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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


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, 2006





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 0-30583*





**PRACTICEXPERT,
      INC.**


(Exact
      name of small business issuer as specified in its charter)




Nevada
            87-0622329(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                Number)





23975
                Park Sorrento Drive, No. 110
            91302Calabasas,
                CA
            (Zip
                Code)(Address
                of principal executive offices)





(818)
      591-0081)


(Issuer's
      telephone number, including area code)




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





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





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





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





Class
            
            Outstanding
                at May 10, 2006Common
                Stock, $.001 par value per share
            
            142,692,487
                Shares









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TABLE
      OF CONTENTS


PagePART
                I - FINANCIAL INFORMATION
            1ITEM
                1
            CONSOLIDATED
                FINANCIAL STATEMENTS
            1Consolidated
                Balance Sheet as of March 30,
                2006
            1Consolidated
                Statements of Operations for the three months
                ended March 31, 2006 and 2005
            2Consolidated
                Statements of Cash Flows for the three months
                ended March 31, 2006 and 2005
            3Notes
                to Consolidated Financial
                Statements
            4ITEM
                2
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF CONSOLIDATED
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            15ITEM
                3
            CONTROLS
                AND PROCEDURES
            17PART
                II - OTHER INFORMATION
            18ITEM
                1
            LEGAL
                PROCEEDINGS
            18ITEM
                2
            UNREGISTERED
                SALES OF EQUITY SECURITIES
            18ITEM
                4
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS
            18ITEM
                5
            OTHER
                INFORMATION
            18ITEM
                6
            EXHIBITS
            18






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**PART
      I - FINANCIAL INFORMATION**





**Item
      1. Consolidated Financial Statements**





**PRACTICEXPERT,
      INC.**


**BALANCE
      SHEET**


MARCH
      31,
      2006


(Unaudited)


**ASSETS****CURRENT
                  ASSETS:**Cash
                  & cash equivalents
              
              $
              222,172Accounts
                  receivable, net of $469,656 allowance for doubtful debts
              
              
              1,329,534Unbilled
                  receivables
              
              
              46,945Other
                  receivables
              
              
              100Total
                  current assets
              
              
              1,598,751**PROPERTY
                  AND EQUIPMENT, net**
              
              
              389,148**OTHER
                  ASSETS:**Deposits
              
              
              73,345**INTANGIBLES:**Client
                  list, net
              
              
              2,453,979Software,
                  net
              
              
              700,000Total
                  intangibles
              
              
              3,153,979$
              5,215,223**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****CURRENT
                  LIABILITIES:**Accounts
                  payable & accrued expenses
              
              $
              5,395,229Notes
                  payable - related parties
              
              
              254,144Notes
                  payable
              
              
              4,197,421Advances
              
              
              422,780Deferred
                  revenue
              
              
              368,751Other
                  current liabilities, including related party debt of
                  $219,439
              
              
              354,526Trust
                  account
              
              
              155,511Dividends
                  payable
              
              
              15,306Total
                  current liabilities
              
              
              11,163,668Notes
                  payable - long term
              
              
              100,000**COMMITMENTS****STOCKHOLDERS'
                  DEFICIT**Preferred
                  stock - unclassified, authorized shares 36,000,000, no par
                  valuenone
                  issued
              
              
              —Preferred
                  stock convertible - Series C, 6%, $.001 par value2,000,000
                  shares authorized; 41,170 issued and outstanding
              
              
              41Common
                  stock, $.001 par value, 200,000,000 shares authorized;142,692,487
                  issued and outstanding
              
              
              142,692Treasury
                  stock, 49,000 shares of common stock
              
              
              (285,000
              )Additional
                  paid in capital
              
              
              18,574,246Shares
                  to be issued
              
              
              689,210Accumulated
                  deficit
              
              
              (25,169,634
              )Total
                  stockholders' deficit
              
              
              (6,048,445
              )$
              5,215,223






The
      accompanying notes form an integral part of these unaudited consolidated
      financial statements




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**PRACTICEXPERT,
      INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATION**


**FOR
      THE THREE MONTH PERIODS ENDED MARCH 31, 2006 AND 2005**


(Unaudited)


**2006**
              
              **2005****(Restated)****Net
                  revenues**
              
              $
              2,881,781
              
              $
              4,733,718**Operating
                  expenses**Depreciation
                  & amortization
              
              
              391,248
              
              
              850,150Medical
                  billing and related services
              
              
              3,392,218
              
              
              4,826,603Total
                  operating expenses
              
              
              3,783,466
              
              
              5,676,753**Loss
                  from operations**
              
              
              (901,685
              )
              
              (943,035
              )**Non-operating
                  income (expense)**Gain
                  on settlement of debts
              
              
              —
              
              
              39,196Loss
                  on sale of inventory
              
              
              (12,045
              )
              
              —Interest
                  income
              
              
              —
              
              
              839Interest
                  expense
              
              
              (127,202
              )
              
              (56,809
              )Total
                  non-operating income (expense)
              
              
              (139,247
              )
              
              (16,774
              )**Loss
                  before income tax**
              
              
              (1,040,932
              )
              
              (959,809
              )**Income
                  taxes**
              
              
              —
              
              
              2,400**Loss
                  before discontinued items**
              
              
              (1,040,932
              )
              
              (962,209
              )**Discontinued
                  operations**Income
                  (loss) from operations to be disposed, net
              
              
              (25,430
              )
              
              11,587**Net
                  loss**
              
              $
              (1,066,362
              )
              $
              (950,622
              )**Basic
                  & diluted weighted average number of common stock
                  outstanding**
              
              
              142,692,487
              
              
              126,751,100**Basic
                  and diluted net loss per share**
              
              $
              (0.01
              )
              $
              (0.01
              )


*Basic
      & diluted weighted average number of shares is the same since the effect of
      dilutive securities is anti-diluted




The
      accompanying notes form an integral part of these unaudited consolidated
      financial statements




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**PRACTICEXPERT,
      INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE MONTH PERIODS ENDED MARCH 31, 2006 AND 2005**


(Unaudited)


**2006**
              
              **2005****(Restated)****CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss from continuing operations
              
              $
              (1,066,363
              )
              $
              (950,622
              )Adjustments
                  to reconcile net loss to net cash used inoperating
                  activities:Depreciation
                  and amortization
              
              
              391,208
              
              
              850,150Gain
                  on settlement of debts
              
              
              —
              
              
              (39,196
              )Shares
                  to be issued for interest
              
              
              22,680
              
              
              —Amortization
                  of discount
              
              
              25,452
              
              
              —Loss
                  on sale of inventory
              
              
              12,045
              
              
              —Warrants
                  issued
              
              
              75,467
              
              
              —**Changes
                  in operating assets and liabilities:**(Increase)
                  decrease in accounts receivable
              
              
              694,241
              
              
              (1,358,688
              )Decrease
                  in other receivable
              
              
              40,300
              
              
              —(Increase)
                  decrease in inventory
              
              
              95,714
              
              
              (139,802
              )Increase
                  in prepaid expenses
              
              
              —
              
              
              (32,379
              )Increase
                  in other current assets
              
              
              —
              
              
              (171,479
              )Increase
                  in other assets-deposit
              
              
              (7,520
              )
              
              (12,503
              )Increase
                  in accounts payable and accrued expense
              
              
              191,963
              
              
              257,749Decrease
                  in other current liabilities
              
              
              (9,833
              )
              
              (129,131
              )Increase
                  in due to physicians
              
              
              11,306
              
              
              —Increase
                  (decrease) in deferred revenue
              
              
              (708,019
              )
              
              414,798Total
                  adjustments
              
              
              835,003
              
              
              (360,481
              )**Net
                  cash used in operating activities**
              
              
              (231,360
              )
              
              (1,311,103
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Cash
                  received at acquisition of subsidiaries
              
              
              —
              
              
              20,023.00Cash
                  paid in acquisition of subsidiaries
              
              
              —
              
              
              (362,187
              )Sale
                  of property & equipment
              
              
              1,287
              
              
              (52,074
              )**Net
                  cash used in investing activities**
              
