##### Table of Contents



U.S. SECURITIES
    AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT UNDER SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    001-15667
  ACCESS PLANS USA,
    INC.
 (Exact name of registrant as
    specified in its charter)
  OKLAHOMA

73-1494382(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   4929
    ROYAL LANE, SUITE 200
    IRVING, TEXAS 75063 (Address
    of principal executive offices)
  (866) 578-1665 (Registrants
    telephone number)
     Securities
    registered under Section 12(b) of the Exchange Act:
    None
    Securities registered under Section 12(g) of the Exchange
    Act:
    Common Stock, $0.01 Par Value
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K.  Yes o þ
  Rule 12b-2
  o o þ
  Rule 12b-2 o þ




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##### 



ACCESS
    PLANS USA, INC.FORM 10-K
    For the Fiscal Year Ended December 31, 2006
    TABLE OF CONTENTS
  PagePART I.Item 1.


Description of
    Business


4Item 1A.


Risk
    Factors


23Item 1B.


Unresolved Staff
    Comments


31Item 2.


Description of
    Properties


31Item 3.


Legal
    Proceedings


31Item 4.


Submission of
    Matters to a Vote of Security Holders


33PART II.Item 5.


Market for the
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchase of Equity Securities


34Item 6.


Selected Financial
    Data


37Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


38Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


48Item 8.


Financial
    Statements and Supplementary Data


49Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


50Item 9A.


Controls and
    Procedures


50Item 9B


Other
    Information


51PART III.Item 10.


Directors,
    Executive Officers and Corporate Governance


51Item 11.


Executive
    Compensation


56Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


65Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


67Item 14.


Principal
    Accounting Fees and Services


69PART IV.Item 15.


Exhibits and
    Financial Statement Schedules


69SIGNATURES


71Amended and Restated Certificate of IncorporationAmended and Restated BylawsForm of Certificate of the Common StockServices AgreementConsent of BDO Seidman, LLPConsent of Hein & Associates LLPRule 13a-14(a) Certification of the Chief Executive OfficerRule 13a-14(a) Certification of the Chief Financial OfficerSection 1350 Certification of the Chief Executive OfficerSection 1350 Certification of the Chief Financial Officer   2




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##### Table of Contents



CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING INFORMATION
   3




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##### Table of Contents



PART I  ITEM 1.
    DESCRIPTION
    OF BUSINESS      Consumer Plan Division.
  Insurance Marketing Division.
  Regional Health Care Division.
    
    We have access to additional distribution channels, including a
    large network of insurance agents that ICM has recruited to sell
    its products;
    We gained expertise in taking advantage of electronic technology
    and web-based services to shorten product development and
    implementation time;
    We are able to complement our non-insurance medical discount
    programs with a broad range of health insurance and specialty
    insurance products; and
    We have reorganized our management team to include key members
    of the ICM management team, including ICMs founder, Peter
    W. Nauert, who is now our President and Chief Executive Officer
    and the Chairman of our Board of Directors. Mr. Nauert, a
    former C.E.O. of two public companies, brings us significant
    expertise and experience in the health insurance industry.       4




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##### Table of Contents



Form 10-K, Form 10-Q, Form 8-K, www.accessplansusa.com
  Healthcare
    Industry Challenges and Market Opportunity
    The uninsured.
    The insured and underinsured. year-by-year and/or
   5




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##### Table of Contents



Self-employed and small
    businesses. 60-80%
  Senior population.
 6




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##### Table of Contents



Our
    Solutions
    Access
    Plans USAs
    Complete SPECTRUM of Health Care Programs
  
        Our
    Consumer Plan Division
  tm
 7




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##### Table of Contents




    Responsibility for the use of healthcare must be put back in the
    hands of the patient. Insurance policies with low co-pays and
    low deductibles have become very popular; however, these
    arrangements actually encourage over-utilization resulting in
    increased healthcare costs; and
    Healthcare must be affordable for the patient, while providing
    the medical providers with adequate payment on a timely basis
    for services provided.        Code*


Avg.*


Total


Avg.*


Total


%


Total $*CPT


CPT Code Description

Count


Price


Price


Reprice


Reprice


Saved


Savings99213


Office/Outpatient Visit, Est


22,230


$
78


$
1,742,090


$
54


$
1,195,689



31
%

$
546,40036415


Routine Venipuncture


14,340



17



239,294



8



109,202



54
%


130,09299214


Office/Outpatient Visit, Est


9,257



120



1,107,947



81



745,968



33
%


361,97980061


Lipid Panel


8,087



76



617,355



22



180,687



71
%


436,66885025


Complete CBC w/Auto Diff WBC


6,523



31



201,589



13



82,840



59
%


118,74980053


Comprehen Metabolic Panel


5,945



55



326,662



18



107,756



67
%


218,90699212


Office/Outpatient Visit, Est


4,389



59



259,283



39



169,697



35
%


89,58684443


Assay Thyroid STIM Hormone


4,035



81



327,724



25



101,785



69
%


225,93999203


Office/Outpatient Visit, New


3,383



135



457,536



95



320,028



30
%


137,50788142


Cytopath, C/V, Thin Layer


3,151



69



217,915



33



104,821



52
%


113,09381,340






$
5,497,395






$
3,118,473



43
%

$
2,378,919     *
    
    The Code Count represents the total number of transactions; Avg.
    Price reflects the retail rates providers charge the
    uninsured; Avg. Reprice reflects the Care Entrée discount
    rate; and Total $ Savings reflects the savings by our Care
    Entréetm
    members. Current Procedural Terminology
    (CPT®)
    is a registered trademark of the American Medical Association. 8




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24-hour tm
  Personal Medical Accounts. tm
  Technology
    and Member Services
    
    maintaining member eligibility and demographic information,
    maintaining representative information including genealogy
    reporting,
    paying commissions,
    maintaining a database of all providers and providing provider
    locator services,
    re-pricing and payment of medical bills,
    drafting members accounts on a monthly basis, and
    tracking of cash receipts and revenues.     9




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Sales and
    Marketing Channels
    Network Marketing. tm tm tm tm
    
  Tele-Sales.
      
    TeleService Centers
    Insurance Agencies with Call Centers
    Large Companies/Brands Looking for Additional Ways to Monetize
    Their Customer Base 10




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Independent Agent Direct.
  
  Reliance
    on key customers.
    Our
    Insurance Marketing Division
      
    continue to develop products for consumers to provide health
    care savings
    and/or
    insurance protection to families and individuals, including
    Americans in their retirement years,
    enhance our product portfolio by adding new products developed
    on our current product platform,
    expand into additional states where we are not currently
    marketing to any significant degree (including Florida,
    California and the upper Northeast), and
    expand the number of insurance carriers that we represent.    
    Major medical/individual health insurance,
    Senior health insurance, managed care, life insurance and
    annuity, and
    Specialty medical and benefit plans for affinity groups,
    associations, employer groups and other groups.  Distribution
    Channels and Operating Divisions
    
  Americas Health Care/Rx Plan
    (AHCP).
 11




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Adult Care Plans/Rx America
    (ACP).
  
  National Direct USA.
  
  American Benefit Resource/Rx
    (ABR).
    Dollars in Thousands



ICM RevenueInsurance Company

Products

2005


2006Continental General Insurance
    Company

Proprietary Major Medical;
    Proprietary HSA-qualified High Deductible plans

$
1,340


$
1,481World Insurance Company

Proprietary Major Medical;
    HSA-qualified High Deductible plans


160



864Empire Fire and Marine

Proprietary Major Medical;
    Proprietary HSA-qualified High Deductible plans


230



724Central Reserve Life Insurance
    Company

Medicare Supplement; Final Expense
    Life Insurance


1,680



1,390Companion Life Insurance Company

Proprietary Mini-Medical plan


610



614Other Carriers




60



279$
4,080


$
5,352     Insurance Company

ProductsGuarantee Trust Life

Proprietary Major Medical and
    HSA-qualified High Deductible plansGolden Rule Insurance Company

Major Medical and HSA-qualified
    High Deductible plansWorld Corp Insurance Company

Medicare Supplement plansThe Wellpoint Family of Companies

Senior Managed Care, Medicare
    Advantage products and Medicare Advantage Medical Savings
    Accounts (MSAs)  12




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##### Table of Contents



Dollars in Thousands

2006State

Revenue


PercentArizona

$
629



15.4
%Illinois


432



10.6
%Texas


412



10.1
%Pennsylvania


324



7.9
%Colorado


270



6.6
%Tennessee


257



6.2
%North Carolina


249



6
%Ohio


190



4.6
%Michigan


161



3.9
%Wisconsin


124



3
%Indiana


114



2.8
%West Virginia


103



2.5
%Nebraska


102



2.5
%Virginia


98



2.4
%Sub-total


3,465



84.5
%All Other States


633



15.5
%$
4,098



100
%   Products
    for Consumers
    Major Medical / Individual Health Insurance
    Market.
  Major Medical Health
    Insurance.
  HSA-Qualified High Deductible Plans.
  Short Term Medical Plans.
  Senior Health Insurance, Managed Care, Life Insurance and
    Annuity.
  Medicare Supplement Plans.
 13




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Medicare Advantage Plans.
  
    Medicare Health Maintenance Organization (HMOs)
    Preferred Provider Organizations (PPO)
    Private
    Fee-for-Service
    Plans      Part D Prescription Plans.
  Final Expense Insurance Plans.
  Specialty Medical And Benefit
    Plans.
  Mini-Medical Plans.
  Insuracos
    Services For Agents and Agencies
    Multiple Carriers for Specific Product
    Lines. state-by-state
  Web Based Technology.
  
    real-time rate quoting;
    agent recruiting, licensing, and contracting; 14




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
    insurance application submission;
    lead ordering and delivery; and
    access to brochures, applications, and marketing materials.    
    a streamlined underwriting process that automatically limits
    application submissions,
    increasing the issue and placement rate on submitted business,
    a proprietary pre-scrubbed agent enrollment process
    that ensures complete and accurate agent contracting,
    an efficient way for agents to sell and submit applications over
    the phone, and
    a central repository that agents visit frequently to obtain
    important documents and updated materials.  Lead Distribution Programs for
    Agents.
  Competitive agent commission rates supplemented by various
    agent incentive programs.
  Working Capital Requirements.
  Home Office Support. on-site e-mail e-mail
  Our
    Regional Health Care Division
  
   15




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El Paso/Las
      Competition
  Consumer Plan Division.
    Insurance Marketing Division.
   16




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Regional Healthcare Division.
  Principal Competitive Factors.
  
    the ability to maintain contracts with reputable preferred
    provider organization networks that offer substantial healthcare
    savings,
    the ability to maintain contracts with reputable insurance
    companies and insurance agents and agencies,
    the ability to attract and retain independent marketing
    representatives for our Consumer Plan Division,
    the ability to identify, develop and offer unique membership
    healthcare programs,
    the quality and breadth of the healthcare membership programs
    offered,
    the quality and extent of customer service,
    the ability to offer substantial savings on major-medical costs
    such as hospital and surgical costs,
    the ability to combine the programs with affordable insurance
    plans that have high deductibles or set payment for
    hospitalization,    
    prices of products and service offered,
    marketing expertise,
    compensation plans for representatives,
    the ability to hire and retain employees,
    the development by others of member programs that are
    competitive with our programs,
    responsiveness to customer needs,
    the ability to satisfy investigations on the part of state
    attorneys general, insurance commissioners and other regulatory
    bodies,
    the ability to finance promotions for the recruiting of members
    and representatives, and
    the ability to effectively market the product on the Internet.  Competitive Risk.
  
