LETTER INSTEAD OF A STOCKHOLDERS MEETING. MAYBE ITS A TREND FOR WALLSTREET TO FOLLOW. LOL
SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
|X| Preliminary Information Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
|_| Definitive Information Statement
PRACTICEXPERT, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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PracticeXpert
PracticeXpert, Inc.
10833 Washington Boulevard
Culver City, CA 90232
October 26, 2005
Dear Stockholder:
I am writing to advise you to that in lieu of the 2005 Annual Meeting of Stockholders of PracticeXpert, Inc., our majority stockholders adopted a written in consent in lieu of such meeting on August 8, 2005, whereby saving the Company the time and expense involved in having a meeting of stockholders.
This booklet includes the notice of matters approved pursuant to the written consent of majority stockholders in lieu of the 2005 Annual Meeting of Stockholders, as well as the Company's Information Statement for the year ended December 31, 2004. A copy of the Company's 2004 Annual Report on Form 10-KSB is also included along with this booklet.
Thank you for your investment in our Company.
Sincerely,
/s/ Jonathan Doctor
Jonathan Doctor
Chairman, President and
Chief Executive Officer
--------------------------------------------------------------------------------
PracticeXpert
PRACTICEXPERT, INC.
NOTICE OF WRITTEN CONSENT OF MAJORITY STOCKHOLDERS
IN LIEU OF 2005 ANNUAL MEETING OF STOCKHOLDERS
RECORD DATE: August 1, 2005
AGENDA
1) Election of the six incumbent directors for an additional one-year term, or until their successors are duly elected and qualified;
2) Amendment of the Company's Articles of Incorporation to increase the authorized number of shares of Common Stock, par value $.001 per share, from 200 million to 250 million; and
3) Ratification of the appointment of Kabani & Company, Inc., as the Company's independent auditors for fiscal 2005.
STOCKHOLDER LIST
A list of stockholders voting pursuant to the Written Consent of Majority Stockholders in Lieu of the 2005 Annual Meeting of Stockholders is available during business hours at the Company's executive offices, 10833 Washington Boulevard, Culver City, California 90232, for examination by any stockholder for any legally valid purpose.
By Order of the Board of Directors,
/s/ Zima Hartz
Zima Hartz
Executive Vice President and Secretary
October 26, 2005
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INFORMATION STATEMENT
FOR WRITTEN CONSENT OF MAJORITY STOCKHOLDERS IN LIEU OF 2005
ANNUAL MEETING OF STOCKHOLDERS
IN GENERAL
If you were a stockholder on the books of the Company at the close of business on August 1, 2005, you are being provided a copy of this Information Statement. On that day, there were 141,097,151 shares of our Common Stock, par value $.001 per share (the "Common Stock"), issued and outstanding.
Each share of Common Stock that was voted in connection with the Written Consent of Majority Stockholders in Lieu of the 2005 Annual Meeting of Stockholders was entitled to one vote. On that day, there were 72,151,754 shares of our Common Stock that were voted in favor of the matters submitted to the majority stockholders. These actions pursuant to the Written Consent of Majority Stockholders will not become effective until 20 days from the date that this Information Statement is first mailed to our stockholders. It is anticipated that the Information Statement will be mailed to stockholders on or about November 25, 2005.
No action is being requested of you. This Information Statement is furnished solely to inform you of the matters that were approved pursuant to the Written Consent of Majority Stockholders in Lieu of the 2005 Annual Meeting of Stockholders. Accordingly, there will be no meeting of stockholders in 2005.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY.
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BOARD COMPOSITION AND PRACTICES
In General
The Board of Directors directs the management of the business and affairs of the Company, as provided in the Company's bylaws, as amended, and pursuant to Nevada corporate law. The Company encourages, but does not require, that all its directors attend all meetings of the Board of Directors (the "Board"). In 2004, the Board held 20 meetings. During 2004, all directors attended at least 75% of the aggregate number of meetings of the Board, except Monica Dedovich and Joseph Simone, members of the Board, attended less than that percentage of the meetings.
Number of Directors
The Board of Directors determines the number of directors. The Board has currently fixed the number at six members, which number was so fixed in connection with the appointment of Charles Smith to the Board on February 2, 2005.