              
              1,287
              
              
              (394,238
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Payments
                  on loans from related parties
              
              
              —
              
              
              (86,704
              )Payments
                  on notes payable
              
              
              (105,468
              )
              
              —Proceed
                  from loans from related parties
              
              
              135,000
              
              
              89,826Proceed
                  from notes payable
              
              
              199,000
              
              
              1,662,095Cash
                  received from shares to be issued
              
              
              30,000
              
              
              11,269**Net
                  cash provided by financing activities**
              
              
              258,532
              
              
              1,676,486**NET
                  INCREASE IN CASH & CASH EQUIVALENTS**
              
              
              28,459
              
              
              (28,855
              )CASH
                  & CASH EQUIVALENTS, BEGINNING BALANCE
              
              
              193,715
              
              
              381,403**CASH
                  & CASH EQUIVALENTS, ENDING BALANCE**
              
              $
              222,174
              
              $
              352,548Cash
                  paid during the year for:Cash
                  paid for interest
              
              $
              —
              
              $
              8,625Cash
                  paid for taxes
              
              $
              —
              
              $
              —Non-cash
                  investing and financing activities:Shares
                  issued for acquisition of subsidiary
              
              $
              —
              
              $
              1,625,000Warrants
                  issued for debt discount
              
              $
              12,000
              
              $
              —






The
      accompanying notes form an integral part of these unaudited consolidated
      financial statements




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**PRACTICEXPERT,
      INC.**


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
      1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION**




PracticeXpert,
      Inc., a Nevada corporation (the “Company”), is a healthcare services and
      technology company, which is in the business of providing “turn-key”
administrative services to our clients, as well as developing and deploying
      systems, technologies and services designed to improve operational efficiencies,
      reduce billing errors and enhance cash flow for medical practitioners. The
      Company was incorporated under the name Engineering Services, Inc., on July
      13,
      1984. Since then, the Company has undergone a series of corporate name changes
      by amending its articles of incorporation, and discontinued a number of its
      businesses.





On
      April
      11, 2003, the Company entered into a stock purchase agreement with Practice
      Xpert Services Corp., a California corporation. Pursuant to this agreement,
      the
      Company purchased 92% of the outstanding shares of capital stock of Practice
      Xpert Services Corp. The shareholders of Practice Xpert Services Corp. received
      7,670,596 shares of common stock of the Company and 1,845,000 shares of Series
      C
      Preferred Stock of the Company; constituting 72.75% of the Company’s voting
      securities. As a condition thereto, the Company’s existing officers resigned and
      the Company’s board of directors appointed the executive officers of Practice
      Xpert Services Corp. to serve as our executive management team. On September
      30,
      2003, the Company purchased the remaining eight percent (8%) of the issued
      and
      outstanding shares of capital stock of Practice Xpert Services Corp. by issuing
      472,860 shares of common stock of the Company and 111,736 shares of Series
      C
      Preferred Stock of the Company to the shareholders of Practice Xpert Services
      Corp. As a result thereof, the Company owns all of issued and outstanding shares
      of capital stock of Practice Xpert Services Corp.





On
      June
      27, 2003, the Company entered into a stock purchase agreement for the sale
      of
      all of the outstanding shares of capital stock of Clover, Inc., one of its
      wholly-owned subsidiaries, to a former director, in exchange for the repurchase
      by the Company of 100,000 shares of common stock of the Company from such
      director. Clover was an operating subsidiary of one of the predecessor
      businesses of the Company.




According
      to the terms of the share exchange agreement, control of the Company passed
      to
      the shareholders of PracticeXpert Services Corp. This type of share exchange
      has
      been treated as a capital transaction accompanied by a recapitalization of
      Practice Xpert Services Corp. in substance, rather than a business combination,
      and is deemed a "reverse acquisition" for accounting purposes since the
      shareholders of Practice Xpert Services Corp. controlled a majority of the
      total
      common shares outstanding immediately following the consummation of the
      transactions contemplated by the share exchange agreement.




On
      July
      21, 2003, the Company changed its name to PracticeXpert, Inc.




PracticeXpert
      owns all of the issued and outstanding shares of capital stock of PracticeXpert
      of California, Inc., a California corporation, and PracticeXpert of Idaho,
      Inc.,
      an Idaho corporation.




On
      November 10, 2003, the Company completed the acquisition of National Healthcare
      Management Services, Inc., a West Virginia Corporation, which subsequently
      changed its name to PracticeXpert of West Virginia, Inc.




On
      March
      1, 2004, PracticeXpert of Texas, Inc., which was formed by the Company on
      November 7, 2003, completed its acquisition of the assets and liabilities of
      Singer MedScript, a Texas sole proprietorship.




On
      April
      28, 2004, the Company completed its acquisition of Cancer Care Network, Inc.,
      an
      Oklahoma corporation, which subsequently changed its name to PracticeXpert
      of
      Oklahoma, Inc.




On
      July
      31, 2003, the Company entered into an agreement to acquire Healthcare Billing
      Solutions, Inc., a Montana corporation, which was subsequently rescinded by
      the
      parties effective September 1, 2004. The loss from Healthcare Billing Solutions,
      Inc. for eight-month period ended August 31, 2004 has been included in the
      loss
      from discontinued operations along with a loss on disposal in the consolidated
      financial statements for the year ended December 31, 2004.




On
      January 3, 2005, the Company acquired Physician Informatics, Inc., doing
      business as PracticeOne, a provider of practice management and clinical
      management solutions, including outsourced medical billing and administrative
      services, as well as proprietary practice and clinical management software.
      This
      entity changed its name to PracticeXpert Systems, Inc. Under the terms of the
      Agreement of Purchase and Sale of Stock dated as of December 20, 2004 for such
      acquisition, the stockholders of PracticeOne were issued 12,500,000 shares
      of
      common stock of the Company, and a promissory note payable to its majority
      stockholder was issued. On June 30, 2005, such promissory note was converted
      into 10,000,000 shares of Common Stock of the Company, which resulted in a
      gain
      of $700,000. Additional purchase price consideration is payable to the selling
      shareholders as an earn-out based upon the results of operations of this entity
      for 2005, 2006 and 2007.





From
      March 11, 2005 to September 30, 2005, PracticeXpert of Idaho, Inc. managed
      an
      oncology medical facility in Yakima, Washington, which resulted in losses of
      $585,705, including write-offs of uncollectible amounts of $227,262.
      PracticeXpert of Idaho, Inc. terminated the management services agreement for
      such facility effective on November 23, 2005. Revenues from such agreement
      amounted to approximately $1,740,000 in 2005.




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On
      December 31, 2005, PracticeXpert of Texas, Inc. completed the sale of its
      medical transcription business to Transcend Services, Inc. Transcend Services
      will pay as purchase price consideration up to $500,000 over three years, on
      an
      earn-out basis, and made an initial payment on closing in the amount of $40,000.
      The amount of future consideration, if any, to be received under such earn-out
      will be based solely on the cash profits received from customers of the medical
      transcription business in existence on the date of closing.





**Reclassification**





For
      comparative purposes, prior period's consolidated financial statements have
      been
      reclassified to conform to report classifications of the current period.





Basis
      of
      presentation





The
      accompanying unaudited condensed consolidated interim financial statements
      have
      been prepared in accordance with the rules and regulations of the Securities
      and
      Exchange Commission for the presentation of interim financial information,
      but
      do not include all the information and footnotes required by generally accepted
      accounting principles for complete financial statements. The audited
      consolidated financial statements for the year ended December 31, 2005 were
      filed on April 28, 2006 with the Securities and Exchange Commission and is
      hereby referenced. In the opinion of management, all adjustments considered
      necessary for a fair presentation have been included. Operating results for
      the
      three month period ended March 31, 2006 are not necessarily indicative of the
      results that may be expected for the year ended December 31, 2006.





