Washington,
      D.C. 20549





FORM
      10-QSB





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


For
      the quarterly period ended March 31, 2007




OR






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


For
      the transition period from _______________ to
      _______________





Commission
      file number 0-21384





KAIRE
      HOLDINGS INCORPORATED


(Exact
      name of registrant as specified in its charter )








**Delaware**
            **8980**
            **13-3367421**(State
                or other jurisdiction of
            (Primary
                Standard Industrial
            (I.R.S.
                Employerincorporation
                or organization)
            Classification
                Code Number )
            Identification
                No.)





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





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





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





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




Class
      of Common Stock     Outstanding
      at May 21, 2007


$.001
      par value   42,616,806 shares





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


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











Transitional
      Small Business Disclosure Format  Yes   No X

















-1-


























**Kaire
      Holdings Incorporated**


**and
      Subsidiaries**





**Consolidated
      Financial Statements**


**for
      the Three Months Ended**


**March
      31, 2007**











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











Consolidated
                Balance Sheets
            1Consolidated
                Statements of Operations
            2Consolidated
                Statements of Cash Flows
            3Notes
                to Consolidated Financial Statements
            4
                -
                30








-2-








March
                31, 2007
            
            December
                31, 2006ASSETS
            (unaudited)
            
            (audited)Cash
            
            
            
            $
            94,951
            
            $
            -Deferred
                financing costs (net of amortization)
            
            1,447
            
            
            6,906Total
                Assets
            $
            96,398
            
            $
            6,906LIABILITIES
                AND STOCKHOLDERS' DEFICITCurrent
                LiabilitiesAccounts
                payable and accrued expenses
            $
            238,804
            
            $
            334,767Advances
                from shareholders
            
            149,266
            
            
            99,266Notes
                payable - related parties
            
            6,021
            
            
            6,021Notes
                payable
            
            200,000
            
            
            -Convertible
                notes
            
            2,031,053
            
            
            1,946,939Derivative
                liability
            
            1,110,646
            
            
            1,700,412Warrant
                liability
            
            80,168
            
            
            137,458Accrued
                interest - convertible notes
            
            472,594
            
            
            472,594Liabilities
                of discontinued operations - Sespe
            
            280,320
            
            
            324,240Total
                Current Liabilities
            
            4,568,872
            
            
            5,021,697Total
                Liabilities
            
            4,568,872
            
            
            5,021,697Stockholders'
                DeficitCommon
                stock, $0.001 par value, 900,000,000 sharesauthorized;
                42,616,806 shares issued and outstanding
            
            42,617
            
            
            42,617Additional
                paid in capital
            
            40,139,231
            
            
            40,139,231Accumulated
                deficit
            
            (44,654,322)
            
            
            (45,196,639)Total
                Stockholders' Deficit
            
            (4,472,474)
            
            
            (5,014,791)Total
                Liabilities and Stockholders' Deficit
            $
            96,398
            
            $
            6,906














-3-











2006
            
            2005(unaudited)
            
            (unaudited)Net
                revenues
            $
            -
            
            $
            -Cost
                of goods sold
            
            -
            
            
            -Gross
                Profit
            
            -
            
            
            -Operating
                ExpensesSalaries
                and related expenses
            
            -
            
            
            24,950General
                and administrative
            
            32,770
            
            
            278,880Total
                Operating Expenses
            
            32,770
            
            
            303,830Loss
                from Operations
            
            (32,770)
            
            
            (303,830)Other
                Income (Expense)Interest
                expense
            
            -
            
            
            (40,489)Gain
                from change in warrant liability
            
            57,290
            
            
            95,001Gain/(loss)
                from change in derivative liability
            
            589,766
            
            
            (132,274)Accretion
                of convertible debt discount
            
            (84,114)
            
            
            (131,248)Debt
                issuance costs
            
            (5,459)
            
            
            (12,103)Total
                Other Income (Expense)
            
            557,483
            
            
            (221,113)Loss
                from continuing operations before income taxes
            
            524,713
            
            
            (524,943)Provision
                for income taxes
            
            -
            
            
            -Net
                loss from continuing operations
            
            524,713
            
            
            (524,943)Discontinued
                operationsLoss
                from discontinued operations - Sespe
            
            17,605
            
            
            (48,201)Gain/(Loss)
                from Discontinued Operations
            
            17,605
            
            
            (48,201)Net
                Loss
            $
            542,318
            
            $
            (573,144)(Loss)
                earnings per weighted average share ofcommon
                stock outstanding - basic and dilutedFrom
                continuing operations
            $
            0.01
            
            $
            (0.02)From
                discontinued operations
            
            0.00
            
            
            (0.00)Total
                (loss) earnings per share - basic and diluted
            $
            0.01
            
            $
            (0.02)Weighted-average
                shares outstanding - basic and diluted
            
            42,616,806
            
            
            36,715,133





-4-





2007
            
            2006Increase
                (decrease) in cash and cash equivalents:Net
                loss
            $
            542,318
            
            $
            (573,144)Adjustments
                to reconcile net loss to net cash usedin
                operating activities:Accretion
                of convertible debt discount
            
            84,114
            
            
            131,248(Gain)/loss
                from change in derivative liability
            
            (589,766)
            
            
            132,274Gain
                from change in warrant liability
            
            (57,290)
            
            
            (95,001)Non-cash
                interest associated with derivative liabilities
            
            -
            
            
            14,977Consulting
                expense related to warrants granted
            
            -
            
            
            222,606Loss
                from discontinued operations - Sespe
            
            6,942
            
            
            5,953Amortization
                of deferred financing costs
            
            5,459
            
            
            13,253Changes
                in operating assets and liabilities:Increase
                in accrued interest on convertible notes
            
            -
            
            
            24,361(Decrease)/increase
                in accounts payable and accrued expenses
            
            (95,964)
            
            
            57,676Decrease
                in liabilities of discontinued - Sespe
            
            (50,862)
            
            
            (68,290)Net
                cash used in operating activities
            
            (155,049)
            
            
            (134,087)Cash
                flow from investing activities:Net
                cash used in investing activities
            
            -
            
            
            -Cash
                flow from financing activities:Proceeds
                from notes payable - shareholders
            
            50,000
            
            
            86,371Payments
                on notes payable - shareholders
            
            -
            
            
            (49,271)Proceeds
                from loans
            
            200,000
            
            
            -Proceeds
                from convertible notes payable
            
            -
            
            
            100,000Increase
                in deferred financing costs
            
            -
            
            
            (3,013)Net
                cash generated by financing activities
            
            250,000
            
            
            134,087Net
                increase in cash and cash equivalents
            
            94,951
            
            
            -Cash
                and cash equivalents at beginning of year
            
            -
            
            
            -Cash
                and cash equivalents at end of period
            $
            94,951
            
            $
            -**Supplementary
                disclosures of cash flow information**Cash
                paid during the year forInterest
            $
            -
            
            $
            -Taxes
            $
            -
            
            $
            -








-5-


During
      the three months ended March 31, 2007, the Company entered into no non-cash
      transactions.





