purpose of selling and distributing diagnostic tests
directly to physician offices and other healthcare providers in the United
Sates. After the Share Exchange and Merger, Alpha succeeded to the line of
business of HPD, which will be continued as its sole line of
business.





The
Company’s common stock is quoted on the Over-the-Counter Bulletin Board (the
“OTCBB”) under the symbol “HPRD.”







Effective
February 7, 2007, the Company entered into a definitive Share Exchange Agreement
with Alpha Motorsport, Inc., a Nevada corporation and the shareholders of HPD
pursuant to which HPD became a wholly-owned subsidiary of the Company (the
“Merger”). The share exchange agreement provided for the acquisition of all of
the issued and outstanding capital stock of HPD consisting of 4,683 shares of
common stock (on an as-converted, issued and outstanding basis), in exchange for
34,464,038 shares of the Alpha Motorsport’s common stock, par value $.001 per
share (the “Share Exchange”). The following table shows the exchange of common
stock in the reverse merger:





Common
      stock of HPD before share exchange
            
            
            Shares
      of common stock in registrant after share exchangeSeries
      A Preferred Stock
            
            
            577
            
            
            
            4,246,370Series
      B Preferred Stock
            
            
            2,548
            
            
            
            18,751,734Common
      Stock
            
            
            1,558
            
            
            
            11,465,934Total
            
            
            4,683
            
            
            
            34,464,038Total
      outside shares of Alpha Mortorsport, Inc. issued upon closing of share
      exchange
            
            
            
            
            
            
            10,000,000Total
      shares outstanding subsequent to the share exchange
            
            
            
            
            
            
            44,464,038





In
connection with the Share Exchange Agreeemnt, the Company assumed the obligation
to register up to 400,000 shares of common stock issued by Alpha in a private
placement (the “Alpha Private Placement”).  In return, the Company
received $500,000 upon the closing of the Merger on February 7, 2007 for
issuance of 400,000 shares of common stock.




Upon the
closing of the Share Exchange, Alpha Motorsport, Inc. had 10,000,000 shares of
common stock issued and outstanding and subsequent to the Share Exchange the
Company had 44,464,038 shares of common stock issued and outstanding. Upon the
closing of the Merger on February 7, 2007, HPD became a wholly-owned subsidiary
of the Company. The share exchange was accounted for as a reverse merger for
accounting purposes. As a result, the Company treated the merger as a capital
transaction and has retroactively revised shareholders’ equity to give effect to
the merger. Prior to the reverse merger, each share of Series A and Series B
preferred stock of HPD was automatically converted into one share of common
stock. Effective with the reverse merger, all shares of common stock of HPD were
exchanged for shares in the registrant, in accordance with the Share Exchange
Agreement. In connection with the Series B Private Placement financing, the
Company issued warrants to brokers with the right to purchase up to 1,368,847
shares of common stock at an exercise price of $0.1359.





6




NOTE
1 – ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED):





Investa
Warrants





On
February 7, 2007, the Company issued warrants to Investa Capital Partners Inc.
(“Investa”) for services performed in connection with the reverse merger
transaction, which were exercisable in two tranches. The tranche A warrants gave
Investa the right to purchase 2,705,659 shares of common stock at an exercise
price of $0.1848 per share. The tranche B warrants gave Investa the right to
purchase 2,032,982 shares of common stock at an exercise price of $0.2459 per
share. The warrants had a fair value of $2,927,285 (calculated to be the fair
value based on the Black-Scholes pricing model on the issuance date.) and have
been recorded as an expense for the year ended December 31, 2007.  Both
tranche A and the tranche B warrants were exercisable for a period of 365 days
from the date of issuance until the warrants expired on February 7,
2008.





The
Investa warrants expired on February 7, 2008. Investa did not exercise these
warrants and the Company did not exercise the put feature.





Liquidity





The
Company has net losses of $810,167 and negative cash flow from operating
activities of $110,110 for the three months ended March 31, 2008, and an
accumulated deficit of $9,356,969 as of March 31, 2008. These circumstances
raise substantial doubt about the Company’s ability to continue as a going
concern. The Company has taken steps to mitigate the negative operating results
by attempting to increase their sales by expanding their market, introducing new
products, and increasing the emphasis on sales and marketing. The Company’s
ultimate success is dependent upon fulfilling its operating plans and raising
additional capital or financing. The financial statements have been prepared on
the basis that the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. There have been no adjustments to the financial statements
to reflect the outcome of this uncertainty.




NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES:




The
summary of significant accounting policies presented below is designed to assist
in understanding the Company's consolidated financial statements. Such
consolidated financial statements and accompanying notes are the representations
of the Company’s management, who is responsible for their integrity and
objectivity. These accounting policies conform to accounting principles
generally accepted in the United States of America (“GAAP") in all material
respects, and have been consistently applied in preparing the accompanying
consolidated financial statements.





Uses of
Estimates—The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant accounting estimates used in the
Company’s financial statements include allowances for doubtful accounts,
valuations of options and warrants, and the valuation allowance on the deferred
tax assets. Actual results could differ from those estimates.





Share-Based
Compensation—The
Company accounts for its stock options in accordance with SFAS No. 123(R), which
requires the measurement and recognition of compensation expense for all
share-based payment awards based on estimated fair values at the date of the
grant. Determining the fair value of share-based awards at the grant date
requires judgment in developing assumptions, which involve a number of
variables. These variables include, but are not limited to, the expected stock
price volatility over the term of the awards, and expected stock option exercise
behavior. In addition, we also use judgment in estimating the number of
share-based awards that are expected to be forfeited.





Fair Value of
Financial Instruments—Statement No. 107, Disclosure About Fair Value of Financial Instruments,
requires the disclosure of the fair value of certain financial instruments. Cash
and cash equivalents, accounts receivable, accounts payable and accrued
expenses, notes payable and other current liabilities are reflected on the
accompanying consolidated balance sheet at carrying value which approximates
fair value due to the short-term nature of these instruments.




Revenue
Recognition-Revenue
is recognized when goods are shipped, provided that there is evidence of an
arrangement with the customer, the price is fixed and determinable and
collection is reasonably assured.




Reclassification-Certain reclassifications
have been made to prior year’s consolidated condensed financial statements to
conform to the current year presentation.





7




NOTE
3 – PER SHARE INFORMATION:




In
accordance with SFAS No. 128 “Earnings Per Share”, basic earnings per common
share (“Basic EPS”) is computed by dividing the net income (loss) by the
weighted-average number of common shares outstanding. Diluted earnings per
common share (“Diluted EPS”) is computed by dividing the net income (loss) by
the sum of the weighted-average number of common shares and dilutive common
stock equivalents and convertible securities then outstanding. SFAS No. 128
requires presentation of both Basic EPS and Diluted EPS on the face of the
Company’s Consolidated Statements of Operations. Consolidated common stock
equivalents totaling 22,448,791 and 9,006,432 were excluded from the computation
of Diluted EPS for the three months ended March 31, 2008 and 2007, respectively,
as their effect on the computation of Diluted EPS would have been
anti-dilutive.





The
following table sets forth the computation of basic and diluted per share
information:




For
      the Three Months Ended March 31,2008
            
            
            2007Numerator:Net
      loss
            
            $
            (810,167
            )
            
            $
            (3,982,304
            )Denominator:Weighted-average
      common shares outstanding basic and diluted
            
            
            44,911,538
            
            
            
            43,978,465Per
      share information – basic and diluted:Net
      loss
            
            $
            (0.02
            )
            
            $
            (0.09
            )




NOTE
4 – NOTE PAYABLE – RELATED PARTY:




On June
28, 2007, the maturity date of the loan from management dated June 1, 2006 in
the amount of $90,000 was extended to December 31, 2007 at an annual interest
rate of 11.5%. On January 1, 2008, the maturity date of this loan was extended
to December 31, 2009 at an annual interest rate of 7.0%.




NOTE
5 – CONVERTIBLE NOTES PAYABLE:




From July
31, 2007 through August 31, 2007, the Company issued $2,150,000 of its 9% Senior
Secured Convertible Debentures (the “Debentures”) in a private placement. The
debentures are convertible into the Company’s common stock, at the option of the
holder, at any time up to maturity at an initial conversion price equal to $0.25
per share. The debentures have a three-year term and accrue interest at
9% per year.