**Segment
      Reporting**





Statement
      of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About
      Segments of an Enterprise and Related Information" requires use of the
      "management approach" model for segment reporting. The management approach
      model
      is based on the way a company's management organizes segments within the company
      for making operating decisions and assessing performance. Reportable segments
      are based on products and services, geography, legal structure, management
      structure, or any other manner in which management disaggregates a company.
      Currently, SFAS 131 has no effect on the Company's consolidated financial
      statements as substantially all of the Company's operations are conducted in
      one
      industry segment.





Following
      is a summary of segment information by geographic unit for the period ended
      March 31, 2006:


CA
              
              ID
              
              TX
              
              OK
              
              WV
              
              NJ
              
              Unallocated
              
              TotalSales
              
              
              150,104
              
              
              242,334
              
              
              —
              
              
              1,043,420
              
              
              47,834
              
              
              1,398,088
              
              
              —
              
              
              2,881,781Operating
                  income (loss)
              
              
              (43,835
              )
              
              (127,220
              )
              
              (25,430
              )
              
              (66,043
              )
              
              3,585
              
              
              417,975
              
              
              (1,225,396
              )
              
              (1,066,364
              )Total
                  assets
              
              
              78,697
              
              
              203,954
              
              
              34,031
              
              
              842,891
              
              
              33,710
              
              
              943,940
              
              
              3,078,001
              
              
              5,215,224Capital
                  Expenditure
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Depreciation
                  and amortization
              
              
              —
              
              
              15,909
              
              
              —
              
              
              25,543
              
              
              —
              
              
              27,628
              
              
              322,167
              
              
              391,248


Following
      is a summary of segment information by geographic unit for the period ended
      March 31, 2005:




CA
              
              ID
              
              TX
              
              OK
              
              WV
              
              NJ
              
              Unallocated
              
              TotalSales
              
              
              260,852
              
              
              822,680
              
              
              290,383
              
              
              2,442,916
              
              
              104,346
              
              
              1,102,924
              
              
              —
              
              
              5,024,101Operating
                  income (loss)
              
              
              (557,378
              )
              
              284,168
              
              
              14,841
              
              
              470,357
              
              
              (6,373
              )
              
              (339,758
              )
              
              (794,050
              )
              
              (928,193
              )Total
                  assets
              
              
              183,204
              
              
              993,109
              
              
              196,459
              
              
              2,043,119
              
              
              70,417
              
              
              1,294,990
              
              
              11,125,541
              
              
              15,906,839Capital
                  Expenditure
              
              
              —
              
              
              —
              
              
              —
              
              
              21,113
              
              
              1,500
              
              
              29,461
              
              
              —
              
              
              52,074Depreciation
                  and amortization
              
              
              773
              
              
              11,889
              
              
              183
              
              
              23,213
              
              
              —
              
              
              33,528
              
              
              780,564
              
              
              850,150




**Principles
      of Consolidation**





The
      accompanying consolidated financial statements include the accounts of
      PracticeXpert, Inc., (legal acquirer, the "Parent"), and its 100% owned
      subsidiary, Practice Xpert Services Corporation and its subsidiaries,
      PracticeXpert of California, Inc., PracticeXpert of Idaho, Inc. PracticeXpert
      of
      West Virginia, Inc., PracticeXpert of Oklahoma, Inc., PracticeXpert of Texas,
      Inc., Physician Informatics, Inc. and its dormant subsidiaries, and
      Transcriptions Plus, Inc. All significant inter-company accounts and
      transactions have been eliminated in consolidation.




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**Recent
      Pronouncements**





In
      December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
      an
      Amendment of FASB Statement No. 123" ("FAS No.
      123R"). FAS No. 123R requires companies to recognize in the statement of
      operations the grant- date fair value of stock options and other equity-based
      compensation issued to employees. FAS No. 123R is effective beginning in the
      Company's first quarter of fiscal 2006. The Company believes that the adoption
      of this standard will have no material impact on its consolidated financial
      statements.





In
      May
      2005, the FASB issued SFAS No. 154, entitled Accounting Changes and Error
      Corrections--a replacement of APB Opinion No. 20 and FASB Statement No. 3.
      This
      Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
      No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
      the requirements for the accounting for and reporting of a change in accounting
      principle. This Statement applies to all voluntary changes in accounting
      principle. It also applies to changes required by an accounting pronouncement
      in
      the unusual instance that the pronouncement does not include specific transition
      provisions. Opinion 20 previously required that most voluntary changes in
      accounting principle be recognized by including in net income of the period
      of
      the change the cumulative effect of changing to the new accounting principle.
      This Statement requires retrospective application to prior periods' financial
      statements of changes in accounting principle, unless it is impracticable to
      determine either the period-specific effects or the cumulative effect of the
      change. This Statement defines retrospective application as the application
      of a
      different accounting principle to prior accounting periods as if that principle
      had always been used or as the adjustment of previously issued financial
      statements to reflect a change in the reporting entity. This Statement also
      redefines restatement as the revising of previously issued financial statements
      to reflect the correction of an error. The adoption of SFAS 154 did not impact
      the consolidated financial statements.




In
      June
      2005, the EITF reached consensus on Issue No. 05-6, Determining the Amortization
      Period for Leasehold Improvements ("EITF 05-6") EITF 05-6 provides guidance
      on
      determining the amortization period for leasehold improvements acquired in
      a
      business combination or acquired subsequent to lease inception. The guidance
      in
      EITF 05-6 will be applied prospectively and is effective for periods beginning
      after June 29, 2005. EITF 05-6 is not expected to have a material effect on
      its
      consolidated financial position or results of operations.





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments—an amendment of FASB Statements No. 133 and 140.” This
      Statement amends FASB Statements No. 133, “Accounting for Derivative Instruments
      and Hedging Activities,” and No. 140, “Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities.” This Statement resolves
      issues addressed in FASB Statement No. 133 Implementation Issue No. D1,
“Application of Statement 133 to Beneficial Interests in Securitized Financial
      Assets.” The Company believes that the adoption of this standard will have no
      material impact on its consolidated financial statements.




In
      March
      2006 FASB issued SFAS 156, “Accounting for Servicing of Financial Assets.” This
      Statement amends FASB Statement No. 140, “Accounting for Transfers and Servicing
      of Financial Assets and Extinguishments of Liabilities,” ** with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. This Statement:




1.
            Requires
                an entity to recognize a servicing asset or servicing liability each
                time
                it undertakes an obligation to service a financial asset by entering
                into
                a servicing contract.




2.
            Requires
                all separately recognized servicing assets and servicing liabilities
                to be
                initially measured at fair value, if practicable.




3.
            Permits
                an entity to choose ‘Amortization method’ or ‘Fair value measurement
                method’ for each class of separately recognized servicing assets and
                servicing liabilities.




4.
            At
                its initial adoption, permits a one-time reclassification of
                available-for-sale securities to trading securities by entities with
                recognized servicing rights, without calling into question the treatment
                of other available-for-sale securities under Statement 115, provided
                that
                the available-for-sale securities are identified in some manner as
                offsetting the entity’s exposure to changes in fair value of servicing
                assets or servicing liabilities that a servicer elects to subsequently
                measure at fair value.




5.
            Requires
                separate presentation of servicing assets and servicing liabilities
                subsequently measured at fair value in the Balance Sheet and additional
                disclosures for all separately recognized servicing assets and servicing
                liabilities.




This
      Statement is effective as of the beginning of the Company’s first fiscal year
      that begins after September 15, 2006. Management believes that this statement
      will not have a significant impact on the consolidated financial
      statements




**NOTE
      2 - BASIC AND DILUTED NET INCOME (LOSS) PER SHARE**





Basic
      and
      diluted net income (loss) per share for the three months ended March 31, 2006
      and 2005 were determined by dividing the net income (loss)
      for the periods by the weighted average number of both basic and diluted shares
      of common stock outstanding. All convertible preferred stock are regarded as
      common stock equivalents and are considered in the diluted net loss per share
      calculations.





