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SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K/A
 (AMENDMENT NO. 1)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 for the fiscal year ended December 31, 2005 or
 o
    
    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 0-22019
 HEALTH GRADES, INC.
  Delaware(State or other jurisdiction of
    
    62-1623449incorporation or organization)
    
    (I.R.S. Employer Identification No.)500 Golden Ridge Road Suite 100Golden, Colorado
    
    80401(Address of principal executive offices)
    
    (Zip Code)
   Title of each class
    
    Name of each exchange on which registeredNone
    
    None
  
 o þ
 o þ
 þ o
 o
  o o þ
 o þ




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Directors of the Registrant
 Kerry R. Hicks
 Peter H. Cheesbrough
 Leslie S. Matthews, M.D.
 John Quattrone,
 J.D. Kleinke,
  Audit Committee Financial Expert




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Code of Conduct
  Section 16(a) Beneficial Ownership Reporting Compliance
   Summary of Cash and Certain Other Compensation
  Summary Compensation Table
 AwardsAnnual Compensation
    
    SecuritiesUnderlying
    
    All OtherName and Principal Position
    
    Year
    
    Salary (1)
    
    Bonus (2)
    
    Options
    
    Compensation(3)Kerry R. Hicks
    
    
    2005
    
    
    $
    303,008
    
    
    $
    87,534
    
    
    
    
    
    
    $
    6,570Chief Executive Officer
    
    
    2004
    
    
    $
    304,289
    
    
    $
    164,556
    
    
    
    
    
    
    $
    6,0002003
    
    
    $
    285,499
    
    
    $
    220,205
    
    
    
    
    
    
    $
    6,000David G. Hicks
    
    
    2005
    
    
    $
    206,212
    
    
    $
    34,195
    
    
    
    
    
    
    $
    6,456Executive Vice President
    
    
    2004
    
    
    $
    206,916
    
    
    $
    82,787
    
    
    
    
    
    
    $
    6,1502003
    
    
    $
    192,847
    
    
    $
    81,327
    
    
    
    
    
    
    $
    5,785Sarah Loughran
    
    
    2005
    
    
    $
    181,478
    
    
    $
    64,734
    
    
    
    
    
    
    $
    5,601Executive Vice President
    
    
    2004
    
    
    $
    173,517
    
    
    $
    78,188
    
    
    
    
    
    
    $
    5,2052003
    
    
    $
    154,121
    
    
    $
    91,227
    
    
    
    
    
    
    $
    4,624Allen Dodge
    
    
    2005
    
    
    $
    155,553
    
    
    $
    34,787
    
    
    
    
    
    
    $
    4,780Senior Vice President  Finance/CFO
    
    
    2004
    
    
    $
    155,162
    
    
    $
    64,074
    
    
    
    
    
    
    $
    4,6552003
    
    
    $
    133,239
    
    
    $
    76,502
    
    
    
    
    
    
    $
    3,997Certification of the CEOCertification of the CFO




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(1)
    
    Note that 2004 included 27 pay periods instead of the standard 26 and therefore annual
salary includes one additional pay period compared to 2005 and 2003.(2)
    
    Bonus amounts were paid in January 2006, relating to performance in 2005.(3)
    
    Includes amounts that we contributed for the account of the executive officers under our
Retirement Savings Plan.  Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
 Number of Securities
    
    Value of UnexercisedUnderlying Unexercised
    
    In-the-MoneyOptions at
    
    Options atShares
    
    
    
    
    
    Fiscal Year-End (#)
    
    Fiscal Year-End ($) (1)acquired on
    
    ValueName
    
    exercise (#)
    
    Realized ($)
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableKerry R. Hicks
    
    
    
    
    
    $
    
    
    
    
    2,289,823
    
    
    
    
    
    
    $
    14,471,681
    
    
    $
    David G. Hicks
    
    
    
    
    
    $
    
    
    
    
    1,124,940
    
    
    
    
    
    
    $
    7,109,621
    
    
    $
    Sarah Loughran
    
    
    50,000
    
    
    $
    147,500
    
    
    
    916,369
    
    
    
    
    
    
    $
    5,791,452
    
    
    $
    Allen Dodge
    
    
    
    
    
    $
    
    
    
    
    623,500
    
    
    
    
    
    
    $
    3,940,520
    
    
    $
    
 
 (1)
    
    Based on $6.32, the closing price of our common stock as reported on the Nasdaq Capital
Market on December 31, 2005.