Accrued
interest on the convertible debt is payable semi-annually in cash or in Common
Stock, at the Company’s option provided, however, payment in shares of common
stock may only occur if during the 20 Trading Days immediately prior to the
applicable Interest Payment Date (i) the Company shall have given the Investor
notice (ii) such shares to be delivered on the Interest Payment Date are
registered at the time of issuance, (iii) at the time of issuance there are a
sufficient number of registered shares to cover all of the shares of common
stock issuable upon conversion of the debenture and (iv) the Common Stock is
trading on the Trading Market and the Registrable Securities are listed for
trading on a Trading Market (and the Company believes, in good faith, that
trading of the Common Stock on a Trading Market will continue uninterrupted for
the foreseeable future).  Accrued interest was approximately $123,000
and $76,000 as of March 31, 2008 and December 31, 2007,
respectively.





Beginning
on the six-month anniversary of the Closing of each Debenture, and continuing on
the same day of each successive month thereafter, the Company must repay
1/29th of the
aggregate face amount of the Debentures, plus all accrued interest thereon,
either in cash or in Common Stock, at the Company’s option. If prepaid in Common
Stock, the number of shares issued will be based on a 25% discount to the volume
weighted average price (VWAP) of the Common Stock for the ten (10) trading days
immediately preceding (but not including) the applicable prepayment date.
Notwithstanding the foregoing, the Company’s right to prepay the Debentures in
shares of Common Stock on each prepayment date is subject to the condition that
the Registration Statement must be effective on such prepayment date and
available for use by the investors.





The
Company will have the ability to cause the investors to convert their Debentures
and any accrued but as yet unpaid interest thereon into Common Stock if (i) the
Registration Statement is effective and available for use by the Investors on
the date the conversion notice is given by the Company, (ii) the closing price
of the Common Stock exceeded $1.00 for each of the 20 consecutive trading days
immediately preceding the date that the conversion notice is given by the
Company, and (iii) the average daily trading volume for the Common Stock during
such 20 consecutive trading day period exceeded 125,000 shares.




8




NOTE
5 – CONVERTIBLE NOTES PAYABLE (CONTINUED):





For each
aggregate face amount of Debentures purchased, each investor received a Warrant
to purchase such number of shares of Common Stock equal to the aggregate face
amount of their respective Debenture divided by the Conversion
Price.  The Warrants are exercisable for a period of five years at an
exercise price of $0.50 per share.  As of March 31, 2008 there are
8,600,000 warrants associated with the debentures outstanding with an aggregate
value of approximately $1,483,000.  The costs associated with the
warrants were recorded as a debt discount and are being amortized using the
effective interest method over the three year term of the notes.




In
addition, the debentures conversion feature has been valued at approximately
$656,000 due to the excess of the market value of the Common Stock over the
conversion price. The discount attributable to the beneficial conversion is
being amortized using the effective interest method over the term of the
debentures.





In
consideration for placement services, the Company has paid the Placement Agent a
commission of 8% of the gross proceeds of the Offering plus 5-year warrants to
purchase up to such number of shares of common stock equal to 8% of the
aggregate amount of Securities subscribed for at $0.19 per share or 100% of the
5-day average closing price of the common stock for the five days preceding, but
not including, the closing date.  The commissions paid to the
placement agent and other costs of issuance were recorded as deferred financing
costs of approximately $441,000 of which approximately $153,000 were related to
the issuance of warrants and approximately $289,000 was paid as cash for
placement agent fees and various other direct costs of
issuance.





In
accordance with the terms of the Debenture agreement, the Company may not pay
dividends or other distributions on the Company's equity securities during the
period that any portion of the debenture is outstanding.





The SB-2
Registration statement was declared effective January 28, 2008. 11,871,993
shares of common stock were registered, including 8,600,000 shares of common
stock which are issuable upon conversion of the debentures at a conversion price
of $0.25 per share.





The
Following table summarizes the above mentioned transaction as of:




March
      31, 2008
            
            
            December
      31, 2007(unaudited)
            
            
            (audited)Convertible
      notes issued
            
            
            
            
            $
            2,150,000
            
            
            
            
            
            $
            2,150,000Less:  Redemptions
            
            
            
            
            
            (150,000
            )
            
            
            
            
            
            -2,000,000
            
            
            
            
            
            
            2,150,000Debt
      discount on convertible notes
              Attributable
      to beneficial conversion
            
            
            655,830
            
            
            
            
            
            
            
            655,830Less:
      Accumulated amortization
            
            
            (154,597
            )
            
            
            (501,233
            )
            
            
            (80,466
            )
            
            
            (575,364
            )Debt
      discount attributable to warrants
            
            
            1,483,084
            
            
            