Weighted
      average number of shares used to compute basic and diluted income (loss) per
      share is the same for the period ended March 31, 2006 and 2005, since the effect
      of the assumed conversion of options and warrants to purchase common shares
      would have an anti-dilutive effect.




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**NOTE
      3 - ACCOUNTS RECEIVABLE**




The
      Company has a net accounts receivable balance of $1,329,534 as of March 31,
      2006. In determining the allowance to be maintained, management considers many
      factors including industry and historical loss experience. The Company believes
      that the majority of its accounts receivable are collectible. The Company
      reserved $469,656 as an allowance for doubtful accounts.





**NOTE
      4 - PROPERTY AND EQUIPMENT**





Property
      and equipment comprised of following on March 31, 2006:


Furniture
                & fixtures
            
            $
            758,619Office
                equipment
            
            
            145,321Computer
                equipment
            
            
            666,841Leasehold
                improvement
            
            
            15,789Financing
                fees
            
            
            80,114Software
            
            
            501,8352,168,519Less
                Accumulated Depreciation & Amortization
            
            
            (1,779,371
            )$
            389,148





**NOTE
      5 - INTANGIBLE ASSETS**





Intangible
      assets consist of Software and Client lists. The Company evaluates intangible
      assets and other long-lived assets for impairment, at least on an annual basis
      and whenever events or changes in circumstances indicate that the carrying
      value
      may not be recoverable from its estimated future cash flows, or where the cost
      of determining value makes valuation impracticable. Recoverability of intangible
      assets and other long-lived assets is measured by comparing their net book
      value
      to the related projected undiscounted cash flows from these assets, considering
      a number of factors including past operating results, budgets, economic
      projections, market trends, and product development cycles. If the net book
      value of the asset exceeds the related undiscounted cash flows, the asset is
      considered impaired, and a second test is performed to measure the amount of
      impairment loss.





**Software:**





The
      Company capitalizes the cost of software and software licenses acquired from
      third party providers or acquired through acquisition. The costs of acquired
      software are amortized over three years. The Company makes on-going evaluations
      of the recoverability of its capitalized software by comparing the amount
      capitalized for each product to the estimated net realizable value of the
      product. If such evaluations indicate that the unamortized software costs exceed
      the net realizable value, the Company writes off the amount by which the
      unamortized software costs exceed net realizable value. The amortization for
      the
      three month period ended March 31, 2006 was $100,000 which compares to $100,000
      for the same time period in 2005.





The
      Company may from time to time capitalize certain computer software development
      costs in accordance with SFAS No. 86, "Accounting for the Costs of Computer
      Software to be Sold, Leased, or Otherwise Marketed." Costs incurred internally
      to create a computer software product or to develop an enhancement to an
      existing product are charged to expense when incurred as research and
      development expense until technological feasibility for the respective product
      is established. Thereafter, all software development costs are capitalized
      and
      reported at the lower of unamortized cost or net realizable value.
      Capitalization ceases when the product or enhancement is available for general
      release to customers. Currently the Company's internally generated products
      are
      all available for general release to its customers, and there all ongoing
      maintenance and development related to those products is expensed. For the
      three
      month period ended March 31, 2006, the Company did not capitalize any internal
      or external costs incurred to develop internal-use computer software.





Client
      lists:





The
      Company has client lists acquired through purchase of subsidiaries recorded
      at
      the carrying value of $2,453,979 and $7,359,109 as of March 31, 2006 and 2005,
      respectively. These client lists are amortized over one to nine years. The
      Company periodically evaluates the carrying value of long-lived assets to be
      held and used in accordance with SFAS 144. The Company records impairment loss
      if the Company determines that the undiscounted cash flows estimated to be
      generated by the client lists are less than the carrying amount. The
      amortization expense for the three month periods ended March 31, 2006 and 2005
      was $220,119 and $680,564, respectively.


The
      estimated aggregated amortization expenses for each of the five succeeding
      years
      are as follows:




Year
            
            Amortization
                ($)2007
            
            
            733,6952008
            
            
            676,9782009
            
            
            403,0602010
            
            
            88,189Yearly
                thereafter
            
            
            38,476




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**NOTE
      6 - OTHER ASSETS**




Other
      assets amounting to $73,345 comprised of a $37,600 insurance premium deposit
      and
      security deposits of $36,345.




**NOTE
      7 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES**





Accounts
      payable and accrued expenses consist of the following:


Accounts
                payable
            
            $
            3,759,469Accrued
                expenses
            
            
            742,415Accrued
                payroll and benefits
            
            
            847,824Accrued
                taxes
            
            
            45,521$
            5,395,229





**NOTE
      8 - NOTES PAYABLE, RELATED PARTIES**





Notes
      payable to related parties consist of the following:




Shareholder,
                bearing interest at 8%, due Feb. 17, 2007, unsecured
            
            
            119,144Shareholder’s
                family, bearing interest at 15%, due Oct. 1, 2006
            
            
            60,000Shareholder’s
                family, bearing interest at 15%, due August 1, 2006
            
            
            75,000Current
                portion
            
            $
            254,144





**NOTE
      9 -NOTES PAYABLE**


Note
                payable--interest rate LIBOR + 0.625%
            
            $
            4,000,000Note
                payable--interest rate 12.0% due in 2007
            
            
            100,000Note
                payable--interest rate 7.0% due in 2008
            
            
            100,000Line
                of credit--expires May 31, 2008
            
            
            104,135Notes
                payable -- interest rate 15%, due June 22, 2006
            
            
            25,000Notes
                payable -- interest rate 15%, due Oct 1, 2006
            
            
            24,000Note
                payable - interest rate 16%, due June 30, 2006
            
            
            50,000Total
            
            $
            4,403,135Less:
                non-current portion
            
            
            100,000Less:
                unamortized discount
            
            
            105,714Current
                portion
            
            $
            4,197,421




During
      the year ended December 31, 2005, the Company consummated a $1,000,000
      asset-based financing revolving credit facility for a term of three years with
      a
      lender. Amounts available under the Loan are limited to approximately eighty
      percent (80%) of qualified accounts receivable, and subject to further reserves,
      as determined from time to time by the lender, which will be less than the
      balance of accounts receivable as reflected on our Consolidated Balance Sheet.
      The collateral pledged for this line of credit was the accounts receivable
      and
      inventory of the Company. As of December 31, 2005, the Company did not meet
      the
      loan covenants as required by this loan. This revolving credit facility was
      canceled in January 2006.





**NOTE
      10 -DEFERRED REVENUE**





As
      of
      March 31, 2006, the Company has a balance of $368,751 of deferred revenue from
      a
      subsidiary acquired in the quarter ended March 31, 2005. The Company recognizes
      revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery
      of
      the product or service has occurred,
      (iii) sales price is fixed or determinable and (iv) collectibility is reasonably
      assured. If vendor specific evidence of fair value exists for elements of
      contract, the Company recognizes the revenue for delivered elements and defers
      revenue for undelivered elements.




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**NOTE
      11 -OTHER CURRENT LIABILITIES**





Other
      current liabilities consist of the following:


Advances
                from stockholders
            
            $
            219,439Credit
                lines payable
            
            
            64,845Credit
                lines payable
            
            
            63,789Other
                current liabilities
            
            
            6,453$
            354,526




The
      advances from shareholders are due on demand, unsecured and interest free.




**NOTE
      12 - COMMITMENTS**





The
      rent
      expense was $206,295 for the three month period ended March 31, 2006,
      respectively, which compared to $197,830 for the same period in 2005. The
      Company currently is in technical default on office leases in California and
      Idaho.





Future
      commitments under operating leases are as follows for the twelve months ending
      March 31:


2007
            
            
            582,2552008
            
            
            526,1122009
            
            
            465,2152010
            
            
            245,9742011
            
            
            12,426Thereafter
            
            
            12,945Total
                minimum lease payment
            
            $
            1,844,928





As
      additional consideration, the Company agreed to issue Company's Common Stock
      to
      the shareholders of PI (Cayman) Limited equal in dollar value to two times
      the
      projected annual cash flow from operations for each of the three consecutive
      calendar years starting 2005. These shares will be issued annually and will
      be
      priced at the average closing price of the Company for the 365 days preceding
      issuance.





