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, 2005

                                       or

|_|   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from ______________ to ___________________

                        Commission file number: 000-30583

                               PRACTICEXPERT, INC.
           (Name of Small Business Issuer as specific in its Charter)

             Nevada                                     87-0622329
 ------------------------------                       ---------------
(State or Other Jurisdiction of                      (I.R.S. Employer
 Incorporation or Organization)                     Identification No.)

10833 Washington Blvd, Culver City, CA                              90232
--------------------------------------                            ----------
(Address of Principal Executive Offices)                          (Zip Code)

          Issuer's telephone number, including area code: 310-815-3500


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such shorter  periods 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 |_|

As of August 15, 2005, the number of  outstanding  shares of Common Stock of the
registrant was 142,188,255.

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


<PAGE>



                                TABLE OF CONTENTS
                                                                            PAGE

PART I - FINANCIAL INFORMATION.................................................1

ITEM 1   FINANCIAL STATEMENTS..................................................1

         Consolidated Balance Sheet as of June 30, 2005........................1

         Consolidated Statements of Operations for
         the three and six months ended June 30, 2005 and 2004.................2

         Consolidated Statements of Cash Flows for
         the six months ended June 30, 2005 and 2004...........................3

         Notes to Consolidated Financial Statements............................4

ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS..................................14

ITEM 3   CONTROLS AND PROCEDURES..............................................20

PART II - OTHER INFORMATION...................................................21

ITEM 1   LEGAL PROCEEDINGS....................................................21

ITEM 2   UNREGISTERED SALES OF EQUITY SECURITIES
         AND USE OF PROCEEDS..................................................21

ITEM 3   DEFAULTS UPON SENIOR SECURITIES......................................22

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................22

ITEM 5   OTHER INFORMATION....................................................22

ITEM 6   EXHIBITS.............................................................22


<PAGE>

<TABLE>
<CAPTION>
                                    PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                          PRACTICEXPERT, INC.
                                      CONSOLIDATED BALANCE SHEET
                                             JUNE 30, 2005


                                                ASSETS

                                                                                            06/30/05
      CURRENT ASSETS:                                                                     ------------
<S>                                                                                       <C>
            Cash & cash equivalents                                                       $    307,615
            Prepaid expenses                                                                   104,622
            Inventory                                                                          150,144
            Accounts receivable, net                                                         3,802,260
            Other receivables                                                                       --
                                                                                          ------------
                     Total current assets                                                    4,364,641

      PROPERTY AND EQUIPMENT, NET                                                              565,955

      OTHER ASSETS
            Deposits                                                                            21,771

      INTANGIBLES:
            Client list, net                                                                 6,531,281
            Software, net                                                                    1,029,107
            Goodwill                                                                         4,591,853
                                                                                          ------------
                                                                                            12,152,241
                                                                                          ------------
                                                                                          $ 17,104,609
                                                                                          ============

                                 LIABILITIES AND STOCKHOLDERS' EQUITY

      CURRENT LIABILITIES:
            Accounts payable & accrued expenses                                           $  3,352,089
            Notes payable - related parties                                                    114,633
            Notes payable                                                                    4,203,248
            Advances                                                                           422,781
            Deferred Revenue                                                                   886,745
            Other current liabilities, including related party debt of $139,703                193,748
            Dividends payable                                                                   15,306
                                                                                          ------------
                     Total current liabilities                                               9,188,550

      Notes Payable, related party - long term                                                  40,928
      Notes Payable - long term                                                                100,000
      Convertible note payable                                                                      --

      COMMITMENTS

      STOCKHOLDERS' EQUITY
            Preferred stock - unclassified, authorized shares 36,000,000,  no par value
               none issued                                                                          --
            Preferred stock convertible - Series C, 6%, $.001 par value
               2,000,000 shares authorized; 41,170 issued and outstanding                           41
            Common stock, $.001 par value, 200,000,000 shares authorized;
               131,591,329 issued and outstanding                                              131,591
            Treasury Stock, 49,000 shares of common stock                                     (285,000)
            Additional paid in capital                                                      17,686,332
            Shares to be issued                                                                732,995
            Accumulated deficit                                                            (10,490,828)
                                                                                          ------------
                     Total stockholders' equity                                              7,775,131
                                                                                          ------------
                                                                                          $ 17,104,609
                                                                                          ============


  The accompanying notes are an integral part of these unaudited consolidated financial statements.
</TABLE>


                                                   1
<PAGE>

<TABLE>
<CAPTION>
                                                  PRACTICEXPERT, INC.
                                          CONSOLIDATED STATEMENTS OF OPERATION
                            FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2005 AND 2004

                                                         SIX MONTHS ENDED JUNE 30,         THREE MONTHS ENDED JUNE 30,
                                                       ------------------------------    ------------------------------
                                                            2005             2004             2005             2004
                                                       -------------    -------------    -------------    -------------
<S>                                                    <C>              <C>              <C>              <C>
NET REVENUES                                           $  10,707,675    $   3,671,491    $   5,683,574    $   2,742,020

OPERATING EXPENSES                                        12,931,910        4,685,098        6,993,101        3,232,089
                                                       -------------    -------------    -------------    -------------
LOSS FROM OPERATIONS                                      (2,224,235)      (1,013,607)      (1,309,527)        (490,069)

NON-OPERATING INCOME (EXPENSE):
       Gain (loss) on settlement of debts                     39,196          (14,500)              --          (14,500)
       Loss on disposal of asset                                  --           (1,706)              --               --
       Legal settlement                                           --          (75,750)              --               --
       Miscellaneous                                              --               --               --           19,800
       Interest income                                         1,771              191              932              136
       Interest expense                                     (126,821)        (163,224)         (66,757)        (130,776)
                                                       -------------    -------------    -------------    -------------
                Total non-operating income (expense)         (85,855)        (254,989)         (65,826)        (125,340)
                                                       -------------    -------------    -------------    -------------
LOSS BEFORE INCOME TAX                                    (2,310,090)      (1,268,596)      (1,375,353)        (615,409)

INCOME TAXES                                                  (1,515)           6,400           (3,915)              --
                                                       -------------    -------------    -------------    -------------
LOSS BEFORE EXTRAORDINARY ITEMS                           (2,308,575)      (1,274,996)      (1,371,438)        (615,409)

EXTRAORDINARY ITEMS
       Gain on conversion of note                          3,300,000               --        3,300,000               --
                                                       -------------    -------------    -------------    -------------
NET INCOME (LOSS)                                            991,425       (1,274,996)       1,928,562         (615,409)