Director Terms
The directors serve for a one-year term or until their successors are duly elected and qualified. The term of each director expires each year or until their respective successors are duly elected and qualified. The Board may fill a vacancy by electing a new director. The Board may also create a new director position and elect a director to hold the newly created position until the term expires.
Corporate Ethics Guidelines
We have adopted corporate ethics and compliance guidelines. Our ethics and compliance guidelines are published as the PracticeXpert, Inc. Legal and Ethical Compliance Policy. This code of ethics applies to all our employees, including our principal executive, financial and accounting officers. It is our policy not to waive compliance with these guidelines.
If at any time you would like to receive a paper copy, free-of-charge, of our Legal and Ethical Compliance Policy, please write to Zima Hartz, Executive Vice President and Secretary, whose address is: PracticeXpert, Inc., 10833 Washington Boulevard, Culver City, California 90232.
Communications with the Board
Our Governance Guidelines provide that any interested parties desiring to communicate with our directors may contact such directors through the Company's Executive Vice President and Secretary, Zima Hartz, whose address is: PracticeXpert, Inc., 10833 Washington Boulevard, Culver City, California 90232.
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ITEM 1 ON AGENDA - ELECTION OF DIRECTORS
The Board of Directors has nominated for election this year, and the majority stockholders have approved, the six incumbent directors for an additional one-year term or until their successors are duly elected and qualified.
Background information about the directors is set forth below.
Jonathan Doctor Jonathan Doctor is our Chairman of
Chairman, President and the Board, President and Chief
Chief Executive Officer of the Company Executive Officer. From December
Director since 2003 2000 to July 2001, Mr. Doctor was a
Age: 42 director at Parkstone Medical
Information Systems. From August
1999 to November 2001, Mr. Doctor
was president of Care Delivery
Solutions Corporation. Mr. Doctor
served as vice president, systems
development of Salick Health Care,
Inc. from July 1997 to May 2000.
Zima Hartz Zima Hartz is our Executive Vice
Executive Vice President and President and Secretary. Prior to
Secretary of the Company joining us, Mr. Hartz was
Director since 2003 responsible for the development and
Age: 44 operations of software products and
solutions in the health care field.
Mr. Hartz served as a director for
Parkstone, Inc. from December 2000
to July 2001. Mr. Hartz served as
executive vice president of Care
Delivery Solutions Corporation from
August 1999 to November 2001. Mr.
Hartz served as senior director of
Software Product Development for
Salick Health Care, Inc. from
January 1998 to July 2000.
Michael Manahan Michael Manahan is our Chief
Chief Financial Officer of the Company Financial Officer. Mr. Manahan also
Director since 2003 serves as president of Magnum
Age: 50 Financial Group, LLC ("Magnum"), a
company he co-founded in April
1998. In February 2002, the
Securities and Exchange Commission
filed a civil action for violations
of federal securities laws against
a public company and certain of its
shareholders and officers, and
against Magnum and Mr. Manahan,
which provided investor relations
services to that company. Magnum
and Mr. Manahan consented to entry
of a permanent injunction enjoining
them from future violations of the
antifraud provisions of the federal
securities laws. Mr. Manahan
established a policy to
independently verifying all
information provided by client
companies for distribution and
publication.
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Monica Dedovich Since March 2001, Monica Dedovich
Director since 2003 has served as a director of
Age: 71 Healthcare Administrative
Management and Practice Xpert
Services Corporation, our
subsidiaries. Ms. Dedovich served
as president of Healthcare
Administrative Management from 1997
to March 2001. Ms. Dedovich is a
frequent speaker and guest lecturer
on physician reimbursement in the
New York Metropolitan Region and
New England. Ms. Dedovich is one of
the founders of the New York State
and Massachusetts State Oncology
Societies.
Joseph Simone Dr. Joseph Simone serves as the
Director since 2003 clinical director emeritus of the
Age: 70 Huntsman Cancer Institute and the
professor emeritus of pediatrics
and medicine at the University of
Utah School of Medicine. From July
1996 to August 2001, Dr. Simone
served as the senior clinical
director at Huntsman Cancer
Institute. From 1992 to 1996, Dr.