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Compensation of Directors
   (i)
    
    $15,000 in cash; and(ii)
    
    subject to stockholder approval of an amendment and restatement of the Companys
1996 Equity Compensation Plan, $15,000 in restricted stock to be issued under the
Companys Equity Compensation Plan; fifty percent of such restricted stock shall vest on
each of the first two anniversaries of the date of grant.
  Ownership of Our Common Stock by Certain Persons
  Number of Shares
    
    Percent ofName of Beneficial Owner
    
    Beneficially Owned
    

Outstanding Shares (1)FMR Corp. (2)
    
    
    2,758,330
    
    
    
    9.7
    %Oberweis Asset Management, Inc. (3)
    
    
    1,425,318
    
    
    
    5.0
    %RS Investment Management Co. LLC (4)
    
    
    2,087,040
    
    
    
    7.4
    %Kerry R. Hicks (5)
    
    
    4,067,293
    
    
    
    13.3
    %David G. Hicks (6)
    
    
    1,641,598
    
    
    
    5.6
    %Sarah Loughran (7)
    
    
    1,505,331
    
    
    
    5.1
    %Allen Dodge (8)
    
    
    742,294
    
    
    
    2.6
    %Peter H. Cheesbrough (9)
    
    
    277,678
    
    
    
    1.0
    %Leslie S. Matthews, M.D.
    
    
    92,296
    
    
    
    *John Quattrone (10)
    
    
    153,333
    
    
    
    *J.D. Kleinke (11)
    
    
    133,333
    
    
    
    *All directors and executive
officers as a group (8 persons)
(12)
    
    
    8,603,156
    
    
    
    25.4
    %
 
 *
    
    Less than one percent.(1)
    
    Applicable percentage of ownership is based on 28,319,609 shares of common stock outstanding
on April 25, 2006. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and means voting or investment power with respect to
securities. Shares of common stock issuable upon the exercise of stock options exercisable
currently or within 60 days of April 25, 2006 (unless otherwise noted) are deemed outstanding
and to be beneficially owned by the person holding such option for purposes of computing such
persons percentage ownership but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. Except for shares held jointly with a persons
spouse or subject to applicable community property laws, or as indicated in the footnotes to
this table, each stockholder identified in the table possesses sole voting and investment
power with respect to all shares of common stock shown as beneficially owned by such
stockholder.(2)
    
    FMR Corp. has sole voting power with respect to 45,084 shares and sole dispositive power with
respect to 2,758,330 shares. Fidelity Management & Research Company (Fidelity), a
wholly-owned subsidiary of FMR Corp. and a registered investment advisor, beneficially owns
2,747,184 of these shares as a result of acting as an investment adviser to various registered
investment companies. Edward C. Johnson 3d and FMR Corp., through their control of Fidelity and
the funds each has sole power to dispose
of 2,747,184 shares owned by the Funds. Members of the family of Edward C. Johnson 3d, Chairman
of FMR Corp., are the




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predominant owners, directly or through trusts, of Series B shares of
common stock of FMR Corp., representing 49% of the voting power of FMR Corp. The Johnson family
group and all other Series B shareholders have entered into a shareholders voting agreement
under which all Series B shares will be voted in accordance with the majority vote of Series B
shares. Accordingly, through their ownership of voting common stock and the execution of the
shareholders voting agreement, members of the Johnson family may be deemed, under the
Investment Company Act of 1940, to form a controlling group with respect to FMR Corp. Neither
FMR Corp., nor Edward C. Johnson 3d has the sole power to vote or direct the voting of shares
owned directly by the Fidelity Funds, which power resides with the Funds Board of Trustees.
Fidelity carries out the voting of the shares under written guidelines established by the Funds
Board of Trustees. Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp.
and a bank, beneficially owns 11,146 shares as a result of its serving as investment manager of
the institutional account(s). Edward C. Johnson 3d and FMR Corp., through its control of
Fidelity Management Trust Company, each has sole dispositive and sole voting power over 11,146
shares owned by the institutional account(s) described above. The address of each of Fidelity
Management & Research Company, FMR Corp., Fidelity Management Trust Company and Edward C.
Johnson 3d is 82 Devonshire Street, Boston, Massachusetts 02109. The information in this note is
based on a Schedule 13G filed with the SEC on February 14, 2006 by FMR Corp. and Edward C.
Johnson 3d.(3)
    
