**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 June 30, 2006





OR





**o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**





For
      the
      transition period from ___________ to ___________





*Commission
      file number 0-30583*





**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 o





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





Transitional
      Small Business Disclosure Format (check one): Yes o 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 August 15, 2006Common
                Stock, $.001 par value per share
            
            170,255,920
                Shares








TABLE
      OF
      CONTENTS





PagePART
                I - FINANCIAL INFORMATION
            
            1ITEM
                1 FINANCIAL STATEMENTS
            
            1Consolidated
                Balance Sheet (unaudited) as of June 30, 2006
            
            1Consolidated
                Statements of Operations (unaudited)for the six and three month periods
                ended June 30, 2006 and 2005
            
            2Consolidated
                Statements of Cash Flows (unaudited) for the six month periods ended
                June
                30, 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
            
            17ITEM
                1 LEGAL PROCEEDINGS
            
            17ITEM
                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




i




**PART
      I - FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**PRACTICEXPERT,
      INC.**


**BALANCE
      SHEET**


JUNE
      30,
      2006


(Unaudited)





**ASSETS****CURRENT
                ASSETS:**Cash
                & cash equivalents
            
            $
            123,502Accounts
                receivable, net of $793,566 allowance for doubtful debts
            
            
            959,092Unbilled
                receivables
            
            
            22,203Loan
                cost
            
            
            66,000Total
                current assets
            
            
            1,170,797**PROPERTY
                AND EQUIPMENT, net**
            
            
            326,880**OTHER
                ASSETS:**Deposits
            
            
            64,205**INTANGIBLES:**Client
                list, net
            
            
            1,754,032Software,
                net
            
            
            600,000Total
                intangibles
            
            
            2,354,032$
            3,915,914**LIABILITIES
                AND STOCKHOLDERS' DEFICIT****CURRENT
                LIABILITIES:**Accounts
                payable & accrued expenses
            
            $
            5,415,866Notes
                payable - related parties
            
            
            162,639Notes
                payable
            
            
            4,268,713Advances
            
            
            422,781Deferred
                revenue
            
            
            575,464Other
                current liabilities, including related party debt of
                $240,864
            
            
            380,209Trust
                account
            
            
            81,657Dividends
                payable
            
            
            15,306Total
                current liabilities
            
            
            11,322,635Notes
                payable - long term
            
            
            100,000Notes
                payable - related party - long term
            
            
            95,253**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, 250,000,000 shares authorized;142,692,487
                issued and outstanding
            
            
            142,692Offering
                costs
            
            
            (277,834
            )Treasury
                stock, 49,000 shares of common stock
            
            
            (285,000
            )Additional
                paid in capital
            
            
            19,380,933Shares
                to be issued
            
            
            713,540Accumulated
                deficit
            
            
            (27,276,346
            )Total
                stockholders' deficit
            
            
            (7,601,974
            )$
            3,915,914




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


1





**PRACTICEXPERT,
      INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATION**


**FOR
      THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2006 AND 2005**


(Unaudited)





**Six
                month periods ended**
            
            **Three
                month periods ended****2006**
            
            **2005**
            
            **2006**
            
            **2005****(Restated)**
            
            
            
            **(Restated)****Net
                    revenues**
            
            $
            4,643,659
            
            $
            9,943,444
            
            $
            1,761,878
            
            $
            5,209,726**Operating
                expenses**Impairment
                of client lists
            
            $
            589,953
            
            $
            334,892
            
            $
            589,953
            
            $
            334,892Depreciation
                & amortization
            
            
            663,510
            
            
            1,705,006
            
            
            272,262
            
            
            854,856Bad
                debt expense
            
            
            323,910
            
            
            75,192
            
            
            323,910
            
            
            -General
                  operating expenses
            
            
            5,796,908
            
            
            10,280,756
            
            
            2,404,690
            
            
            5,529,345Total
                operating expenses
            
            
            7,374,281
            
            
            12,395,846
            
            
            3,590,815
            
            
            6,719,093**Loss
                from operations**
            
            
            (2,730,621
            )
            
            (2,452,402
            )
            
            (1,828,936
            )
            
            (1,509,367
            )**Non-operating
                income (expense)**Gain
                on settlement of debts
            
            $
            -
            
            $
            39,196
            
            $
            -
            
            $
            -Loss
                on sale of assets
            
            
            (12,045
            )
            
            -
            
            
            -
            
            
            -Interest
                income
            
            
            -
            
            
            1,770
            
            
            -
            
            
            932Interest
                expense
            
            
            (383,045
            )
            
            (110,808
            )
            
            (255,843
            )
            
            (53,999
            )Total
                non-operating expense
            
            
            (395,090
            )
            
            (69,842
            )
            
            (255,843
            )
            
            (53,067
            )**Loss
                before income tax**
            
            
            (3,125,711
            )
            
            (2,522,245
            )
            
            (2,084,779
            )
            
            (1,562,434
            )**Income
                taxes**
            
            
            -
            
            
            (1,515
            )
            
            -
            
            
            (3,915
            )**Loss
                before discontinued & extraordinary items**
            
            
            (3,125,711
            )
            
            (2,520,730
            )
            
            (2,084,779
            )
            
            (1,558,519
            )**Discontinued
                operations**Income
                (loss) from operations to be disposed, net
            