Dividend requirement for preferred stock                          --          (63,122)              --               --
                                                       -------------    -------------    -------------    -------------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS    $     991,425    $  (1,338,118)   $   1,928,562    $    (615,409)
                                                       =============    =============    =============    =============

BASIC  WEIGHTED AVERAGE NUMBER OF
    COMMON STOCK OUTSTANDING                             128,725,142       47,669,948      130,814,566       72,854,984
                                                       =============    =============    =============    =============
BASIC NET INCOME (LOSS) PER SHARE                      $        0.01    $       (0.03)   $        0.01    $       (0.01)
                                                       =============    =============    =============    =============
FULLY DILUTED INCOME (LOSS) PER SHARE                  $        0.01    $       (0.03)   $        0.01    $       (0.01)
                                                       =============    =============    =============    =============


           The accompanying notes are an integral part of these unaudited consolidated financial statements.
</TABLE>


                                                           2
<PAGE>

<TABLE>
<CAPTION>

                                      PRACTICEXPERT, INC.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2005 AND 2004


                                                                         2005           2004
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                               $   991,425    $(1,338,118)
     Adjustments to reconcile net loss to net cash used in
        operating activities:
         Reimbursed expenses                                                  --             --
         Impairment of Client List                                       154,759             --
         Depreciation and amortization                                 1,705,006        566,314
         Loss on disposal of asset                                            --          1,706
         (Gain) loss on settlement of debts and conversion of note    (3,339,196)        14,500
         Shares issued for services and compensation                     165,284        629,783
         Shares to be issued for service                                      --             --
         (Increase) decrease in current assets
               Accounts receivable                                    (1,864,614)    (1,017,694)
               Inventory                                                (150,144)            --
               Prepaid expenses                                          (82,577)        (7,431)
               Other current assets                                      102,770        (27,239)
         Increase (decrease) in current liabilities:
               Accounts payable and accrued expense                      425,549        700,143
               Other current liabilities                                (156,390)            --
               Deferred revenue                                          177,447             --
               Dividends payable                                              --             --
         Increase in other assets-deposit                                 (1,915)            --
                                                                     -----------    -----------
     Total Adjustments                                                (2,864,021)       860,082
                                                                     -----------    -----------
                 Net cash used in operating activities                (1,872,596)      (478,036)
                                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
         Cash received at acquisition of subsidiaries                     20,023             --
         Cash paid in acquisition of subsidiaries                       (362,187)    (4,250,000)
         Development of software                                              --       (137,980)
         Goodwill reduction for reimbursement of expenses                796,000             --
         Purchase of property & equipment                                (71,579)       (58,419)
                                                                     -----------    -----------
                 Net cash used in investing activities                   382,257     (4,446,399)
                                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
         Payments on loans from related parties                          (99,813)        52,606
         Payments of notes payable                                      (220,000)      (985,552)
         Proceeds from loan from related parties                       1,725,095             --
         Proceeds of notes payable                                            --             --
         Proceeds from subscription                                           --        126,978
         Cash received from shares to be issued                           11,269             --
         Cash received from issuance of shares                                --      5,842,153
         Proceed from disposal of fixed asset                                 --          1,500
                                                                     -----------    -----------
                 Net cash provided by  financing activities            1,416,551      5,037,685
                                                                     -----------    -----------
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                       (73,788)       113,250

CASH & CASH EQUIVALENTS, BEGINNING BALANCE                               381,403         71,017
                                                                     -----------    -----------
CASH & CASH EQUIVALENTS, ENDING BALANCE                              $   307,615    $   184,267
                                                                     ===========    ===========


The accompanying notes are an integral part of these unaudited consolidated financial statements.
</TABLE>


                                               3
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Practice Xpert Services Corp.  ("PXSC") was  incorporated  on August 11, 2001 in
the State of California,  under the name Care Delivery Services Corporation.  On
October 22, 2001,  the PXSC filed an amendment to its articles of  incorporation
to change its name to Practice Xpert Services Corp.

On April 11,  2003,  PXSC  entered into a stock  purchase  agreement  with Thaon
Communications,   Inc.,  a  publicly  traded  Nevada   corporation,   originally
incorporated on July 13, 1984.  Pursuant to this agreement,  Thaon purchased 92%
of the  outstanding  shares of capital stock of PXSC. The  shareholders  of PXSC
received  7,670,596  shares of  Thaon's  common  stock and  1,845,000  shares of
Thaon's Series C Preferred Stock,  constituting 72.75% of its voting securities.
As a condition  thereto,  Thaon's  existing  officers  resigned and the board of
directors  appointed  the  executive  officers of PXSC to serve as the executive
management team.

On September 30, 2003,  PracticeXpert purchased the remaining eight percent (8%)
of the issued and outstanding shares of capital stock of PXSC by issuing 472,860
shares of common  stock and 111,736  shares of Series C  Preferred  Stock to the
shareholders of PXSC. As a result thereof,  PracticeXpert owns all of the issued
and outstanding shares of PXSC.

According to the terms of the share exchange agreement,  control of the combined
companies (the "Company")  passed to the former  shareholders of PXSC. This type
of share  exchange  has been  treated as a capital  transaction  accompanied  by
recapitalization of PXSC in substance,  rather than a business combination,  and
is deemed a  "reverse  acquisition"  for  accounting  purposes  since the former
owners  of  PXSC  controlled  a  majority  of  the  total  Thaon  common  shares
outstanding  immediately  following  the  acquisition.  No pro  forma  financial
statements have been presented as Thaon had no significant  assets or operations
prior to the acquisition.

On July 21, 2003 Thaon filed an amendment to its articles of  incorporation  and
changed its name to PracticeXpert, Inc. ("PracticeXpert").

PracticeXpert,  a healthcare services and technology company, is in the business
of developing  and deploying  systems,  technologies,  and services  designed to
improve operational  efficiencies,  reduce billing errors, and enhance cash flow
for,  medical  practitioners.  The products and services  include  revenue cycle
services,  business management  services,  transcription  services,  consulting,
seminars,  practice management  software,  and electronic heath records software
all  marketed  under the brand name  "Xpert."  Where  applicable,  PracticeXpert
bundles  its  technology  applications  with  its  billing  and  other  practice
management  services  to  provide a  complete  and  integrated  solution  to its
physician customers.

PracticeXpert  delivers its products and services to its  customers  through the
following  subsidiaries,  of which Practice Xpert, through its 100% ownership of
PXSC, owns 100% of the issued and outstanding shares of:

PracticeXpert of California,  Inc., a California corporation,  formerly known as
Healthcare Administrative Management Corp., incorporated on July 29, 1997.