            
            
            
            
            1,483,084Less:
      Accumulated amortization
            
            
            (356,655
            )
            
            
            (1,126,429
            )
            
            
            (188,537
            )
            
            
            (1,294,547
            )Convertible
      notes payable, net of
              discounts
            
            
            
            
            
            $
            372,338
            
            
            
            
            
            
            $
            280,089






The
approximate future minimum principal payments on the convertible notes payable
as of March 31, 2008 are as follows:




Year
      Ended
              December
      31,
            
            Amount2008
            
            $
            665,0002009
            
            
            890,0002010
            
            
            445,000$
            2,000,000




9




NOTE
6 – COMMITMENTS AND CONTINGENCIES:





Lease





As of
March 31, 2008, the Company had a month-to-month lease and was negotiating a new
lease for rental space.





Purchase
Commitments





The Company has a purchase agreement
for a diagnostic test, which requires the Company to order minimum amounts of
diagnostic tests. Should the Company fail to meet this minimum ordering
requirement, this agreement can be terminated by the vendor.TheCompany’spurchase commitment (expressed as a
number of units) is75,000
for a total of $241,935 for the year ended December 31,
2008.




NOTE
7 – STOCK OPTIONS AND WARRANTS:





On
December 18, 2006, the HPD Board of Directors adopted the Healthcare Providers
Direct, Inc. Stock Option Plan (the “Plan”) which provides for the grant of
incentive stock options and nonqualified stock options. On December 27, 2006 the
Company’s shareholders approved the Plan.





The Board
of Directors has approved and adopted the 2007 Stock Incentive Plan effective
and dated June 26, 2007. Options with an exercise price of $1.20 were granted on
March 28, 2007 to HPD employees were exchanged for options granted to the same
employees under the 2007 HPD’s Incentive Stock Option Plan for an equal number
of options originally granted in March 2007 at the exercise price of $0.60,
representing the closing price of the Company’s common stock on June 26,
2007.





Key
employees, consultants and non-employee directors of the Company are eligible to
receive awards under the Plan. Except to the extent set forth in any award
agreement to the contrary, options granted under the Plan vest in three equal
annual installments for non-employee directors and in four equal annual
installments for all other option holders commencing on the first anniversary of
the date of grant. Options are granted at no less than fair market value of the
Company’s stock on the date of grant.





There are
6,402,672 shares of Common Stock reserved for issuance upon the exercise of
options. Options have a term of ten years. In the event of a termination of
employment or service, options that are vested at the time of such termination
generally remain exercisable for ninety days in the event of involuntary
termination or termination due to retirement or disability, and for one year in
the event of termination due to death. Vested options are immediately canceled
upon termination for “Cause”. All unvested options are canceled immediately upon
termination for any reason. Upon the date of a “change in control”, all
outstanding unvested options become immediately vested and fully
exercisable.





The
Company’s compensation expense related to stock option awards (“stock options”)
was approximately $23,000 and $283,000 for the three months ended March 31, 2008
and 2007, respectively.





Stock
Options


Compensation
expense related to stock options granted is recognized ratably over the service
vesting period for the entire option award. The total number of stock option
awards expected to vest is adjusted by the estimated forfeiture rate. The
Company does not anticipate any forfeitures. The Company determined the fair
market value of each stock option issued on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions for the three months ended March 31, 2008 and 2007:





Assumptions:
            
            2008
            
            
            2007Risk-free
      interest rate
            
            
            4.5
            %
            
            
            4.5
            %Expected
      option life in years
            
            
            5.0
      years
            
            
            
            5.0
      yearsExpected
      stock price volatility
            
            
            211.3
            %
            
            
            75.0
            %Expected
      dividend yield
            
            
            0.0
            %
            
            
            0.0
            %





The
computation of the expected option life is based on a weighted-average
calculation combining the average life of options that have already been
exercised and post-vest cancellations with the estimated life of the remaining
vested and unexercised options. The expected volatility is based on The
Company’s historical stock price. The risk-free interest rate is based on the
U.S. Treasury yield curve over the expected term of the option. The Company has
never paid cash dividends on its common stock and does not anticipate paying
cash dividends in the foreseeable future. Consequently, the Company uses an
expected dividend yield of zero in the Black-Scholes option valuation
model.