            
            (47,365
            )
            
            5,151
            
            
            (21,935
            )
            
            (6,436
            )**Loss
                before extraordinary items**
            
            
            (3,173,076
            )
            
            (2,515,578
            )
            
            (2,106,714
            )
            
            (1,564,955
            )**Extraordinary
                items**Gain
                on conversion of note
            
            
            -
            
            
            600,000
            
            
            -
            
            
            600,000**Net
                loss**
            
            $
            (3,173,076
            )
            $
            (1,915,578
            )
            $
            (2,106,714
            )
            $
            (964,955
            )**Basic
                & diluted weighted average number of****common
                stock outstanding**
            
            
            142,692,487
            
            
            128,725,142
            
            
            142,692,487
            
            
            130,814,566**Basic
                and diluted net loss per share**
            
            $
            (0.02
            )
            $
            (0.01
            )
            $
            (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


2





**PRACTICEXPERT,
      INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE SIX MONTH PERIODS ENDED JUNE 30, 2006 AND 2005**


(Unaudited)





**2006**
            
            **2005****(Restated)****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss from continuing operations
            
            $
            (3,173,076
            )
            $
            (1,915,578
            )Adjustments
                to reconcile net loss to net cash used inoperating
                activities:Depreciation
                and amortization
            
            
            663,511
            
            
            1,705,006Allowance
                for bad debts
            
            
            323,910
            
            
            -Loss
                (gain) on disposal of asset
            
            
            -
            
            
            -Impairment
                of client lists
            
            
            589,953
            
            
            334,892Gain
                on settlement of debts
            
            
            -
            
            
            (612,326
            )Shares
                to be issued for interest
            
            
            47,010
            
            
            -Shares
                issued for service
            
            
            -
            
            
            165,284Amortization
                of debt discount
            
            
            107,223
            
            
            -Amortization
                of offering costs
            
            
            36,745
            
            
            -Amortization
                of loan costs
            
            
            6,000
            
            
            -Loss
                on sale of inventory
            
            
            12,045
            
            
            -Warrants
                issued
            
            
            75,467
            
            
            -Options
                issued
            
            
            6,375
            
            
            -**Changes
                in operating assets and liabilities:**(Increase)
                decrease in accounts receivable
            
            
            765,512
            
            
            (1,864,614
            )Decrease
                in other receivable
            
            
            40,400
            
            
            -(Increase)
                decrease in inventory
            
            
            95,714
            
            
            (150,144
            )Increase
                in prepaid expenses
            
            
            -
            
            
            (82,577
            )Increase
                in other current assets
            
            
            -
            
            
            102,770Increase
                in loan cost
            
            
            (72,000
            )
            
            -(Increase)
                decrease in other assets-deposit
            
            
            1,620
            
            
            (1,915
            )Increase
                (decrease) in current liabilities:Increase
                in accounts payable and accrued expense
            
            
            212,561
            
            
            425,549Increase
                (decrease) in other current liabilities
            
            
            15,850
            
            
            (156,390
            )Decrease
                in due to physicians
            
            
            (62,548
            )
            
            -Increase
                (decrease) in deferred revenue
            
            
            (501,306
            )
            
            177,447Total
                adjustments
            
            
            2,364,042
            
            
            42,982**Net
                cash used in operating activities**
            
            
            (809,034
            )
            
            (1,872,596
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Cash
                received at acquisition of subsidiaries
            
            
            -
            
            
            20,023Cash
                paid in acquisition of subsidiaries
            
            
            -
            
            
            (362,187
            )Proceed
                from disposal of fixed asset
            
            
            -
            
            
            796,000Purchase
                of property & equipment
            
            
            -
            
            
            (71,579
            )Sale
                of property & equipment
            
            
            1,287
            
            
            -**Net
                cash used in investing activities**
            
            
            1,287
            
            
            382,257**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Payments
                on loans from related parties
            
            
            -
            
            
            (99,813
            )Payments
                of notes payable
            
            
            (130,214
            )
            
            (220,000
            )Proceeds
                from loans - related parties
            
            
            138,748
            
            
            1,725,095Proceeds
                from notes payable
            
            
            699,000
            
            
            -Cash
                received for shares to be issued
            
            
            30,000
            
            
            11,269**Net
                cash provided by financing activities**
            
            
            737,534
            
            
            1,416,551**NET
                INCREASE IN CASH & CASH EQUIVALENTS**
            
            
            (70,213
            )
            
            (73,788
            )CASH
                & CASH EQUIVALENTS, BEGINNING BALANCE
            
            
            193,715
            
            
            381,403**CASH
                & CASH EQUIVALENTS, ENDING BALANCE**
            
            $
            123,502
            
            $
            307,615


Supplemental
                information:Cash
                paid during the year for:Cash
                paid for interest
            
            $
            78,390
            
            $
            8,625Cash
                paid for taxes
            
            $
            -
            
            $
            -Non-cash
                investing and financing activities:Shares
                issued for conversion of note
            
            $
            -
            
            $
            -Shares
                issued for acquisition of subsidiary
            
            $
            -
            
            $
            1,625,000Warrants
                issued for debt discount
            
            $
            497,733
            
            $
            -Warrants
                issued for offering costs
            
            $
            314,529
            
            $
            -





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


3




**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.


4





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. No additional
      payment has been received.