PracticeXpert  of Idaho,  Inc.,  an Idaho  corporation,  formerly  known as K.R.
Johnson and Associates incorporated on December 22, 1995.

PracticeXpert  of West  Virginia,  Inc., a West Virginia  corporation,  formerly
known as National Healthcare Management Services, incorporated on June 23, 1999.


                                       4
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PracticeXpert of Oklahoma, Inc, an Oklahoma corporation,  formed for the purpose
of acquiring Cancer Care Network, incorporated on March 31, 2004.

PracticeXpert  of Texas,  Inc, a Texas  corporation,  formed for the  purpose of
acquiring 100% of Singer MedScript's asset, incorporated on November 7, 2003.

Physician  Informatics,  Inc., a New Jersey  corporation,  known as PracticeOne,
incorporated on February 2, 1999. (Note 7)

Transcriptions Plus, Inc. a California corporation,  incorporated on January 26,
1998. (Note 7)

On July 31, 2003,  PracticeXpert  entered  into a purchase  agreement to acquire
100% of Healthcare Billing  Solutions,  Inc. (HBS), a Montana  corporation.  The
Company  made the decision to dispose of  Healthcare  Billing  Solutions,  Inc.,
effective September 1, 2004.

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, 2004
were filed on April 14, 2005 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, 2005 are not  necessarily  indicative
of the results that may be expected for the year ended December 31, 2005.

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.


                                       5
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


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

PRINCIPLES OF CONSOLIDATION

<TABLE>
<CAPTION>

                           CA         ID        TX       OK          WV       NJ       Montana    Unallocated     Total
                       ---------  ---------  -------  ---------   -------  ---------  ----------  -----------   ----------
<S>                    <C>        <C>        <C>      <C>         <C>      <C>        <C>         <C>           <C>
Sales                    515,339  2,007,427  573,120  4,956,057   191,107  2,464,625                            10,707,675
Operating
  income (loss)       (1,351,033)   209,732   38,115    896,615   (19,587)  (289,685)              (1,708,392)  (2,224,235)
Total assets             243,171    835,064  421,654  2,368,638    27,892  1,348,389               11,859,801   17,104,609
Capital
  Expenditure              4,929      1,183   21,113      1,500    42,854                                           71,579
Depreciation
  and amortization         1,546     23,930    3,191     46,426    14,448     61,832                1,553,633    1,705,006

Following is a summary of segment  information by geographic unit for the period
ended June 30, 2004:

                                                                                                                  Total
                                                                                                                 ---------
Sales                    584,885  1,079,216  251,822  1,513,358   191,937                 50,082                 3,671,300
Operating
  income (loss)         (838,909)    50,746  (15,492)   394,331   (45,657)               (37,336     (448,022)    (940,339)
Total assets             717,544    391,238  414,307  1,441,439    60,180                 17,572    6,327,328    9,369,608
Capital
  Expenditure            137,980                         19,119                                                    157,099
Depreciation
  and amortization        47,346     28,405   16,667     13,655    12,219                      0      128,739      247,031
</TABLE>

PRINCIPLES OF CONSOLIDATION

The accompanying  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.

RECENT PRONOUNCEMENTS

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

In December  2004,  the FASB  issued  SFAS  Statement  No.  153,  "Exchanges  of
Nonmonetary  Assets."  The  Statement  is an  amendment of APB Opinion No. 29 to
eliminate the exception for nonmonetary  exchanges of similar  productive assets
and replaces it with a general  exception  for exchanges of  nonmonetary  assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial statements.

In March 2004, the Emerging  Issues Task Force  ("EITF")  reached a consensus on
Issue  No.  03-1,  "The  Meaning  of  Other-Than-Temporary  Impairment  and  its
Application  to Certain  Investments."  The EITF  reached a consensus  about the
criteria  that should be used to  determine  when an  investment  is  considered
impaired,  whether that impairment is other-than-temporary,  and the measurement
of an  impairment  loss and how that criteria  should be applied to  investments
accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND
EQUITY   SECURITIES."  EITF  03-01  also  included   accounting   considerations


                                       6
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


subsequent to the recognition of an other-than-temporary impairment and requires
certain  disclosures  about  unrealized  losses that have not been recognized as
other-than-temporary   impairments.   Additionally,   EITF  03-01  includes  new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  In September  2004, the Financial  Accounting  Standards Board (FASB)
delayed  the  accounting  provisions  of  EITF  03-01;  however  the  disclosure
requirements remain effective for annual reports ending after June 15, 2004. The
Company will evaluate the impact of EITF 03-01 once final guidance is issued.

NOTE 2 - INTANGIBLE ASSETS

Intangible  assets consist of Software,  Goodwill 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.  (Note 7) 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 amounts
for the six and three  month  periods  ended  June 30,  2005 were  $219,534  and
$105,356,  respectively, which compares to $57,349 and $30,516 for the same time
periods in 2004.

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, 2005, the Company capitalized no internal
and external  costs  incurred to develop  internal-use  computer  software.  The
amortization amounts for the six and three month periods ended June 30, 2005 was
$219,534 and $105,356,  respectively.  which compares to $57,349 and $30,516 for
the same time periods in 2004.


                                       7
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Client lists:

The Company has client lists acquired through purchase of subsidiaries valued at
$6,531,281  and  $6,667,204  as of June 30, 2005 and 2004,  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,  2005  was  $154,759  and  $0
respectively. The amortization expense for the six and three month periods ended
June 30,  2005 was  $1,353,633  and  $673,069  respectively,  which  compares to
$465,697 and $400,493 for the same time periods in 2004

The estimated aggregated amortization expenses for each of five succeeding years
ended June 30:

                           2006     $2,155,384
                           2007        789,826
                           2008        581,778
                           2009        274,752
                           2010        163,765

Goodwill:

The Company has recorded  goodwill  through  purchase of subsidiaries  valued at
$5,387,853  (Note 7) and  $796,000  was offset by the cash  receivable  from the
shareholders of P1 (Cayman) Limited based on the purchase agreement. (Note 7)

NOTE 3 - COMMON STOCK

ISSUANCE OF SHARES FOR SERVICE

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 2005 the  Company  issued  12,473,890  shares of
restricted   common  stock  valued  at   $1,625,000  as  part  of  the  purchase
consideration  for the  acquisition  of Physician  Informatics,  Inc.  (Note 7).
During  the  second  quarter  of 2005 the  Company  issued  1,630,440  shares of
restricted  common stock valued at $165,284 as part of services  rendered to the
Company and 222,017 shares of restricted  common stock valued at $66,605 as part
of sale of stock to investors.