During
      the three months ended March 31, 2006, the Company entered into the following
      non-cash transactions:


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


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





**1.**  **Summary
      of Significant Accounting Policies**





Organization
      and Line of Business





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





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





On
      May
      11, 2007 an Agreement and Plan of Merger was executed between Kaire
      Holdings Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass,
      whereby YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation. H&H Glass was formed in 1989 and
      distributes Asian glass to North America








History





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





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







Principles
      of Consolidation





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


-6-


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





Basis
      of Presentation





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





The
      accompanying unaudited interim consolidated financial statements represent
      the
      financial activity of Kaire Holdings Incorporated and its subsidiaries. The
      consolidated financial statements for the three months ended March 31, 2007,
      have been prepared in accordance with generally accepted accounting principles
      for interim financial information in the US and in accordance with the
      instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly,
      the
      financial statements do not include all of the information and footnotes
      required by generally accepted accounting principles for complete financial
      statements. In the opinion of management, all adjustments (consisting of normal
      recurring accruals) considered necessary for a fair presentation have been
      included. For further information, refer to consolidated financial statements
      and footnotes thereto for the fiscal quarter ended March 31, 2007, included
      herein. The consolidated financial statements include the accounts of the
      Company and its majority-owned subsidiaries. All inter-company transactions
      were
      eliminated. The financial statements and notes are representations of the
      management and the Board of Directors who are responsible for their integrity
      and objectivity.





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








Estimates





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








Cash
      and Cash Equivalents





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


-7-


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





Revenue
      Recognition





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








Net
      Client Revenue





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








Third-Party
      Contractual Adjustments





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





For
      the
      period ended March 31, 2007, there were no gross revenues of discontinued
      operations (Sespe).





For
      the
      three months ended March 31, 2006, gross revenues were $306,104 less
      approximately $20,018 of contractual adjustments based on reimbursement
      contracts, resulting in net third-party contract revenues of approximately
      $286,086.





All
      revenues of Sespe Pharmacy are reported in the accompanying financial statements
      as components of “Net loss from discontinued operations (Sespe)” (see Note
      14).








Net
      Loss per Share





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








Inventory





Inventory
      consists primarily of pharmaceuticals and health care products and is stated
      at
      the lower of cost or market on a first-in-first-out basis. Sespe had no
      inventory as of March 31, 2007. Inventory as of December 31, 2006, is reported
      in the accompanying financial statements as a component of “Liabilities of
      discontinued operations (Sespe)” (see Note 14).








-8-


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





Property
      and Equipment





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








Stock
      Warrants Issued to Third Parties





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








Income
      Taxes





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


-9-


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





Fair
      Value of Financial Instruments





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








Convertible
      Debt Financing and Derivative Liabilities





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





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





At
      each
      balance sheet date, the Company adjusts the derivative financial instruments
      to
      their estimated fair value and analyzes the instruments to determine their
      classification as a liability or equity. As of March 31, 2007, the estimated
      fair value of the Company’s derivative liability was $1,110,646, as well as a
      warrant liability of $80,168. As of December 31, 2006, the estimated fair value
      of the Company’s derivative liability was $1,700,412, as well as a warrant
      liability of $137,458. The estimated fair value of the debt features was
      determined using the probability weighted averaged expected cash flows / Lattice
      Model. The model uses several assumptions including: historical stock price
      volatility (utilizing a rolling 120 day period), risk-free interest rate
      (3.50%), remaining maturity, and the closing price of the Company’s common stock
      to determine estimated fair value of the derivative asset. In valuing the debt
      features at December 31, 2006, the Company used the closing price of $0.025
      and
      the respective conversion and exercise prices for the warrants. For the period
      ended March 31, 2007, there was an increase in the market value of the Company’s
      common stock to $0.014 from $0.010 at December 31, 2006.








Deferred
      Financing Costs





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


-10-


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





Stock-Based
      Compensation





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





Specifically,
      the Company adopted SFAS No. 123R using the “prospective method” This statement
      replaced FAS-123, *Accounting
      for Stock-Based Compensation* ,
      supersedes APB Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      amends FAS-95, *Statement
      of Cash Flows* .
      FAS-123R requires companies to apply a fair-value-based measurement method
      in
      accounting for shared-based payment transactions with employees and to record
      compensation cost for all stock awards granted after the required effective
      date
      and for awards modified, repurchased or cancelled after that date. The scope
      of
      FAS-123R encompasses a wide range of share-based compensation arrangements,
      including share options, restricted share plans, performance-based awards,
      share
      appreciation rights, and employee share purchase plans. All employee stock
      option grants made since the beginning of fiscal 2005 have been expensed over
      the related stock option vesting period based on the fair value at the date
      the
      options are granted. Prior to fiscal 2005, the Company applied Accounting
      Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to
      Employees,” and related interpretations in accounting for stock options. The
      Company did not have any unvested employee stock options or warrants outstanding
      as of the three month period ending March 31, 2007.





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





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








Comprehensive
      Income (Loss)





Statement
      of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”
(SFAS 130) established standards for reporting and display of comprehensive
      income (loss) and its components in a full set of general-purpose financial
      statements. Comprehensive income consists of net income and unrealized gains
      (losses) on available-for-sale securities; foreign currency translation
      adjustments; changes in market values of future contracts that qualify as a
      hedge; and negative equity adjustments recognized in accordance with SFAS No.
      87. The Company, however, does not have any components of comprehensive income
      (loss) as defined by SFAS 130 and therefore, for the three-month periods ended
      March 31, 2007 and 2006, comprehensive loss is equivalent to the Company’s net
      loss.


-11-


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





Advertising
      Costs





The
      Company expenses advertising and marketing costs as they are incurred. There
      were no advertising and marketing costs for the periods ended March 31, 2007
      and
      2006.