**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
      six and three month periods ended June 30,, 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
      June
      30, 2006:





CA
            
            ID
            
            TX
            
            OK
            
            WV
            
            NJ
            
            Unallocated
            
            TotalSales
            
            
            405,935
            
            
            451,522
            
            
            -
            
            
            1,639,226
            
            
            -
            
            
            2,146,976
            
            
            -
            
            
            4,643,659Operating
                income (loss)
            
            
            68,774
            
            
            (193,753
            )
            
            (27,100
            )
            
            (217,654
            )
            
            (20,265
            )
            
            194,853
            
            
            (2,535,476
            )
            
            (2,730,621
            )Total
                assets
            
            
            74,335
            
            
            151,682
            
            
            16,089
            
            
            423,429
            
            
            2,997
            
            
            767,094
            
            
            2,480,288
            
            
            3,915,914Capital
                Expenditure
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Depreciation
                and amortization
            
            
            -
            
            
            26,534
            
            
            -
            
            
            51,087
            
            
            -
            
            
            53,729
            
            
            532,160
            
            
            663,510




Following
      is a summary of segment information by geographic unit for the period ended
      June
      30, 2005:





CA
            
            ID
            
            TX
            
            OK
            
            WV
            
            NJ
            
            Unallocated
            
            TotalSales
            
            
            515,339
            
            
            2,007,427
            
            
            -
            
            
            4,956,057
            
            
            -
            
            
            2,464,621
            
            
            -
            
            
            9,943,444Operating
                income (loss)
            
            
            119,229
            
            
            135,624
            
            
            (5,211
            )
            
            887,559
            
            
            (10,802
            )
            
            (376,320
            )
            
            (3,202,481
            )
            
            (2,452,402
            )Total
                assets
            
            
            243,171
            
            
            835,064
            
            
            421,654
            
            
            2,368,638
            
            
            27,892
            
            
            1,348,389
            
            
            8,818,444
            
            
            14,063,252Capital
                Expenditure
            
            
            4,929
            
            
            1,183
            
            
            21,113
            
            
            1,500
            
            
            42,854
            
            
            -
            
            
            -
            
            
            71,579Depreciation
                and amortization
            
            
            1,546
            
            
            23,930
            
            
            3,191
            
            
            46,426
            
            
            14,448
            
            
            61,832
            
            
            1,553,633
            
            
            1,705,006





**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.


5




**Recent
      Pronouncements**





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 LOSS PER SHARE**





Basic
      and
      diluted net loss per share for the six and three month periods ended June 30,
      2006 and 2005 were determined by dividing the 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 loss per share is
      the
      same for the six month and three month periods ended June 30, 2006 and 2005,
      since the effect of the assumed conversion of options and warrants to purchase
      common shares would have an anti-dilutive effect.




**NOTE
      3 - ACCOUNTS RECEIVABLE**




The
      Company has a net accounts receivable balance of $959,092 as of June 30, 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
      $793,566 as an allowance for doubtful accounts.





**NOTE
      4 - PROPERTY AND EQUIPMENT**





Property
      and equipment consist of following on June 30, 2006:


6




Furniture
                & fixtures
            
            $
            758,619Office
                equipment
            
            
            145,321Computer
                equipment
            
            
            666,841Leasehold
                improvement
            
            
            15,789Software
            
            
            501,8352,088,405Less
                accumulated depreciation & amortization
            
            
            (1,761,525
            )$
            326,880




**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
      six and three month periods ended June 30, 2006 was $200,000 and $100,000,
      respectively, which compares to $219,534 and $105,356 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
      six
      and three month periods ended June 30, 2006 and 2005, 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 $1,754,032 and $6,351,148 as of June 30, 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 impairment
      expense for the six and three month periods ended June 30, 2006 was $589,953
      for
      both periods in 2006, which compares to $334,892 for the same time periods
      in
      2005. The amortization expense for the six and three month periods ended June
      30, 2006 was $330,113 and $109,994, respectively, while the amortization expense
      for the same time periods in 2005 were $1,353,633 and $673,069, respectively.





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





Year
            
            Amortization2007
            
            $
            733,6952008
            
            
            733,6952009
            
            
            286,6422010
            
            
            -Yearly
                thereafter
            
            
            -$
            1,754,032




7




**NOTE
      6 - OTHER ASSETS**




Other
      assets amounting to $64,205 comprised of a $37,600 insurance premium deposit
      and
      security deposits of $26,605.





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





Accounts
      payable and accrued expenses consist of the following as of June 30, 2006:





Accounts
                payable
            
            $
            3,744,822Accrued
                expenses
            
            
            748,895Accrued
                payroll and benefits
            
            
            876,401Accrued
                taxes
            
            
            45,749$
            5,415,867





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





Notes
      payable to related parties consist of the following as of June 30, 2006:




Shareholder,
                bearing interest at 8%, due May 1, 2009, unsecured
            
            
            122,892Shareholder’s
                family, bearing interest at 15% & 18%, due Oct. 1,
                2006
            
            
            60,000Shareholder’s
                family, bearing interest at 15% & 18%, due August 1,
                2006
            
            
            75,000Total
            
            
            258,562Less
                non-current portion
            
            
            95,923Current
                portion
            
            $
            162,639





During
      the six month periods ended June 30, 2006 and 2005, interest expense amounted
      to
      $13,320 and 3,670, respectively. During the three month periods ended June
      30,
      2006 and 2005, interest expense amounted to $8,219 and $1,835,
      respectively.