NOTE 4   - SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The Company  paid $0 for income tax and  $121,471  for  interest  during the six
month period June 30, 2005.  The Company paid $0 for income tax and $158,349 for
interest during the six month period ended June 30, 2004.

The cash  flow  statements  do not  include  following  non-cash  investing  and
financing activities:

During  the  first  quarter  of 2005 the  Company  issued  12,473,890  shares of
restricted   common  stock  valued  at   $1,625,000  as  part  of  the  purchase
consideration  for the  acquisition of Physician  Informatics,  Inc.  During the
second quarter of 2005 the Company issued 1,630,440 shares of restricted  common
stock valued at $165,284 as part of services rendered to the Company and 222,017
shares of restricted  common stock valued at $66,605 as part of sale of stock to
investors.


                                       8
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic and diluted net income (loss) per share for the six and three months ended
June 30, 2005 and 2004 were determined by dividing the net income (loss) for the
periods  by the  weighted  average  number of both basic and  diluted  shares of
common stock outstanding. All convertible preferred stock are regarded as common
stock  equivalents  and  are  considered  in the  diluted  net  loss  per  share
calculations.

Weighted  average  number of shares  used to compute  basic and  diluted  income
(loss) per share is the same for the period  ended June 30,  2005 and 2004 since
all the warrants and options outstanding are not dilutive.

NOTE 6 - GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principle,  which contemplate  continuation of the
Company as a going concern.  However,  the Company has an accumulated deficit of
$10,490,828 as of June 30, 2005 including the current period income of $991,425.
The continuing losses have adversely affected the liquidity of the Company.  The
Company faces continuing  significant business risks including,  but not limited
to, its ability to maintain vendor and supplier  relationships  by making timely
payments when due.

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded  asset amounts shown in the  accompanying  balance
sheet is dependent  upon continued  operations of the Company,  which in turn is
dependent  upon the  Company's  ability  to  raise  additional  capital,  obtain
financing and to succeed in its future operations.  The 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, 2005, towards (i) obtaining debt financing (ii)
controlling  of  salaries  and general and  administrative  expenses,  and (iii)
management of accounts payable.

NOTE 7 - ACQUISITION

On  January  10,  2005,   PracticeXpert,   Inc.  completed  its  acquisition  of
Transcriptions  Plus,  Inc. a  transcription  company  located in Palm  Springs,
California.  The purchase  price  consisted of a cash payment of $300,000 at the
closing and the issuance of a promissory  note for $100,000 which bears interest
of seven percent (7%) per annum and payable in 3 years. The note will be payable
in equal  quarterly  installments  with the first  payment  due 90 days from the
closing date.

As a result of this acquisition,  the Company expects that Transcriptions  Plus,
Inc.   will  add   additional   transcription   revenues  and  it  will  provide
opportunities to sell medical billing services.  A summary of the Transcriptions
Plus, Inc. assets  acquired,  liabilities  assumed and  consideration  for is as
follows:


                                       9
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                                                     Allocated
                                                      Amount
                                                    -----------
              Current assets                        $     6,820
              Fixed assets                               11,029
              Current liabilities                      (107,822)
              Client lists                              286,889
              Goodwill                                  233,084
                                                    -----------
                                                    $   430,000
                                                    ===========

              Consideration paid                      Amount
                                                    -----------
              Cash                                  $   300,000
              7% Note payable - payable in 2008         100,000
              Cost for acquisition                       30,000
                                                    -----------
                                                    $   430,000
                                                    ===========

On January  3,  2005,  the  Company  completed  its  acquisition  of  Physicians
Informatics,  Inc., a Virginia  corporation,  t/a  PracticeOne  ("PracticeOne").
PracticeOne maintains offices in Calabasas,  California,  Somerset,  New Jersey,
and  Richland,  Washington.  PracticeOne  provides  HIPAA  compliant  integrated
software and service solutions that address core practice  management,  clinical
management and claims management for physicians. The acquisition was consummated
by the Company and Practice Xpert Services  Corp., a wholly-owned  subsidiary of
the Company, which entered into the Agreement of Purchase and Sale of Stock (the
"Purchase  Agreement")  dated as of December 20, 2004,  with  PracticeOne and PI
(Cayman)  Limited,  to acquire the capital stock of PracticeOne,  for a purchase
price of  12,500,000  shares of common  stock,  par value  $.001 per share  (the
"Common Stock"),  which has been allocated among the shareholders of PracticeOne
in accordance with their respective ownership interests.

As a result of this  acquisition,  the Company  expects  that  PracticeOne  will
enhance  the  Company's  ability  to better  serve the  medical  community  with
combined  technology with service. A summary of the PracticeOne assets acquired,
liabilities assumed and consideration for is as follows:

                                                     Allocated
                                                      Amount
                                                    -----------

              Current assets                        $   297,605
              Fixed assets                              213,529
              Other assets                               48,641
              Current liabilities                    (3,596,133)
              LT liabilities                         (4,000,000)
              Client lists                            2,500,000
              Goodwill                                4,993,545
              Software                                1,200,000
                                                    -----------
                                                    $ 1,657,187
                                                    ===========

              Consideration paid                      Amount
                                                    -----------

              Common stock - 12,500,000 shares        1,625,000
              Cost for acquisition                       32,187
                                                    -----------
                                                    $ 1,657,187
                                                    ===========


                                       10
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


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

Per the  purchase  agreement,  the  shareholders  of PI (Cayman)  Limited are to
provide funds in cash to cover Physician  Informatics,  Inc.'s operation deficit
for the six  months of  operations  following  the  closing  date.  The  Company
received  $796,000  from  the  shareholders  of PI  (Cayman)  which  offset  the
Goodwill.