Simone served as physician-in-chief
of the Memorial Sloan-Kettering
Cancer Center in New York, New
York. Before joining Memorial
Sloan-Kettering, Dr. Simone served
as a physician at St. Jude
Children's Research Hospital in
Memphis, Tennessee, where he joined
the staff in 1967. Dr. Simone
served as chief executive officer
of St. Jude Children's Research
Hospital from 1983 to 1992. Dr.
Simone served for six years as a
member of the Board of Scientific
Advisors of the National Cancer
Institute and is chairman of the
National Cancer Policy Board of the
Institute of Medicine.
Charles Smith Charles Smith serves as chairman
Director since 2005 and chief executive officer of
Age: 49 PracticeOne, one of our wholly
owned subsidiaries. Mr. Smith was
formerly senior vice president of
mergers and acquisitions and a
director at Election, Inc., a
global election software and
services company. Previously, Mr.
Smith held senior managerial,
business development and finance
positions at Procter & Gamble and
PepsiCo International.
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COMMITTEES OF OUR BOARD OF DIRECTORS
Our Board of Directors has established an Audit Committee, a Nominating Committee and a Compensation Committee. From time to time, our Board of Directors may establish other committees.
Audit Committee
The Audit Committee has the responsibility of (i) recommending the selection of our independent public accountants, (ii) reviewing and approving the scope of the independent public accountants' audit activity and extent of non-audit services, (iii) reviewing with management and our independent public accountants the adequacy of our accounting system and the effectiveness of our internal audit plan and activities, (iv) reviewing with management and our independent public accountants the financial statements and exercising general oversight of the financial reporting process and (v) reviewing with us litigation and other legal matters that may affect our financial condition, and monitoring compliance with our business ethics and other policies.
The Audit Committee is composed of Jonathan Doctor, Joseph Simone and Michael Manahan. Dr. Simone is the only committee member independent of management and free from any relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment as a committee member. The Board has determined that Dr. Simone is "independent" within the meaning of the listing standards of the American Stock Exchange. The Audit Committee did not meet in 2004. The Audit Committee has not adopted a charter. The functions that would normally be performed by the Audit Committee were performed by the Board.
Nominating Committee
The Nominating Committee's function is to propose nominees to the Board of Directors. The members of the Nominating Committee are Jonathan Doctor, Zima Hartz and Michael Manahan. The Nominatng Committee did not meet in 2004. The Nominating Committee has not adopted a charter and, thus, has not adopted a policy regarding the consideration of director candidates by stockholders. In the Board's view, it is premature to adopt such a policy prior to the adoption of a committee charter. The members of the Nominating Committee consist of management, and, thus, are not independent. The functions that would normally be performed by the Nominating Committee were performed by the Board.
Compensation Committee
The Compensation Committee has the responsibility of (i) establishing the salary rates of our officers and employees and our subsidiaries, (ii) approving the issuance of stock options and other securities to management and its affiliates, and (iii) examining periodically our compensation structure and compensation plans. Any options or other securities to be issued to members of the Compensation Committee or their respective affiliates must be approved by a majority of the members of the Company's Board of Directors who do not have an interest in such transaction.
The Compensation Committee is composed of Zima Hartz, Monica Dedovich and Joseph Simone. The Compensation Committee did not meet in 2004. The functions that would normally be performed by the Compensation Committee were performed by the Board.
DIRECTOR COMPENSATION
Directors are paid an annual retainer fee of 40,000 shares of Common Stock for serving on the Board of Directors. All directors are reimbursed for out-of-pocket expenses incurred in connection with the Company's business and attending meetings.
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ITEM 2 ON AGENDA --
INCREASE IN THE AUTHORIZED COMMON STOCK TO 250 MILLION SHARES
The Board and the majority stockholders have approved an increase in the authorized number of shares of Common Stock from 200 million to 250 million.