The
Company’s determination of fair value is affected by the Company’s stock price
as well as a number of assumptions that require judgment. The weighted-average
fair value per share was approximately $0.13 for the quarter ended March 31,
2008. No options were exercised during the quarter ended March 31, 2008. As of
March 31, 2008, total unrecognized compensation cost related to all stock
options granted was approximately $262,000 and the related weighted-average
period over which it is expected to be recognized is approximately 1.3 years.
The maximum term to exercise the Company’s stock options is ten
years.




10




NOTE
7 – STOCK OPTIONS AND WARRANTS (CONTINUED):





A summary
of the status of stock option activity for the quarter ended March 31, 2008 is
as follows:





Summary of activity:
            
            Number
      of SharesOutstanding
      as of December 31, 2007:
            
            
            2,347,209Granted
            
            
            400,000Exercised
            
            
            -Cancelled,
      forfeited or expired
            
            
            (100,000
            )Outstanding
      as of March 31, 2008:
            
            
            2,647,209Vested
      and Expected to vest as of March 31, 2008:
            
            
            2,647,209Exercisable:
            
            
            1,654,239Available
      for future grants:
            
            
            3,755,463




Warrants





On
January 10, 2008, the Company issued 5-year warrants to Lincoln Associates LLC,
a related party, for general business services to be performed during 2008,
which are exercisable in two tranches.  Tranche A warrant gives
Lincoln Associates LLC the right to purchase up to 100,000 shares of the
Company’s Common Stock. This warrant is exercisable at any time at an exercise
price of $0.09 per share, valued at $8,643 (calculated to be the fair value
based on the Black-Scholes pricing model on the issuance date).  The
tranche B warrant gives Lincoln Associates LLC the right to purchase up to
100,000 shares of the Company’s Common Stock. This warrant is exercisable at any
time at an exercise price of $0.19 per share, valued at $8,484 (calculated to be
the fair value based on the Black-Scholes pricing model on the issuance date).
William Dioguardi, a member of the Company’s board of directors, is the managing
partner of Lincoln Associates LLC.




NOTE
8 – SUBSEQUENT EVENTS:




Pursuant
to a written consent of a majority of the stockholders, dated March 6, 2008, in
lieu of a special meeting of the stockholders, a majority of the stockholders
approved the following actions:





1.           To
amend the Company’s Articles of Incorporation to create 25,000,000 shares of
blank check preferred stock, $0.001 par value.





The
Company filed a preliminary information statement on Schedule 14C with the
Securities and Exchange Commission on April 10, 2008.  A definitive
information statement was filed with the Securities and Exchange Commission on
April 22, 2008.  The Company will take the actions approved by a
majority of the stockholders 20 days after the definitive information statement
is mailed to the shareholder of record of the Company on March 6,
2008.





On April 25, 2008, William P. Dioguardi
resigned as director of the Company, effective immediately. There was no
disagreement or dispute between Mr. Dioguardi and the Company which led to his
resignation.




11




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




This
Report contains certain forward-looking statements and information relating to
the Company that is based on the beliefs of the Company’s management, as well as
assumptions made by, and information currently available to, the Company’s
management. When used in this Report, the words “anticipate”, “believe”,
“estimate”, “expect”, “there can be no assurance”, “may”, “could”, “would”,
“might”, “intends” and similar expressions and their negatives, as they relate
to the Company or the Company’s management, are intended to identify
forward-looking statements. Such statements reflect the view of the Company at
the date they are made with respect to future events, are not guarantees of
future performance and are subject to various risks and uncertainties as
identified in the Company’s Annual Report on Form 10-KSB for the year ended
December 31, 2007 and those described from time to time in previous and future
reports filed with the Securities and Exchange Commission. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein with
the forward-looking statements referred to above and as set forth in the Form
10-Q. The Company does not intend to update these forward-looking statements for
new information, or otherwise, for the occurrence of future events.




Results
of Operations




For the Three Months Ended
March 31, 2008, as Compared to the Comparable Period in 2007




Revenues





Net
revenues for the three months ended March 30, 2008 and 2007 were $137,796 and
$138,898, respectively.  The decrease in revenues of $1,102 or 0.8%
was primarily due to change in the mix of product sales. There was an
approximate $42,000 decrease in the Zstat Flu test due to the product expiring
in September of 2007. This decrease was offset by an increase in sales of our
Rapid HIV Diagnostic Test of approximately $33,000. This decrease was further
offset by an increase across other product lines of approximately
$8,000.