**NOTE
      13 - INCOME TAXES**





No
      provision was made for Federal income tax since the Company has significant
      net
      operating losses. Through March 31, 2006, the Company incurred net operating
      losses for tax purposes of $13,640,000, approximately. The net operating loss
      carry forwards may be used to reduce taxable income through the year 2026.
      The
      availability of the Company's net operating loss carryforwards are subject
      to
      limitation if there is a 50% or more positive change in the ownership of the
      Company's stock. The provision for income taxes consists of the state minimum
      tax imposed on corporations.





Temporary
      differences which give rise to deferred tax assets and liabilities at March
      31,
      2006 consist mainly of net operating loss carryforward. The gross deferred
      tax
      asset balance as of March 31, 2006 was approximately $4,701,000. A 100%
      valuation allowance has been recorded for the deferred tax assets due to the
      uncertainty of its realization.





The
      following is a reconciliation of the provision for income taxes at the U.S.
      federal income tax rate to the income taxes reflected in the Consolidated
      Statements of Operations for the three months ended:




March
                31,
            
            March
                31,2006
            
            2005Tax
                expense (credit) at statutory rate-federal
            
            
            (34
            )%
            
            (34
            )%State
                tax expense net of federal tax
            
            
            (6
            )
            
            (6
            )Changes
                in valuation allowance
            
            
            40
            
            
            40Tax
                expense at actual rate
            
            
            —
            
            
            —






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**NOTE
      14 - RESTRICTED CASH**





Cash
      includes $155,511 of cash held in a separate bank account on behalf of the
      physicians. This amount represents cash collected by the Company on behalf
      of
      the physicians and is reflected as trust account in the balance sheet.





**NOTE
      15 - STOCK BASED COMPENSATION PLANS**





The
      Company adopted SFAS No. 123-R effective January 1, 2006 using the modified
      prospective method. Under this transition method, stock compensation expense
      recognized in the first quarter of 2006 includes compensation expense for all
      stock-based compensation awards granted on or after January 1, 2006, based
      on
      the grant date fair value estimated in accordance with the provisions of SFAS
      No. 123-R.





Prior
      to
      January 1, 2006, the Company measured stock compensation expense using he
      intrinsic value method of accounting in accordance with Accounting Principles
      Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees,” and
      related interpretations (AB No. 25). Thus, expense was generally not recognized
      for the company’s employee stock option and purchase plans.





Impact
      of adoption of SFAS No. 123-R





During
      the three month periods ended March 31, 2006 and 2005, no expense was recognized
      since the Company did not have any stock options vested during those periods.





The
      Company did not issued any stock option in the three month periods ended March
      31, 2006 and 2005. As of March 31, 2006, the number of stock options outstanding
      is 7,350,000.





**NOTE
      16 - COMMON STOCK**





Shares
      to be issued





The
      Company records an expense when it issues equity instruments to acquire goods
      and services. Restricted Stock issued for services is valued at the average
      fair
      market value of an equivalent amount of free trading shares of the Company
      as
      quoted on OTCBB on the date of issuance.





During
      the first quarter of 2006 the Company recorded 336,000 shares of restricted
      common stock to be issued valued at $7,680 as part of financing agreements
      and
      2,000,000 shares of restricted common stock valued at $30,000 as part a stock
      subscription that occurred during the quarter. In addition, the Company recorded
      560,329 shares of restricted common stock valued at $15,000 as part of interest
      paid on the 8% credit line. No stock was actually issued during the first
      quarter of 2006.





Common
      Stock Purchase Warrants




During
      the year ending December 31, 2005, the Company issued warrants to purchase
      6,900,000 shares of its common stock at an exercise price of $0.30 per share.
      The value of the warrants resulted in an $175,728 increase to Additional Paid
      in
      Capital and a corresponding offset to Unamortized Discount, which will be
      amortized to Interest Expense over the life of the loan. During the first
      quarter of 2006, $25,118 was amortized as interest expense and the Unamortized
      Discount as of March 31, 2006 is $94,047.




During
      the first quarter of 2006, the Company issued warrants to purchase 750,000
      shares of its common stock in association with new financing and carry an
      exercise price of $0.02 per share and life of 10 years. These warrants were
      value at $12,000 using the Black-schole option pricing model, which assumed
      a
      risk free interest rate of 4.64%, an expected stock volatility of 71%, and
      an
      expected life of 10 years.




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The
      value
      of the warrant was recorded as Unamortized Discount and was amortized over
      the
      life of the loan. During the first quarter of 2006, $333 was amortized as
      interest expense and the Unamortized Discount as of March 31, 2006 is
      $11,667.




During
      the year ended December 31, 2005, the Company issued warrants for consulting
      fees. During the first quarter of 2006, 678,205 warrants were vested. These
      warrants were value at $75,467 using the Black-schole option pricing model,
      which assumed a risk free interest rate of 4.64%, an expected stock volatility
      of 100%, and an expected life of 10 years. The value of these warrants was
      recorded as consulting expense.




**NOTE
      17 - RESTATEMENT OF QUARTERLY CONSOLIDATED FINANCIAL
      STATEMENTS**





The
      Company has revised its filings on Form 10-QSB for the three month periods
      ended
      March 31, 2005 in order to restate the carrying value of the promissory note
      (the “Note”) in the principal amount of $4,000,000 with PracticeOne, as debtor,
      and PI (Cayman) Limited, as lender, and record such Note at its fair value
      equal
      to the value of the common stock that would be issued upon its conversion.
      Accordingly, the carrying value of the Note will be reduced to the amount of
      $1,300,000, which is determined by multiplying the $0.13 closing market price
      of
      the Company’s common stock on January 3, 2005, the date the Note was issued in
      connection with the consummation of the PracticeOne acquisition, by the
      10,000,000 shares of common stock convertible under the Note. Accordingly,
      goodwill related to the PracticeOne acquisition was reduced by the amount of
      $2,700,000.




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The
      effect of the correction is as follows:


ASPREVIOUSLY
              
              ASREPORTED
              
              RESTATEDBALANCE
                  SHEETAs
                  of March 31, 2005Intangibles:Goodwill
              
              $
              4,864,419
              
              $
              2,164,419Total
                  assets
              
              $
              18,606,839
              
              $
              15,906,839Liabilities:Notes
                  payable
              
              $
              4,063,515
              
              $
              3,915,725Convertible
                  note payable
              
              $
              4,000,000
              
              $
              1,300,000Total
                  current liabilities
              
              $
              9,642,452
              
              $
              9,494,662Stockholder's
                  equity (deficit):Additional
                  paid in capital
              
              $
              17,280,370
              
              $
              17,441,595Accummulated
                  deficit
              
              $
              (12,419,390
              )
              $
              (12,432,825
              )Total
                  stockholder's equity (deficit)
              
              $
              4,810,351
              
              $
              4,958,141
   STATEMENT
                  OF OPERATIONSAs
                  of March 31, 2005Operating
                  expensesMedical
                  billing and related services
              
              $
              4,733,718
              
              $
              4,813,118Total
                  operating expenses
              
              $
              5,676,753
              
              $
              5,663,268Loss
                  from operations
              
              $
              (943,035
              )
              $
              (929,550
              )Loss
                  before income tax
              
              $
              (959,809
              )
              $
              (946,324
              )Loss
                  before discontinued items
              
              $
              (962,209
              )
              $
              (948,724
              )Net
                  loss
              
              $
              (950,622
              )
              $
              (937,137
              )
  CASH
                  FLOWSAs
                  of March 31, 2005Cash
                  flows from operating activities:Net
                  loss
              
              $
              (950,622
              )
              $
              (937,137
              )Adjustments
                  to recondile net loss to net cash used:Increase
                  in accounts payable and accrued expense
              
              $
              244,264
              
              $
              257,749Total
                  adjustments
              
              $
              (373,966
              )
              $
              (360,481
              )