The purpose of the increase in the authorized number of shares of Common Stock from 200 million to 250 million is to have shares of Common Stock available for issuance upon the exercise of options and warrants as well as future issuances of Common Stock. The increase in the authorized number of shares will become effective upon filing the amendment to the Company's Articles of Incorporation with the Secretary of State of Nevada, which will occur not less than 20 days from the date that the Information Statement is first mailed to stockholders. The full text of the amendment is set forth on Exhibit A-1 attached hereto.
ITEM 3 ON AGENDA --
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Board has appointed, and the majority stockholders have approved, Kabani & Company, Inc. ("Kabani"), as the Company's independent auditor, also referred to as the independent registered public accounting firm, for fiscal 2005. Since March 2001, Kabani has served as the independent auditor for the Company. The Board believes that Kabani is knowledgeable about the Company's operations and accounting practices and is well qualified to act in the capacity of independent auditor.
Although the appointment of the independent auditor was not required to be approved by the stockholders, the Board of Directors believes that stockholders should participate in such selection through ratification. The proposal to ratify the Board's appointment of Kabani was approved by the majority stockholders.
Fees Billed by Independent Auditor
The following table sets forth fees billed to the Company by Kabani for professional services rendered for 2004 and 2003 (in thousands).
2004 2003
------------- ---------------
Audit Fees (1) $ 80 $ 62
============= ===============
(1) Aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements and for the reviews of financial statements included in the Company's quarterly reports on Form 10-QSB and current reports on Form 8-K, and accounting consultations on matters reflected in the financial statements.
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STOCK OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the number of shares of our Common Stock owned beneficially by (i) each person known to us to own beneficially more than five percent of our outstanding Common Stock, (ii) each of our directors and named executive officers and (iii) all of our directors and executive officers as a group, in each case based upon the beneficial ownership of such persons of Common Stock as reported to us as of August 1, 2005, including shares as to which a right to acquire ownership exists (for example, through the exercise of stock options) within the meaning of Rule 13d-3(d)(1) under the Securities Exchange Act of 1934. In general, "beneficial ownership" includes those shares that a person has the power to vote or transfer, and options to acquire Common Stock that are exercisable currently or within 60 days.
Number of Percent of
Beneficial Owner Shares Class
---------------------------------------- ------------------- ------------
Jonathan Doctor 9,971,838(1) 7.1 %
Zima Hartz 9,465,182(2) 6.7 %
Monica Dedovich 9,708,412 6.9 %
Michael Manahan 6,877,729(3) 4.9 %
Joseph Simone 169,328 *
Charles Smith 523,111 *
Barron Partners LP 36,237,668(4) 25.7 %
Renn Capital Group, Inc. 33,333,334(5) 23.6 %
PI (Cayman) Limited 26,661,926(6) 18.9 %
All directors and executives
as a group (6 persons) 36,715,600(7) 26.0 %
* Less than one percent.
1. The amount includes 1,500,000 shares of our Common Stock underlying stock options.
2. The amount includes 1,000,000 shares of our Common Stock underlying stock options.
3. The amount includes 1,500,000 shares of our Common Stock underlying stock options.
4. The amount includes 18,333,334 shares of our Common Stock underlying warrants. The general partner of Barron Partners LP is Barron Capital Advisors LLC, a Delaware limited liability company. Andrew B. Worden is the managing member of such general partner. Its address is: Barron Capital Advisors, LLC, 730 Fifth Avenue, 9th Floor, New York, New York 10019.
5. The amount includes 16,666,667 shares of our Common Stock underlying warrants. RENN Capital Group, Inc. is the investment adviser to Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth Investment Trust PLC, and has shared voting and dispository power with respect to the shares. RENN Capital Group, Inc. is registered as an investment adviser under the Investment Adviser Act of 1940. Its address is: Renn Capital Group, Inc., 8080 North Central Expressway, Suite 210, LB-59, Dallas, Texas 75206.
6. This amount includes 6,000,000 shares of our Common Stock underlying warrants. Its address is: PI (Cayman) Limited, Corporate Park III, 580 Howard Avenue, Somerset, New Jersey 08873.