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

                    Accounts payable                $ 2,420,982
                    Accrued expenses                    436,572
                    Accrued payroll and benefits        468,800
                    Payroll tax payable                  25,735
                                                    -----------
                                                    $ 3,352,089
                                                    ===========

NOTE 9 - NOTES PAYABLE, RELATED PARTIES

Notes payable to related parties consist of the following:

Notes payable- Shareholder, interest free, due on demand       $   63,789
Notes payable-  shareholder bearing interest at 8%, due on
 Feb. 17, 2007, unsecured                                          91,772
                                                               ----------
Total                                                             155,561
Less: non-current portion                                          40,928
                                                               ----------
Current portion                                                $  114,633
                                                               ==========

NOTE 10 -NOTES PAYABLE

Note payable- interest rate 6.5%, due on Feb. 25, 2005         $   93,910
Notes payable- interest rate 10%, due in May 2005                  55,000
Line of Credit- interest rate LIBOR plus .625%                  3,776,000
Note payable-interest rate 7%                                     100,000
Notes payable & Credit lines                                      278,338
                                                               ----------
Total                                                           4,303,248
Less: non-current portion                                         100,000
                                                               ----------
Current portion                                                $4,203,248
                                                               ==========


                                       11
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11 - CONVERTIBLE NOTE PAYABLE AND EXTRAORDINARY GAIN

Upon purchase of a subsidiary,  the Company  assumed the  subsidiary's  majority
shareholders'  advances and loans amounting $4,000,000,  bearing no interest and
carrying five year term. This note is convertible to the Company's  common stock
at a conversion price at $.40 per share at any time at the option of the Company
and at anytime on or following the 181st  calendar day after the closing date at
the option of majority shareholder.  The Company elected to convert this note to
common stock at June 30, 2005. The effect of the transaction increased shares to
be  issued  by  $700,000  resulting  in a gain  on the  conversion  of  note  of
$3,300,000; the gain has been recorded as an extraordinary gain.

NOTE 12 -DEFERRED REVENUE

The Company has a balance of $886,745  of  deferred  revenue  from a  subsidiary
acquired in the quarter  ended March 31, 2005.  The Company  recognizes  revenue
when (i)  persuasive  evidence of an  arrangement  exists,  (ii) delivery of the
product or service has occurred,  (iii) sales price is fixed or determinable and
(iv)  collectibility is reasonably  assured. If vendor specific evidence of fair
value exists for elements of contract,  the Company  recognizes  the revenue for
delivered elements and defers revenue for undelivered elements.

NOTE 13 -OTHE CURRNT LIABILITIES

Other current liabilities consist of the following:

              Advances from shareholders                       $  139,703
              Credit lines payable                                 54,045
                                                               ----------
                                                               $  193,748
                                                               ==========

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

NOTE 14 -   COMMITMENTS

The  Company  has  office  lease  agreements  that  last up to 5  years.  Future
commitments  under operating  leases are as follows for the twelve months ending
June 30:

                                             2006              $  560,043
                                             2007                 384,601
                                             2008                 294,847
                                             2009                 283,004
                                             2010                 124,350
                                                               ----------
                               Total minimum lease payments    $1,646,845
                                                               ==========


                                       12
<PAGE>

                               PRACTICEXPERT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


The rent expense was  $416,753 and $218,923 for the six and three month  periods
ended June 30, 2005,  respectively,  which  compared to $133,670 and $76,106 for
the same time periods in 2004.

NOTE 15 -   INCOME TAXES

No  provision  was made for other  entities on the Federal  income tax since the
Company has significant  net operating loss.  Through June 30, 2005, the Company
incurred net operating losses for tax purposes of  approximately  $4,493,000 The
net operating  loss carry  forwards may be used to reduce taxable income through
the year 2024.  The  availability  of the  Company's  net  operating  loss carry
forwards 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 raise to deferred tax assets and liabilities at
June 30, 2005 comprised  mainly of net operating  loss carry forward.  The gross
deferred tax asset balance as of June 30, 2005 was approximately  $1,797,000.  A
100%  valuation  allowance  has been recorded for the deferred tax assets due to
the uncertainty of its  realization.  No provision for income tax is made in the
statement of operation for the six months ended June 30, 2005 because of the net
operating losses carried forward.


                                       13
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

FORWARD-LOOKING INFORMATION

THE FOLLOWING  INFORMATION  SHOULD BE READ IN CONJUNCTION  WITH THE CONSOLIDATED
FINANCIAL  STATEMENTS OF  PRACTICEXPERT,  INC. AND THE NOTES  THERETO  APPEARING
ELSEWHERE  IN THIS  FILING.  STATEMENTS  IN  THIS  MANAGEMENT'S  DISCUSSION  AND
ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS AND ELSEWHERE IN THIS
REPORT  THAT  ARE NOT  STATEMENTS  OF  HISTORICAL  OR  CURRENT  FACT  CONSTITUTE
"FORWARD-LOOKING STATEMENTS."

This report contains certain  forward-looking  statements regarding management's
plans and  objectives  for  future  operations  including  plans and  objectives
relating to our planned marketing efforts and future economic  performance.  The
forward-looking statements and associated risks set forth in this report include
or relate to, among other things, (a) our projected sales and profitability, (b)
our growth strategies,  (c) anticipated trends in our industry,  (d) our ability
to obtain and retain sufficient capital for future  operations,  (e) our ability
to achieve adequate intellectual property protection for our future products and
(f) our anticipated  needs for working  capital.  These  statements may be found
under  "Management's  Discussion and Analysis of Financial Condition and Results
of Operations",  as well as in this report  generally.  Actual events or results
may differ  materially from those discussed in  forward-looking  statements as a
result of various factors described in this report generally.  In light of these
risks and  uncertainties,  there can be no  assurance  that the  forward-looking
statements contained in this report will in fact occur.

The  forward-looking  statements  herein are based on current  expectations that
involve a number of risks and uncertainties. Such forward-looking statements are
based on  assumptions  that that  demand  for our  products  and  services  will
significantly  increase,  that our Chief Executive Officer and President,  Chief
Financial  Officer and Executive Vice  President  will remain  employed as such,
that our forecasts  accurately  anticipate market demand, and that there will be
no material  adverse  change in our  operations  or business or in  governmental
regulations   affecting  us,  our  clients  and/or   suppliers.   The  foregoing
assumptions  are based on judgments with respect to, among other things,  future
economic,  competitive and market conditions, and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond  our  control.  Accordingly,  although  we believe  that the  assumptions
underlying the  forward-looking  statements are reasonable,  any such assumption
could prove to be inaccurate  and therefore  there can be no assurance  that the
results  contemplated  in  forward-looking   statements  will  be  realized.  In
addition,  there  are a number  of other  risks  inherent  in our  business  and
operations,  which  could  cause our  operating  results to vary  markedly,  and
adversely from prior results or the results  contemplated by the forward-looking
statements.  Growth in absolute  and  relative  terms and  selling,  general and
administrative  expenses or the occurrence of  extraordinary  events could cause
actual  results  to  vary  materially  from  the  results  contemplated  by  the
forward-looking  statements.  Management  decisions,  including  budgeting,  are
subjective  in many  respects  and  periodic  revisions  must be made to reflect
actual conditions and business developments, the impact of which may cause us to
alter  marketing,  capital  investment  and other  expenditures,  which may also
materially  adversely affect our results of operations.  In light of significant
uncertainties  inherent  in the  forward-looking  information  included  in this
report,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by us or any other person that our  objectives  or plans will be
achieved.