**NOTE
      18 - RELATED PARTY TRANSACTIONS**





The
      Company has executed an amendment to an executive employment agreement with
      Michael Manahan, Chief Executive Officer whereby his salary is fixed at $85,000
      during the term of the contract. The Company also has executed an amendment
      to
      an executive employment agreement with Anthony Biele, Chief Financial Officer
      whereby his salary is reduced to $110,000 until October 23, 2006 at which time
      it increases to $150,000 The Company has executive employment agreements with
      Jonathan Doctor, President and Zima Hartz, Executive Vice President . These
      last
      two employment agreements provide for a salary based on our revenues, as
      follows:





REVENUE
                RUN RATE
            
            ANNUAL
                SALARY RATE$
                3.8 million
            
            $
            52,0005.0
                million
            
            
            62,73710.0
                million
            
            
            114,10515.0
                million
            
            
            154,10520.0
                million
            
            
            182,73725.0
                million
            
            
            200,000





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The
      Employment Agreements for Messrs. Manahan, Doctor and Hartz also provide for
      (i)
      bonus compensation in an amount equal to five percent (5%) of our net income
      before taxes, which is payable in cash or shares of Common Stock at the Board’s
      discretion, (ii) the issuance of options to purchase 500,000 shares of Common
      Stock at an exercise price of $0.12 per share, which vest immediately, and
      (iii)
      the issuance of options to purchase 1,500,000 shares of Common Stock at an
      exercise price of $0.30 per share, which vest ratably in equal increments over
      three years from the date of issuance.





The
      Employment Agreements for Messrs. Manahan, Doctor and Hartz provide that such
      agreements may
      be
      terminated by the executive, at the executive’s discretion, if there is
      more
      than a fifty percent (50%) change in our ownership or a substantive change
      in
      control or management. Upon such an occurrence, Messrs. Manahan, Doctor and
      Hartz will each be entitled to a lump sum payment of $1,000,000.





The
      Employment Agreement, as amended, for Anthony Biele has a term of four years,
      which expires on December 31, 2009. Such agreement also provides for (i) bonus
      compensation and (ii) the issuance of options to purchase 350,000 shares of
      Common Stock at an exercise price of $0.30 per share, which vest ratably in
      equal increments over four years from the date of issuance. In the event that
      Mr. Biele is terminated without cause as defined therein. Mr. Biele is entitled
      to 50% of his unpaid salary for the remaining term.







The
      Company is authorized to purchase on behalf of Messrs. Manahan, Doctor and
      Hartz
      up to $5,000 in shares of Common Stock in the open market each calendar month.
      The Company may also loan each such person up to $500,000 for him to purchase
      shares of Common Stock. The Company has not made any such purchases or
      loans.




Total
      compensation of $158,813 was recorded in three month period ended March 31,
      2006
      based on the agreements.




On
      March
      14, 2006 Corazon Manahan, wife of Michael Manahan, Chief Executive Officer,
      agreed to loan the Company $60,000 and a Promissory Note was issued with
      interest at 15% per annum for three months from the issuance date and 18% per
      annum thereafter until the principal is repaid on the October 1, 2006 maturity
      date. The note holder will be entitled to up to 375,000 shares of common stock
      of the Company.




During
      the quarter ended March 31, 2006, the Company obtained a note of $75,000 from
      Jonathan Doctor’s family member. The note is unsecured, past due, and bears and
      interest rate of 15% per annum.




On
      January 3, 2005, the Company consummated the transactions contemplated by that
      certain Agreement of Purchase and Sale of Stock dated as of December 20, 2004
      with PI (Cayman) Limited for the purchase of Physician Informatics, Inc. This
      agreement provides for (i) an earn-out payable in shares of Common Stock equal
      in dollar value to two times the annual cash flow from operations of Physician
      Informatics, Inc. for 2005, 2006 and 2007 and (ii) a fee equal to 8% per annum
      on the outstanding principal balance of our $4,000,000 loan with Citibank,
      N.A.,
      which is payable quarterly in shares of Common Stock. The Company has reserved
      for issuance shares of Common Stock to PI (Cayman) Limited, which are issuable
      in respect of the such earn-out for 2005. The Company has also granted a first
      right of refusal in favor of PI (Cayman) Limited to participate, in part or
      whole, on all of our future debt or equity financings in excess
      $250,000.




**NOTE
      19 - GOING CONCERN**





The
      accompanying consolidated financial statements have been prepared in conformity
      with generally accepted accounting principles, which contemplate continuation
      of
      the Company as a going concern. The Company has an accumulated deficit of
      $25,169,634 as of March 31, 2006 including the current period loss of
      $1,066,364. The continuing losses have adversely affected the liquidity of
      the
      Company. The Company faces continuing significant business risks including,
      but
      not limited to, its ability to maintain vendor and supplier relationships by
      making timely payments when due.





In
      view
      of the matters described in the preceding paragraph, recoverability of a major
      portion of the recorded asset amounts shown in the accompanying balance sheet
      is
      dependent upon continued operations of the Company, which in turn is dependent
      upon the Company's ability to raise additional capital, obtain financing and
      to
      succeed in its future operations. The consolidated 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 as a going concern.





Management
      has taken the following steps to revise its operating and financial
      requirements, which it believes are sufficient to provide the Company with
      the
      ability to continue as a going concern. Management devoted considerable effort
      during the period ended March 31, 2006, towards (i) obtaining debt financing
      (ii) controlling of salaries and general and administrative expenses, and (iii)
      management of accounts payable.




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**NOTE
      20 - SUBSEQUENT EVENTS (UNAUDITED)**





On
      April
      14, 2006, we received short-term financing from investors pursuant to the
      issuance and sale of one-year 12% Senior Secured Convertible Debentures with
      a
      face amount of $250,000, which have a term
      of
      one year. We have pledged the capital stock of our subsidiaries and granted
      a
      security interest in our assets and the assets of our subsidiaries in favor
      of
      such investors, which secures repayment of the debentures. Each of our
      subsidiaries has also guaranteed repayment of the debentures. In connection
      with
      the foregoing transaction, we issued warrants
      to purchase 12,000,000 shares of our common stock at an exercise price of $.001
      per share, expiring on April 10, 2016. We paid an investment banking fee to
      Midtown Partners & Co. LLC for its services in connection with arranging the
      foregoing transaction in the amount of $25,000 and the issuance of warrants
      to
      purchase 1,000,000 shares of our common stock at an exercise price of $.025
      per
      share, expiring on April 10, 2016.




On
      April
      6, 2006, the Company received approval to increase its authorized common stock
      with a par value of $0.001 from 200,000,000 to 250,000,000 shares.





During
      May 2006, a complaint was filed against the Company by a former employee for
      alleging breach of an agreement whereby the Company failed to pay a bonus due
      to
      such employee. The complaint alleges amount the amount due under the bonus
      agreement amounts to $219,179.  In addition the complaint seeks additional
      damages and fees totaling $13,000 plus other relief that the court deems just
      and equitable.  The Company is currently assessing the validity of the
      complaint and cannot determine the outcome at this time, however if successful,
      the complaint could have a material adverse effect on the consolidated financial
      statements.





On
      May
      23, 2006, PracticeXpert, Inc. (the "Company") received an additional $350,000
      in
      short-term financing, or an aggregate of $600,000, from investors (“Original
      Purchasers”)pursuant to the issuance and sale of one-year 12% Senior Secured
      Convertible Debentures and warrants to purchase shares of Common Stock of the
      Company. The Company had previously entered into a Securities Purchase Agreement
      dated as of April 11, 2006 with certain investors pursuant to which the Company
      issued and sold an aggregate principal amount of $250,000 of 12% Senior Secured
      Convertible Debentures of the Company (the "Original Debentures") and
      (ii)warrants to purchase an aggregate of 10,000,000 shares of Common Stock.
      In
      connection with the financing, the Company and the Original Purchasers have
      amended and restated the original agreement and other agreements related thereto
      to cover the increase of (A) the aggregate principal amount of the Debentures
      from $250,000 to $600,000 and certain other provisions, (B) the aggregate number
      of shares to be issued upon exercise of the warrants from 10,000,000 to
      90,000,000 and certain other provisions, and (C) the investors participating
      in
      the Financing.