**NOTE
      9 -NOTES PAYABLE**





Notes
      payable consist of the following as of June 30, 2006:




Note
                payable —interest rate LIBOR + 0.625%
            
            $
            4,000,000Note
                payable—interest rate 12.0% due in 2007
            
            
            600,000NotNote
                payable — interest rate 7.0% due in 2008
            
            
            100,000Line
                of credit — closed January 2006
            
            
            38,039Line
                of credit—expires May 31, 2008
            
            
            60,100NotNotes
                payable — interest rate 15%, due June 22, 2006
            
            
            6,250NotNotes
                payable — interest rate 15%, due Oct 1, 2006
            
            
            24,000Note
                payable — interest rate 16%, due June 30, 2006
            
            
            50,000Total
            
            $
            4,878,389Less:
                non-current portion
            
            
            100,000Less:
                unamortized discount
            
            
            509,676Current
                portion
            
            $
            4,268,713




Closed
      Line of Credit:





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 were 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.


8


Convertible
        Debentures:




During
      the quarter ended June 30, 2006, the Company received $600,000 in short-term
      financing from the sale of one-year 12% Senior Secured Convertible Debentures
      and warrants to purchase 90,000,000 shares of the Company’s common
      stock . The
      debentures have a term of one year and are due on May 19, 2007, unless earlier
      terminated by the parties. At the Company's option, quarterly interest payments
      may be paid in cash or shares of Common Stock. For
      collateral, the Company
      has pledged the stock of all of its subsidiaries and granted a security interest
      in the assets of the Company and all of its subsidiaries





These
      warrants have an exercise price of $.001 per share, and expire on May 19, 2016.
      The warrants have been valued using the Black-Scholes option pricing model
      which
      assumed a risk free interest rate of 4.64%, dividend yield of 0%, an expected
      stock volatility of 77%, and an expected life of 10 years. The Company has
      recorded the unamortized discount related to these warrants and beneficial
      conversion feature at $485,733. The unamortized discount will be amortized
      over
      the life of the debentures. As of June 30, 2006, $56,669 has been amortized
      to
      interest expense. (See Note 16)





Financing
      fee:





The
      Company paid total loan costs of $72,000 in connection with the debenture.
      During the three month period ended June 30, 2006, $6,000 was amortized. As
      of
      June 30, 2006, the balance of loan cost is $66,000. In addition, the Company
      granted warrants to purchase 4,500,000 shares of the Company’s 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. These warrants expire on May 19, 2016. These warrants were valued at
      $314,579 using the Black-Schole option pricing model which assumed a risk free
      interest rate of 4.64%, dividend
      yield of 0%, an
      expected stock volatility of 77%, and an expected life of 10 years. The value
      of
      the warrants was recorded as offering costs in the equity section of the balance
      sheet. During
      the three month period ended June 30, 2006, $36,745
      of the offering costs have been amortized to loan cost expense. As of June
      30,
      2006, the balance of offering cost is $277,834. (See Note 16)





**NOTE
      10 -DEFERRED REVENUE**





As
      of
      June 30, 2006, the Company has $575,464 of deferred revenue. 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.




**NOTE
      11 -OTHER CURRENT LIABILITIES**





Other
      current liabilities consist of the following as of June 30, 2006:




Advances
                from stockholders
            
            $
            240,864Credit
                lines payable
            
            
            65,792Credit
                lines payable
            
            
            63,789Other
                current liabilities
            
            
            9,764$
            380,209





As
      of
      June 30, 2006, $80,529 of the advances from shareholders is due on demand,
      unsecured and interest free. The remaining $156,821 of the advances from
      stockholders at June 30, 2006, carries an interest rate of 10% per
      year.




**NOTE
      12 - COMMITMENTS**





Rent
      commitments :





The
      rent
      expense was $361,828 and $155,533 for the six and three month periods ended
      June
      30, 2006, respectively, which compared to $416,753 and $218,923 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
      June 30:





2007
            
            
            390,8182008
            
            
            351,5882009
            
            
            227,6502010
            
            
            50,550Total
                minimum lease payment
            
            $
            1,020,556




9




PracticeOne
      Acquisition :





As
      additional consideration for the purchase of PracticeOne in 2005, the Company
      agreed to issue 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 with 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 June 30, 2006, the Company incurred net operating
      losses for tax purposes of $15,738,000, 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 June
      30,
      2006 consist mainly of net operating loss carryforward. The gross deferred
      tax
      asset balance as of June 30, 2006 was approximately $5,541,000. 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:


**June
                  30,**
                **2006**
              ****
              **June
                  30,**
                **2005**Tax
                  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
              
              
              —
              
              
              —




**NOTE
      14 - RESTRICTED CASH**





Cash
      includes $81,657 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**





During
      the six month period ended June 30, 2006, the Company issued stock options
      to
      its Chief Financial Officer to purchase 1,500,000 of the Company’s common stock
      at an exercise price of $.015. The option expires in 2016 and vests pro-rata
      over the next three years (1⁄4 upon signing, and 1⁄4 upon each successive
      anniversary date for the next three years).