    competitors will not develop their own software that re-prices
    medical bills or a full-service customer service function
    similar to ours,
    our competitors will not increase their emphasis on programs
    similar to our programs to more effectively compete with us,
    our competitors will not recruit our independent marketing
    representatives and insurance agents by offering more attractive
    sales commissions,
    our competitors will not provide programs comparable or superior
    to our programs at lower membership fees or lower insurance
    premiums, 17




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
    our competitors will not adapt more quickly to evolving industry
    trends or changing market requirements,
    new competitors will not enter the market,
    other businesses such as insurance companies or preferred
    provider organization networks will not themselves introduce
    competing programs, and
    competitors may not develop more effective marketing campaigns
    that more effectively utilize direct mail and television
    advertising.    Business
    Objectives and Plans
    Continue to Develop a Broad Spectrum of Unique Healthcare
    Service Programs for Broad Markets.
  Continue to Develop a Recurring Revenue
    Base. tm tm
      Leverage and Develop Multiple Network
    Partners.
  Provide High Quality Consumer Service for Our Healthcare
    Membership Program.
  Provide High Quality Service for our Sales Representatives
    and Insurance Agents.
 18




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Continue to Develop and Enhance Our
    Technology.
  Increase Tele-Sales Operations.
  Develop Private-Label Product
    Offerings.
  Distribution of Our Products in Multiple
    Languages.
  Continue to Expand Our Third-Party Administrator
    Services.
  Governmental
    Regulation
    Possible Insurance Company
    Regulation.
    State Discount Medical Program
    Regulation. and/or state-by-state
   19




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
    non-compliance may cause us to become the subject of a variety
    of enforcement or private actions
    compliance with changes in applicable regulations could
    materially increase the associated operating costs;
    non-compliance with any rules and regulations enforced by a
    federal or state consumer protection authority may subject us or
    our management personnel to fines or various forms of civil or
    criminal prosecution; and
    non-compliance or alleged non-compliance may result in negative
    publicity potentially damaging our reputation, network
    relationships, client relationships and the relationship with
    program members, representatives and consumers in general.  Insurance
    Regulations.
    
    Similar to the insurance companies providing products and
    services offered by us, we are unable to accurately predict
    additional government regulations that may be enacted in the
    future affecting the insurance industry and the offered products
    and service or how existing or future regulations might be
    interpreted.
    Additional governmental regulation or future interpretation of
    existing regulations may increase the cost of compliance or
    materially affect the insurance products and services offered by
    us through independent insurance agencies and their agents and
    our operations, products or profitability.
    We must rely on the insurance companies that provide the
    insurance products and financial services offered by Insuraco to
    carefully monitor state and federal legislative and regulatory
    activity as it affects their insurance products and services.
    The Company believes that the insurance products and financial
    services that we offer comply in all material respects with all
    applicable federal and state regulations.
    We work closely with independent associations that provide
    discounts and other benefits to groups of consumers. Among the
    benefits afforded to the members of such associations are
    varying forms of insurance. Our ability to offer insurance
    products that we are authorized to distribute to these
    associations for inclusion in their benefit packages may be
    affected by governmental regulation or future interpretation of
    existing regulations that may increase the cost of regulatory
    compliance or affect the nature and scope of products that we
    may make available to such associations.  Product Claims and Advertising.
    
    the Federal Trade Commission will not question our advertising
    or other operations in the future, 20




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
    a state will not interpret product claims presumptively valid
    under federal law as illegal under that states
    regulations, or
    future Federal Trade Commission regulations or decisions will
    not restrict the permissible scope of such claims.    Network Marketing Organization.
       21




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Healthcare Regulation and
    Reform.
          E-Commerce
    Regulation.
  Legislative Developments.
   22




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Employees
    Number ofDepartment

EmployeesCustomer Services and Claims
    Administration


64Executive and Administration


11Information Services


9Provider Relations


3Finance and Accounting


7Sales and Marketing


3Data Entry


1Quality Assurance


9Utilization Review and Management


7     ITEM 1A.
    RISK
    FACTORS  Our Risk
    Factors
    
    adversely affect the market price of our common stock,
    adversely affect our future operations,
    adversely affect our business,
    adversely affect our financial condition,
    adversely affect our results of operations,
    require significant reduction or discontinuance of our
    operations,
    require us to seek a merger partner, or
    require us to sell additional stock on terms that are highly
    dilutive to our shareholders.  THIS
    REPORT CONTAINS CAUTIONARY STATEMENTS RELATING TO FORWARD
    LOOKING INFORMATION.
   23




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
    discuss our future expectations,
    contain projections of our future operating results or of our
    future financial condition, or
    state other forward-looking information.    DURING
    2006, 2005 AND 2004 WE HAVE INCURRED LOSSES FROM OPERATIONS IN
    THE CONSUMER PLAN DIVISION AND REGIONAL HEALTHCARE
    DIVISION AND THESE LOSSES MAY CONTINUE.
  tm tm
  OUR
    REVENUES IN THE CONSUMER PLAN DIVISION ARE LARGELY
    DEPENDENT ON THE INDEPENDENT MARKETING REPRESENTATIVES, WHOSE
    REDUCED SALES EFFORTS OR TERMINATION MAY RESULT IN SIGNIFICANT
    LOSS OF REVENUES.
  tm tm tm tm
    A
    LARGE PART OF OUR REVENUES ARE DEPENDENT ON KEY
    RELATIONSHIPS WITH A FEW PRIVATE LABEL RESELLERS AND WE MAY
    BECOME MORE DEPENDENT ON SALES BY A FEW PRIVATE LABEL
    RESELLERS.
   24




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DEVELOPMENT
    AND MAINTENANCE OF RELATIONSHIPS WITH PREFERRED PROVIDER
    ORGANIZATIONS ARE CRITICAL AND THE LOSS OF SUCH RELATIONSHIPS
    COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
    BUSINESS.
    WE
    CURRENTLY RELY HEAVILY ON ONE KEY PREFERRED PROVIDER
    ORGANIZATION AND THE LOSS OF OR A CHANGE IN OUR RELATIONSHIP
    WITH THIS PROVIDER COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
    BUSINESS.
    WE
    FACE COMPETITION FOR MARKETING REPRESENTATIVES AS WELL AS
    COMPETITIVE OFFERINGS OF HEALTHCARE PRODUCTS AND
    SERVICES.
       25




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GOVERNMENT
    REGULATION MAY ADVERSELY AFFECT OR LIMIT OUR
    OPERATIONS.
      WE
    HAVE A FIDUCIARY RESPONSIBILITY TO OUR MEMBERS THROUGH OUR TOTAL
    CARE AND ESSENTIAL CARE PROGRAM OFFERINGS. IN THIS CAPACITY, WE
    COULD BE LIABLE FOR THE LOSS OF MEMBERS FUNDS DEPOSITED
    WITH US IN PERSONAL MEDICAL ACCOUNTS.
    AS A
    RESULT OF THE INTRODUCTION OF PERSONAL MEDICAL ACCOUNTS, OUR
    FINANCIAL POSITION AND RESULTS OF OPERATIONS MAY CONTINUE TO BE
    ADVERSELY IMPACTED BY A DECREASE IN THE NUMBER OF HEALTHCARE
    SAVINGS PROGRAM MEMBERSHIPS THAT WE CAN SELL AND
    MAINTAIN.
   26




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THE
    FAILURE OF OUR NETWORK MARKETING ORGANIZATION TO COMPLY WITH
    FEDERAL AND STATE REGULATION COULD RESULT IN ENFORCEMENT
    ACTION AND IMPOSITION OF PENALTIES, MODIFICATION OF OUR NETWORK
    MARKETING SYSTEM, AND NEGATIVE PUBLICITY.
      
    the evolving interpretations of existing laws and regulations,
    and
    the enactment of new laws and regulations pertaining in general
    to network marketing organizations and product and service
    distribution.    
    result in enforcement action and imposition of penalty,
    require modification of the marketing representative network
    system,
    result in negative publicity, or
    have a negative effect on distributor morale and loyalty.    THE
    LEGALITY OF OUR NETWORK MARKETING ORGANIZATION IS SUBJECT TO
    CHALLENGE BY OUR MARKETING REPRESENTATIVES, WHICH COULD RESULT
    IN SIGNIFICANT DEFENSE COSTS, SETTLEMENT PAYMENTS OR JUDGMENTS,
    AND COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF
    OPERATIONS AND FINANCIAL CONDITION.
    WE MAY
    HAVE EXPOSURE AND LIABILITY RELATING TO NON-COMPLIANCE WITH THE
    HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 AND
    THE COST OF COMPLIANCE COULD BE MATERIAL.
   27




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DISRUPTIONS
    IN OUR OPERATIONS DUE TO IMPLEMENTATION OF OUR MANAGEMENT
    INFORMATION SYSTEM MAY OCCUR AND COULD ADVERSELY AFFECT OUR
    CLIENT RELATIONSHIPS.
    WE
    HAVE MANY COMPETITORS AND MAY NOT BE ABLE TO COMPETE EFFECTIVELY
    WHICH MAY LEAD TO A LACK OF REVENUES AND DISCONTINUANCE OF OUR
    OPERATIONS.
      
    we will be able to compete successfully;
    our competitors will not develop programs that render our
    programs less marketable or even obsolete; or
    we will be able to successfully enhance our programs when
    necessary.  THE
    GOODWILL ACQUIRED PURSUANT TO OUR ACQUISITIONS OF THE CAPELLA
    GROUP AND AAI MAY BECOME FURTHER IMPAIRED AND REQUIRE A
    WRITE-DOWN AND THE RECOGNITION OF AN IMPAIRMENT EXPENSE THAT MAY
    BE SUBSTANTIAL.
    OUR
    SUBSIDIARY, AAI, DERIVES A LARGE PERCENTAGE OF ITS INCOME FROM A
    FEW KEY CLIENTS AND THE LOSS OF ANY OF THOSE CLIENTS COULD HAVE
    A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS AND
    FINANCIAL CONDITION.
   28




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##### Table of Contents



WE MAY
    FIND IT DIFFICULT TO INTEGRATE ICMS BUSINESS AND
    OPERATIONS WITH OUR BUSINESS AND OPERATIONS.
    WE ARE
    DEPENDENT ON THIRD PARTY SERVICE PROVIDERS AND THE FAILURE OF
    SUCH SERVICE PROVIDERS TO ADEQUATELY PROVIDE SERVICES TO US
    COULD AFFECT OUR FINANCIAL RESULTS BECAUSE SUCH FAILURE COULD
    AFFECT OUR RELATIONSHIP WITH OUR CUSTOMERS.
    THE
    AVAILABILITY OF OUR INSURANCE PRODUCTS AND FINANCIAL SERVICES
    ARE DEPENDENT ON OUR STRATEGIC RELATIONSHIPS WITH VARIOUS
    INSURANCE COMPANIES AND THE UNAVAILABILITY OF THOSE PRODUCTS AND
    SERVICES FOR ANY REASON MAY RESULT IN SIGNIFICANT LOSS OF
    REVENUES.
     29