Long-Lived
      Assets





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








Recent
      Accounting Pronouncements





In
      June
      2006, the FASB issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes—an interpretation of FASB Statement No.
      109* (FIN
      48). FIN 48 provides guidance for the recognition, derecognition and measurement
      in financial statements of tax positions taken in previously filed tax returns
      or tax positions expected to be taken in tax returns. FIN 48 requires an entity
      to recognize the financial statement impact of a tax position when it is more
      likely than not that the position will be sustained upon examination. If the
      tax
      position meets the more-likely-than-not recognition threshold, the tax effect
      is
      recognized at the largest amount of the benefit that is greater than fifty
      percent likely of being realized upon ultimate settlement. The Company will
      be
      required to adopt FIN 48 as of January 1, 2007, with any cumulative effect
      of
      the change in accounting principle recorded as an adjustment to opening retained
      earnings. The Company is currently evaluating the impact of FIN 48 and has
      not
      yet determined the effect on its earnings or financial position.





In
      March
      2006, the FASB issued SFAS No. 156, *Accounting
      for Servicing of Financial Assets—an amendment of FASB Statement No.
      140.* Companies are required to apply SFAS No. 156 as of the first annual reporting
      period that begins after September 15, 2006. The Company does not believe
      adoption of SFAS No. 156 will have a material effect on its unaudited condensed
      consolidated financial position, results of operations or cash
      flows.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,”
which defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS No. 157 does not require any new fair value
      measurements, but provides guidance on how to measure fair value by providing
      a
      fair value hierarchy used to classify the source of the information. This
      statement is effective on the Company beginning July 1, 2008. The Company
      is currently assessing the potential impact that the adoption of SFAS
      No. 157 will have on its financial statements.


-12-


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





In
      September 2006, the FASB issued SFAS No. 158, Employer’s Accounting
      for Defined Benefit Pension and Other Postretirement Plans, an Amendment of
      FASB
      Statements No. 87, 88, 106 and 132(R), which applies to all plan sponsors
      who offer defined benefit postretirement plans. SFAS No. 158 requires
      recognition of the funded status of a defined benefit postretirement plan in
      the
      statement of financial position and expanded disclosures in the notes to
      financial statements. The Company adopted this provision for the year ended
      December 31, 2006 and the adoption did not have a material impact on its
      consolidated financial position. In addition, SFAS No. 158 requires
      measurement of plan assets and benefit obligations as of the date of the plan
      sponsor’s fiscal year end. The Company is required to adopt the measurement
      provision of SFAS No. 158 for its fiscal year ending December 31,
      2008. The Company is in the process of evaluating the impact of the measurement
      provision of SFAS No. 158 on its 2008 consolidated financial position,
      operations and cash flows. The
      Company is currently assessing the potential impact that the adoption of SFAS
      158 will have on its financial statements; however, the impact is not expected
      to be material.





In
      June
      2006, the FASB ratified the consensus on Emerging Issues Task Force
      (“EITF”) Issue No. 06-3, “How Taxes Collected from Customers and
      Remitted to Governmental Authorities Should Be Presented in the Income
      Statement” (“EITF No. 06-3”). The scope of EITF No. 06-3 includes any
      tax assessed by a governmental authority that is directly imposed on a
      revenue-producing transaction between a seller and a customer and may include,
      but is not limited to, sales, use, value added, Universal Service Fund
      (“USF”) contributions and some excise taxes.  The Task Force affirmed
      its conclusion that entities should present these taxes in the income statement
      on either a gross or a net basis, based on their accounting policy, which should
      be disclosed pursuant to APB Opinion No. 22, “Disclosure of Accounting
      Policies.”  If such taxes are significant and are presented on a gross
      basis, the amounts of those taxes should be disclosed.  The consensus on
      EITF No. 06-3 will be effective for interim and annual reporting periods
      beginning after December 15, 2006.  The Company currently does not
      show sales tax billed to its customers on the income statement but records
      the
      same as a liability.





In
      September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108
      was issued in order to eliminate the diversity of practice surrounding how
      public companies quantify financial statement misstatements. In SAB 108, the
      SEC
      staff established an approach that requires quantification of financial
      statement misstatements based on the effects of the misstatements on each of
      the
      company’s financial statements and the related financial statement disclosures.
      This model is commonly referred to as a “dual approach” because it requires
      quantification of errors under both the iron curtain and the roll-over methods.
      The Company currently uses, and has historically applied, the dual method for
      quantifying identified financial statement misstatements. The Company applied
      the provisions of SAB 108 in connection with the preparation of the annual
      financial statements for the year ending December 31, 2006. The adoption of
      SAB 108 did not have a significant effect on its financial position, results
      of
      operations, or cash flows.


-13-


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





Recent
      Accounting Pronouncements (continued)





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











**2.**  **Going
      Concern**





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern. However, although the Company has a profit for
      the
      three months ended March 31, 2007 of $542,318 because of gains in warrant and
      derivative liabilities, it has experienced a loss of $573,144 for the same
      period prior year. The Company has also experienced net losses of $1,313,550
      and
      $2,160,123 for the years ended December 31, 2006 and 2005, respectively. The
      Company also had a net working deficit of $4,472,474 and $5,014,791 for the
      periods ended March 31, 2007, and December 31, 2006 respectively. Additionally,
      the Company must raise additional capital to meet its working capital needs.
      If
      the Company is unable to raise sufficient capital to fund its operations for
      the
      Health Advocacy program, it might be required to discontinue its pharmacy
      operations. These factors raise substantial doubt about the Company’s ability to
      continue as a going concern. In view of the matters described above,
      recoverability of a major portion of the recorded asset amounts shown in the
      accompanying balance sheet is dependent upon the Company’s ability to generate
      sufficient sales volume to cover its operating expenses and to raise sufficient
      capital to meet its payment obligations. The financial statements do not include
      any adjustments relating to the recoverability and classification of recorded
      asset amounts, or amounts and classification of liabilities that might be
      necessary should the Company be unable to continue in existence.


-14-


**2.**  **Going
      Concern (continued)**





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





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





Also,
      on
      May 11, 2007 an Agreement and Plan of Merger was executed between Kaire
      Holdings Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass,
      whereby YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.