                                       14
<PAGE>

Some of the information in this report contains forward-looking  statements that
involve substantial risks and uncertainties. Any statement in this report and in
the documents incorporated by reference into this report that is not a statement
of an historical fact constitutes a "forward-looking  statement".  Further, when
we use the words  "may",  "expect",  "anticipate",  "plan",  "believe",  "seek",
"estimate",  "internal", and similar words, we intend to identify statements and
expressions that may be forward-looking  statements.  We believe it is important
to communicate  certain of our  expectations  to our investors.  Forward-looking
statements  are not  guarantees  of  future  performance.  They  involve  risks,
uncertainties  and  assumptions  that could  cause our future  results to differ
materially from those expressed in any forward-looking  statements. Many factors
are beyond our ability to control or predict.  In such a case, the trading price
of our  common  stock  could  decline  and you  could  lose  all or part of your
investment.  You are  accordingly  cautioned not to place undue reliance on such
forward-looking  statements.  We have no obligation or intent to update publicly
any  forward-looking  statements whether in response to new information,  future
events or otherwise.

OVERVIEW

      PracticeXpert,  Inc., a Nevada  corporation,  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 were
incorporated under the name Engineering Services,  Inc., on July 13, 1984. Since
then,  we have  undergone a series of  corporate  name  changes by amending  our
articles of  incorporation,  and  discontinued  a number of our  businesses.  On
November  27,  2000,  we changed our name to Thaon  Communications,  Inc.,  and,
subsequently,   acquired  and  commenced   certain   media  and   communications
businesses,  all of which were discontinued or sold. On July 9, 2003, we changed
our name to PracticeXpert, Inc.

Prior to our name change to  PracticeXpert,  Inc., on April 11, 2003, we entered
into a stock purchase agreement with Practice Xpert Services Corp., a California
corporation.  Pursuant to this  agreement,  we 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 our common stock and
1,845,000  shares of our Series C Preferred  Stock,  constituting  72.75% of our
voting securities.  As a condition  thereto,  our existing officers resigned and
our board of  directors  appointed  the  executive  officers of  Practice  Xpert
Services Corp. to serve as the executive management team.

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


                                       15
<PAGE>

On September  30, 2003,  we 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 our common stock and 111,736 shares of our Series C
Preferred Stock to the shareholders of Practice Xpert Services Corp. As a result
thereof,  we own all of  issued  and  outstanding  shares  of  capital  stock of
Practice Xpert Services Corp.

On April 28, 2004, we raised $5.8 million from investors pursuant to the sale of
shares of our common stock and warrants to purchase shares of common stock in an
offering exempt from the registration  requirements  under the Securities Act of
1933, as amended.  This transaction was immediately  followed by the filing of a
Form SB-2 Registration  Statement with the Securities and Exchange Commission to
register such shares of common stock and common stock underlying the warrants in
a public offering,  which was declared  effective by the Securities and Exchange
Commission  ("SEC") on August 13, 2004, and currently  remains  effective.  Such
investors  purchased  48,333,347  shares of our common stock at a price of $0.12
per share, and five-year warrants to purchase  48,333,347 shares of common stock
at an exercise  price of $0.30 per share.  H.C.  Wainwright  & Co.  Inc., a Wall
Street  investment  banking  firm,  acted as the  exclusive  placement  agent in
connection  with the foregoing.  H.C.  Wainwright & Co. Inc., and its designees,
received  warrants  to  purchase  9,666,668  shares of our common  stock,  as an
investment  banking fee and certain cash consideration for the services provided
to us.

On April 29, 2004, we completed the  acquisition  of Cancer Care Network,  Inc.,
located in Oklahoma City,  Oklahoma,  which specializes in radiation and medical
oncology billing and management for a purchase price of $5,500,000. The purchase
price  consisted  of a lump sum cash  payment of  $4,100,000,  the  issuance  of
$500,000 in shares of common  stock,  subject to an increased  adjustment on the
first  and  second  anniversary  date  of the  closing,  and the  issuance  of a
promissory note for $900,000,  which bears interest of six and one-half  percent
(6.5%)  per annum and is payable in 10 monthly  installments  of  principal  and
interest.

On September 1, 2004,  we disposed of  Healthcare  Billing  Solutions,  Inc., by
agreeing  to  mutually  rescind  the  stock  purchase   agreement  entered  into
previously  with the seller.  The  operating  results  from  Healthcare  Billing
Solutions, Inc. are presented separately in our financial statements under "Loss
on disposal of subsidiary, net".

On January 3, 2005, we acquired Physician  Informatics,  Inc., doing business as
PracticeOne  ("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.
Under the terms of our agreement,  we issued to the  shareholders of PracticeOne
12,500,000 shares of our common stock, and assumed a $4 million  promissory note
payable to its majority shareholder.  Additional purchase price consideration is
payable to the shareholders as an earn-out based upon  PracticeOne's  results of
operations subsequent to the closing. Furthermore, such majority shareholder has
guaranteed a revolving credit facility between PracticeOne and a major financial
institution that will provide us an additional  $2,000,000 in borrowing capacity
for any potential future corporate  acquisitions,  as determined by our Board of
Directors.


                                       16
<PAGE>

RESULTS OF OPERATIONS

      The following sections discuss the results of operations for the three and
six month periods ended June 30, 2005, compared to the results of operations for
the three and six month periods  ended June 30, 2004,  and were derived from our
financial  statements and notes thereto included in this quarterly report, which
are  unaudited,  and related  records.  Historical  results are not  necessarily
indicative of results that may be expected for any future period.  The following
information and data should be read in conjunction with our unaudited  financial
statements,  including  the  related  footnotes  and with  reference  to certain
additional  information  previously  reported in the Company's  annual report on
Form 10-KSB for the year ended December 31, 2004, and reports  previously  filed
with the SEC under the Securities Exchange Act of 1934, as amended.

      Net  revenue  was  $5,683,574  for the three  months  ended June 30,  2005
compared to net revenue of $2,742,020  for the three months ended June 30, 2004.
Revenues in the 2005 period were greater  primarily as a result of new business,
and as a result of the  acquisition  of Cancer Care  Network in May,  2004,  and
PracticeOne in January, 2005.