7. This amount includes 4,000,000 shares of our Common Stock underlying stock options.
Section 16(a) Beneficial Ownership Reporting Compliance
The rules of the Securities and Exchange Commission require that we disclose late filings of reports of stock ownership (and changes in stock ownership) by our directors and statutory insiders. To the best of the Company's knowledge, all of the filings for the Company's directors and statutory insiders were made on a timely basis in 2004 except as follows:
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o Each of Messrs. Doctor, Hartz, Manahan, Dr. Simone and Ms. Dedovich did not timely file on Form 4 the Company's grant of 10,000 shares of Common Stock on October 13, 2004 and December 29, 2004.
o Each of Messrs. Doctor, Hartz and Manahan did not timely file on Form 4 the Company's grant on October 4, 2004, of options to purchase 1,500,000 shares of Common Stock at an exercise price of $.30 per share, which expire on October 4, 2014.
o Each of Messrs. Doctor, Hartz and Manahan did not timely file on Form 4 the return to the Company on June 2, 2004, 1,986,466, 1,984,803 and 1,255,636 shares of Common Stock by Messrs. Doctor, Hartz and Manahan, respectively, as part of a transaction involving the sale of shares of Common Stock by the Company to a private investor.
Each of the foregoing transactions was reported by such persons on their Form 5s for fiscal 2004.
EXECUTIVE COMPENSATION
In General
All decisions regarding compensation for the Company's executive officers and executive compensation programs are reviewed, discussed, and approved by the Board of Directors. All compensation decisions are determined following a detailed review and assessment of external competitive data, the individual's contributions to the Company's success, any significant changes in an executive officer's role or responsibilities, and equity of pay relationships among the executive officers.
Employment Agreements
We have executive employment agreements with Jonathan Doctor, our Chairman, President and Chief Executive Officer, Michael Manahan, our Chief Financial Officer, and Zima Hartz, our Executive Vice President and Secretary (collectively, the "Employment Agreements"). The Employment Agreements have a term of three years, which commence on December 31, 2003. The Employment Agreements provide for base salary compensation payable to the executive officers consistent with the revenues of the Company, as follows:
REVENUES ANNUAL BASE SALARY
$ 3.8 million $ 52,000
5.0 million 62,737
10.0 million 114,105
15.0 million 154,105
20.0 million 182,737
25.0 million 200,000
For each $5.0 million incremental increase in revenues in excess of $25.0 million, an additional $15,000 in annual base salary
The Employment Agreements also provide for (i) bonus compensation payable by the Company in an amount equal to five percent (5%) of the Company's net income before taxes payable in cash or shares of Common Stock at the Board's discretion, (ii) the issuance of options to purchase 500,000 shares of Common Stock at an exercise price of $0.12 per share under the PracticeXpert, Inc. 2003 Stock Option Plan, which vest immediately, and (iii) the issuance of options to purchase 1,500,000 shares of Common Stock at an exercise price of $0.30 per share under the PracticeXpert, Inc. 2004 Equity Incentive Plan, which vest ratably in equal increments over three years from the date of issuance.
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The Employment Agreements provide that they may be terminated by the executive officers in their discretion, if there is more than a fifty percent (50%) change in ownership of the capital stock of the Company, or any other change in control of the Company. In such case, the executive officers may terminate their Employment Agreement and each such person will be entitled to a lump sum payment of $1,500,000 by the Company.
The Company is authorized to purchase on behalf of each executive officer up to $5,000 in shares of Common Stock in the open market each calendar month. The Company may also loan each executive officer up to $500,000 for him to purchase shares of Common Stock. As of the date hereof, the Company has not made any such purchases of Common Stock or loans for the purchase of Common Stock on behalf of its executive officers.
As employees of the Company, all executive officers are eligible to participate in the standard employee benefit programs made available to all employees generally, including without limitation medical insurance, dental insurance and participation in the Company's 401K plan.
No compensation in excess of $100,000 per year was awarded to, earned by, or paid to any of our executive officers during the fiscal years 2003 and 2002. The following table provides summary information for the years 2004, 2003 and 2002 concerning cash and non-cash compensation paid or accrued by us to our "named" executive officers.