The
      following summary presents the incentive options under the plan granted,
      exercised, expired and outstanding at June 30, 2006:


**Under
                  Plan**
              ****
              **Weighted**
                **Average**
                **Exercise**
                **Price**
              ****
              **Aggregate**
                **Intrinsic**
                **Value**Balance,
                  December 31, 2005
              
              
              7,350,000
              
              $
              0.26
              
              $
              -Granted
              
              
              1,500,000
              
              
              .015Lapsed
              
              
              -
              
              
              -Exercised
              
              
              -
              
              
              -Balance,
                  June 30, 2006
              
              
              8,850,000
              
              $
              0.22
              
              $
              -




10


The
      following summary presents the weighted average exercise prices, number of
      options outstanding and exercisable, and the remaining contractual lives of
      the
      Company's stock options at June 30, 2006:




****
                ****
                **Options**
                  **Outstanding**
                  **Weighted**
                ****
                ****
                ****
                **Options
                    Exercisable**
                ********
                ****
                **Number**
                  **Outstanding**
                ****
                **Average**
                      **Remaining**
                      **Contractual**
                      **Life**
                ****
                **Weighted**
                  **Average**
                  **Exercise**
                  **Price**
                ****
                **Number**
                  **Exercisable**
                ****
                **Weighted**
                  **Average**
                  **Exercise**
                  **Price**Options
                
                
                8,850,000
                
                
                8.64
                
                $
                0.26
                
                
                4,962,500
                
                $
                0.22





Prior
      to
      January 1, 2006, the Company measured stock compensation expense using the
      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.





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 six month period ended June 30, 2006 includes compensation
      expense for all stock-based compensation awards vested on or after January
      1,
      2006, based on the grant date fair value estimated in accordance with the
      provisions of SFAS No. 123-R.





Impact
      of adoption of SFAS No. 123-R





Stock
      compensation expense measured in accordance with SFAS No. 123-R totaled $6,375
      or $0.00 per basic and diluted share during the six month ended June 30, 2006.
      The adoption of SFAS No. 123-R resulted in increased expense of approximately
      $6,375 as compared to the stock compensation expense that would have been
      recorded pursuant to APB No. 25.





During
      the six month period ended June 30, 2005, there were no options granted or
      vested.





Methods
      of estimating fair value





Under
      both SFAS No. 123-R and under the fair value method of accounting under
      SFAS No. 123 (i.e., SFAS No. 123 Pro Forma), the fair value of stock
      options is determined using the Black-Scholes model.





Significant
      assumptions used to estimate fair value





The
      assumptions used in estimating the fair value of stock options granted were
      as
      follows: a risk free interest rate of 4.64%, dividend yield of 0%, an expected
      stock volatility of 77%, and an expected life of 10 years.





Under
      SFAS No. 123-R, the company's expected volatility assumption is based on the
      historical volatility of the Company's stock. The expected life assumption
      is
      primarily based on historical exercise patterns and employee post-vesting
      termination behavior. The risk-free interest rate for the expected term of
      the
      option is based on the U.S. Treasury yield curve in effect at the time of grant.





Stock
      compensation expense recognized in the six month period ended June 30, 2006
      is
      based on awards expected to vest, and there were no estimated forfeitures.
      SFAS
      No. 123-R requires forfeitures to be estimated at the time of grant and
      revised in subsequent periods, if necessary, if actual forfeitures differ from
      those estimates.





**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.





During
      the second quarter of 2006 the Company recorded 475,500 shares of restricted
      common stock to be issued valued at $9,331 as part of financing agreements
      and
      814,655 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 second
      quarter of 2006.





11




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 six month
      and three month period ended June 30, 2006, $38,554 and $13,435 was amortized,
      respectively. The Unamortized Discount as of June 30, 2006 is
      $80,612.




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 valued at $75,467 using the Black-Scholes option pricing model,
      which assumed a risk free interest rate of 4.64%, dividend
      yield of 0%, an
      expected stock volatility of 100%, and an expected life of 10 years. The value
      of these warrants was recorded as consulting expense. No warrants issued for
      service were vested during the second quarter of 2006.




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
      valued at $12,000 using the Black-Schole option pricing model, which assumed
      a
      risk free interest rate of 4.64%, dividend
      yield of 0%, an
      expected stock volatility of 71%, and an expected life of 10 years. The value
      of
      the warrant was recorded as Unamortized Discount and was amortized over the
      life
      of the loan. As of June 30, 2006 this discount has been fully amortized to
      interest expense.




During
      the second quarter of 2006, the Company issued warrants to purchase 90,000,000
      shares of its common stock in association with new financing at an exercise
      price of $0.001 per share and life of 10 years. The warrants were valued using
      the Black-Schole option pricing model, which assumed a risk free interest rate
      of 4.64%, dividend
      yield of 0%, an
      expected stock volatility of 77%, and an expected life of 10 years. The total
      value of the warrant and beneficial conversion feature of $483,733 was recorded
      as Unamortized Discount and was amortized over the life of the loan. During
      the
      second quarter of 2006, $56,669 was amortized as interest expense and the
      Unamortized Discount as of June 30, 2006 is $429,064.