      During  the  second  quarter  of  2004,  we began to  report  revenue  and
operating expenses in two distinct revenue classifications, "Medical billing and
related  services"  and  "Management  services".  For 2005,  we have  decided to
discontinue using these reporting  classifications.  We consider our customers -
independent   physicians,   physician  groups,  and  clinics  -  to  be  of  one
classification, as all of our products and services are offered to all customers
within our target customer base.  Further,  the services performed for customers
who receive Management  services are in many instances identical to the services
performed for customers who receive  Medical billing and related  services.  For
financial  statement  purposes,   we  do  segment  revenues  and  certain  other
information by geographic region. See "Notes to Unaudited Consolidated Financial
Statements".

      Our  operating  expenses  for the three  months  ended June 30,  2005 were
$6,993,101  compared to  $3,232,089  for the three  months  ended June 30, 2004.
Operating  expenses  increased  in 2005 over  2004 due to  expenses  related  to
servicing new business, the added costs from the operations of new acquisitions,
costs  associated  with the  amortization of acquired client lists and software,
new sales and  marketing  initiatives  and  expenses  related  to the  continued
pursuit of acquisition opportunities.

      Included in operating  expenses are the expenses of operating two specific
cancer treatment  facilities.  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.  However,  these drugs  represent a significant
cost, and if drugs are purchased and not used immediately,  the result will be a
spike in operating expenses,  in relation to revenues.  During the quarter ended
June 30,  2005,  $150,144  worth of drugs  were  purchased,  and not used in the
quarter.  These drugs have been reported as an asset on our consolidated balance
sheet at June 30, 2005, as Inventory. During the quarter ended June 30, 2005, an
additional  $1,536,477 of drugs were  administered to patients,  and the related
costs were included as operating expenses.


                                       17
<PAGE>

      We had a net income of $1,928,562,  or a basic net income per common share
of $0.01 and a fully diluted net income per common share of $0.01, for the three
months ended June 30, 2005  compared to a net loss of  $615,409,  or a basic and
fully  diluted net loss per common  share of $0.01,  for the three  months ended
June 30,  2004.  The net income for the  current  three  month  period  includes
expenses of $1,009,615 in depreciation, amortization and the write-down in value
of  intangible  assets to  estimated  realizable  value,  primarily  related  to
acquired  client  lists and  acquired  software.  In  addition,  the net  income
includes   $433,790  of  operating   expenses  relating  to  the  operations  of
PracticeOne, which was acquired in January 2005. Under the terms of the purchase
agreement, the previous owners are obligated to reimburse us for these operating
expenses.  However,  upon  the  advice  of our  independent  auditors,  we  have
determined  that the proper  treatment for these  expenses is to include them on
the income  statement  as  expenses,  and to credit the cash  payments  from the
previous owners of PracticeOne against the goodwill of the business.

      Net  revenue  was  $10,707,675  for the six  months  ended  June 30,  2005
compared to net revenue of  $3,671,491  for the six months  ended June 30, 2004.
Revenues in the 2005 period were greater  primarily as a result of new business,
and as a result of the  acquisition  of Cancer Care  Network in May,  2004,  and
PracticeOne in January, 2005.

      Our  operating  expenses  for the six  months  ended  June 30,  2005  were
$12,931,910  compared  to  $4,685,098  for the six months  ended June 30,  2004.
Operating  expenses  increased  in 2005 over  2004 due to  expenses  related  to
servicing new business, the added costs from the operations of new acquisitions,
costs  associated  with the  amortization of acquired client lists and software,
new sales and  marketing  initiatives  and  expenses  related  to the  continued
pursuit of acquisition opportunities.

      Included in operating  expenses are the expenses of operating two specific
cancer treatment  facilities.  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.  However,  these drugs  represent a significant
cost, and if drugs are purchased and not used immediately,  the result will be a
spike in  operating  expenses,  in  relation to  revenues.  During the six month
period ended June 30, 2005, $150,144 worth of drugs were purchased, and not used
during  the  period.  These  drugs  have  been  reported  as  an  asset  on  our
consolidated balance sheet at June 30, 2005, as Inventory.  During the six month
period ended June 30, 2005, an additional  $2,419,699 of drugs were administered
to patients, and the related costs were included as operating expenses.

      We had a net income of $991,425, or a basic net income per common share of
$0.01 and a fully  diluted  net income per  common  share of $0.01,  for the six
months ended June 30, 2005 compared to a net loss of $1,338,118,  or a basic and
fully diluted net loss per common share of $0.03,  for the six months ended June
30, 2004. The net income for the current six month period  includes  expenses of
$1,859,765  in  depreciation,  amortization  and  the  write-down  in  value  of


                                       18
<PAGE>

intangible assets to estimated  realizable value,  primarily related to acquired
client  lists and  acquired  software.  In  addition,  the net  income  includes
$796,000 of operating expenses relating to the operations of PracticeOne,  which
was acquired in January  2005.  Under the terms of the purchase  agreement,  the
previous  owners are  obligated to reimburse  us for these  operating  expenses.
However,  upon the advice of our independent  auditors,  we have determined that
the  proper  treatment  for these  expenses  is to  include  them on the  income
statement as expenses,  and to credit the cash payments from the previous owners
of PracticeOne against the goodwill of the business.  Net income also includes a
one time gain on the  conversion  of note of  $3,300,000.  Also,  during the six
month period we were able to obtain  $165,284 in consulting,  advisory and other
services through the issuance of unregistered common stock.

LIQUIDITY AND CAPITAL RESOURCES

      As of June 30, 2005, we had $307,615 in cash and cash equivalents. Current
assets at June 30,  2005 were  $4,364,641,  compared to current  liabilities  of
$9,188,550,  resulting in a working capital deficit of $4,823,909. This compares
to a working  capital  deficit at March 31, 2005 of  $5,038,743.  Of the current
liabilities at June 30, 2005,  $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,
$886,745  relates  to  deferred   revenue  on  software  sales,   $3,776,000  is
outstanding on the Citibank,  N.A. revolving credit facility,  and approximately
$767,173  is  due  to,  or  advances  from,  officers,  directors,   significant
shareholders and former owners of certain of PracticeXpert's subsidiaries.

      Our only sources of liquidity  are our bank  accounts,  our unused  credit
facilities,  which at June 30, 2005 were $224,000 and our revenues.  We received
$11,269  during  the six months  ended  June 30,  2005 from the sale of stock to
investors.  During the six months ended June 30,  2005,  we used  $1,872,596  in
capital to fund operations, we received $1,416,551 in advances on notes payable,
net of principal payments made, we purchased  equipment for operations  totaling
$71,579,  and we used  $342,164  for  acquisitions,  net of cash  received  with
acquisitions. During the six month period we were able to obtain services valued
at $165,284  through the issuance of  unregistered  common stock. We continue to
seek capital, primarily for expansion plans.