Cost
of Sales





Our cost
of sales increased to $84,889 for the three months ended March 31, 2008, as
compared to $61,821 for the three months ended March 31, 2007. This increase of
$23,068 was primarily attributed to the overall change in product mix sales. The
Zstat Flu test was sold until September 2007(the product expiration date), had a
low product cost and was replaced with a higher product cost flu test. Cost of
sales as a percentage of product sales increased to 61.6% in the first quarter
of 2008 from 44.5% for the first quarter of 2007.  This increase was
attributed to the increase in lower profit margin product mix sales as discussed
above.




Gross
Profit





Gross
profit for the three months ended March 31, 2008 decreased to $52,907 or 38.4%
of revenues from $77,077 or 55.5% of revenues for the three months ended March
31, 2007. The decrease in the gross profit percentage was due primarily to a
decrease in higher profit product sales.





Expenses





For the
three months ended March 31, 2008, operating expenses decreased $3,520,801 to
$535,639, as compared to $4,056,440 for the three months ended March 31,
2007.  This decrease was primarily the result of recording merger
related expenses during the three months ended March 31, 2007. Expenses consist
of clinical research and development work on one new diagnostic test, sales and
marketing expenses, merger related and general and administrative
expenses.





Research
and Development





Research
and development expenses were $9,242 and $47,282 for the three months ended
March 31, 2008 and 2007, respectively.  The majority of research and
development expenses consist of external costs for studies and analysis
activities. The decrease of $38,040 was the result of completing various
projects, as mentioned above, during the first three months of 2007. We expect
our research and development costs to increase in future periods primarily due
to the expenses associated with the completion of clinical trials.





Sales
and Marketing





Sales and
marketing expenses were $132,192 and $228,118 for the three months ended March
31, 2008 and 2007 respectively. This decrease of $95,926 was the result of an
approximate decrease of $128,000 for marketing efforts during the first three
months ended March 31, 2007, to establish existing business relationships
(EBR’s) with potential new customers. In addition, approximately $0 and $20,000
was spent to purchase customer lists during the three months ended March 31,
2008 and 2007, respectively. To offset these decreases, there was an approximate
$53,000 increase in salaries and benefits in 2008 as a result of additional
staff hired.





Merger
Related





Merger
related expenses were $0 for the three months ended March 31, 2008, as compared
to $2,927,285 for the three months ended March 31, 2007. This decrease was the
result of recording the Investa Capital Partners warrant expense issued for
services performed in connection with the reverse merger transaction (see note 1
to the financial statements included herein).





12





General
and Administrative




General
and administrative expenses decreased $459,550 to $394,205 for the three months
ended March 31, 2008, as compared to $853,755 for the three months ending March
31, 2007.  This decrease was partially the result of recording stock
based compensation and the issuance of stock and warrants for services rendered
in the approximate amounts of $40,000 for the three months ended March 31, 2008
as compared to $310,000 for the three months ended March 31, 2007. There was an
approximate $65,000 decrease in legal expense due the Company completing the
reverse merger during the first three months of 2007. There was approximately $0
and $75,000 for new hire recruitment fees during the three months ended March
31, 2008 and 2007, respectively. Additionally, $0 and $50,000 was incurred on
our reimbursement coding work and strategic direction for products currently in
the clinical study phase during the three months ended March 31, 2008 and 2007,
respectively.




Operating
Loss





Our operating loss was $482,732 for the
three months ended March 31, 2008, as compared to an operating loss of
$4,056,440 for the three months ended March 31, 2007. The decrease of $3,496,631
in the operating loss is primarily due to the aforementioned factors as
described above.





Interest
Expense





Interest
expense was $327,435 and $2,941 for the three months ended March 31, 2008 and
2007, respectively. The increase of $324,494 was primarily due to the
amortization of both the deferred financing and the debt discount on convertible
debentures of approximately $278,000 and interest expense on these debentures of
approximately $48,000.





Net
Loss





The aforementioned factors resulted in
a net loss of $810,167 during the three months ended March 31, 2008, as compared
to a net loss of $3,982,304 during the three months ended March 31, 2007, a
decrease of approximately 80%.  This decrease was primarily due to the
aforementioned factors as described above




Liquidity
and Capital Resources




The
Company has not historically generated, and does not currently generate, enough
revenue to provide the cash needed to support its operations, and has continued
to operate primarily by raising capital and incurring debt. In order to better
position the Company to take advantage of potential growth opportunities and to
fund future operations, the Company sold $2,150,000 of its 9% Senior Secured
Convertible Debentures (the “Debentures”) in a private placement from July 31,
2007 through August 31, 2007. The debentures are convertible into the Company’s
common stock at the option of the holder at any time up to maturity at an
initial conversion price equal to $0.25 per share. The debentures have a
three-year term and accrue interest at 9% per year.