**3.**  **Accounts
      Receivable - Trade**





In
      the
      three months ended March 31, 2007 and 2006, approximately 0% and 43.6% of net
      revenues of continuing operations respectively were derived under federal and
      state insurance reimbursement programs with 0% and 56.4% respectively coming
      from private party reimbursements and other third parties. For the three-month
      period ending March 31, 2007 and 2006, the breakout is as follows:





2007
            
            2006Medi-Cal
            0%
            
            43.6%Medi-Care
            0%
            
            0%Private
                Party
            0%
            
            30.1%Other
                third-parties
            0%
            
            26.3%








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





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


-15-


**3.**  **Accounts
      Receivable - Trade (continued)**





Accounts
      receivable, net of Reserve for doubtful accounts, are reported as components
      of
“Liabilities of discontinued operations (Sespe)” in the accompanying financial
      statements (see Note 14). As of March 31, 2007, 10% of Sespe Pharmacy’s accounts
      receivable were reserved as doubtful.











**4.**  **Convertible
      Notes Payable**





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





Date
                of Note
            
            Amount
                of Notes
            
            Conversion
                Price(1)
            
            Term
                of NoteDecember
                12, 2003 (2)
            
            $
            676,576
            
            $
                0.04 or 70%
            
            3
                yearsMay
                3, 2004
            
            
            650,000
            
            $
                0.09 or 85%
            
            3
                yearsMarch
                29, 2005
            
            
            125,000
            
            $
                0.04 or 85%
            
            1
                yearJune
                23, 2005
            
            
            350,000
            
            $
                0.03 or 80%
            
            2
                yearsDecember
                13, 2005 (2)
            
            
            150,000
            
            70%
            
            2
                yearsMarch
                13, 2006 (2)
            
            
            100,000
            
            70%
            
            2
                yearsApril
                11, 2006 (2)
            
            
            100,000
            
            70%
            
            2
                yearsTotal
                convertible notes
            
            
            2,151,576Less
                unamortized bond discount
            
            
            (120,523)Net
                convertible notes
            
            $
            2,031,053








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





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


(2)  no
      warrants issued with this financing transaction.




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





The
      Company filed the convertible note and warrant documents for the May 3, 2004
      funding in the Form SB-2, on June 21, 2004, which was declared effective on
      February 14, 2006. The Notes were entered into pursuant to the terms of a
      subscription agreement between the Company and the Holders, which was also
      included in the respective filings.


-16-


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





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





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





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





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





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





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





The
      debt
      discount is being accreted using the effective interest method over the term
      of
      the note. The value of the discount on the converted notes on the books is
      being
      accreted over the term of the note (three years). For the three months ended
      March 31, 2007 and 2006, the Company accreted $84,114 and $131,248,
      respectively, of debt discount related to the Notes.





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





-17-


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





Warrants
      Issued





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





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





These
      amounts have been classified as a derivative instrument and recorded as a
      liability on the Company’s balance sheet in accordance with current
      authoritative guidance. The estimated fair value of the warrants was determined
      using the Black-Scholes option-pricing model with a closing price of on the
      date
      of issuance and the respective exercise price, a 5 year term, and the volatility
      factor relative to the date of issuance. The model uses several assumptions
      including: historical stock price volatility (utilizing a rolling 120 day
      period), risk-free interest rate (3.50%), remaining time till maturity, and
      the
      closing price of the Company’s common stock to determine estimated fair value of
      the derivative liability. In valuing the warrants at December 31, 2005, the
      Company used the closing price of $0.025, the respective exercise price, the
      remaining term on each warrant, and a volatility of 113%. In accordance with
      the
      provisions of SFAS No. 133, Accounting for Derivative Instruments, the Company
      is required to adjust the carrying value of the instrument to its fair value
      at
      each balance sheet date and recognize any change since the prior balance sheet
      date as a component of Other Income (Expense). The warrant derivative liability
      at December 31, 2005, had increased to a fair value of $126,095, due in part
      to
      a decrease in the market value of the Company’s common stock to $0.025 from
      $0.055 at December 31, 2004 which resulted in Other Income of $105,771 on the
      Company’s books.





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





For
      the
      year ended December 31, 2006, the warrant derivative liability had increased
      to
      a value of $137,458, due to the issuance of the warrant in February 2006 with
      a
      valuation at issuance of $222,606 offset by a decrease in warrant values due
      to
      a decrease in the market value of the Company’s common stock to $0.010 from
      $0.025 at December 31, 2005, which resulted in an “Other Income” item of
      $211,243 for the year ended December 31, 2006. The Company used a closing price
      of $0.010, the respective exercise prices, remaining time till maturity and
      a
      153% volatility factor.


-18-


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





Warrants
      Issued (continued)





For
      the
      three months ended March 31, 2007, the warrant derivative liability had
      decreased to a value of $80,168, due to the cancellation of warrant issued
      in
      February 2006 with a valuation at issuance of $222,606 offset by increases
      in
      warrant values due to an increase in the market value of the Company’s common
      stock to $0.014 from $0.010 at December 31, 2006, which resulted in an “Other
      Income” item of $57,290 for the three-month period ended March 31, 2007. The
      Company used a closing price of $0.014, the respective exercise prices,
      remaining time till maturity and a 197% volatility factor.





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








Debt
      Features





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





Pursuant
      to the terms of the Notes, these notes are convertible at the option of the
      holder, at anytime on or prior to maturity. There is an additional interest
      rate
      adjustment feature, a liquidated damages clause, a cash premium option as well
      as the redemption option. The debt features represents an embedded derivative
      that is required to be accounted for apart from the underlying Notes. At
      issuance of the Notes, the debt features had an estimated initial fair value
      as
      follows, which was recorded as a discount to the Notes and a derivative
      liability on the consolidated balance sheet.





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





-19-


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





Debt
      Features (continued)





In
      subsequent periods, if the price of the security changes, the embedded
      derivative financial instrument related to the debt features will be adjusted
      to
      the fair value with the corresponding charge or credit to Other Expense or
      Income. The estimated fair value of the debt features was determined using
      the
      probability weighted averaged expected cash flows / Lattice Model with the
      closing price on original date of issuance, a conversion price based on the
      terms of the respective contract, a period based on the terms of the notes,
      and
      a volatility factor on the date of issuance. The model uses several assumptions
      including: historical stock price volatility (utilizing a rolling 120 day
      period), risk-free interest rate (3.50%), remaining maturity, and the closing
      price of the Company’s common stock to determine estimated fair value of the
      derivative liability. In valuing the debt features at March 31, 2007 the Company
      used the closing price of $0.014 and the respective conversion price, a
      remaining term coinciding with each contract, and a volatility of
      197% . For
      the
      Quarter ended March 31, 2007, the estimated value of the debt features decreased
      to $1,110,646, thus the Company recorded Other Income on the consolidated
      statement of operations for the change in fair value of the debt features
      related to these notes of $589,766 for the Quarter ended March 31, 2007.