The
      New
      Warrants have an exercise price of $.001 per share, expire on May 19, 2016
      and
      replace the Original Warrants. The New Debentures have a term of one year and
      expire on May 19, 2006, unless earlier terminated by the parties. At the
      Company's option, quarterly interest payments may be paid in cash or shares
      of
      Common Stock, which have been registered under the Securities Act of 1933,
      as
      amended (the "Act"). The Company has pledged the capital stock of all of its
      subsidiaries and granted a security interest in the assets of the Company and
      all of its subsidiaries. The Company has compensated Midtown Partners & Co.
      LLC for its services in arranging the Financing by making a cash


payment
      in the amount of $72,000 and by issuing warrants to purchase 4,500,000 shares
      of
      Common Stock at an exercise price of $.002 per share and warrants to purchase
      13,500,000 shares of Common Stock at an exercise price of $.001 per share,
      which
      expire on May 19, 2016. Such warrants replace the warrants previously issued
      to
      Midtown Partners dated April 10, 2006.




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





**Overview**





PracticeXpert,
      Inc., a Nevada corporation (the "Company", "us", "we" and "our"), is a
      healthcare services and technology company, that is in the business of providing
      "turn-key" administrative services to our clients, as well as developing and
      deploying systems, technologies and services designed to improve operational
      efficiencies, reduce billing errors and enhance cash flow for medical
      practitioners. We bundle our technology applications with our billing and other
      practice management services to provide an integrated solution to our clients.
      As we grow both organically and through acquisitions, we are working to become
      a
      simpler and more integrated company.





**Critical
      Accounting Policies and Estimates**





A
      summary
      of significant accounting policies is provided in Note 1 to our consolidated
      financial statements included in our 2005 Form 10-KSB. The preparation of
      consolidated financial statements in conformity with generally accepted
      accounting principles requires us to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and disclosure of contingent
      assets and liabilities at the date of the consolidated financial statements
      and
      the reported amounts of revenues and expenses during the reporting period.
      We
      base our estimates on historical experience and on various other assumptions
      that are believed to be reasonable under the circumstances. Estimated amounts
      may differ under different assumptions or conditions, and actual results could
      differ from the estimates. There are many critical accounting policies discussed
      in the notes to our consolidated financial statements including the following
      critical accounting policy that affects the judgments and estimates used in
      the
      preparation of our consolidated financial statements. Actual results will differ
      from those estimates.





**Recent
      Accounting Pronouncements**





There
      are
      no recent accounting pronouncements that affect the Company in the recent
      quarter.





**Results
      of Operations**





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





Net
      revenue was $2,881,781 for the three months ended March 31, 2006 compared to
      net
      revenue of $5,024,101 for the three months ended March 31, 2005. Revenues in
      the
      2006 period were lower primarily as a result of the termination of management
      and billing services agreements with Algis Sidrys, M.D., and Paul Jacquin,
      M.D.,
      due to our inability to manage the practices profitably under the terms of
      such agreements.
      In addition, there was a decline in billing services revenue due to the loss
      of
      specific contracts, including some unprofitable contracts and a decline in
      software revenues during the last 6 months of 2005 contributing to the decrease
      in revenue for the three months ended March 31, 2006.





Our
      operating expenses for the three months ended March 31, 2006 were $3,806,514
      compared to $5,952,294 for the three months ended March 31, 2005. Included
      in
      operating expenses in 2005 are the expenses of operating two specific cancer
      treatment facilities. Operating expenses decreased as a result of the
      termination of management and billing services agreements with Algis Sidrys,
      M.D., and Paul Jacquin, M.D., relating to one of the treatment centers and
      the
      termination of a management and billing agreement with the second cancer
      treatment center. Included in those treatment facility expenses are the costs
      of
      drugs administered to patients. Historically, these drugs have been purchased
      and immediately expensed, as typically these drugs are used within a short
      period of their purchase.





We
      had a
      net loss of $1,066,364, or a basic and fully diluted net loss per common share
      of $0.01, for the three months ended March 31, 2006 compared to a net loss
      of
      $950,622, or a basic and fully diluted net loss per common share of $0.01,
      for
      the three months ended March 31, 2005. The net loss for the current three month
      period includes expenses of $391,248 in depreciation and amortization.





At
      March
      31, 2006, our trade accounts payable was $3,759,469, compared to $3,621,926
      at
      March 31, 2005. The increase was primarily the result of not generating
      sufficient cash from operations to pay our suppliers on a timely basis. A
      substantial portion of our trade creditors' invoices are significantly past
      due.
      Our largest creditor, Oncology Therapeutics Network ("OTN"), was owed $1,415,364
      as of March 31, 2006 in connection with the supply of drugs for the treatment
      centers that we no longer operate on behalf of our physician clients. We are
      attempting to arrange mutually acceptable payment terms with OTN for the amounts
      owed.




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**Subsequent
      Events**





Due
      to
      our continuing losses from operations, we are in the process of reducing our
      operating expenses, consolidating operations and facilities, terminating
      unprofitable service contracts and implementing other cost saving measures.
      We
      are also deploying our own practice management software throughout our
      facilities, which we believe will allow us to replace more expensive software
      from providers.





On
      April
      14, 2006, we received short-term financing from investors pursuant to the
      issuance and sale of one-year 12% Senior Secured Convertible Debentures with
      a
      face amount of $250,000, which have a term
      of
      one year. We have pledged the capital stock of our subsidiaries and granted
      a
      security interest in our assets and the assets of our subsidiaries in favor
      of
      such investors, which secures repayment of the debentures. Each of our
      subsidiaries has also guaranteed repayment of the debentures. In connection
      with
      the foregoing transaction, we issued warrants to purchase 12,000,000 shares
      of
      our common stock at an exercise price of $.001 per share, expiring on April
      10,
      2016. We paid an investment banking fee to Midtown Partners & Co. LLC for
      its services in connection with arranging the foregoing transaction in the
      amount of $25,000 and the issuance of warrants to purchase 1,000,000 shares
      of
      our common stock at an exercise price of $.025 per share, expiring on April
      10,
      2016.





On
      April
      6, 2006, the Company received approval to increase its authorized common stock
      with a par value of $0.001 from 200,000,000 to 250,000,000 shares.





On
      May
      23, 2006, PracticeXpert, Inc. (the "Company") received an additional $350,000
      in
      short-term financing, or an aggregate of $600,000, from investors (“Original
      Purchasers”)pursuant to the issuance and sale of one-year 12% Senior Secured
      Convertible Debentures and warrants to purchase shares of Common Stock of the
      Company. The Company had previously entered into a Securities Purchase Agreement
      dated as of April 11, 2006 with certain investors pursuant to which the Company
      issued and sold an aggregate principal amount of $250,000 of 12% Senior Secured
      Convertible Debentures of the Company (the "Original Debentures") and
      (ii)warrants to purchase an aggregate of 10,000,000 shares of Common Stock.
      In
      connection with the financing, the Company and the Original Purchasers have
      amended and restated the original agreement and other agreements related thereto
      to cover the increase of (A) the aggregate principal amount of the Debentures
      from $250,000 to $600,000 and certain other provisions, (B) the aggregate number
      of shares to be issued upon exercise of the warrants from 10,000,000 to
      90,000,000 and certain other provisions, and (C) the investors participating
      in
      the Financing.