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WE ARE
    DEPENDENT UPON INDEPENDENT INSURANCE AGENCIES AND THEIR AGENTS
    TO OFFER AND SELL OUR INSURANCE PRODUCTS AND FINANCIAL
    SERVICES.
        WE
    FACE INTENSE COMPETITION IN THE MARKET PLACE FOR OUR PRODUCTS
    AND SERVICES AS WELL AS COMPETITION FOR INSURANCE AGENCIES AND
    THEIR AGENTS FOR THE MARKETING OF THE PRODUCTS AND SERVICES
    OFFERED.
       30




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##### Table of Contents



WE ARE
    HIGHLY DEPENDENT ON PETER W. NAUERT AND THE LOSS OF HIS SERVICES
    WOULD HAVE A SUBSTANTIAL ADVERSE EFFECT ON OUR OPERATIONS AND
    FINANCIAL RESULTS.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS  Rule 12b-2
  ITEM 2.
    PROPERTIES          Less than








More thanDollars in Thousands

Total


1 Year


1-3 Years


3-5 Years


5 YearsTotal operating leases on real
    property, net of sublease income

$
2,104


$
402


$
924


$
778


$
   ITEM 3.
    LEGAL
    PROCEEDINGS    Kirk, et al v Precis, Inc. and David
    May.
   31




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##### Table of Contents



Zermeno v Precis. Manuela Zermeno, individually and on behalf of the
    general public; and Juan A. Zermeno, individually and on behalf
    of the general public v Precis, Inc., an Oklahoma corporation
    and Does 1 through 100, inclusive
  California Foundation for Business
    Ethics, Inc., a California non-profit corporation, v Precis,
    Inc., and Does 1 through 100, inclusive
    tm tm et. Seq.
      State of Texas v The Capella Group, Inc.
    et al.
 32




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##### Table of Contents



Investigation of National Center for Employment of the
    Disabled, Inc. and Access HealthSource,
    Inc.(AAI)
    States General Life Insurance
    Company. No. GV-500484, No. GV-500484 No. D-1-GN-06-4697. successor-in-interest
  ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   33




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##### Table of Contents



VotesItem

For


Against


Abstained


TotalRatification of Hein &
    Associates LLP


7,742,350



23,100



430



7,765,880Election of Kent H. Webb as
    director


7,599,267



163,769



2,844



7,765,880Election of Nicholas J. Zaffiris
    as director


7,177,579



585,457



2,844



7,765,880Election of J. French Hill as
    director


7,697,450



65,400



3,030



7,765,880Election of Kenneth S. George as
    director


7,694,086



68,950



2,844



7,765,880Election of Russell Cleveland as
    director


7,620,002



143,034



2,844



7,765,880  PART II  ITEM 5.
    MARKET
    FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  over-the-counter
    Closing SalePriceCommon StockQuarter Ended

High


LowMarch 31, 2005

$
2.72


$
1.69June 30, 2005

$
1.94


$
0.78September 30, 2005

$
1.51


$
1.01December 31, 2005

$
1.97


$
1.54March 31, 2006

$
1.67


$
1.25June 30, 2006

$
1.69


$
1.12September 30, 2006

$
2.46


$
1.58December 31, 2006

$
2.01


$
1.34       
    variations in quarterly operating results,
    changes in earnings estimates by analysts,
    adverse earnings or other financial announcements of our
    customers or clients, 34




---



##### Table of Contents




    announcements and introductions of product or service
    innovations or new contracts by us or our competitors, and
    general stock market conditions.  over-the-counter over-the-counter
  over-the-counter
  
    the
    over-the-counter
    securities are subject to substantial and sudden price increases
    and decreases;
    at times the price (bid and ask) information for the securities
    may not be available;
    if there are only one or two market makers, there is a risk that
    the dealers or group of dealers may control the market in our
    common stock and set prices that are not based on competitive
    forces; and
    the actual sale price ultimately obtained for a block of stock
    may be substantially below the quoted bid price.    Dividend
    Policy
    Securities
    Authorized For Issuance Under Equity Compensation
    Plans.
    Options and Warrants


Number of SecuritiesNumber of





Remaining AvailableShares


Weighted Average


for Future IssuanceUnderlying


Exercise Price of


Under EquityPlan Category

Unexercised


Outstanding


Compensation Plans(1)Equity compensation plans approved
    by our stockholders:2002 Non employee stock option plan


475,000


$
1.99



2002 IMR stock option plan


116,354



4.66



1999 stock option plan


836,000



1.99



579,2941,427,354



2.21



579,294     (1)
    
    The number of shares of our common stock remaining available for
    issuance under equity compensation plans is after excluding the
    number of securities issuable upon exercise of outstanding
    options and warrants  Unregistered
    Securities Sold During Preceding Three Years
  Access HealthSource, Inc (AAI).
 35




---



##### Table of Contents



Insurance Capital Management USA
    Inc.
 36




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    Dollars in Thousands

2006


2005


2004


2003


2002Service revenues

$
21,974


$
30,028


$
37,413


$
40,224


$
40,455Operating expenses:Cost of operations


10,514



13,138



15,826



12,043



10,208Sales and marketing


5,463



7,486



11,358



15,212



16,702General and administrative


6,776



9,769



10,385



6,014



5,694Impairment charge for goodwill


6,440



12,900



2,000







Total operating expenses


29,193



43,293



39,569



33,269



32,604Operating (loss) income


(7,219
)


(13,265
)


(2,156
)


6,955



7,851Other expense:Interest income (expense), net


355



159



(57
)


(153
)


(67
)Net (loss) income before taxes


(6,864
)


(13,106
)


(2,213
)


6,802



7,784Provision for income taxes
    (benefit) expense


(50
)


123



(556
)


2,524



2,662(Loss) income from continuing
    operations


(6,814
)


(13,229
)


(1,657
)


4,278



5,122Gain on sale of operations, net of
    taxes






300











(Loss) earnings from discontinued
    operations, net of taxes


(910
)


(442
)


(299
)


(189
)


356Net (loss) earnings


(7,724
)


(13,371
)


(1,956
)


4,089



5,478Preferred stock dividend


















14Net (loss) earnings applicable to
    common stockholders

$
(7,724
)

$
(13,371
)

$
(1,956
)

$
4,089


$
5,464(Loss) earnings per share:BasicContinuing operations

$
(0.51
)

$
(1.06
)

$
(0.14
)

$
0.36


$
0.43Discontinued operations

$
(0.07
)

$
(0.01
)

$
(0.03
)

$
(0.01
)

$
0.03DilutedContinuing operations

$
(0.51
)

$
(1.06
)

$
(0.14
)

$
0.36


$
0.43Discontinued operations

$
(0.07
)

$
(0.01
)

$
(0.03
)

$
(0.01
)

$
0.03Weighted average number of common
    shares outstandingBasic


13,486,562



12,432,591



11,921,946



11,848,789



11,790,650Diluted


13,486,562



12,432,591



11,921,946



11,924,214



11,996,222   37




---



##### Table of Contents



Dollars in Thousands

2006


2005


2004


2003


2002Cash Flows Data:Net cash provided by operating
    activities

$
725


$
514


$
1,759


$
7,819


$
3,989Net cash used in investing
    activities

$
(3,263
)

$
(1,822
)

$
(2,595
)

$
(945
)

$
(920
)Net cash used in financing
    activities

$
(241
)

$
(964
)

$
(1,969
)

$
(1,398
)

$
(1,213
)   December 31,Dollars in Thousands

2006


2005Balance Sheet Data:Cash and cash equivalents

$
3,232


$
6,011Unrestricted short-term investments


200



Restricted short-term investments


1,420



250Current assets


6,876



14,954Working capital


3,996



4,692Total assets


16,320



30,864Current liabilities


2,880



10,262Total liabilities


2,928



10,500Stockholders equity


13,392



20,364     (1)
    
    We acquired AAI in 2004 for a purchase price of $8,244,000. The
    total includes cash payments of $4,232,000 and distribution of
    2,145,483 shares with a value of $3,632,000 paid to the
    seller and acquisition costs of $380,000 through
    December 31, 2006.(2)
    
    Certain reclassifications have been made to prior period
    financial information to conform to the current presentation of
    the financial information.(3)
    
    For the years ended December 31, 2006, 2005, and 2004
    outstanding stock options on 43,575, 25,375, and
    54,864 shares, respectively, were not included in the
    calculation of fully diluted earnings per share because the
    inclusion would have been anti-dilutive.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
  Consumer Healthcare Savings. tm tm
   38




---



##### Table of Contents



tm
  Employer and Group Healthcare
    Services.
  Financial Services
    (Discontinued).
  Rental Purchase And Club Membership Programs
    (Discontinued). point-of-sale point-of-sale
  Operational
    Review
   39




---



##### Table of Contents



Critical
    Accounting Policies
  Revenue Recognition.
  Healthcare Membership Revenues. tm
 40




---



##### Table of Contents



AAI Third Party Administration.
  Commission Expense. tm
  Acquisitions.
  Fixed Assets.
    Intangible Asset Valuation.
 41




---



##### Table of Contents



Income Taxes.
  Reclassifications.
  Results
    of Operations
  Consumer Healthcare Savings.
  Dollars in Thousands

For the Twelve Months Ended December 31,Dollar


Percent





Dollar


Percent2006


Change


Change


2005


Change


Change


2004Revenues

$
14,483


$
(6,677
)


(31.6
)%

$
21,160


$
(11,465
)


(35.1
)%

$
32,625Operating expenses:Cost of operations


5,581



(2,254
)


(28.8
)%


7,835



(5,315
)


(40.4
)%


13,150Sales and marketing


4,775



(1,701
)


(26.3
)%


6,476



(4,098
)


(38.8
)%


10,574General and administrative


4,381



(1,936
)


(30.6
)%


6,317



(1,389
)


(18.0
)%


7,706Total operating expenses


14,737



(5,891
)


(28.6
)%


20,628



(10,802
)


(34.4
)%


31,430Operating income

$
(254
)

$
(786
)


(147.7
)%

$
532


$
(663
)


(55.5
)%

$
1,195Percent of Revenue:Revenues


100
%










100
%










100
%Operating expenses:Cost of operations


38.5
%










37.0
%










40.3
%Sales and marketing


33.0
%










30.6
%










32.4
%General and administrative


30.2
%










29.9
%










23.6
%Total operating expenses


101.8
%










97.5
%










96.3
%Operating income


(1.8
)%










2.5
%










3.7
%   Service Revenues.
 42




---



##### Table of Contents



Care
    Entrée Membership
  (Count at
    End of Quarter)
  1st
    Qtr


2nd
    Qtr


3rd
    Qtr


4th
    Qtr


1th
    Qtr


2nd
    Qtr


3rd
    Qtr


4th
    Qtr2005


2005


2005


2005


2006


2006


2006


2006Member Count  End of
    Quarter


51,895



46,514



41,958



37,952



37,281



35,823



34,020



31,826Percent Change


(8.88
)%


(10.37
)%


(9.79
)%


(9.54
)%


(1.77
)%


(3.91
)%


(5.03
)%


(6.45
)%Average revenue per member, net
    of sales and marketing costs

$
25.70


$
26.24


$
26.16


$
24.03


$
23.86


$
22.54


$
22.40


$
22.32     tm
  Cost of Operations.
 43




---



##### Table of Contents



Sales and Marketing Expenses. tm tm
  General and Administrative Expenses.
  Employer and Group Healthcare
    Services.
  Dollars in Thousands