Accrued
interest on the convertible debt  is payable semi-annually in cash or
in Common Stock, at the Company’s option provided,however,
payment in shares of common stock may only occur if during the 20 Trading Days
immediately prior to the applicable Interest Payment Date (i) the Company shall
have given the Investor notice (ii) such shares to be delivered on the Interest
Payment Date are registered at the time of issuance, (iii) at the time of
issuance there are a sufficient number of registered shares to cover all of the
shares of common stock issuable upon conversion of the debenture and (iv) the
Common Stock is trading on the Trading Market and the Registrable Securities are
listed for trading on a Trading Market (and the Company believes, in good faith,
that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future).  Accrued interest as of March 31, 2008 is
approximately $123,000.





Beginning
on the six-month anniversary of the Closing of each Debenture, and continuing on
the same day of each successive month thereafter, the Company must repay
1/29th  of the aggregate face amount of the Debentures, plus all
accrued interest thereon, either in cash or in Common Stock, at the Company’s
option. If prepaid in Common Stock, the number of shares issued will be based on
a 25% discount to the volume weighted average price (VWAP) of the Common Stock
for the ten (10) trading days immediately preceding (but not including) the
applicable prepayment date. Notwithstanding the foregoing, the Company’s right
to prepay the Debentures in shares of Common Stock on each prepayment date is
subject to the condition that the Registration Statement must be effective on
such prepayment date and available for use by the investors.





The
Company will have the ability to cause the investors to convert their Debentures
and any accrued but as yet unpaid interest thereon into Common Stock if (i) the
Registration Statement is effective and available for use by the Investors on
the date the conversion notice is given by the Company, (ii) the closing price
of the Common Stock exceeded $1.00 for each of the 20 consecutive trading days
immediately preceding the date that the conversion notice is given by the
Company, and (iii) the average daily trading volume for the Common Stock during
such 20 consecutive trading day period exceeded 125,000 shares.





For each
aggregate face amount of Debentures purchased, each investor received a Warrant
to purchase such number of shares of Common Stock equal to the aggregate face
amount of their respective Debenture divided by the Conversion
Price.  The Warrants are exercisable for a period of five years at an
exercise price of $0.50 per share.  At March 31, 2008 there are
8,600,000 warrants associated with the debentures
outstanding.




13




As
of March 31, 2008, Healthcare Providers Direct, Inc. had a working capital
deficit of $1,054,929 and cash on hand of $15,654.  During the three
months ended March 31, 2008, cash flows used in operating activities were
$110,110. This was principally due to the net loss of $810,167, less non-cash
items of $324,778. The non-cash items consisted of amortization of the
convertible notes and deferred financing costs and the recording of stock based
compensation expense. Accounts payable and accrued expenses increased
approximately $346,000.





For the three months ended March 31, 2008, cash flows used in investing
activities were $1,766 for purchase of equipment.





For
the three months ended March 31, 2008, cash flows used in financing activities
were $150,000 due to the convertible notes redemption as described
above.




Future
Liquidity and Capital Needs





Based
upon our current working capital position, current operating plans and expected
business conditions, management believes that the Company needs additional debt
and/or equity financing to finance operations in 2008. The financial statements
do not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from our possible inability to continue as a going
concern.




Significant
additional capital resources are required from sources including equity and/or
debt financings, license arrangements, grants and/or collaborative research
arrangements in order to develop products. Thereafter, additional working
capital will need to be raised.





Additional
investments are being sought, but we cannot guarantee that we will be able to
obtain such investments. The trading price of our common stock and a downturn in
the U.S. stock and debt markets could make it more difficult to obtain financing
through the issuance of equity or debt securities. Even if we are able to raise
the funds required, it is possible that we could incur unexpected costs and
expenses, fail to collect significant amounts owed to us, or experience
unexpected cash requirements that would force us to seek alternative financing.
Furthermore, if we issue additional equity or debt securities, stockholders may
experience additional dilution or the new equity securities may have rights,
preferences or privileges senior to those of existing holders of our common
stock. If additional financing is not available or is not available on
acceptable terms, we will have to curtail our operations.