During
      the second quarter of 2006, the Company also issued warrants to purchase 18,000,000 shares
      of
      its common stock in association with new financing and a life of 10 years.
      Out
      of the 18,000,000 warrants, 4,500,000 warrants are at an exercise price of
      $0.002 per share and 13,500,000 warrants are at an exercise price of $0.001
      per
      share. These warrants were valued at $314,579 using the Black-Scholes option
      pricing model, which assumed a risk free interest rate of 4.64%, dividend
      yield of 0%, an
      expected stock volatility of 77%, and an expected life of 10 years. Since these
      warrants were issued as part of a financing fee arrangement, the value of these
      warrants were recorded as Offering Costs in the equity section and are to be
      amortized over the life of the related loans. During the second quarter of
      2006,
      $36,745 was amortized as loan cost expense and the balance of the Offering
      Costs
      as of June 30, 2006 is $277,834.




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





The
      Company has revised its filings on Form 10-QSB for the six month and three
      month
      periods ended June 30, 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.





The
      Company has also revised its filings on Form 10-QSB for the quarter ended June
      30, 2005 in order to restate the carrying value of its customer lists acquired
      from Cancer Care Network, Inc. (“CCN”) and PracticeOne, and record additional
      impairment losses for the three and six months ended June 30, 2005.




12




The
      effect of the correction is as follows:




**AS**
                    **PREVIOUSLY**
                    **REPORTED**
              ****
              **AS**
                **RESTATED**BALANCE
                  SHEET**As
                  of June 30, 2005**Intangibles:Customer
                  lists
              
              $
              6,531,281
              
              $
              6,351,148Goodwill
              
              $
              4,591,853
              
              $
              1,730,630Total
                  assets
              
              $
              17,104,609
              
              $
              14,063,252Liabilities:Notes
                  payable
              
              $
              4,203,248
              
              $
              4,068,893Total
                  current liabilities
              
              $
              9,188,550
              
              $
              9,054,195Stockholder's
                  equity:Accummulated
                  deficit
              
              $
              (10,490,828
              )
              $
              (13,397,831
              )Total
                  stockholder's equity
              
              $
              7,775,131
              
              $
              4,868,128Total
                  liabilities & stockholder's equity
              
              $
              17,104,609
              
              $
              14,063,252
  STATEMENT
                  OF OPERATIONS**As
                  of June 30, 2005****Six
                  months**
              ****
              **Three
                  months**Operating
                  expensesImpairment
                  of client lists
              
              
              $
              154,759
              
              $
              334,892
              
              $
              154,759
              
              $
              334,892Medical
                  billing and related services
              
              
              $
              10,329,078
              
              $
              10,355,948
              
              $
              5,515,960
              
              $
              4,679,195Total
                  operating expenses
              
              
              $
              12,188,843
              
              $
              12,395,846
              
              $
              6,525,575
              
              $
              5,868,943Loss
                  from operations
              
              
              $
              (2,245,399
              )
              $
              (2,452,402
              )
              $
              (1,315,849
              )
              $
              (659,217
              )Loss
                  before income tax
              
              
              $
              (2,315,241
              )
              $
              (2,522,245
              )
              $
              (1,368,916
              )
              $
              (712,284
              )Loss
                  before extraordinary items
              
              
              $
              (2,313,726
              )
              $
              (2,520,730
              )
              $
              (1,365,001
              )
              $
              (708,369
              )Gain
                  on the conversion of note
              
              
              $
              3,300,000
              
              $
              600,000
              
              $
              3,300,000
              
              $
              600,000Net
                  income (loss)
              
              
              $
              991,425
              
              $
              (1,915,578
              )
              $
              1,928,563
              
              $
              (964,955
              )


CASH
                  FLOWS**As
                  of June 30, 2005**Cash
                  flows from operating activities:Net
                  loss
              
              
              $
              (991,425
              )
              $
              (1,915,578
              )Adjustments
                  to recondile net loss to net cash used:Impairment
                  of intangible assets
              
              
              $
              154,759
              
              $
              334,892Gain
                  on the settlement of debt
              
              
              $
              (3,339,196
              )
              $
              (612,326
              )Total
                  adjustments
              
              
              $
              (2,864,021
              )
              $
              42,982





**NOTE
      18 - RELATED PARTY TRANSACTIONS**





During
      the first quarter of 2006, the Company had executive employment agreements
      with
      Jonathan Doctor, President and Zima Hartz, Executive Vice President that
      provided 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





13




During
      the second quarter of 2006, the Company executed an amendment to executive
      employment agreements with Michael Manahan, Chief Executive Officer, Jonathan
      Doctor, President and Zima Hartz, Executive Vice President whereby their
      salaries are 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
      Employment Agreements for Manahan, Doctor and Hartz also provide for (i) bonus
      compensation in an amount equal to five percent (5%) of 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 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. The 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 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 $268,693 and $109,880 was recorded in six and three month
      periods ended June 30, 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, and bears and interest
      rate of 15% per annum until April 1, 2006 and 18% per annum thereafter until
      the
      principal is repaid on the August 1, 2006 maturity date. The note holder will
      be
      entitled to up to 525,000 shares of common stock of the Company.