For the Twelve Months Ended December 31,Dollar


Percent





Dollar


Percent2006


Change


Change


2005


Change


Change


2004Revenues

$
7,409


$
(1,128
)


(13.2
)%

$
8,537


$
4,458



109.3
%

$
4,079Operating expenses:Cost of operations


4,933



(337
)


(6.4
)%


5,270



2,594



96.9
%


2,676Sales and marketing


659



(103
)


(13.5
)%


762



375



96.9
%


387General and administrative


513



(247
)


(32.5
)%


760



374



96.9
%


386Total operating expenses


6,105



(687
)


(10.1
)%


6,792



3,343



96.9
%


3,449Operating income

$
1,304


$
(441
)


(25.3
)%

$
1,745


$
1,115



177.0
%

$
630Percent of Revenue:Revenues


100
%










100
%










100
%Operating expenses:Cost of operations


66.6
%










61.7
%










65.6
%Sales and marketing


8.9
%










8.9
%










9.5
%General and administrative


6.9
%










8.9
%










9.5
%Total operating expenses


82.4
%










79.6
%










84.6
%Operating income


17.6
%










20.4
%










15.4
%   Service Revenues.
   44




---



##### Table of Contents



Cost of Operations.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
  Corporate and Other.
  Dollars in Thousands

For the Twelve Months Ended December 31,Dollar


Percent





Dollar


Percent2006


Change


Change


2005


Change


Change


2004Revenues

$
82


$
(249
)


(75.2
)%

$
331


$
(378
)


(53.3
)%

$
709Operating expenses:Cost of operations






(33
)


(100.0
)%


33



33



100.0
%


Sales and marketing


29



(219
)


(88.3
)%


248



(149
)


(37.5
)%


397General and administrative


1,882



(810
)


(30.1
)%


2,692



399



17.4
%


2,293Goodwill impairment, without tax
    considerations


6,440



(6,460
)


(50.1
)%


12,900



10,900



545.0
%


2,000Total operating expenses


8,351



(7,522
)


(47.4
)%


15,873



11,183



238.4
%


4,690Operating income

$
(8,269
)

$
7,273



(46.8
)%

$
(15,542
)

$
(11,561
)


290.4
%

$
(3,981
)Percent of Revenue:Revenues


100
%










100
%










100
%Operating expenses:Cost of operations


35
%










75
%










56
%Sales and marketing


2,295
%










813
%










323
%General and administrative


7,854
%










3,897
%










282
%Total operating expenses


10,184
%










4,795
%










661
%Operating income


(10,084
)%










(4,695
)%










(561
)%     Service Revenues.
  Cost of Operations.
  Sales and Marketing Expenses.
 45




---



##### Table of Contents



General and Administrative Expenses.
  Impairment Charge for Goodwill.
  Discontinued Operations.
  Dollars in Thousands

For the Twelve Months Ended December 31,Dollar


Percent





Dollar


Percent2006


Change


Change


2005


Change


Change


2004Service revenues

$
125


$
(1,055
)


(89.4
)%

$
1,180


$
274



100.0
%

$
906Operating expenses:Cost of operations


94



(906
)


(90.6
)%


1,000



276



100.0
%


724Sales and marketing


343



(125
)


(26.7
)%


468



337



100.0
%


131General and administrative


598



370



100.0
%


228



(301
)


100.0
%


529Total operating expenses


1,035



(661
)


(39.0
)%


1,696



312



100.0
%


1,384Operating income

$
(910
)

$
(394
)


76.4
%

$
(516
)

$
(38
)


100.0
%

$
(478
)Percent of Revenue:Revenues


100
%










100
%










100
%Operating expenses:Cost of operations


75.2
%










84.7
%










79.9
%Sales and marketing


274.4
%










39.7
%










14.5
%General and administrative


478.4
%










19.3
%










58.4
%Total operating expenses


828.0
%










143.7
%










152.8
%Operating income


(728.0
)%










(43.7
)%










(52.8
)%     Financial Services  Care 125.
  Vergance.
 46




---



##### Table of Contents



Member Services.
  Income
    Tax Provision
  Accounting for Income Taxes
  Liquidity
    and Capital Resources
  Operating Activities.
  Investing Activities.
  Financing Activities.
     47




---



##### Table of Contents



Contractual
    Obligations
  Operating Leases. Accounting for
    Leases.
  Capital Leases.
  Less than








More thanDollars in Thousands

Total


1 Year


1-3 Years


3-5 Years


5 YearsOperating Leases, net of sublease
    income

$
2,104


$
402


$
924


$
778


$
Capital Leases


238



190



48







Total

$
2,342


$
592


$
972


$
778


$
     ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   48




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Quarterly
    Results Of Operations And Seasonality
    page F-1.
  Dollars in Thousands

2006 Quarter Ended (Unaudited)March 31


June 30


September 30


December 30Service revenues

$
6,093


$
5,650


$
5,299


$
4,932Total operating expenses


5,888



5,793



5,585



11,927Operating income (loss)


205



(143
)


(286
)


(6,995
)Other income


73



91



95



96Earnings (loss) before income taxes


278



(52
)


(191
)


(6,899
)Provision for income taxes


(4
)


(461
)


(20
)


435Earnings (loss) from continuing
    operations


282



409



(171
)


(7,334
)(Loss) earnings from discontinued
    operations, net of tax


(321
)


(588
)


(14
)


13Net loss

$
(39
)

$
(179
)

$
(185
)

$
(7,321
)Earnings (loss) per share:BasicEarnings (loss) from continuing
    operations

$
0.02


$
0.03


$
(0.01
)

$
(0.54
)(Loss) earnings from discontinued
    operations, net of tax

$
(0.02
)

$
(0.04
)

$
(0.00
)

$
0.00DilutedEarnings (loss) from continuing
    operations

$
0.02


$
0.03


$
(0.01
)

$
(0.54
)(Loss) earnings from discontinued
    operations, net of tax

$
(0.02
)

$
(0.04
)

$
(0.00
)

$
0.00   49




---



##### Table of Contents



Dollars in Thousands

2005 Quarter Ended (Unaudited)March 31


June 30


September 30


December 30Service revenues

$
8,481


$
7,760


$
7,185


$
6,602Total operating expenses


8,519



18,608



6,867



9,299Operating (loss) income


(38
)


(10,848
)


318



(2,697
)Other income


13



26



60



60(Loss) earnings before income taxes


(25
)


(10,822
)


378



(2,637
)Provision for income taxes


(9
)


(8
)


103



37(Loss) earnings from continuing
    operations


(16
)


(10,814
)


275



(2,674
)(Loss) earnings from discontinued
    operations, net of tax


(35
)


(13
)


(145
)


51Net (loss) earnings

$
(51
)

$
(10,827
)

$
130


$
(2,623
)(Loss) earnings per share:Basic(Loss) earnings from continuing
    operations

$
(0.00
)

$
(0.89
)

$
0.02


$
(0.21
)(Loss) earnings from discontinued
    operations, net of tax

$
(0.00
)

$
(0.00
)

$
(0.01
)

$
0.00Diluted(Loss) earnings from continuing
    operations

$
(0.00
)

$
(0.89
)

$
0.02


$
(0.20
)(Loss) earnings from discontinued
    operations, net of tax

$
(0.00
)

$
(0.00
)

$
(0.01
)

$
0.00     (1)
    
    Certain reclassifications have been made to prior quarterly
    financial information to conform to the current presentation of
    the quarterly financial information.(2)
    
    For the years ended December 31, 2006, 2005, and 2004
    outstanding stock options on 43,575, 25,375, and
    54,864 shares, respectively, were not included in the
    calculation of fully diluted earnings per share because the
    inclusion would have been anti-dilutive.(3)
    
    In the fourth quarter of 2006, a $6,866,000 goodwill impairment
    charge including tax considerations of $426,000 was recorded. In
    2005, a $9,900,000 goodwill impairment charge was recorded in
    the second quarter and an additional $3,000,000 goodwill
    impairment charge was recorded in the fourth quarter.  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
    DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES     50




---



##### Table of Contents




    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of our assets;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and directors,
    and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on our financial
    statements.      ITEM 9B.
    OTHER
    INFORMATION  Form 8-K
 PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE  Our
    Directors And Executive Officers
   51




---



##### Table of Contents



Name

Age

PositionPeter W. Nauert(4)


63


Chief Executive Officer,
    President, and Chairman of the Board of DirectorsRobert L. Bintliff


53


Chief Financial Officer and
    TreasurerIan R. Stuart


50


Chief Operating OfficerFrank Apodaca


44


Chief Executive Officer and
    President of Access HealthSource, Inc.Eliseo Ruiz III


41


Vice President, General Counsel
    and SecretaryNancy L. Zalud


53


Vice President of CommunicationsCarl H. Fischer


51


President and Chief Marketing
    Officer of Adult Care Plans/Rx AmericaMichael K. Owens, Jr.


32


President of Americas Health
    Care/Rx Plan Agency, Inc.Andrew A. Boemi(2)(3)


62


DirectorRussell Cleveland(1)(4)


68


DirectorKenneth S. George(2)(3)


58


DirectorJ. French Hill(2)(4)


50


DirectorKent H. Webb, M.D.(1)(5)


49


DirectorNicholas J. Zaffiris(1)(3)


43


Director     (1)
    
    Member of the Compensation Committee(2)
    
    Member of the Audit Committee.(3)
    
    Member of the Corporate Governance and Nominating Committee.(4)
    
    Member of the Executive Committee.(5)
    
    Medical Director.  Peter W. Nauert
  Robert L. Bintliff 1985-1995), (1995-1999) (1999-2001). (1981-1985). (2001-2004).
  Ian R. Stuart
 52




---



##### Table of Contents



Frank Apodaca
  Eliseo Ruiz III
  Nancy L. Zalud
  Carl H. Fischer
  Michael K. Owens, Jr.
  Andrew A. Boemi
 53




---



##### Table of Contents



Russell Cleveland
  Kenneth S. George
  J. French Hill (2000-2003).
  Kent H. Webb, M.D.
  Nicholas J. Zaffiris
  Board
    Committees
   54




---



##### Table of Contents



Audit
    Committee Financial Experts
    
    understanding of generally accepted accounting principles and
    financial statements;
    ability to assess the general application of generally accepted
    accounting principles in connection with the accounting for
    estimates, accruals and reserves;
    experience preparing, auditing, analyzing or evaluating
    financial statements that present the breadth and level of
    complexity of accounting issues that are generally comparable to
    the breadth and complexity of issues that can reasonably be
    expected to be raised by our financial statements, or experience
    actively supervising one or more persons engaged in such
    activities;
    understanding of internal controls and procedures for financial
    reporting; and
    understanding of audit committee functions.    and/or
 55




---



##### Table of Contents



Compliance
    With Section 16(a) Of The Securities Exchange Act Of
    1934
      Code of
    Ethics
    www.accessplansusa.com.
    ITEM 11.
    EXECUTIVE
    COMPENSATION  Report
    from the Compensation Committee
    Overview
    of Executive Compensation
   56




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##### Table of Contents



Elements
    of Executive Compensation
    
    base salary,
    performance based incentive compensation (bonuses),
    awards under our equity compensation plans,
    perquisites and other personal benefits.     57




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##### Table of Contents



Executive Base Salaries.
  