    Oberweis Asset Management, Inc. (OAM) is an investment adviser, and James D. Oberweis and
James W. Oberweis are OAMs principal stockholders. OAM, James D. Oberweis and James W.
Oberweis have shared voting and dispositive power with respect to the 1,425,318 shares listed
in the table. The principal business address of OAM, James D. Oberweis and James W. Oberweis
is 3333 Warrenville Road, Suite 500, Lisle, Illinois 60532. The information in this note is
based on a Schedule 13G filed with the SEC on February 14, 2006 by OAM, James D. Oberweis and
James W. Oberweis.(4)
    
    RS Investment Management Co. LLC (RS LLC), is the general partner of RS Investment
Management, L.P. (RS L.P.), an investment adviser and a managing member of registered
investment advisers. George R. Hecht is a control person of RS LLC
and RS L.P. and George R. Hecht have shared voting and shared
dispositive power with respect to the 2,087,040 shares listed in the
table. The information in this note is based on a Schedule 13G
filed with the SEC on February 10, 2006 by RS LLC,
RS L.P. and Mr. Hecht, which did not disclose their
principal business address.(5)
    
    Includes 10,000 shares of common stock held by The David G. Hicks Irrevocable Childrens
Trust and 2,289,823 shares underlying stock options. Does not include 60,000 shares of common
stock held by The Hicks Family Irrevocable Trust, for which shares Mr. Hicks disclaims
beneficial ownership. Mr. Hicks address is 500 Golden Ridge Road, Suite 100, Golden,
Colorado 80401.(6)
    
    Includes 1,124,940 shares underlying stock options.(7)
    
    Includes 916,369 shares underlying stock options.(8)
    
    Includes 623,500 shares underlying stock options.(9)
    
    Includes 256,678 shares underlying stock options.(10)
    
    Includes 153,333 shares underlying stock options.(11)
    
    Includes 133,333 shares underlying stock options.(12)
    
    Includes 5,497,976 shares underlying stock options and 10,000 shares of common stock held by
The David G. Hicks Irrevocable Childrens Trust.




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(a)
    
    1. Financial Statements.
 The financial statements were included in our Annual Report on Form 10-K for the year ended
December 31, 2005 as initially filed and were listed on
page 31 of that report.
 2.
    
    Financial Statement Schedules.
  (b)
    
    Exhibits.




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EXHIBITNUMBER
    
    DESCRIPTION3.1
    
    Form of Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended December 31, 2001.)3.2
    
    Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our amendment to our Quarterly Report on
Form 10-Q/A for the quarter ended September 30, 2004, filed on May 2, 2005)10.1*
    
    1996 Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to our Annual Report on Form
10-K for the year ended December 31, 2002.)10.2.1
    
    Loan and Security Agreement dated May 10, 2002 by and between Health Grades, Inc., Healthcare Ratings, Inc.,
ProviderWeb.net, Inc., and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002.)10.2.2
    
    Loan Modification Agreement dated March 11, 2003 by and between Health Grades, Inc. and Silicon Valley Bank
(incorporated by reference to Exhibit 10.2.2 to our Annual Report on Form 10-K for the year ended December 31,
2002.)10.2.3
    
    Loan Modification Agreement dated February 20, 2004 by and between Health Grades, Inc. and Silicon Valley Bank
(incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31,
2004)10.2.4
    
    Loan Modification Agreement dated February 22, 2005 by and between Health Grades, Inc. and Silicon Valley Bank.
(incorporated by reference to exhibit 10.2.4 to our Form 10-K for the year ended December 31, 2005)10.3*
    
    Employment Agreement dated as of April 1, 1996 by and
between Specialty Care Network, Inc. and Kerry R.
Hicks (incorporated by reference to Exhibit 10.3 to
our Registration Statement on Form S-1
(File No. 333-17627))10.4.1*
    