The
timing and degree of any future capital requirements will depend on many
factors, including:





·
            The
      magnitude and scope of our research and development programs and our
      ability to establish, enforce and maintain strategic arrangement for
      research, development, clinical testing, manufacturing and
      marketing;





·
            our
      progress with preclinical development and clinical
  trials;





·
            the
      time and costs involved in obtaining regulatory
  approvals;


·
            the
      costs involved in preparing, filing, prosecuting, maintaining, defending
      and enforcing patents; and claims;
and




·
            the
      number and type of product candidates that we
  pursue





Further,
if additional funds are obtained through arrangements with collaborative
partners, these arrangements may require us to relinquish rights to some of our
technologies, product candidates or products that we would otherwise seek to
develop and commercialize on our own. If sufficient capital is not available, we
may be required to delay, reduce the scope of or eliminate one or more of our
product lines.





Off-Balance
Sheet Arrangements




An
off-balance sheet arrangement is any contractual arrangement involving an
unconsolidated entity under which a company has (a) made guarantees,
(b) a retained or a contingent interest in transferred assets, (c) any
obligation under certain derivative instruments or (d) any obligation under
a material variable interest in an unconsolidated entity that provides
financing, liquidity, market risk, or credit risk support to the company, or
engages in leasing, hedging, or research and development services within the
company.




The
Company does not have any off-balance sheet financing as of March 31,
2008.




14




Management’s
Discussion of Critical Accounting Policies and Estimates




Accounting
estimates and assumptions 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. For all of these estimates, we caution
that future events rarely develop exactly as forecast, and the best estimates
routinely require adjustments. Management believes that these policies, are
fully described under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s Annual Report on Form
10-KSB for the year ended December 31, 2007. The Company has made no changes to
these policies during 2008.











15




Item 3.
Quantitative and Qualitative Disclosures about Market Risk





N/A




Item 4T. Controls and
Procedures




(a)   Evaluation
      of Disclosure Controls and
Procedures




Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as
of December 31, 2007. In designing and evaluating the disclosure controls
and procedures, management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. In addition, the design of disclosure
controls and procedures must reflect the fact that there are resource
constraints and that management is required to apply its judgment in evaluating
the benefits of possible controls and procedures relative to their
costs.





Based
on our evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are designed at a
reasonable assurance level and are effective to provide reasonable assurance
that information we are required to disclose in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required
disclosure.




(b)   Changes
      in Internal Controls




There
were no changes that occurred during the fiscal quarter covered by this
Quarterly Report on Form 10-Q that have materially affected, or are reasonably
likely to materially affect, the Company’s internal controls over financial
reporting.




16




PART
II - OTHER INFORMATION




Item
1. Legal
Proceedings




None.




Item 1a. Risk
Factors





N/A





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




On
January 8, 2008, we issued 5,000 shares of common stock to Sichenzia Ross
Friedman Ference LLP for legal services rendered to us. The shares were issued
pursuant to an exemption under Section 4(2) of the Securities Act of
1933.




Item 3. Defaults upon Senior
Securities




None.




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




Pursuant
to a written consent of a majority of the stockholders, dated March 6, 2008, in
lieu of a special meeting of the stockholders, a majority of the stockholders
approved the following actions:





1.                        To
amend the Company’s Articles of Incorporation to create 25,000,000 shares of
blank check preferred stock, $0.001 par value.





The
Company filed a preliminary information statement on Schedule 14C with the
Securities and Exchange Commission on April 10, 2008.  A definitive
information statement was filed with the Securities and Exchange Commission on
April 22, 2008.  The Company will take the actions approved by a
majority of the stockholders 20 days after the definitive information statement
is mailed to the shareholder of record of the Company on March 6,
2008.




Item 5. Other
Information




None.




Item 6.
Exhibits






Exhibit
      Number
            Description
      of Exhibit31
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and
      Exchange Act of 1934, as amended32
            Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief
      Financial Officer)






17







SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.









HEALTHCARE PROVIDERS DIRECT,
      INC.May
      15, 2008
              By:
              /s/ Norman
      ProulxNorman
      ProulxChief
      Executive Officer (Principal Executive Officer) and Chief Financial
      Officer (Principal Financial Officer and Accounting Officer) and
      Director