    the performance of the executive;
    the performance of the Company;
    information provided in the 2004 study; and
    internal factors including previously agreed upon commitments
    bound by contract, the executives compensation relative to
    other officers, and changes in job responsibility.    Incentive Compensation (Bonuses).
    Long-Term Equity Compensation Plan
    Grants.
 58




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##### Table of Contents




    enhance the link between the creation of stockholder value and
    long-term executive incentive compensation;
    provide an opportunity for increased equity ownership by
    executives; and
    maintain competitive levels of executive compensation.    Other Benefits.
    Chief
    Executive Officer Compensation
      Post-Employment
    Compensation and Contractual Commitments
       59




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##### Table of Contents



Summary
    Compensation
    Option


All OtherName and Principle Position

Year


Salary


Bonus


Awards(1)


Compensation


TotalNicholas J. Zaffiris(2)


2006


$
100,000


$



$
29,677


$
22,000


$
151,677Acting Chief Executive OfficerFrank Apodaca(3)


2006



266,303



59,077



14,220



81,250



420,850Chief Executive Officer and
    President of Access HealthSource, Inc.Robert L. Bintliff(4)


2006



187,032



75,000



116,646



7,800



386,478Chief Financial Officer and
    TreasurerEliseo Ruiz III(5)


2006



177,019



35,000



123,746







335,765Executive Vice President
    and General CounselDavid Wysong(6)


2006



59,077



147,667







36,000



242,744Vice President of Business
    Development     (1)
    
    We use the Binomial Lattice option-pricing model to estimate the
    option fair values of option awards as described in
    Note 2  Summary of Significant Accounting
    Policies (Stock Based Compensation) of the financial statements
    to arrive at the amounts for Option Awards.(2)
    
    Mr. Zaffiris was the Non-Executive Chairman of the Board of
    Directors and, in such capacity, served as our Acting Chief
    Executive Officer in 2006. He was not employed by the Company.
    The amount attributed to him in 2006 includes $22,000 in regular
    board compensation and $100,000 as compensation for his services
    as Non-Executive Chairman of the Board of Directors. The option
    awards relate to the net increase in value of 45,000 stock
    options repriced to $2.00 from prices ranging from $2.59 to
    $7.65 in December 2006.(3)
    
    Mr. Apodacas other compensation is related to
    non-competition provisions in his employment agreement. The
    option awards relate to the net increase in value of 100,000
    stock options repriced to $2.00 from $2.76 in December 2006. As
    the president of AAI, Mr. Apodaca is given the use of a
    company car with an original value of $36,000.(4)
    
    Mr. Bintliffs option awards relate to 150,000 stock
    options granted in November plus the net increase in value of
    100,000 stock options repriced to $2.00 from $2.99 in December
    2006. Mr. Bintliff received a $50,000 cash bonus as a
    result our success in restructuring certain lease commitments to
    save costs and in achieving certain tax benefits as a result of
    a reorganization of our operations in 2005. He also received a
    $25,000 cash bonus relating to his efforts in our preparation
    for the merger with ICM. His other compensation was a car
    allowance of $650 per month.(5)
    
    Mr. Ruizs option awards relate to 150,000 stock
    options granted in November plus the net increase in value of
    100,000 stock options repriced to $2.00 from $3.88 in December
    2006.(6)
    
    Mr. Wysongs employment terminated on October 18,
    2006. The amount under the designation bonus is the
    amount of commission paid to Mr. Wysong as a percentage of
    actual revenues received by AAI. The amount under the
    designation all other compensation is the amount of
    post-employment compensation we paid Mr. Wysong for certain
    services and commitments by him. 60




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##### Table of Contents



Grants of
    Plan-Based Awards
    Number of StockName

Grant Date


Option Shares


Exercise PriceNicholas J. Zaffiris(1)


12/29/06



45,000


$
2.00Frank Apodaca(1)


12/29/06



100,000


$
2.00Robert L. Bintliff


11/01/06



150,000


$
1.76Robert L. Bintliff(1)


12/29/06



100,000


$
2.00Eliseo Ruiz III


11/01/06



150,000


$
1.76Eliseo Ruiz III(1)


12/29/06



100,000


$
2.00     (1)
    
    These stock options were repriced to $2.00 from prices ranging
    from $2.59 to $7.65 in December 2006.  Option
    Exercises in Last Fiscal Year
    Outstanding
    Equity Awards at Fiscal Year-End
  .
  Number of Securities Underlying Unexercised Options as of


Option


OptionDecember 31, 2006


Exercise


ExpirationName

Exercisable


Unexercisable


Price


DateFrank B. Apodaca


12,500



37,500


$
1.05



6/18/200950,000



50,000



2.00



5/25/2010Robert L. Bintliff


50,000



50,000



2.00



2/28/2009



150,000



1.76



11/1/2011Eliseo Ruiz III


75,000



25,000



2.00



3/23/2009



150,000



1.76



11/1/2011David M. Wysong


10,000



10,000



2.40



8/18/200910,000



30,000



1.75



10/5/2009   Compensation
    of Directors
    
    Each non-employee member of the board receives a quarterly
    payment of $4,000.
    In addition, each non-employee member of the board received $500
    per quarter for each committee on which he or she serves and an
    additional $500 per quarter for each committee for which he
    or she serves as chairperson.
    We reimburse our directors for travel and out of pocket expenses
    in connection with their attendance at meetings of the board.
    We may occasionally grant stock options to our board members. 61




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##### Table of Contents



Fees Earned or


OptionName

Paid in Cash


Awards


TotalEugene Becker

$
24,000


$



$
24,000Russell Cleveland(1)


20,000



17,529



37,529Kenneth S. George(1)


20,000



15,614



35,614J. French Hill(1)


20,000



17,628



37,628Kent H. Webb, M.D.(1)


25,000



19,638



44,638     (1)
    
    These stock options were repriced to $2.00 from prices ranging
    from $2.59 to $7.65 in December, 2006. We used the Binomial
    Lattice option-pricing model to estimate the option fair values
    as described in Note 2  Summary of Significant
    Accounting Policies (Stock Based Compensation) of the financial
    statements, to arrive at the amounts for Option Awards set forth
    above.  Equity
    Compensation Plans
  1999 Stock Option Plan.
        12-month 12-month
  2002 Non-Employee Stock Option
    Plan.
 62




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##### Table of Contents



Director
    Liability and Indemnification
    
    for a breach of the directors duty of loyalty to us or our
    stockholders,
    for acts or omissions by a director not in good faith or which
    involve intentional misconduct or a knowing violation of law,
    arising under Section 1053 of the Oklahoma General
    Corporation Act relating to the declaration of dividends and
    purchase or redemption of shares in violation of the Oklahoma
    General Corporation Act, or
    for any transaction from which the director derived an improper
    personal benefit.        
    indemnitee served as one of our directors or officers, or served
    as a director, officer, employee or agent of a corporation,
    partnership, joint venture, trust or other enterprise at our
    request or
    indemnitee was involved in any threatened, pending or completed
    action, suit or proceeding by us or in our right to procure a
    judgment in our favor by reason that the indemnitee served as
    one of our directors or 63




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##### Table of Contents



officers, or served as a director, officer, employee or agent of
    a corporation, partnership, joint venture, trust or other
    enterprise at our request.      Employment
    Arrangements and Lack of Keyman Insurance
          
    entitlement to fringe benefits including medical and insurance
    benefits and participation in our 401(k) plan and MSA plan and
    any other benefit plan we establish, and a car allowance of up
    to $650 per month or use of company owned vehicle; and
    limited salary continuation during any period of temporary or
    permanent disability, illness or incapacity to substantially
    perform the services required under the agreement or in the
    event of employees death.         64




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##### Table of Contents



Name

Title

Base SalaryPeter W. Nauert

Chief Executive Officer and
    Chairman of the Board of Directors

$
300,000Ian Stuart

Chief Operating Officer

$
200,000Michael Owens

President of Americas Health
    Care/Rx Plan Agency, Inc.

$
175,000Carl Fischer

Chief Executive Officer of
    American Benefit Resource/Rx, Inc. and President and Chief
    Marketing Officer of Adult Care Plans/Rx America

$
150,000Nancy Zalud

Vice President of Communications

$
130,000   Compensation
    Committee Interlocks And Insider Participation
    Conclusion
    and Report on Executive Compensation
    Regulation S-K Form 10-K
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   65




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##### Table of Contents



Beneficial
    Ownership Of Common Stock
  As of March 30, 2007Other


Beneficial OwnershipShares


Stock


Beneficially


TotalOwned of


Option


Owned


SharesRecord


Shares


Shares


Owned


PercentOur Directors:Kent H. Webb


94,019



113,000







207,019



1.15
%Kenneth S. George






55,000







55,000



0.31
%J. French Hill


2,000



65,000







67,000



0.37
%Nicholas J. Zaffiris






65,000







65,000



0.36
%Russell Cleveland(3)










3,242,313



3,242,313



18.00
%Andrew A. Boemi(4)


50,054











50,054



0.28
%Our Executive
    Officers:Peter W. Nauert Director,
    President & CEO(5)


3,684,299











3,684,299



20.46
%Frank B. Apodaca(6)


188,699



100,000



30,849



319,548



1.77
%Robert L. Bintliff(7)


3,000



50,000







53,000



0.29
%David Wysong






20,000







20,000



0.11
%   As of March 30, 2007Other


Beneficial OwnershipShares


Stock


Beneficially


TotalOwned of


Option


Owned


SharesName of Beneficial Owner

Record


Shares


Shares


Owned


PercentEliseo Ruiz III(8)


2,200



75,000







77,200



0.43
%Ian R. Stuart(9)


583,961











583,961



3.24
%Carl H. Fisher(10)


46,054











46,054



0.26
%Michael K. Owens(11)


92,107











92,107



0.51
%Nancy L. Zalud(12)


46,054











46,054



0.26
%Our Executive Officer and
    Directors as a group of fourteen persons


4,792,447



523,000



3,273,162



8,588,609



47.68
%0.00
%Other Beneficial
    Owners:


















0.00
%Ready One Industries


1,961,784











1,961,784



10.89
%US Special Opportunities
    Trust PLC(3)


801,813











801,813



4.45
%Renaissance Capital
    Growth & Income
    Fund III, Inc.(3)


890,500











890,500



4.94
%Premier RENN US Emerging Growth
    Fund Limited(3)


750,000











750,000



4.16
%Renaissance US Growth Investment
    Trust PLC(3)


800,000











800,000



4.44
%RENN Capital Group, Inc.(3)










3,242,313



3,242,313



18.00
%Rodney D. Baber


1,043,354











1,043,354



5.79
%Lewis Opportunity Fund, LP


1,173,700











1,173,700



6.52
%R & R Opportunity Fund, LP


865,965











865,965



4.81
%  66




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##### Table of Contents



(1)
    
    Shares not outstanding but deemed beneficially owned by virtue
    of the right of the named person to acquire the shares within
    60 days of the above-mentioned date are treated as
    outstanding for determining the amount and percentage of common
    stock owned by the person. Shares for which beneficial ownership
    is disclaimed by an individual also are included for purposes of
    determining the amount and percentage of Common Stock owned by
    such individual. Based upon our knowledge, each named person has
    sole voting and sole investment power with respect to the shares
    shown except as noted, subject to community property laws, where
    applicable.(2)
    
    The percentage shown was rounded to the nearest one-tenth of one
    percent, based upon 18,011,292 shares of common stock being
    outstanding on March 30, 2007.(3)
    