    Employment Agreement between Specialty
Care Network, Inc. and David Hicks, dated March 1,
1996 (incorporated by reference to Exhibit 10.8 to
our Registration Statement of Form S-1(File No. 333-17627))10.4.2*
    
    Amendment to Employment Agreement between Specialty
Care Network, Inc. and David Hicks, dated December 2,
1997. (incorporated by reference to Exhibit 10.8.1 to
our Annual Report on Form 10-K for the
fiscal year ended December 31, 1997)10.5
    
    Building Lease between GR Development One, LLC, Landlord and Health Grades, Inc. Tenant. (incorporated by
reference to exhibit 10.5 to our Form 10-K for the year ended December 31, 2005)+10.6
    
    Directors Compensation+23.1
    
    Consent of Grant Thornton LLP++31.1^
    
    Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act.++31.2^
    
    Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act.+32.1
    
    Certification of the Chief Executive Officer pursuant to Rule 15d-14(b) under the Securities Exchange Act.+32.2
    
    Certification of the Chief Financial Officer pursuant to Rule 15d-14(b) under the Securities Exchange Act.
 
 *
    
    - Constitutes a management contract, compensatory plan or arrangement required to be filed
as an exhibit to this report.+
    
    - Previously filed.++
    
    - Filed herewith.




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Date: May 1, 2006
    By
    /s/ Kerry R. HicksKerry R. HicksChief Executive OfficerDate: May 1, 2006
    By
    /s/ Allen DodgeAllen DodgeSenior Vice President  Finance/CFO




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Exhibit Index
 EXHIBITNUMBER
    
    DESCRIPTION3.1
    
    Form of Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended December 31, 2001.)3.2
    
    Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our amendment to our Quarterly Report on
Form 10-Q/A for the quarter ended September 30, 2004, filed on May 2, 2005)10.1*
    
    1996 Equity Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to our Annual Report on Form
10-K for the year ended December 31, 2002.)10.2.1
    
    Loan and Security Agreement dated May 10, 2002 by and between Health Grades, Inc., Healthcare Ratings, Inc.,
ProviderWeb.net, Inc., and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002.10.2.2
    
    Loan Modification Agreement dated March 11, 2003 by and between Health Grades, Inc. and Silicon Valley Bank
(incorporated by reference to Exhibit 10.2.2 to our Annual Report on Form 10-K for the year ended December 31,
2002.)10.2.3
    
    Loan Modification Agreement dated February 20, 2004 by and between Health Grades, Inc. and Silicon Valley Bank
(incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31,
2004)10.2.4
    
    Loan Modification Agreement dated February 22, 2005 by and between Health Grades, Inc. and Silicon Valley Bank.
(incorporated by reference to exhibit 10.2.4 to our Form 10-K for the year ended December 31, 2005)10.3*
    
    Employment Agreement dated as of April 1, 1996 by and
between Specialty Care Network, Inc. and Kerry R.
Hicks (incorporated by reference to Exhibit 10.3 to
our Registration Statement on Form S-1
(File No. 333-17627))10.4.1*
    
    Employment Agreement between Specialty
Care Network, Inc. and David Hicks, dated March 1,
1996 (incorporated by reference to Exhibit 10.8 to
our Registration Statement of Form S-1(File No. 333-17627))10.4.2*
    
    Amendment to Employment Agreement between Specialty
Care Network, Inc. and David Hicks, dated December 2,
1997. (incorporated by reference to Exhibit 10.8.1 to
our Annual Report on Form 10-K for the
fiscal year ended December 31, 1997)10.5
    
    Building Lease between GR Development One, LLC, Landlord and Health Grades, Inc. Tenant. (incorporated by
reference to exhibit 10.5 to our Form 10-K for the year ended December 31, 2005)+10.6
    
    Directors Compensation+23.1
    
    Consent of Grant Thornton LLP++31.1^
    
    Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act.++31.2^
    
    Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act.+32.1
    
    Certification of the Chief Executive Officer pursuant to Rule 15d-14(b) under the Securities Exchange Act.+32.2
    
    Certification of the Chief Financial Officer pursuant to Rule 15d-14(b) under the Securities Exchange Act.
 
 *
    
    - Constitutes a management contract, compensatory plan or arrangement required to be filed
as an exhibit to this report.+
    
    - Previously filed.++
    
    - Filed herewith.