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 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
      $27,276,346 as of June 30, 2006 including the current period loss of $3,173,076.
      The continuing losses have adversely affected the liquidity of the Company.
      The
      Company is in default in payment of note payable. 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 June 30, 2006, towards (i) obtaining debt financing
      (ii)
      controlling of salaries and general and administrative expenses, and (iii)
      managing of accounts payable.





14





**NOTE
      20 - SUBSEQUENT EVENT**





Subsequent
      to June 30, 2006, the Company issued an additional 27,563,433 shares of common
      stock, under the following circumstances:





13,229,441
      shares were issued for exercise of warrants.


3,000,000
      shares were issued for services (under the Company’s S-8 plan).


4,055,652
      shares were issued from shares to be issued.


7,278,340
      shares were issued per the PracticeOne earn out agreement.





**Item
      2. Management's Discussion and Analysis or Plan 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 June 30, 2006 Compared to Three Months Ended June 30, 2005





Net
      revenue was $1,761,878 for the three months ended June 30, 2006 compared to
      net
      revenue of $5,209,726 for the three months ended June 30, 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 which contribute to the
      decrease in revenue for the three months ended June 30, 2006.





Our
      operating expenses for the three months ended June 30, 2006 were $3,590,815
      compared to $6,719,093 for the three months ended June 30, 2005. Included in
      operating expenses in 2005 are the expenses of operating two specific cancer
      treatment facilities that were not present in 2006. 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. Also 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 $2,106,714, or a basic and fully diluted net loss per common share
      of $0.01, for the three months ended June 30, 2006 compared to a net loss of
      $964,955, or a basic and fully diluted net loss per common share of $0.00,
      for
      the three months ended June 30, 2005. The net loss for the current three month
      period includes expenses of $272,262 in depreciation and amortization, $589,953
      in impairment of customer lists, and $323,910 of bad debt expense.





At
      June
      30, 2006, our trade accounts payable was $3,744,822, compared to $2,409,745
      at
      June 30, 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 $1,460,781
      as of June 30, 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.





15





Six
      Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005





Net
      revenue was $4,643,659 for the three months ended June 30, 2006 compared to
      net
      revenue of $9,943,444 for the three months ended June 30, 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 which contribute to the
      decrease in revenue for the three months ended June 30, 2006.





Our
      operating expenses for the three months ended June 30, 2006 were $7,374,281
      compared to $12,395,846 for the three months ended June 30, 2005. Included
      in
      operating expenses in 2005 are the expenses of operating two specific cancer
      treatment facilities that were not present in 2006. 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. Also 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 $3,173,076, or a basic and fully diluted net loss per common share
      of $0.02, for the three months ended June 30, 2006 compared to a net loss of
      $1,915,578, or a basic and fully diluted net loss per common share of $0.01,
      for
      the three months ended June 30, 2005. The net loss for the current six month
      period includes expenses of $663,510 in depreciation and amortization, $589,953
      in impairment of customer lists, and $323,910 in bad debt expense, as compared
      to $1,705,006 of depreciation and amortization, $334,892 of impairment on
      customer lists, and $75,192 in bad debt expense.





**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
      June
      30, 2006, our total assets were $3,915,914 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 $330,113, impairment of intangibles in the
      amount of $589,953, and $323,910 of bad debt expense during the period. Our
      current assets at June 30, 2006 totaled $1,170,797 and our current liabilities
      were $11,417,888, compared to current assets of $2,412,593 and current
      liabilities of $11,436,267 at December 31, 2005. The working capital deficit
      at
      June 30, 2006 was $10,247,091, compared to a working capital deficit at December
      31, 2005 of $9,023,674. As of June 30, 2006, we had $123,502 in cash and cash
      equivalents.





Of
      the
      current liabilities at June 30, 2006, $15,306 relates to dividends payable
      on
      Preferred Stock, which may be paid in shares of common stock at the Company's
      option, $422,781 relates to advances from investors for common stock not yet
      issued, $575,464 relates to deferred revenue on software sales, $1,460,781
      relates to a drug payable and $4,000,000 is outstanding on the Citibank, N.A.
      demand loan.





During
      the six months ended June 30, 2006, we used $809,034 in capital to fund
      operations; we received (net) $737,534 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 million
      with
      Citibank, N.A., bearing interest on a variable rate which was 4.315% at June
      30,
      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 June 30, 2006, we are
      currently overdue on interest payments in the amount of $32,000.





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.





**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.





16




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.





**Off-Balance
      Sheet Arrangements**





We
      have
      not entered into any off-balance sheet arrangements that have or are reasonably
      likely to have a current or future effect on our financial condition, changes
      in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources and would be considered material
      to
      investors. ****





**Item
      3. Controls and Procedures**





**Disclosure
      Controls and Procedures**





Regulations
      under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
      require public companies to maintain "disclosure controls and procedures,"
      which
      are defined to mean a company's controls and other procedures that are designed
      to ensure that information required to be disclosed in the reports that it
      files
      or submits under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Exchange Act. Our Chief
      Executive Officer and Chief Financial Officer carried out an evaluation of
      the
      effectiveness of our disclosure controls and procedures as of the end of the
      period covered by this report. Based on those evaluations, our Chief Executive
      Officer and Chief Financial Officer concluded that:





(i)
      that
      our disclosure controls and procedures are designed to ensure that information
      required to be disclosed by us in the reports we file under the Exchange Act
      is
      recorded, processed, summarized and reported within the time periods specified
      in the Exchange Act and that such information is accumulated and communicated
      to
      our management, including the CEO and CFO, as appropriate to allow timely
      decisions regarding required disclosure; and





(ii)
      that
      our disclosure controls and procedures are effective.