    The 3,242,313 Other Beneficially Owned Shares are
    owned by US Special Opportunities Trust PLC
    (801,813 shares), Renaissance Capital Growth &
    Income Fund III, Inc. (890,500 shares), Premier RENN
    US Emerging Growth Fund Limited (750,000 shares),
    Renaissance US Growth Investment Trust PLC
    (800,000 shares), each of which is an investment fund
    managed by RENN Capital Group, Inc. Mr. Cleveland controls
    RENN Capital Group, Inc. and is deemed, therefore, deemed to be
    the beneficial owner of the common stock shares.(4)
    
    Pursuant to the terms of our merger acquisition of ICM,
    Messrs. Nauert and Boemi became members of our Board of
    Directors on January 29, 2007.(5)
    
    Under the terms of our merger acquisition of ICM, we are
    obligated to issue and deliver additional common stock shares to
    the shareholders of ICM including the Peter W. Nauert Revocable
    Trust that is controlled by Mr. Nauert. The issuance of the
    additional shares is based upon the adjusted earnings before
    interest, taxes, depreciation and amortization of Insuraco USA
    and its subsidiaries. The number of additional shares that may
    be issued to Mr. Nauert is not determinable as of the date
    of this report, but the maximum number of shares that we may
    deliver is 5,533,482.(6)
    
    Mr. Apodaca had an agreement with National Center for
    Employment of the Disabled (NCED), the former parent
    of AAI and for whom he previously provided service. This
    agreement entitles Mr. Apodaca to 10% of the common stock
    shares and cash we paid or will pay NCED for Access.
    Mr. Apodaca has received 183,699 common stock shares and
    (ii) is entitled to and is the beneficial owner of an
    additional 30,849 shares. He has also purchased 5,000 of
    our shares directly and currently has options exercisable within
    60 days of the record date for 62,500 shares.
    Mr. Apodaca holds additional options to purchase 87,500
    common stock shares that are not exercisable and will not be
    exercisable within 60 days of the date of this report.(7)
    
    Mr. Bintliff is our Chief Financial Officer. The
    beneficially owned shares and percentage of outstanding shares
    include 50,000 shares of our common stock issuable upon
    exercise of stock options. Mr. Bintliff holds additional
    options to purchase 200,000 common stock shares that are not
    exercisable and will not be exercisable within 60 days of
    the date of this report.(8)
    
    Mr. Ruiz is our General Counsel. The beneficially owned
    shares and percentage of outstanding shares include 75,000
    common stock shares that are exercisable or will be exercisable
    within 60 days of the date of this report. Mr. Ruiz
    holds additional options to purchase 175,000 common stock shares
    that are not exercisable and will not be exercisable within
    60 days of the date of this report.(9)
    
    In January 2007, Mr. Stuart became our Chief Operating
    Officer.(10)
    
    In January 2007, Mr. Fisher became our President and Chief
    Marketing Officer of our Adult Care Plans/Rx America subsidiary
    that was acquired as part of our merger acquisition of ICM.(11)
    
    In January 2007, Mr. Owens became our President of our
    Americas Health Care/Rx Plan Agency, Inc. subsidiary that
    was acquired as part of our merger acquisition of ICM.(12)
    
    In January 2007, Ms. Zalud became our Vice President of
    Marketing and Communications.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS   67




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##### Table of Contents



Certain Relationships with NCED.
  Mr. Nauerts Relationship with The States
    General Life Insurance Company. No. GV-500484
 68




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##### Table of Contents



No. GV-500484 No. D-1-GN-06-4697. successor-in-interest
  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Audit Fees.
  Audit Related Fees.
  All Other Fees.
    ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K
  Index and Consolidated Financial Statements
  Financial Statement Schedules required to be filed
    by Item 8 of this form
      Exhibits
 69




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##### Table of Contents



EXHIBIT INDEX
    ExhibitNo.

Description3
.1

Registrants Amended and
    Restated Certificate of Incorporation3
.2

Registrants Amended and
    Restated Bylaws4
.1

Form of certificate of the common
    stock of Registrant4
.2

Form of Underwriters Warrant
    and Warrant Certificate, incorporated by reference to
    Exhibit 4.2 of Registrants
    Form SB-2
    Registration Statement
    (No. 333-86643).10
.1

Precis, Inc. 1999 Stock Option
    Plan (amended and restated), incorporated by reference to the
    Schedule 14A filed with the Commission on June 23,
    2003.10
.2

Precis, Inc. 2002 Non-Employee
    Stock Option Plan (amended and restated), incorporated by
    reference to the Schedule 14A filed with the Commission on
    December 29, 2006.10
.3

Employment Agreement dated
    November 1, 2004, between registrant and Robert Bintliff,
    incorporated by reference to Exhibit 10.7 on
    registrants
    Form 10-K
    filed with the Commission on April 18, 2005.10
.4

Employment Agreement dated
    June 18, 2004, between registrant and Frank Apodaca,
    incorporated by reference to Exhibit 2.2 at registrants
    Form 8-K
    filed with the Commission on July 2, 2004.10
.5

Services Agreement with Lifeguard
    Emergency Travel, Inc.23
.1

Consent of Independent Registered
    Public Accounting Firm-BDO Seidman, LLP.23
.2

Consent of Independent Registered
    Public Accounting Firm-Hein & Associates LLP31
.1

Rule 13a-14(a)
    Certification of Peter W. Nauert as Chairman of the Board,
    President and Chief Executive Officer.31
.2

Rule 13a-14(a)
    Certification of Robert L. Bintliff as Chief Financial Officer.32
.1

Section 1350 Certification of
    Peter W. Nauert as Chairman of the Board, President and Chief
    Executive Officer32
.2

Section 1350 Certification of
    Robert L. Bintliff as Chief Financial Officer.  70




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##### Table of Contents



SIGNATURES    ACCESS PLANS USA, INC.
  By:
    /s/  PETER
    W. NAUERT         By:
    /s/  ROBERT
    L. BINTLIFF         Signature

Title

Date/s/  PETER
    W. NAUERTPeter
    W. Nauert

Chairman of the Board of
    Directors, President and Chief Executive Officer

April 2, 2007/s/  ROBERT
    L. BINTLIFFRobert
    L. Bintliff

Chief Financial Officer

April 2, 2007/s/  ANDREW
    A. BOEMIAndrew
    A. Boemi

Director

April 2, 2007/s/  RUSSELL
    CLEVELANDRussell
    Cleveland

Director

April 2, 2007/s/  KENNETH
    S. GEORGEKenneth
    S. George

Director

April 2, 2007/s/  J.
    FRENCH HILLJ.
    French Hill

Director

April 2, 2007/s/  KENT
    H.
    WEBB, M.D.Kent
    H. Webb, M.D.

Director

April 2, 2007/s/  NICHOLAS
    J. ZAFFIRISNicholas
    J. Zaffiris

Director

April 2, 2007  71




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##### Table of Contents



INDEX TO
    FINANCIAL STATEMENTS
  Reports of
    Independent Registered Public Accounting Firms


F-2Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-4Consolidated
    Statements of Operations for the Years Ended December 31,
    2006, 2005 and 2004


F-5Consolidated
    Statements of Stockholders Equity for the Years Ended
    December 31, 2006, 2005 and 2004


F-6Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004


F-7Notes to
    Consolidated Financial Statements


F-8  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              (Signed Hein & Associates LLP)
    F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                F-3




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##### Table of Contents



ACCESS
    PLANS USA, INC.
  CONSOLIDATED
    BALANCE SHEETS
 AS OF
    DECEMBER 31, 2006 AND 2005
  Dollars in Thousands

2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
3,232


$
6,011Unrestricted short-term investments


200



Restricted short-term investments


1,420



250Cash-in-trust






5,585Accounts and notes receivable, net


190



263Income taxes receivable


322



1,046Inventory


20



332Prepaid expenses


1,492



1,467Total current assets


6,876



14,954Fixed assets, net


924



1,124Goodwill and other intangible
    assets, net


7,471



14,332Deferred tax asset


387



275Other assets


662



179Total assets

$
16,320


$
30,864LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
178


$
467Accrued commissions


156



380Accrued cost of business
    combinations






1,170Other accrued liabilities


1,458



1,590Franchise taxes payable


429



507Members liabilities






5,585Deferred fees


82



47Current portion of capital leases


190



241Deferred tax liability


387



275Total current liabilities


2,880



10,262Capital lease obligations, net of
    current portion


48



238Total liabilities


2,928



10,500Commitments and contingenciesStockholders equity:Preferred stock, $1.00 par value,
    2,000,000 shares authorized, none issued






Common stock, $.01 par value,
    100,000,000 shares authorized; 14,012,763 and 13,704,269
    issued, respectively, and 13,512,763 and 13,204,269 outstanding,
    respectively


140



137Additional paid-in capital


29,691



28,942Accumulated deficit


(15,388
)


(7,664
)Less: treasury stock
    (500,000 shares)


(1,051
)


(1,051
)Total stockholders equity


13,392



20,364Total liabilities and
    stockholders equity

$
16,320


$
30,864   The accompanying notes are an integral part of these
    consolidated financial statements.
 F-4




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##### Table of Contents



ACCESS
    PLANS USA, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 FOR THE
    YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
  Dollars in Thousands, Except Earnings per Share

2006


2005


2004Service revenues

$
21,974


$
30,028


$
37,413Operating expenses:Cost of operations


10,514



13,138



15,826Sales and marketing


5,463



7,486



11,358General and administrative


6,776



9,769



10,385Impairment charge for goodwill


6,440



12,900



2,000Total operating expenses


29,193



43,293



39,569Operating loss


(7,219
)


(13,265
)


(2,156
)Other income (expense), net:Interest income (expense), net


355



159



(57
)Loss before taxes


(6,864
)


(13,106
)


(2,213
)Provision for income taxes
    (benefit) expense


(50
)


123



(556
)Loss from continuing operations


(6,814
)


(13,229
)


(1,657
)Discontinued:Gain on sale of discontinued
    operations, net of taxes of $180






300



Loss from discontinued operations,
    net of tax benefit of $0, $73 and $179, respectively


(910
)


(442
)


(299
)Net loss

$
(7,724
)

$
(13,371
)

$
(1,956
)Loss per share:BasicContinuing operations

$
(0.51
)

$
(1.06
)

$
(0.14
)Discontinued operations

$
(0.07
)

$
(0.01
)

$
(0.03
)DilutedContinuing operations

$
(0.51
)

$
(1.06
)

$
(0.14
)Discontinued operations

$
(0.07
)

$
(0.01
)

$
(0.03
)Weighted average number of common
    shares outstanding:Basic


13,486,562



12,432,591



11,921,946Diluted


13,486,562



12,432,591



11,921,946   The accompanying notes are an integral part of these
    consolidated financial statements.
 F-5




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ACCESS
    PLANS USA, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 FOR THE
    YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
  Additional





Retained EarningsCommon Stock


Paid-in


Treasury


(AccumulatedDollars in Thousands

Shares


Amount


Capital


Stock


Deficit)


TotalBalance, December 31, 2003


11,872,147


$
119


$
25,821


$



$
7,663


$
33,603Stock option exercised, net of tax


1,250







4











4Issuance of stock in business
    combinations


488,486



5



1,395











1,400Other


(26,117
)


(1
)


1











Purchase of treasury stock at cost


(255,946
)










(682
)