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





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





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





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





For
      the
      three months ended March 31, 2007, the Company recorded Other Income of $589,766
      and $57,290, related to the decrease in value of the debt features and decrease
      in value of the warrants, respectively. A tabular reconciliation of this
      adjustment follows:


-20-


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





Debt
      Features (continued)





For
      the
      three months ended March 31, 2007:





$
            57,290
            income,
                decrease in value of 2003, 2004, 2005, 2006 and 2007 warrant
                liability589,766
            income,
                decrease in value of 2003, 2004, 2005, 2006 and 2007 derivative
                liability$
            647,056
            other
                income related to convertible debt





For
      the
      three months ended March 31, 2006:





$
            95,001
            income,
                decrease in value of 2003, 2004, 2005 and 2006 and warrant
                liability(132,274)
            expense,
                increase in value of 2003, 2004, 2005 and 2006 derivative
                liability$
            37,273
            other
                expense related to convertible debt





For
      the
      three months ended March 31, 2007:





$
            0
            of
                interest expense related to accretion of 2003 convertible
                debt48,239
            of
                interest expense related to accretion of 2004 convertible
                debt23,136
            of
                interest expense related to accretion of 2005 convertible
                debt12,739
            of
                interest expense related to accretion of 2006 convertible
                debt$
            84,114
            of
                interest expense related to convertible debt





For
      the
      three months ended March 31, 2006:





$
            26,169
            of
                interest expense related to accretion of 2003 convertible
                debt51,999
            of
                interest expense related to accretion of 2004 convertible
                debt50,906
            of
                interest expense related to accretion of 2005 convertible
                debt2,174
            of
                interest expense related to accretion of 2006 convertible
                debt$
            131,248
            of
                interest expense related to convertible
                debt





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





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





$
            1,946,939
            December
                31, 2006 value0
            original
                carrying value on 2007 convertible debt84,114
            accretion
                of convertible debt$
            2,031,053
            March
                31, 2007 carrying value of debt





-21-


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





Debt
      Features (continued)





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





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








$
            1,700,412
            December
                31, 2006 value of derivative liability0
            original
                values of 2007 derivative liability(324,510)
            decrease
                in values of 2003 derivative liability(2,204)
            decrease
                in values of 2004 derivative liability(187,993)
            decrease
                in values of 2005 derivative liability(75,059)
            decrease
                in values of 2006 derivative liability$
            1,110,646
            March
                31, 2007 value of derivative
                liability








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





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











$
            137,458
            December
                31, 2006 value of warrant liability0
            original
                carrying values of 2006 warrant liability8,072
            expense,
                increase in value of 2004 warrant liability27,341
            expense,
                increase in value of 2005 warrant liability(92,703)
            income,
                decrease in values of 2006 warrant liability$
            80,168
            March
                31, 2007 value of warrant liability








-22-


**5.**  **Common
      Stock Transactions**





Common
      stock transactions during the three months ending March 31,
      2007





None








Common
      stock transactions during the three months ending March 31, 2006





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











**6.**  **Related
      Party Transactions**





None











**7.**  **Property
      and Equipment**





Property
      and equipment included in discontinued operations at March 31, 2007 and December
      31, 2006, consisted of the following:





March
            
            December2007
            
            2006Furniture
                and fixtures
            $
            -
            
            $
            85,000Vehicles
            
            -
            
            
            14,712Computers
                and equipment
            
            -
            
            
            22,094-
            
            
            121,806Less
                accumulated depreciation and amortization
            
            (-)
            
            
            (121,806)Total
            $
            -
            
            $
            0








Depreciation
      and amortization expense for the three months ended March 31, 2007 and 2006,
      was
      $0 and $5,935, respectively.





Depreciation
      expenses are reported as Other Expenses in “Loss from discontinued operations
      (Sespe)” in the accompanying financial statements (see Note
      14).


-23-


**8.**  **Accounts
      Payable and Accrued Expenses**





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





March
                31, 2007
            
            December
                31, 2006Accounts
                payable
            $
            20,669
            
            $
            75,982Accrued
                professional and related fees
            
            74,300
            
            
            114,950Accrued
                officer’s compensation
            
            118,143
            
            
            118,143Accrued
                settlements
            
            25,692
            
            
            25,692Total
            $
            238,804
            
            $
            334,767








Accounts
      payable and accrued expenses of Sespe are reported as components of “Liabilities
      of discontinued operations (Sespe)” in the accompanying financial statements
      (see Note 14) and consisted of the following:.





2007
            
            2006Accounts
                payable
            $
            252,476
            
            $
            327,963Accrued
                liabilities
            
            1,175
            
            
            1,175Accrued
                payroll and related liabilities
            
            19,645
            
            
            37,340Accrued
                settlements
            
            7,024
            
            
            7,024Sales
                tax payable
            
            -
            
            
            43Total
            $
            280,320
            
            $
            373,545











**9.**  **Commitments
      and Contingencies**





Litigation





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





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





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


-24-


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





Litigation
      (continued)





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





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





On
      April
      29, 2002, outside counsel contacted the DHS to discuss its findings and present
      the documentation supporting their position. DHS informed outside counsel that
      they would have to follow the standard appeal process, which normally requires
      two or more months to complete. Classic Care Pharmacy instructed outside counsel
      to seek an ex parte temporary restraining order against the DHS for their
      failure to show cause regarding their actions. On May 8, 2002, in the Superior
      Court for the state of California, the Court granted Classic Care’s ex parte
      request issuing a preliminary injunction against the DHS and reinstated Classic
      Care Pharmacy’s medical provider number. The Court set May 24, 2002 as the date
      for the DHS to show cause. On May 24, 2002, the DHS was still not prepared
      to
      show cause. The court granted a 30-day extension. Classic
      Care, Inc. and Classic Care Pharmacy administrative appeal failed. Once the
      appeal took place the Superior court could no longer uphold our lack for due
      process claim and the DHS canceled Classic Care Pharmacy’s medical provider
      number. The justice department took no further action against Classic Care
      Pharmacy. The Company dissolved Classic Care, Inc. and Classic Care Pharmacy.