      At March 31, 2005 long term liabilities included a $4,000,000 note payable
to the former majority  shareholder of PracticeOne.  This note was  non-interest
bearing,  and was  convertible to 10,000,000  million shares of common stock, at
the  conversion  price of $0.40 per share,  at any time at our option and at any
time on or following the 181st calendar day after the closing date at the option
of majority  shareholder.  During the three month  period ended June 30, 2005 we
elected to convert this note into common stock. The stock to be issued to retire
this  note was  valued  at  $700,000  based on the then  current  market  price,
resulting in a gain on the conversion of note of $3,300,000.

      Due to numerous  economic and competitive  risks,  any or all of which may
have a material  adverse impact upon our  operations,  there can be no assurance
that we will be able to successfully  generate significant revenues or achieve a
level of profits which will permit us to stay in business.  However,  we believe
cash  generated  from net revenues will be sufficient to fund all of our general
and administrative expenditures for the next twelve months.


                                       19
<PAGE>

FLUCTUATIONS IN OPERATING RESULTS; SEASONALITY

      Annual and  quarterly  fluctuations  in our results of  operations  may be
caused by the timing and the amount of payments received by our customers,  upon
which our  revenues  are based.  Our future  results  also may be  affected by a
number of factors,  including  our ability to offer our services at  competitive
prices and to anticipate  customer demands.  Our results may also be affected by
economic  conditions in the geographical  areas in which we operate.  All of the
foregoing may result in substantial  unanticipated quarterly earnings shortfalls
or  losses.  Due to  all of the  foregoing,  we  believe  that  period-to-period
comparisons  of our results of operations  are not  necessarily  meaningful  and
should not be relied upon as indicative of future performance.

INFLATION

      We  believe  that our  revenue  and  results of  operations  have not been
significantly impacted by inflation since we began operations.

SUBSEQUENT EVENTS

None.

ITEM 3. CONTROLS AND PROCEDURES

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


                                       20
<PAGE>

                           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 financial condition or liquidity.  The resolution in any reporting
period of one or more of these matters,  however,  could have a material adverse
effect on the results of operations for that period.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      During the three month  period ended June 30,  2005,  we issued  1,317,329
shares of common  stock,  in a private  offering  exempt  from the  registration
requirements  under the Securities Act of 1933, as amended,  pursuant to Section
4(2)  thereof,  in exchange  for services to certain  consultants,  advisors and
service providers of the Company,  and 313,111 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 of 1933, as amended.

      During the three  month  period  ended June 30,  2005,  we issued  222,017
shares of common stock to accredited  investors,  in a private  offering  exempt
from the registration requirements under the Securities Act of 1933, as amended,
pursuant to Section 4(2) thereof, at a purchase price of $0.30 per share for net
proceeds to the Company of $66,605, of which $55,340 was received in 2004. 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 of 1933, as amended.

      On June 1, 2005, we issued to Meridian Commercial  Healthcare Finance, LLC
warrants  to purchase  900,000  shares of common  stock at an exercise  price of
$0.30 per  share,  expiring  on June 1, 2015,  in  connection  with a loan.  The
issuance of the warrants was exempt from the registration requirements under the
Securities  Act of 1933,  as amended,  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 of 1933, as amended.

      On July  12,  2005,  we  settled  a  transaction  for the  issuance  of an
aggregate of 10.0 million  shares of common stock in a private  offering  exempt
from the registration requirements under the Securities Act of 1933, as amended,
pursuant to Section 4(2) thereof,  for the total  consideration of $4.0 million,
or $0.40 per share, to one investor,  PI (Cayman)  Limited,  a company organized


                                       21
<PAGE>

and  existing  under  the laws of the  Cayman  Islands.  Under the terms of this
transaction,  a convertible  promissory note (the "Note") dated January 3, 2005,
in the  principal  amount of $4.0 million was issued by  PracticeXpert  Systems,
Inc.,  formerly Physician  Informatics,  Inc., our subsidiary,  as debtor, to PI
(Cayman) Limited, as lender,  whereupon,  we exercised our conversion option, as
set forth in the Note,  effective  on June 30,  2005,  to convert  the Note into
shares of common stock . PI (Cayman)  Limited  represented  its intention to the
registrant  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.  We believe  that PI
(Cayman)  Limited is an "accredited  investor",  as that term is defined in Rule
501 promulgated under the Securities Act of 1933, as amended.


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 AND REPORTS ON FORM 8-K

1.    The following Exhibits are filed herein:

      No.         Title
      ----        --------------------------------------------------------------
      31.1        Certification   of  Chief  Executive   Officer  and  President
                  pursuant to the Securities  Exchange Act of 1934, Rules 13a-14
                  and  15d-14,  as  adopted  pursuant  to  Section  302  of  the
                  Sarbanes-Oxley Act of 2002

      31.2        Certification  of  Chief  Financial  Officer  pursuant  to the
                  Securities  Exchange Act of 1934, Rules 13a-14 and 15d-14,  as
                  adopted pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                  2002

      32.1        Certification  pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


                                       22
<PAGE>

                                   SIGNATURES

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

                                        PRACTICEXPERT, INC.


DATED: August 19, 2005                  By: /s/ Jonathan Doctor
                                          --------------------------------------
                                          Jonathan Doctor
                                          Chief Executive Officer and President,
                                          Director
                                         (Principal Executive Officer)


DATED: August 19, 2005                  By: /s/ Michael Manahan
                                          --------------------------------------
                                          Michael Manahan
                                          Chief Financial Officer, Director
                                          (Principal Financial Officer and
                                           Principal Accounting Officer)


                                       23
<PAGE>

                                INDEX TO EXHIBITS

No.            Title
-----          -----------------------------------------------------------------
31.1           Certification of Chief Executive  Officer and President  pursuant
               to the Securities  Exchange Act of 1934, Rules 13a-14 and 15d-14,
               as adopted pursuant to Section 302 of the  Sarbanes-Oxley  Act of
               2002

31.2           Certification   of  Chief  Financial   Officer  pursuant  to  the
               Securities  Exchange  Act of 1934,  Rules  13a-14 and 15d-14,  as
               adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1           Certification  Pursuant  to 18 U.S.C.  Section  1350,  as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


                                       24