**Changes
      in Internal Control Over Financial Reporting**





There
      were no significant changes in our internal controls or, to our knowledge,
      in
      other factors that could significantly affect our internal controls subsequent
      to the evaluation date.





While
      management believes that our disclosure controls and procedures and our internal
      control over financial reporting are effective, no system of controls can
      prevent all error and all fraud. A control system, no matter how well designed
      and operated, can provide only reasonable, not absolute, assurance that the
      control system's objectives will be met. Further, the design of a control system
      must reflect the fact that there are resource constraints, and the benefits
      of
      controls must be considered relative to their costs. Because of the inherent
      limitations in all control systems, no evaluation of controls can provide
      absolute assurance that all control issues and instances of fraud, if any,
      within our company have been detected. These inherent limitations include the
      realities that judgments in decision-making can be faulty, and that breakdowns
      can occur because of simple error or mistake. Controls can also be circumvented
      by the individual acts of some persons, by collusion of two or more people,
      or
      by management override of the controls. The design of any system of controls
      is
      based in part upon certain assumptions about the likelihood of future events,
      and there can be no assurance that any design will succeed in achieving its
      stated goals under all potential future conditions. Over time, controls may
      become inadequate because of changes in conditions or deterioration in the
      degree of compliance with its policies or procedures. Because of the inherent
      limitations in a cost-effective control system, misstatements due to error
      or
      fraud may occur and not be detected.





**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 during that period.





During
      May 2006, a complaint was filed against the Company by a former employee
      alleging the breach of an agreement whereby the Company failed to pay a bonus
      to
      such employee. The complaint alleges that the amount due under the bonus
      agreement is $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 predict any outcome at this time. The full amount of the
      liability is recorded in accrued expenses at June 30, 2006.





17





**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
      3. Defaults Upon Senior Securities**





None ****





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





None





**Item
      5. Other Information**





None





**Item
      6. Exhibits**





**Exhibit
                Number**
            
            **Description
                of Exhibit**3.1
            
            Articles
                of Incorporation and Certificate of Amendment (1)3.2
            
            Amended
                and Restated Bylaws (2)4.1
            
            Stock
                Certificate (1)4.2
            
            Instruments
                defining the rights of security holders (1)10.1
            
            Agreement
                dated December 31, 2005 between the Company and Transcend Services,
                Inc.
                (3)10.2
            
            Agreement
                of Purchase and Sale of Stock dated December 20, 2004 among the Company,
                Practice Xpert Services Corp., Physician Informatics, Inc. and PI(Cayman)
                Limited (4)10.3
            
            Security
                Purchase Agreement dated April 11, 2006, among PracticeXpert, Inc.
                and
                purchasers signatory thereto (5)10.4
            
            Form
                of 12% Senior Secured Debenture dated April 11, 2006 issued by the
                Company
                (5)10.5
            
            Form
                of Warrant dated April 11, 2006 to purchase 12,000,000 shares of
                Common
                Stock (5)10.6
            
            Security
                Agreement dated April 11, 2006 among the Company and its subsidiaries
                (5)10.7
            
            Subsidiary
                Guarantee dated June 1, 2005 by the Company's subsidiaries in favor
                of the
                purchasers (5)10.8
            
            Employment
                Agreement dated December 12, 2005 between the Company and Anthony
                Biele
                (6)31.1
            
            Certification
                Pursuant To Section 302 Of The Sarbanes-Oxley Act Of
                200231.2
            
            Certification
                Pursuant To Section 302 Of The Sarbanes-Oxley Act Of
                200232.1
            
            Certification
                Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section
                906 Of
                The Sarbanes-Oxley Act Of 200232.2
            
            Certification
                Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section
                906 Of
                The Sarbanes-Oxley Act Of 2002





(1)
            Filed
                as an exhibit to the Company’s Annual Report on Form 10-KSB, filed on
                April 28, 2006.


(2)
            Filed
                as an exhibit to the Company’s Quarterly Report on Form 10-QSB, filed on
                November 28, 2005.


(3)
            Filed
                as an exhibit to the Company’s Current Report on Form 8-K, filed on
                January 5, 2006.


(4)
            Filed
                as an exhibit to the Company’s Current Report on Form 8-K, filed on
                January 7, 2006.


(5)
            Filed
                as an exhibit to the Company’s Current Report on Form 8-K, filed on April
                20, 2006.


(6)
            Filed
                as an exhibit to the Company’s Current Report on Form 8-K, filed on
                December 16, 2005.





18




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.




**PRACTICEXPERT,
                INC.**Date: August
              18, 2006
            
            /s/
              Michael ManahanMichael Manahan
              Chief Executive Officer (Principal Executive
                Officer)  Date: August
              18, 2006
            
            /s/ Anthony BieleAnthony
              Biele
              Chief
                Financial Officer (Principal Financial and Accounting
                Officer)