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








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





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





-25-


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





Litigation
      (continued)





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





On
      January 20, 2005, McKesson Medical-Surgical, Inc. (“Plaintiff”) filed a
      complaint against Effective Health, Inc., a subsidiary of Kaire, for failure
      to
      pay the principal sum of $17,466 for goods and/or services. A settlement was
      reached in October 2005 calling for Effective Health to pay $2,000 upon
      execution and $1,300 a month until the balance is paid off. The balance owed
      as
      of December 31, 2006, and March 31, 2007, was $1,375, and is included in the
      accompanying financial statements as a component of “Liabilities of discontinued
      operations (Sespe)” (see Note 14).








*Ventura
      County Superior Court, Case No. CIV234713*





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





The
      parties to that action entered into a settlement and mutual release agreement
      in
      October 2005, wherein EHI agreed to pay the aggregate sum of $12,587 in
      accordance with structured terms spanning over approximately eight (8) months.
      Although most of that sum has been paid, EHI defaulted and, on or about October
      5, 2006, IPC obtained a default judgment against EHI for the principal sum.
      The
      balance owed as of December 31, 2006, and March 31, 2007, was $5,649, and is
      included in the accompanying financial statements as a component of “Liabilities
      of discontinued operations (Sespe)” (see Note 14).








*Medical
      License*





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








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





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





Pharm-Aid
      alleges that EHI has failed to pay the principal sum of $25,279 for staffing
      services rendered. Given the fact that EHI was served on October 26, 2006,
      the
      Company’s counsel feels that they have not gathered sufficient facts in order to
      render an opinion as to the validity of Pharm-Aid’s claim. The Company has
      recorded a liability which is included in the accompanying financial statements
      as a component of “Liabilities of discontinued operations (Sespe)” (see Note
      14).


-26-


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





Litigation
      (continued)





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





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








Leases





*Operating
      leases*





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





Rent
      expense for the three months ended March 31, 2007 an2 2006, was $0 and $8,870,
      respectively, and is included in the accompanying financial statements as a
      component of “Loss from discontinued operations (Sespe)” (see Note
      14).








Employment
      Agreements





*Chief
      Executive Officer Compensation*





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





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





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


-27-


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





Consulting
      Agreements





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











**10.**  **Stock
      Options and Warrants**





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





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





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





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





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





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


-28-


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








The
      following table summarizes information with respect to stock warrants
      outstanding and exercisable at March 31, 2007:





Warrants
                Outstanding
            
            Warrants
                ExercisableRange
                of Exercise
              Prices
            
            Number
              Outstanding
                as of March 31, 2007
            
            Weighted
              Average
              Remaining
                Contractual Life
            
            Weighted
              Average
              Exercise
              Price
            
            Number
                Exercisable as of March 31, 2007
            
            Weighted
              Average
              Exercise
              Price$0.03
                - $0.17
            
            25,972,221
            
            2.83
            
            $
            0.06
            
            25,972,221
            
            $
            0.0625,972,221
            
            2.83
            
            $
            0.06
            
            25,972,221
            
            $
            0.06








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





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








-29-


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





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





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








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











**11.**  **Loss
      per Share**





Earnings
      per share have been calculated using the weighted average number of shares
      outstanding during each period. As of March 31, 2007 and 2006, potentially
      dilutive securities consist of convertible debentures convertible into
      179,298,000 and 179,298,000 common shares and warrants convertible into
      25,972,221 and 37,972,221 shares respectively. Earnings per share-dilutive
      does
      not include the effect of potentially dilutive securities for the periods ended
      March 31, 2007 and 2006. The loss from operations for the period ended March
      31,
      2007, and the loss from operations and the net loss for the period ended March
      31, 2006, make these securities anti-dilutive.





-30-


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





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





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





There
      was
      no income or loss related to the discontinued operations of Classic Care during
      the three months ended March 31, 2007 and 2006.











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





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


-31-





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





March
                31, 2007
            
            December
                31, 2006Assets:Cash
            $
            31
            
            $
            43Accounts
                receivable
            
            -
            
            
            7,168Inventory
            
            -
            
            
            46,454Total
                assets
            $
            31
            
            $
            53,665Liabilities:Accounts
                payable and accrued expenses
            $
            (280,351)
            
            $
            (373,545)Note
                payable - related party
            
            -
            
            
            (4,360)Total
                liabilities
            $
            (280,351)
            
            $
            (377,905)Net
                Assets (Liabilities) of Discontinued Operations
            $
            (280,320)
            
            $
            (324,240)








The
      following is a breakdown of the operations of Sespe Pharmacy discontinued
      operations for the period ended March 31, 2007 and 2006:





2007
            
            2006Revenues
            $
            -
            
            $
            286,086Cost
                of sales
            
            -
            
            
            (213,364)Operating
                expenses
            
            (51,895)
            
            
            (114,970)Other
                income
            
            69,500
            
            
            -Other
                expense
            
            -
            
            
            (5,953)Net
                Income (loss)
            $
            17,605
            
            $
            (48,201)











**14.**  **Subsequent
      Events**





Merger
      with H&H Glass Corporation





On
      January 23, 2007, Kaire Holdings Corporation’s and its wholly owned subsidiary
      YesRx.com executed a Letter of Intent whereby YesRx.com will acquire all of
      the
      outstanding Stock of H&H Glass Corporation, an Illinois corporation. The
      terms of the acquisition includes the issuance of approximately $8 million
      in
      the common stock of the Company. In addition, as part of the transaction, all
      current convertible note holders have agreed to restructure their debt into
      zero
      coupon fixed rate convertible preferred shares with a two year hold on any
      conversions. The Agreement and Plan of Merger was consummated on May 11,
      2007.





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





Plan
      of Operation





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




·
            On
                January 23, 2007, Kaire Holdings, Inc., through its subsidiary YesRx.com,
                signed a letter of intent to acquire H&H Glass, an Illinois
                corporation, which wasformed
                in1989
                and distributes Asian glass to North America. In fiscal year December
                31,
                2005, H&H Glass had net revenues of approximately $13.5 millionand
                net earnings of approximately $0.5 million. This acquisition was
                consummated on May 11, 2007 with the execution of the Agreement and
                Plan
                of Merger by the parties.





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





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





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





Short
      Term





·
            Continue
                growing revenue and profits through the existing
                business;





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





Long
      Term





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





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








-32-














Results
      of Operations





Three
      Months Ended March 31, 2006 Compared to March 31, 2005





Revenue:





Revenue
      is part of discontinued operations which are discussed below.