(682
)Net loss


















(1,956
)


(1,956
)Balance, December 31, 2004


12,079,820



123



27,221



(682
)


5,707



32,369Stock option exercised, net of tax


20,000







25











25Issuance of stock in business
    combinations


1,348,503



14



1,696











1,710Purchase of treasury stock at cost


(244,054
)










(369
)






(369
)Net loss


















(13,371
)


(13,371
)Balance, December 31, 2005


13,204,269



137



28,942



(1,051
)


(7,664
)


20,364Stock option expense










231











231Issuance of stock in business
    combinations


308,494



3



518











521Net loss


















(7,724
)


(7,724
)Balance, December 31, 2006


13,512,763


$
140


$
29,691


$
(1,051
)

$
(15,388
)

$
13,392   The accompanying notes are an integral part of these
    consolidated financial statements.
 F-6




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 FOR THE
    YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
  Dollars in Thousands

2006


2005


2004Operating activities:Net loss

$
(7,724
)

$
(13,371
)

$
(1,956
)Adjustments to reconcile net loss
    to net cash provided by operating activities:Depreciation and amortization


774



1,754



2,323Gain on sale of discontinued
    operations






(480
)


Other non-cash items and loss on
    disposal of fixed assets


453



94



176Provision for losses on accounts
    and notes receivable


39



198



1,012Stock option expense


231







Goodwill impairment including tax
    considerations


6,866



12,900



2,000Deferred income taxes






1,146



(1,041
)Changes in operating assets and
    liabilities (net of business acquired):Accounts and notes receivable, net


34



(149
)


(208
)Income taxes receivable


724



(66
)


(859
)Inventory


128



(188
)


1Prepaid expenses


(25
)


(920
)


(97
)Other assets


75



7



(139
)Accounts payable


(289
)


(3
)


48Accrued liabilities


(518
)


(299
)


243Deferred fees


35



(107
)


(17
)Income taxes payable


(78
)


(2
)


273Net cash provided by operating
    activities


725



514



1,759Investing activities:Increase in unrestricted
    short-term investments


(200
)






Increase in restricted short-term
    investments


(1,170
)


(250
)


Purchase of fixed assets


(848
)


(336
)


(736
)Cash used in business combination,
    net of cash acquired


(1,045
)


(1,711
)


(1,859
)Proceeds from sale of discontinued
    operations






475



Net cash used in investing
    activities


(3,263
)


(1,822
)


(2,595
)Financing activities:Exercise of stock options






25



4Payments of capital leases


(241
)


(620
)


(1,291
)Purchase of treasury stock






(369
)


(682
)Net cash used in financing
    activities


(241
)


(964
)


(1,969
)Net decrease in cash and cash
    equivalents


(2,779
)


(2,272
)


(2,805
)Cash and cash equivalents at
    beginning of year


6,011



8,283



11,088Cash and cash equivalents at end
    of year

$
3,232


$
6,011


$
8,283Supplemental disclosure:Income taxes recovered (paid), net

$
998


$
(155
)

$
(1,106
)Interest paid

$
50


$
72


$
91Non-cash investing and financing
    activities:Acquisition of fixed assets
    through capital leases, net of retirements

$



$
507


$
186Issuance of stock in business
    combination

$
521


$
1,710


$
1,400Cash-in-trust
    collected, net of refunds and claims paid

$
(5,585
)

$
663


$
2,153   The accompanying notes are an integral part of these
    consolidated financial statements.
 F-7




---



##### Table of Contents



ACCESS
    PLANS USA, INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS



Note 1 
    Nature of Business



Access Plans USA, Inc., formerly Precis, Inc. (the
    Company) is a provider of innovative healthcare and
    other membership service programs. The Company offers savings on
    healthcare services throughout the United States to persons who
    are under-insured. These savings are offered by accessing the
    same preferred provider organizations (PPOs) that are utilized
    by many insurance companies. These programs are sold primarily
    through a network marketing strategy under the name Care
    Entréetm
    and through private label resellers. The Company also addresses
    the needs of self-funded employers and groups by providing third
    party administration services and access to a proprietary PPO
    network.



Note 2 
    Summary of Significant Accounting Policies



Basis of Presentation.  The consolidated
    financial statements have been prepared in accordance with
    generally accepted accounting principles and include the
    accounts of the Companys wholly-owned subsidiaries, The
    Capella Group, Inc., Foresight, Inc. (discontinued and dissolved
    in 2005), Care Financial, LLC (formerly Smart Care Insurance
    Agency LLC) and Access HealthSource, Inc.
    (AAI). All significant inter-company accounts and
    transactions have been eliminated. Certain reclassifications
    have been made to prior period financial statements to conform
    to the current presentation of the financial statements.



Use of Estimates.  The preparation of
    financial statements in conformity with generally accepted
    accounting principles requires management of the Company to make
    estimates and assumptions that affect the amounts reported in
    the financial statements and accompanying notes. Certain
    significant estimates are required in the evaluation of goodwill
    and intangible assets for impairment. Actual results could
    differ from those estimates and such differences could be
    material.



Revenue Recognition.  Revenue
    recognition varies based on source.



Healthcare Membership Revenues.  The Company
    recognizes its Care
    Entréetm
    program membership revenues, other than initial enrollment fees,
    on each monthly anniversary date. Membership revenues are
    reduced by the amount of estimated refunds. For members that are
    billed directly, the billed amount is collected almost entirely
    by electronic charge to the members credit cards,
    automated clearinghouse or electronic check. The settlement of
    those charges occurs within a day or two. Under certain private
    label arrangements, the Companys private label partners
    bill their members for the membership fees and the
    Companys portion of the membership fees is periodically
    remitted to the Company. During the time from the billing of
    these private-label membership fees and the remittance to it,
    the Company records a receivable from the private label partners
    and records an estimated allowance for uncollectible amounts.
    The allowance of uncollectible receivables is based upon review
    of the aging of outstanding balances, the credit worthiness of
    the private label partner and its history of paying the agreed
    amounts owed.



Membership enrollment fees, net of direct costs, are deferred
    and amortized over the estimated membership period that averages
    eight to ten months. Independent marketing representative fees,
    net of direct costs, are deferred and amortized over the term of
    the applicable contract. Judgment is involved in the allocation
    of costs to determine the direct costs netted against those
    deferred revenues, as well as in estimating the membership
    period over which to amortize such net revenue. The Company
    maintains a statistical analysis of the costs and membership
    periods as a basis for adjusting these estimates from time to
    time.



AAI Third Party Administration.  AAIs
    principal sources of revenues include administrative fees for
    third party claims administration, network provider fees for the
    preferred provider network and utilization and management fees.
    These fees are based on monthly or per member per month fee
    schedules under specified contractual agreements. Revenues from
    these services are recognized in the periods in which the
    services are performed and when collection is reasonably assured.

F-8




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Rental Purchase and Club Membership
    Revenues.
  Commission Expense. tm
  Cash-in-Trust. Cash-in-trust cash-in-trust
  Cash and Cash Equivalents.
  Unrestricted Short-Term
    Investments.
  Restricted Short-Term
    Investments.
  Trade Accounts Receivable and
    Notes Receivable.
  Fixed Assets.
  Furniture and Fixtures

7 yearsLeasehold Improvements

Over the term of the lease, or
    useful life,
    whichever is shorterComputers and Office Equipment

3-5 yearsSoftware

3 yearsAutomobiles

5 years      F-9




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Other Intangible Assets.
  Goodwill.
  Income Taxes.
  Net Earnings per Share. out-of-the-money
  Concentration of Credit Risk.
    Fair Value of Financial
    Instruments.
  Stock-Based Compensation. Share-Based
    Payment
 F-10




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recently Issued Accounting
    Standards.
  Accounting for Uncertainty
    in Income Taxes, Accounting for Income
    Taxes.
  Fair Value Measurements,
  Note 3 
    Business Combination
   F-11




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     For the YearEnded December 31,Dollars in Thousands

2004  (Unaudited)Revenues

$
40,292Net loss

$
(1,710
)Loss per common shareBasicFrom continuing operations

$
(0.14
)From discontinued operations

$
(0.03
)DilutedFrom continuing operations

$
(0.14
)From discontinued operations

$
(0.03
)Weighted average common shares
    outstanding:Basic


12,329,018Diluted


12,329,018     Note 4 
    Accounts and Notes Receivable
    Dollars in Thousands

2006


2005Accounts receivable

$
276


$
320Allowance for doubtful accounts
    receivable


(86
)


(83
)Accounts receivable, net


190



237Notes receivable


154



206Allowance for doubtful notes
    receivable


(154
)


(180
)Notes receivable, net






26Accounts and notes receivable, net

$
190


$
263    F-12




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 5 
    Prepaid Expenses
    Dollars in Thousands

2006


2005Provider network premiums

$
435


$
643Member services


400



Insurance


511



484Postage


50



134Service contracts


10



57Rent






31Other


86



118$
1,492


$
1,467   Note 6 
    Fixed Assets
    Dollars in Thousands

2006


2005Furniture and fixtures

$
23


$
311Leasehold improvements


210



169Computers and office equipment


1,559



1,770Software


1,144



996Automobiles


36



2,972



3,246Accumulated depreciation and
    amortization


(2,048
)


(2,122
)Fixed assets, net

$
924


$
1,124   Note 7 
    Goodwill and Other Intangible Assets
    Dollars in Thousands

Goodwill


Trademark


TotalIntangible assets, balance as of
    January 1, 2005

$
22,781


$



$
22,781Contingent consideration paid


4,591







4,591Goodwill impairment charge


(13,040
)






(13,040
)Intangible assets, balance as of
    December 31, 2005


14,332







14,332Goodwill impairment charge


(6,440
)






(6,440
)Tax impact on goodwill impairment
    charge


(426
)






(426
)Acquisition of trademark






5



5Intangible assets, balance as of
    December 31, 2006

$
7,466


$
5


$
7,471    F-13




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Note 8 
    Capital Leases
    Dollars in Thousands

Amount2007

$
2732008


51Total minimum lease payments


324Less: Executory costs


(25
)Less: Interest


(61
)Present value minimum lease
    payments


238Current portion of capital lease
    obligations


190Capital lease obligations, net of
    current portion

$
48     Dollars in Thousands

2006


2005Capitalized lease assets

$
593


$
759Accumulated amortization


(530
)


(308
)Net book value

$
63


$
451Capitalized lease obligation

$
238


$
479    F-14




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 9 
    Accrued Liabilities
    Dollars in Thousands

2006


2005Accrued acquisition costs


162



127Accrued payroll and benefits


326



442Accrued professional fees


197



254Unrecoverable claims accrual


116



167Accrued foresight club premiums






123Other


657



477$
1,458


$
1,590   Note 10 
    Stockholders Equity
      Note 11 
    Common Stock Options
  Stock-Based Compensation. Share-Based
    Payment
   F-15




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Dollars in Thousands

2005


2004Loss from continuing operations

$
(13,229
)

$
(1,657
)Gain on sale of operations, net of
    taxes


300



Loss from discontinued operations


(442
)


(299
)Net loss


(13,371
)


(1,956
)Deduct: Total stock-based
    compensation expense determined under fair value based method
    for all awards, net of related tax effects


(361
)


(316
)Pro forma net loss

$
(13,732
)

$
(2,272
)     2005


2004Earnings (loss) per share:Basic  as reportedFrom continuing operations

$
(1.06
)