SUMMARY COMPENSATION TABLE
-------------------------------------------------
Annual Compensation
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Name and Other Annual
Principal Position Year Salary (US$) Bonus ($) Compensation ($)
---------------------------------------------------------------------------------------------------
Jonathan Doctor, President and 2004 $114,003 (4) - 0 - $4,800 (5)
Chief Executive Officer
Michael Manahan, Chief Financial 2004 $114,003 (4) - 0 - $4,800 (5)
Officer
Zima Hartz, Executive Vice President 2004 $114,003 (4) - 0 - $4,800 (5)
and Secretary
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Jonathan Doctor, President and
Chief Executive Officer 2003 $30,500 - 0 - $9,739 (3)
---------------------------------------------------------------------------------------------------
Adam Anthony, Chief Executive
Officer 2003 - 0 - - 0 - - 0 -
---------------------------------------------------------------------------------------------------
Adam Anthony, Chief Executive
Officer 2002 $72,000(2) - 0 - $19,600 (1)
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(1) On February 6, 2002, 600,000 shares of Common Stock were issued for services to the Board of Directors for the period from January 3, 2001 to June 30, 2002, at $.02 per share for a total value of $12,000; on March 16, 2002, 288,462 shares of Common Stock were issued in lieu of automobile allowance at $.02 per share for a total value of $6,000; on July 8, 2002, 200,000 shares of Common Stock were issued for services to the Board of Directors for the period from July 1, 2002 to December 31, 2002, at a price of $.008 for a total value of $1,600.
(2) On October 1, 2002, 130,638 shares of Series B Preferred Stock were issued in lieu of cash for deferred salary and housing allowance for the period from January 3, 2001, to October 1, 2002, at $.75 per share for a total value of $100,979.
(3) On July 31, 2003, 8,619 shares were issued for services as a member of the Board of Directors.
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(4) Included $20,000 in salaries accrued but not paid. All three executive officers agreed to defer a portion of their salaries to assist Company in meeting other financial obligations.
(5) Includes 10,000 shares of common stock issued for services as members of the Board of Directors and $3,600 for automobile allowance.
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Long Term Compensation
----------------------------------------------------------
Awards Payouts
------------------------------------------------------------------------------------------------------------
Restricted Securities Underlying LTIP
Stock Options/ Payouts All Other
Name and Principal Position Year Award(s)($) SARs(#) ($) Compensation ($)
------------------------------------------------------------------------------------------------------------
Jonathan Doctor, President
and Chief Executive Officer 2004 - 0 - 1,000,000 - 0 - - 0 -
Michael Manahan, Chief 2004 - 0 - 1,000,000 - 0 - - 0 -
Financial Officer
Zima Hartz, Executive Vice 2004 - 0 - 1,000,000 - 0 - - 0 -
President and Secretary
------------------------------------------------------------------------------------------------------------
Jonathan Doctor, President 2003 - 0 - - 0 - (1) - 0 - - 0 -
and Chief Executive Officer
------------------------------------------------------------------------------------------------------------
Adam Anthony, Chief Executive
Officer 2003 - 0 - - 0 - - 0 - - 0 -
------------------------------------------------------------------------------------------------------------
Adam Anthony, Chief Executive
Officer 2002 - 0 - - 0 - - 0 - - 0 -
------------------------------------------------------------------------------------------------------------
---------------------------------------------
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
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Number of
Securities Percent of Total
Underlying Options/SARs Granted to Exercise of Base
Name Options/SARs(1) Employees In Fiscal Year Price ($/Sh) Expiration Date
-------------------------------------------------------------------------------------------------------------------
Jonathan Doctor, President 500,000 100% $0.12 December 31, 2009
and Chief Executive Officer 1,500,000 33% $0.30 October 4, 2014
Michael Manahan, Chief 500,000 100% $0.12 December 31, 2009
Financial Officer 1,500,000 33% $0.30 October 4, 2014
Zima Hartz, Executive Vice 500,000 100% $0.12 December 31, 2009
President and Secretary 1,500,000 33% $0.30 October 4, 2014
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OTHER INFORMATION
Annual Report on Form 10-KSB
Copies of the Company's Annual Report on Form 10-KSB, without exhibits, can be obtained without charge from the Executive Vice President and Secretary, at PracticeXpert, Inc., 10833 Washington Boulevard, Culver City, California 90232, or telephone (310) 815-3500. You also may view a copy of the Form 10-KSB electronically by accessing our website (www.pxpert.com).