Cost
      of
      Goods Sold:





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








Gross
      Profit:




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








Operating
      Expenses:





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





Operating
      expenses for the period ending March 31, 2007 was $32,770 compared to $303,830
      for the same period in 2006, or a decrease of $271,060 (89.2%). The decrease
      in
      operating expenses was mostly attributable to decreases in the following: 1)
      general administration of $246,110 (88.2%) and 2) Salaries and related expenses
      of $24,950 (100.0%) as a result of the downsizing of the business. The $246,110
      decrease in general and administrative expense was primarily due to consulting
      expense recorded in 2006 in connection with warrants issued to a consultant
      in
      exchange for professional services valued at $222,606. These warrants were
      cancelled in January 2007.




Other
      Income (Expense):





Interest
      expense for the period ending March 31, 2007 was $0 compared to $40,489 for
      the
      same period in 2006, for a decrease of $40,489 (100.0%) due to a freeze on
      interest charges on the convertible debt as part of the acquisition of H&H
      Glass. Gain
      from
      the change in warrant liability for the periods ending March 31, 2007 and 2006
      was $57,290 and $95,001 respectively for a decrease of $37,711 (39.7%). This
      decrease was a result of an increase in the valuation of the warrant liability.
      Derivative liability income/(expense) for the periods ending March 31, 2007
      and
      2006 was $589,766 and ($132,274) for a decrease in expense of $722,040 (545.9%).
      This decrease in expense was a result of an increase in the valuation of the
      derivative liability. Accretion of convertible debt discount expense for the
      periods ending March 31, 2007 and 2006 was $84,114 and $131,248 respectively
      for
      a decrease of $47,134 (35.9%). The decrease is a result an increase in the
      valuation of the derivative liability. Debt issuance costs for the period ending
      March 31, 2007 and 2006 was $5,459 and $12,103 respectively for a decrease
      of
      $6,644 (54.9%) which is a result of the costs associated with the issuance
      of
      additional debt subsequent to June 30, 2005.





Discontinued
      Operations:





Classic
      Care: No activity








Sespe
      Pharmacy (Effective Health, Inc.):





Revenue





Net
      revenue from Sespe Pharmacy discontinued operations for the three month period
      ended March 31, 2007 was $0 as compared to $286,086 for the same period in
      2006,
      or a decrease of $286,086 (100.0%). The
      decrease in sales is a result of the discontinuation of the pharmacy business
      as
      of February 4, 2007.





Cost
      of
      Goods Sold





Cost
      of
      goods sold from Sespe Pharmacy discontinued operations
      for the three month period ended March 31, 2007 was $0 as compared to $213,364
      for the same period in 2006, or a decrease of $213,364 (100.0%). The
      decrease in cost of goods sold is a result of the discontinuation of the
      pharmacy business as of February 4, 2007.







Operating
      Expenses:





Operating
      expenses from Sespe Pharmacy discontinued operations for the three month period
      ending March 31, 2007 was $51,895 compared to expenses of $114,970 for the
      same
      period in 2006, or a decrease of $63,075 (54.9%). The decrease in operating
      expenses is a result of the discontinuation of the pharmacy business as of
      February 4, 2007.





Other
      Income:





Other
      income from Sespe Pharmacy discontinued operations for the three-month period
      ending March 31, 2007, was $69,500, compared to $0 for the same period in 2006.
      This other income was entirely due to the write off of accounts payable related
      to services that would no longer be provided due to the discontinuation of
      the
      pharmacy business in February 2007.





Other
      Expense:





Other
      expenses from Sespe Pharmacy discontinued operations for the three month period
      ending March 31, 2007 were $0 compared to $5,953 for the same period in 2006,
      or
      a decrease of $5,953 (100.0%). The decrease in other expense is entirely due
      to
      depreciation expense related to the property, plant and equipment which was
      disposed of as a result of the discontinuation of the pharmacy business as
      of
      February 4, 2007.




Federal
      Income Tax





No
      provision was made for Federal income tax since the Company has incurred
      significant net operating losses from inception. Through the month period ending
      March 31, 2007, the Company incurred a net income after discontinued operations
      for tax purposes of approximately $542,318. The net operating loss carry forward
      may be used to reduce taxable income through the year 2014. The Company's tax
      returns have not been audited by the Internal Revenue Service. The carry forward
      amounts may therefore be subject to audit and adjustment. As a result of the
      Tax
      Reform Act, the availability of net operating loss carry forwards can be
      deferred, reduced or eliminated under certain circumstances. Net operating
      losses in the State of California were not available for use during 1992 and
      the
      carry forward period has generally been reduced from fifteen years to five
      years





The
      decision to discontinue operations was based on our inability to adequately
      grow
      revenues through none Medi-Cal clients. That being the case, we decided to
      change business directions in 2007 in an industry that had fewer road blocks.
      That decision resulted in the acquisition of H&H Glass by our YesRx.com
      subsidiary consummated on May 11, 2007.







Liquidity
      and Capital Resources





Cash
      flow
      used in operations for the three month period ending March 31, 2007 amounted
      to
      ($155,049), which mainly consisted of the following: 1) gain from the change
      in
      derivative liability of $589,766, 2) gain from the change in warrant liability
      of $57,290, 3) decrease in account payable and accrued expenses of $95,964
      and
      4) a decrease in liabilities of discontinued - Sespe of $50,862 offset by the
      following: 1) the net profit for the three months ending March 31, 2007 of
      $542,318, 2) accretion of convertible debt discount of $84,118, 3) gain from
      discontinued operations - Sespe of $6,942 4) amortization of deferred financing
      costs of $5,459




Net
      cash
      used in investing activities for the three month period ending March 31, 2006
      was $nil.





Net
      cash
      generated from financing activities for the three month period ending March
      31,
      2007 was $250,000 which consisted primarily of proceeds from notes payable
      -
      shareholder of $50,000 and proceeds from a third party loan of $200,000.