The
      New
      Warrants have an exercise price of $.001 per share, expire on May 19, 2016
      and
      replace the Original Warrants. The New Debentures have a term of one year and
      expire on May 19, 2006, unless earlier terminated by the parties. At the
      Company's option, quarterly interest payments may be paid in cash or shares
      of
      Common Stock, which have been registered under the Securities Act of 1933,
      as
      amended (the "Act"). The Company has pledged the capital stock of all of its
      subsidiaries and granted a security interest in the assets of the Company and
      all of its subsidiaries. The Company has compensated Midtown Partners & Co.
      LLC for its services in arranging the Financing by making a cash


payment
      in the amount of $72,000 and by issuing warrants to purchase 4,500,000 shares
      of
      Common Stock at an exercise price of $.002 per share and warrants to purchase
      13,500,000 shares of Common Stock at an exercise price of $.001 per share,
      which
      expire on May 19, 2016. Such warrants replace the warrants previously issued
      to
      Midtown Partners dated April 10, 2006.





**Liquidity
      and Capital Resources**





Our
      primary source of liquidity is cash from ongoing operations and borrowings
      from
      lenders. We have incurred significant losses to date, which we have financed
      primarily through the sale of equity securities and borrowings.





At
      March
      31, 2006, our total assets were $5,215,223 compared to $6,414,040 at December
      31, 2005. The decrease was primarily the result of amortization of our
      intangible assets in the amount of $220,119 during the period. Our current
      assets at March 31, 2006 totaled $1,598,751 and our current liabilities were
      $11,163,668, compared to current assets of $2,412,593 and current liabilities
      of
      $11,436,267 at December 31, 2005. The working capital deficit at March 31,
      2006
      was $9,564,917, compared to a working capital deficit at December 31, 2005
      of
      $9,023,674. As of March 31, 2006, we had $190,107 in cash and cash equivalents.





Of
      the
      current liabilities at March 31, 2006, $15,306 relates to dividends payable
      on
      Preferred Stock, which may be paid in shares of common stock at the Company's
      option, $422,780 relates to advances from investors for common stock not yet
      issued, $368,751 relates to deferred revenue on software sales, $1,415,364
      relates to drug payable and $4,000,000 is outstanding on the Citibank, N.A.
      demand loan.





During
      the three months ended March 31, 2006, we used $231,361 in capital to fund
      operations; we received $258,532 in financing activities, and sold equipment
      from operations totaling $1,287.





One
      of
      our subsidiaries has a demand loan in the approximate amount of $4.0 million
      with Citibank, N.A., bearing interest on a variable rate which was 4.315% at
      March 31, 2006. Citibank has the right to demand immediate repayment of this
      loan, which could substantially and materially adverse affect our business
      and
      operations and our ability to continue as a going concern. At March 31, 2006,
      we
      are currently overdue on interest payments in the amount of
      $42,000.





There
      can
      be no assurance that we will be able to meet our financial obligations in a
      timely manner, generate sufficient revenues or achieve a level of profits to
      allow us to continue as a going concern. Even if we are able to manage our
      cash
      from operations and indebtedness to allow for
      continued operation of the Company, we have no cash reserves. Our inability
      to
      maintain sufficient cash flows and borrowings could have a material adverse
      effect on our business and operations and our ability to continue as a going
      concern.




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Safe
      Harbor Cautionary Statement Regarding Outlook and Forward-Looking Information





From
      time
      to time the Company makes, and this report contains forward looking statements,
      as defined in the Private Securities Litigation Reform Act of 1995, relating
      to
      projected revenues, earnings, growth opportunities, capital expenditures,
      government regulations, working capital, executive officer retention, labor
      costs, strategic plans and industry trends. All statements made in this
      Management's Discussion and Analysis of Consolidated Financial Condition and
      Results of Operations that are not historical in nature should be considered
      forward-looking. Actual results could differ materially from these
      forward-looking statements. Many factors, including changes in demand for
      products and services in the health care and medical billing industries,
      customer retention, changes in healthcare regulations, customer acceptance
      of
      technological innovation and price increases, continued liquidity of our
      customers (including physician customers), drug supply relationships, adverse
      litigation, and economic and political conditions, could change the anticipated
      results. You are accordingly cautioned not to place undue reliance on any
      forward-looking statements.





While
      PracticeXpert's growth strategy includes possible acquisitions, the Company
      cannot provide any assurance as to when, if or on what terms any acquisitions
      will be made. Acquisitions involve various inherent risks, such as, among
      others, our ability to integrate acquired businesses and to achieve identified
      financial and operating synergies.





Additional
      information concerning factors that could cause actual results to differ
      materially from those projected in the forward-looking statements is contained
      in PracticeXpert's periodic filings with the Securities and Exchange Commission,
      including its 2005 Form 10-KSB and this Form 10-QSB. The Company assumes no
      duty
      to update forward-looking statements.





**Item
      3. Controls and Procedures**





Our
      President and Chief Financial Officer (the "Certifying Officers") are
      responsible for establishing and maintaining disclosure controls and procedures
      for the Company. The Certifying Officers have designed such disclosure controls
      and procedures to ensure that material information is made known to them,
      particularly during the period in which this report was prepared. The Certifying
      Officers have evaluated the effectiveness of the Company's disclosure controls
      and procedures as of the end of the period covered by this report and believe
      that the Company's disclosure controls and procedures are effective based on
      the
      required evaluation. During the period covered by this report, there were no
      changes in internal controls that materially affected, or are reasonable likely
      to materially affect, the Company's internal control over financial reporting.




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**PART
      II - OTHER INFORMATION**





**Item
      1. Legal Proceedings**





From
      time
      to time, we become involved in various lawsuits, claims and proceedings related
      to the conduct of our business. While we cannot predict the outcome of any
      lawsuit, claim or proceeding, our management does not believe that the
      disposition of any pending matters is likely to have a material adverse effect
      on our consolidated financial condition or liquidity. The resolution in any
      reporting period of one or more of these matters, however, could have a material
      adverse effect on the results of operations for that period.





**Item
      2. Unregistered Sales of Equity Securities**





During
      the three month period ended September 30, 2005, we issued 504,234 shares of
      common stock, in a private offering exempt from the registration requirements
      under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
      to
      Section 4(2) thereof, in exchange for services to certain consultants, advisors
      and service providers of the Company, and 60,000 shares of common stock to
      members of our board of directors in exchange for their services on the board
      of
      directors of the Company. These persons represented their intention to acquire
      the Shares for investment only and not with a view to sell such shares in
      connection with any distribution thereof, and an appropriate restrictive legend
      was affixed to the stock certificates. Each of these persons represented to
      us
      their status as an "accredited investor", as that term is defined in Rule 501
      promulgated under the Securities Act.





On
      August
      5, 2005, we issued 536,926 shares of our common stock to PI (Cayman) Limited
      as
      a quarterly interest payment on a loan. The issuance of the shares of common
      stock was exempt from the registration requirements under the Securities Act,
      pursuant to Section 4(2) thereof. This entity represented to us its status
      as an
      "accredited investor", as that term is defined in Rule 501 promulgated under
      the
      Securities Act. PI (Cayman) Limited represented its intention to acquire such
      shares for investment only and not with a view to sell such shares in connection
      with any distribution thereof, and an appropriate restrictive legend was affixed
      to the stock certificate.




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





None





**Item
      5. Other Information**





None




**Item
        6. Exhibits**





The
      following Exhibits are filed herein:





Exhibits





Exhibit
                31.1
            302
                Certification - Michael ManahanExhibit
                31.2
            302
                Certification - Anthony BieleExhibit
                32.1
            906
                Certification - Michael ManahanExhibit
                32.2
            906
                Certification - Anthony Biele








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**SIGNATURES**





In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant duly caused this report to be signed on its behalf by the undersigned
      thereunto duly authorized.




**PRACTICEXPERT,
              INC.**Date: 
May
              22, 2006
            By:
            /s/ ANTHONY
              BIELEName:  
                Anthony Biele
              Title:    
                Interim Chief Financial Officer
              (Principal Financial Officer and Authorized
                Officer)


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PracticeXpert
      Inc.,





Index
      to
      Exhibits





Exhibit
                Number
            
            DescriptionExhibit
                31.1
            
            302
                Certification - Michael ManahanExhibit
                31.2
            
            302
                Certification - Anthony BieleExhibit
                32.1
            
            906
                Certification - Michael ManahanExhibit
                32.2
            
            906
                Certification - Anthony Biele







20