Information Statement Distribution
The Company pays the cost of preparing, assembling and mailing this Information Statement and Annual Report. We will reimburse banks, brokers and other nominee holders for reasonable expenses they incur in sending these materials to our beneficial stockholders whose stock is registered in the nominee's name.
Electronic Access to Information Statement and Annual Report
Stockholders can elect to view future Company information statements and annual reports over the Internet instead of receiving paper copies in the mail and thus can save the Company the cost of producing and mailing these documents. You will be responsible for any costs normally associated with electronic access, such as usage and telephonic charges.
Registered stockholders who have access to the Internet and agree to receive future reports and other information may do so by accessing our web site (www.pxpert.com).
By order of the Board of Directors,
/s/ Jonathan Doctor
Jonathan Doctor
Chairman, President and
Chief Executive Officer
Culver City, California
October 26, 2005
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EXHIBIT A-1
FORM OF
AMENDMENT TO ARTICLES OF INCORPORATION
OF
PRACTICEXPERT, INC.
NOW, THEREFORE, IT IS HEREBY RESOLVED, that the Articles of Incorporation of the Corporation be amended by changing Article 5, so that as amended Article 5 shall be and read as follows:
"The total number of shares of stock which the Corporation shall have the authority to issue is an aggregate amount of 300,000,000, consisting of 250,000,000 shares of Common Stock, par value $0.001 per share ("Common Stock"), and 50,000,000 shares in six classes of Preferred Stock, par value $0.001 per share ("Preferred Stock").
The relative rights, preferences, privileges, limitations and restrictions relating to the Preferred Stock are as set forth in the Statement of the Rights and Preferences of Preferred Stock of PracticeXpert, Inc., set forth on Exhibit A and by this reference incorporated herein.
Dividends may be paid upon the Common Stock as and when declared by the Board of Directors of the Corporation out of any funds legally available therefor."
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EXHIBIT A
STATEMENT OF THE RIGHTS AND PREFERENCES OF PREFERRED STOCK
OF
PRACTICEXPERT, INC.
The Board of Directors of the Corporation shall have the authority, by resolution, to divide any or all of the shares of the Preferred Stock into, and to authorize the issuance of, one or more series, and with respect to each such series to establish and, prior to issuance to determine and fix:
(1) A distinguished designation for such series, the number of shares comprising such series, and the par value thereof, which number may be increased or decreased from time to time (but not below the number of shares then outstanding) by action of the Board of Directors;
(2) The rate and times at which and the other conditions upon which dividends on the shares may be declared and paid or set aside for payment, whether dividends shall be cumulative, and the date from which any dividends shall accrue;
(3) Whether or not the shares shall be redeemable and, if so, the price and the terms and conditions of such redemption;
(4) The amounts payable by preference or otherwise upon shares in the event of voluntary or involuntary liquidation, dissolution, winding up or distribution of the assets of the Corporation;
(5) Whether the shares shall be convertible or exchangeable for shares of any other class or series of securities of the Corporation, and if so, the terms and conditions of such conversion or exchange; and
(6) Whether or not the shares shall have voting rights, including the right to vote as a class on designated matters, such as, but not by way of limitation, the merger, consolidation or sale of substantially all of the Corporation's assets, or the approval of designated action by a greater than two-thirds (2/3rds) affirmative vote, and if so, the terms and conditions thereof and nay limitations thereon.
In the resolution establishing a new series of the Preferred Stock, the Board of Directors may provide for any other relative powers, preferences, rights, qualifications, limitations and restrictions of such series as are consistent with other terms of the Corporation's Articles of Incorporation.
All shares of all series, if any, of the Preferred Stock shall be identical, except as to the above-mentioned rights and preferences which the Board of Directors establishing a particular series shall otherwise provide, in the event amounts payable upon a liquidation preference shall participate ratably in any distribution in accordance with the sums which would be payable on such distribution, if all sums payable thereon to holders of all shares of Preferred Stock were discharged in full.
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End of Filing
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