On
      March
      31, 2007 the Company had total assets of $96,398 compared to $6,906 on December
      31, 2006, an increase of $89,492 or 1,295.9%. The Company had a total
      stockholder's deficit of $4,472,474 on March 31, 2007, compared to a
      stockholders deficit of $5,014,791 on December 31, 2006, a decrease of $542,317
      or 10.8%. As of March 31, 2007 the Company's working capital position increased
      by $542,317 (10.8%) from a working capital deficit of $5,014,791 at December
      31,
      2006 to a working capital deficit of $4,472,474 at March 31, 2007. This result
      was attributed primarily to 1)
      increase in cash of $94,951 (no cash at December 31, 2006), 2) decrease in
      accounts payable and accrued expenses of $ 95,963 (28.7%), 3) decrease in the
      derivative liability of $589,766 (34.7%), 4) decrease in the warrant liability
      of $57,290 (41.7%), and 5) a decrease in discontinued operation liabilities
      of
      $43,920 (13.5%), offset by 1) a decrease in deferred financing costs of $5,459
      (79.0%), 2) an increase in advances from shareholders of $50,000 (50.4%), 3)
      an
      increase in notes payable of $200,000 (no such loan at December 31, 2006),and
      4)
      a decrease in convertible debt discount of $84,114.





Estimated
      future cash requirements





Over
      the
      next twelve months, management is of the opinion that sufficient working capital
      will be obtained from operations and external financing to meet our operating
      needs however it is unlikely that there will be sufficient capital to meet
      our
      non operational needs. Kaire Holdings basically has no operating expenses and
      as
      of May 11, 2007 it acquired H&H Glass through its subsidiary YesRx.com,
      which is profitable and has a positive cash flow. More information will be
      available upon the completion of the audit of H&H Glass. However, management
      anticipates that H&H Glass will have adequate cash flow over the next twelve
      months without the need for outside capital.





Subsequent
      Events :





On
      May
      11, 2007 an Agreement and Plan of Merger was executed between Kaire
      Holdings Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass,
      whereby YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.





Going
      Concern





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern. However, though the Company has a profit for the
      three months ended March 31, 2007 of $542,318 as a result of gains in warrant
      and derivative liabilities, it has experienced a loss of $573,144 for the same
      period prior year. The Company has also experienced net losses of $1,313,551
      and
      $2,160,123 for the years ended December 31, 2006 and 2005, respectively. The
      Company also had a net working deficit of $4,472,474 and $5,014,791 for the
      periods ended March 31, 2007 and 2006 respectively. Additionally, the Company
      must raise additional capital to meet its working capital needs. These factors
      raise substantial doubt about the Company’s ability to continue as a going
      concern. In view of the matters described above, recoverability of a major
      portion of the recorded asset amounts shown in the accompanying balance sheet
      is
      dependent upon the Company’s ability to generate sufficient sales volume to
      cover its operating expenses and to raise sufficient capital to meet its payment
      obligations. The financial statements do not include any adjustments relating
      to
      the recoverability and classification of recorded asset amounts, or amounts
      and
      classification of liabilities that might be necessary should the Company be
      unable to continue in existence.





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





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





Also,
      on
      May 11, 2007 an Agreement and Plan of Merger was executed between Kaire
      Holdings Incorporated, its wholly-owned subsidiary YesRx.com, and H&H Glass,
      whereby YesRx.com will acquire all of the outstanding stock of H&H Glass
      Corporation, an Illinois corporation.





-33-




ITEM 3.
      CONTROLS AND PROCEDURES




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





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





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


-34-




PART
      II.
      OTHER INFORMATION




**Item
      1.**  **Legal
      Proceedings**





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





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





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





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





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





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





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








-35-


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





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





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





On
      January 20, 2005, McKesson Medical-Surgical, Inc. (“Plaintiff”) filed a
      complaint against Effective Health, Inc., a subsidiary of Kaire, for failure
      to
      pay the principal sum of $17,466 for goods and/or services. A settlement was
      reached in October 2005 calling for Effective Health to pay $2,000 upon
      execution and $1,300 a month until the balance is paid off. The balance owed
      as
      of March 31, 2007 was $1,375, and is included in the accompanying financial
      statements as a component of “Liabilities of discontinued operations (Sespe)”
(see Note 14).





*Ventura
      County Superior Court, Case No. CIV234713*





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





The
      parties to that action entered into a settlement and mutual release agreement
      in
      October 2005, wherein EHI agreed to pay the aggregate sum of $12,587 in
      accordance with structured terms spanning over approximately eight (8) months.
      Although most of that sum has been paid, EHI defaulted and, on or about October
      5, 2006, IPC obtained a default judgment against EHI for the principal sum.
      The
      balance owed as of March 31, 2007 was $5,649, and is included in the
      accompanying financial statements as a component of “Liabilities of discontinued
      operations (Sespe)” (see Note 14).





*Medical
      License*





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











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





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





Pharm-Aid
      alleges that EHI has failed to pay the principal sum of $25,279 for staffing
      services rendered. Given the fact that EHI was served on October 26, 2006,
      the
      Company’s counsel feels that they have not gathered sufficient facts in order to
      render an opinion as to the validity of Pharm-Aid’s claim. The Company has
      recorded a liability which is included in the accompanying financial statements
      as a component of “Liabilities of discontinued operations (Sespe)” (see Note
      14).


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








ITEM
      2  Changes
      in Securities and Use of Proceeds





None




ITEM
      3.  Defaults
      Upon Senior Securities





None





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





None





ITEM
      5.  Other
      Information





None





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








a)
      Exhibits





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


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





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


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





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


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





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


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





(b)  Reports
      on Form 8-K:





1)
      February 2, 2007:  Item
      4.01
      Change in Registrant’s Certifying Accountant - Pohl, McNabola, Berg &


Co.,
      LLP
      (“PMB”) consummated a merger with Helin,
      Donovan, Trubee & Wilkinson., LLP (“HDTW”).




2)
      February 5, 2007:  Item
      2.01
      Acquisition or Disposition of Assets **- O** n
      January
      23, 2007, Kaire Holdings  Corporation’s
      and it’s wholly owned subsidiary YesRx.com executed a Letter of Intent whereby
      YesRx.com will  acquire
      all of the outstanding Stock of H&H Glass Corporation, an Illinois
      corporation.





3)
      April
      9, 2007:  Item
      5.02. Departure of Principal Officer - As of April 9, 2007, Randall Jones was


removed
      as Chief Financial Officer of Kaire Holdings, Inc.





4)
      May
      14, 2007:  Item
      2.01
      Acquisition or Disposition of Assets - On
      May
      11, 2007, with the due diligence


completed
      for both side, the parties consummated the merger with the execution of the
      Agreement and Plan of


Merger












































-36-








SIGNATURES











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








KAIRE
      HOLDINGS INCORPORATED.


(Registrant)











Dated:
      May 21, 2007  By: /s/ Steven
      R.Westlund


Steven Westlund


Chief
      Executive Officer, Chairman


Principal
      Financial Officer and Director














-37-