$
(0.14
)From sale of and discontinued
    operations

$
(.01
)

$
(0.03
)Basic  pro-formaFrom continuing operations

$
(1.09
)

$
(0.17
)From sale of and discontinued
    operations

$
(.01
)

$
(0.03
)Diluted  as
    reportedFrom continuing operations

$
(1.06
)

$
(0.14
)From sale of and discontinued
    operations

$
(.01
)

$
(0.03
)Diluted  pro-formaFrom continuing operations

$
(1.09
)

$
(0.17
)From sale of and discontinued
    operations

$
(.01
)

$
(0.03
)    F-16




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2004Risk free interest rate


4.23
%


3.94
%Volatility rate


72
%


48
%Dividend yield


None



NoneOption expected lives


5 yrs



5 yrs   Stock-Based Compensation Plans.
          Amendments to the Stock-Based Compensation
    Plans.
     F-17




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2006 Stock Option Information.
      2006Weighted


WeightedAverage


AverageExercise


FairOptions


Price


ValueOutstanding at beginning of year


1,301,354


$
3.48


$
1.58Granted


310,000



1.76



0.95Exercised










Forfeited


(184,000
)


4.13



1.77Outstanding at end of year


1,427,354



2.21



1.39Vested (exercisable)


832,854



2.45



1.58Non-Vested


594,500



1.87



1.12Outstanding at end of year


1,427,354



2.21



1.39     Options Outstanding


Options ExercisableWeighted


Weighted





WeightedAverage


Average





AverageOutstanding


Remaining


Exercise


Outstanding


ExercisePrice Range

At
    12/31/06


Life (Years)


Price


12/31/06


Price$1.05 to $1.75


212,000



3.7


$
1.32



137,000


$
1.29$1.76 to $3.55


1,113,066



2.9



2.07



605,566



2.22$3.56 to $5.25


74,550



1.2



4.39



62,550



4.45$5.26 to $9.50


27,738



0.2



8.65



27,738



8.651,427,354



2.9



2.21



832,854



2.45  F-18




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005 Stock Option Information.
  2005WeightedAverage


WeightedExercise


AverageOptions


Price


Fair ValueOutstanding at beginning of year


1,489,764


$
4.01


$
1.78Granted at market value


224,000



1.37



1.02Exercised


(20,000
)


1.25



0.55Forfeited


(392,410
)


4.39



1.95Outstanding at end of year


1,301,354



3.48



1.58Vested


842,229



3.88



1.79Non-Vested


459,125



4.18



1.84Outstanding at end of year


1,301,354



3.48



1.58     Options Outstanding


Options ExercisableWeighted


Weighted





WeightedAverage


Average





AverageOutstanding


Remaining


Exercise


Outstanding


ExercisePrice Range

At
    12/31/05


Life (Years)


Price


12/31/05


Price$1.05 to $1.75


212,000



4.8


$
1.32



112,000


$
1.27$1.76 to $3.55


610,566



3.5



2.80



366,816



2.85$3.56 to $5.25


348,550



3.4



4.34



234,800



4.54$5.26 to $9.50


130,238



2.4



7.90



128,613



7.891,301,354



3.6



3.48



842,229



3.88  F-19




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2004 Stock Option Information. and/or
  2004WeightedAverage


WeightedExercise


AverageOptions


Price


Fair ValueOutstanding at beginning of year


991,014


$
5.73


$
1.88Granted at market value


845,500



3.20



1.47Exercised


(8,750
)


3.55



1.55Forfeited


(338,000
)


7.02



1.75Outstanding at end of year


1,489,764



4.01



1.78Vested


702,514



4.45



2.01Non-Vested


787,250



3.62



1.58Outstanding at end of year


1,489,764



4.01



1.78     Options Outstanding


Options ExercisableWeighted


Weighted





WeightedAverage


Average





AverageOutstanding


Remaining


Exercise


Outstanding


ExercisePrice Range

At
    12/31/04


Life (Years)


Price


12/31/04


Price$1.25 to $1.87


40,000



1.0


$
1.25



40,000


$
1.25$2.24 to $3.55


652,566



4.4



2.84



300,441



2.95$3.82 to $5.25


630,460



4.1



4.35



216,710



4.81$5.78 to $8.51


137,738



3.4



7.61



130,238



7.72$9.37 to $9.50


29,000



2.2



9.50



15,125



9.501,489,764



4.0



4.01



702,514



4.45   Note 12 
    Income Taxes
    Dollars in Thousands

2006


2005


2004Current provision

$
(465
)

$
(916
)

$
306Deferred provision


415



1,146



(1,041
)Provision for income taxes

$
(50
)

$
230


$
(735
)Tax provision (benefit) from
    continuing operations

$
(50
)

$
41


$
(650
)Tax provision (benefit) from sale
    and discontinued operations

$



$
189


$
(85
)Provision (benefit) for income
    taxes

$
(50
)

$
230


$
(735
)  F-20




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Dollars in Thousands

2006


2005Deferred income tax assets:Net operating loss carryforwards

$
1,047


$
739Allowance for doubtful accounts
    and notes


89



85Depreciation and impairment of
    fixed assets


41



61Accrued expenses


201



254Valuation allowance


(862
)


(116
)Total deferred tax assets


516



1,023Deferred income tax liabilities:Prepaid expenses


516



544Depreciation






Intangible asset basis differences






479Total deferred tax liabilities


516



1,023Deferred tax asset, net

$



$
Deferred tax asset, current

$



$
Deferred tax asset, non-current


387



275Deferred tax liability, current


(387
)


(275
)Deferred tax asset, net

$



$
       2006


2005


2004Federal statutory rate


(34.0
)%


34.0
%


(34.0
)%Permanent differences


31.3
%


(32.4
)%


0.0
%State rate


6.4
%


(0.9
)%


8.1
%Increase in valuation allowance


(5.3
)%


0.0
%


0.0
%Other


0.8
%


(0.8
)%


(1.4
)%(0.8
)%


(0.1
)%


(27.3
)%  F-21




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13 
    Related Party Transactions
      Note 14 
    Commitments and Contingencies
  Legal Proceedings.
  Kirk, et al v Precis, Inc. and David
    May.
      Zermeno v Precis Manuela
    Zermeno, individually and on behalf of the general public; and
    Juan A. Zermeno, individually and on behalf of the general
    public v Precis, Inc., an Oklahoma corporation and Does 1
    through 100, inclusive
 F-22




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   California Foundation for Business
    Ethics, Inc., a California non-profit corporation,
    v Precis, Inc., and Does 1 through 100, inclusive
    tm tm et. Seq.
      State of Texas v The Capella Group, Inc.
    et al. th
  Investigation of National Center for Employment of the
    Disabled, Inc. and Access HealthSource, Inc.
    (AAI).
 F-23




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Restricted Short-Term Investments.
  Employment Agreements.
  Note 15 
    Operating Leases
    Less than


1-3


3-5


More than 5Dollars in Thousands

Total


1 Year


Years


Years


YearsTotal operating leases on real
    property, net of sublease income

$
2,104


$
402


$
924


$
778


$
       Note 16 
    Employee Benefit Plan
    Note 17 
    Segmented Information
  Disclosure About Segments of an
    Enterprise and Related Information
 F-24




---



##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Dollars in Thousands

2006Consumer


Employer and





TotalHealthcare


Group Healthcare


Corporate


ContinuingSavings


Services


and Other


OperationsService revenue(1)

$
14,483


$
7,409


$
82


$
21,974Operating income (loss)(1)


(254
)


1,304



(8,269
)


(7,219
)Interest expense (income)


(240
)


(115
)






(355
)Goodwill impairment including tax
    considerations










6,866



6,866Depreciation and amortization


651



105







756Tax Benefit(2)










(50
)


(50
)Assets acquired, net of disposals


(460
)


291







(169
)Intangible assets(2)










7,471



7,471Assets held


2,908



12,429



983



16,320   F-25




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##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Dollars in Thousands

2005Consumer


Employer and





TotalHealthcare


Group Healthcare


Corporate


ContinuingSavings


Services


and Other


OperationsService revenue(1)

$
21,160


$
8,537


$
331


$
30,028Operating income (loss)(1)


532



1,745



(15,542
)


(13,265
)Interest expense (income)










(159
)


(159
)Goodwill impairment










12,900



12,900Depreciation and amortization


1,440



146







1,586Taxes(2)










50



50Assets acquired, net of disposals






20



(2,930
)


(2,910
)Intangible assets(2)










14,332



14,332Assets held


8,335



11,157



11,346



30,838   Dollars in Thousands

2004Consumer


Employer and





TotalHealthcare


Group Healthcare


Corporate


ContinuingSavings


Services


and Other


OperationsService revenue(1)

$
32,625


$
4,079


$
709


$
37,413Operating income (loss)(1)


1,195



630



(3,981
)


(2,156
)Interest expense (income)










57



57Goodwill impairment










2,000



2,000Depreciation and amortization


2,247



58



4



2,309Tax benefit(2)










(735
)


(735
)Assets acquired, net of disposals


658



585



1,278



2,521Intangible assets(2)










22,781



22,781Assets held


10,743



8,636



20,268



39,647     (1)
    
    Unusual charges are included in the loss at the corporate level
    and not allocated to the related segment. The loss before
    provision for income taxes for 2006 for the Employer and Group
    Healthcare Services segment excludes charges for impairment of
    goodwill of $4,066,000 including tax considerations of $426,000
    which is due primarily to the current and projected reductions
    in earnings due to a decline in number of lives covered under
    plans that are administered by AAI. The loss before provision
    for income taxes for 2006 for the Consumer Healthcare Savings
    segment excludes charges of $2,800,000 for impairment of
    goodwill recorded in connection with the acquisition of Capella.
    The loss before provision for income taxes for 2005 for the
    Consumer Healthcare Savings segment excludes charges of
    $12,900,000 for impairment of goodwill recorded in connection
    with the acquisition of Capella. The loss before provision for
    income taxes for 2004 for the non-healthcare membership program
    segment excludes a $2,000,000 charge for impairment of goodwill
    recorded in connection with the acquisition of Foresight Inc.(2)
    
    Intangible assets and income tax expense (benefit) are not
    allocated to the assets and operations of the related segment. F-26




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##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 18 
    Discontinued Operations
    DISCONTINUED
    OPERATIONS SELECTED FINANCIAL DATA
  For the Twelve MonthsDollars in Thousands

Ended December 31,2006


2005


2004Service Revenues

$
125


$
1,180



906Operating expenses:Cost of operations


94



1,000



724Sales and marketing


343



468



131General and administrative


598



228



529Total operating expenses


1,035



1,696



1,384Operating loss


(910
)


(516
)


(478
)Interest (income) expense






1



Loss before income taxes


(910
)


(515
)


(478
)Provision for income taxes
    (benefit) expense






(73
)


(179
)Earnings (loss) from operations


(910
)


(442
)


(299
)Gain on sale of operations, net of
    taxes






300



Net loss

$
(910
)

$
(142
)

$
(299
)     Financial Services  Care
    125.
  Vergance.
  Member Services.
 F-27




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##### Table of Contents



ACCESS
    PLANS USA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 19 
    Subsequent Events
  Insurance Capital Management USA
    Inc.
  States General Life Insurance
    Company. No. GV-500484, th th No. GV-500484 th No. D-1-GN-06-4697. successor-in-interest
   F-28