UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.              )

PROXY STATEMENT

December 29, 2006

PRECIS, INC.
4929 W. Royal Lane
Suite 200
Irving, TX 75063

The Board of Directors of Precis, Inc. has approved a merger agreement that will result in Insurance Capital Management USA Inc. (ICM) becoming a wholly-owned subsidiary of Precis. Before we can complete this merger, the merger agreement must be approved by Precis’ shareholders. Let me tell you a few things about ICM and the merger to familiarize you with the proposed transaction.

·       The combined companies will offer a full range of products, including insurance and non-insurance products and managed care services that will help Americans gain access to affordable healthcare. Also, to more properly reflect the mission of the company, we are asking our shareholders to approve the change of our name to Access Plans USA, Inc.

·        You can find more information on our products and services on pages 40 and 55 and information on the name change on page 35 of the Proxy Statement.

·       ICM’s operations principally consist of the sale and marketing of individual health insurance products and related benefit plans, primarily through a broad network of independent agency channels.

·        More information on ICM is found in the Proxy Statement, with a specific discussion on pages 36-54.       

·       We will not be paying any cash as consideration in the merger (other than the costs of the transaction). Instead, we will issue shares of our common stock to the shareholders of ICM, all of whom will become members of our management team. We believe that this will properly align the interests of the ICM shareholders and management team with the interests of our other shareholders in growing the combined companies and achieving profitable operations.

·        The number of shares that we will issue will depend on ICM’s earnings, before interest, tax, depreciation, amortization and other adjustments.

·        If ICM records at least $1,250,000 of cumulative earnings over four consecutive calendar quarters ending on or before December 31, 2007, we will issue 6,756,382 shares, which is the maximum number of shares that we can issue under the merger agreement.

·        For more information on how the merger consideration will be calculated and conveyed, please see pages 2-3 of the Proxy Statement.

·       The operations of ICM that will be a part of the combined companies are profitable and growing. However, the results of ICM (audited results for the years 2003, 2004 and 2005 and unaudited results for the nine months ended September 30, 2006) shown on pages F-3-F-25 of the Proxy Statement include losses attributed to a subsidiary that ICM distributed to its shareholders and that will not be a part of ICM or Precis after the merger.

·        To see what the adjusted results of ICM would be without this subsidiary and other ICM activities that will not be assumed by us, please see pages  F-74-F-77 of the Proxy Statement.

·        For a more detailed discussion of the adjusted results, please see pages 49-51 of the Proxy Statement.

·       We expect that the merger will return us to profitability and will be accretive to earnings. The unaudited pro forma financial statements of the combined companies on pages F-78-F-82 of the Proxy Statement show that our earnings per share from continuing operations for the nine months ended September 30, 2006, would have increased thirty three percent (33%) if we had included the adjusted operating results of ICM with ours.

·        These unaudited pro forma results and the explanations of the adjustments are on pages F-74-F-82 of the Proxy Statement.

·       After the merger, Peter W. Nauert ICM’s principal shareholder, will be our Chief Executive Officer and our largest shareholder. We believe that Mr. Nauert has the ability and experience to effectively lead the combined companies.

·        More information on Mr. Nauert can be found on page 51 of the Proxy Statement.

·       The proxy statement describes the potential risks and disadvantages of the merger.

·        More information on the potential risks and disadvantages of the merger can be found on pages 15-17 and 20-23, respectively, of the Proxy Statement.

·       Our Board of Directors, after diligent study and consideration, has determined that the merger is in our and our shareholders’ best interests.

·        Please see pages 17-23 of the Proxy Statement for more information on how the Board of Directors considered the merger.

The Proxy Statement provides you with detailed information about the proposed merger-acquisition of Insurance Capital Management USA Inc. We encourage you to read it all carefully and not rely on the summary information provided in this letter.

Your vote is very important.   Please take the time to vote, whether or not you plan to attend the Special Shareholders Meeting. If you sign, date and mail your proxy without indicating how you want to vote, we will vote your proxy in favor of the merger-acquisition. If you do not return your proxy, or if you do not instruct your broker how to vote the shares held for you in your brokerage account, the effect will be neither a vote for nor a vote against the merger-acquisition.

The Special Meeting of Shareholders will be held on January 30, 2006, 10:00 am. local time, at the Sheraton Grand Hotel at the Dallas / Fort Worth Airport, 4440 West John Carpenter Freeway, Irving, Texas 75063.

We are very enthusiastic about the acquisition of Insurance Capital Management USA Inc. and the accompanying opportunities. Our Board of Directors recommends that you vote FOR this merger-acquisition.

This Proxy Statement is dated December 29, 2006 and was first mailed to Precis shareholders on or about December 29, 2006.

NOTICE OF SPECIAL SHAREHOLDERS MEETING
To be held on January 30, 2007

TO THE SHAREHOLDERS:

Precis, Inc. will hold a Special Meeting of its shareholder at the Sheraton Grand Hotel at Dallas / Ft. Worth Airport, 4440 West John Carpenter Freeway, Irving, Texas 75063, commencing at 10:00 am., local time on January 30, 2007 to vote on:

1.                The Agreement and Plan of Merger, dated November 8, 2006, by and among Precis, Inc., and Insurance Capital Management USA Inc. (“ICM”), and the shareholders of Insurance Capital Management USA Inc., providing for the merger of Insurance Capital Management USA Inc. with and into Precis, Inc. and, effectively, the subsidiaries of Insurance Capital Management USA Inc. and its subsidiaries becoming wholly-owned by Precis;

2.                The Precis, Inc. 2002 Non-Employee Stock Option Plan, as amended and restated on November 8, 2006;

3.                Amendment and restatement of the Certificate of Incorporation of Precis, Inc. to change its name to Access Plans USA, Inc.;

4.                Any other business that properly comes before the meeting or any adjournment or postponement of the Special Meeting.

Precis shareholders at the close of business on December 22, 2006, are receiving notice and may vote at the Special Meeting. Approval of the Agreement and Plan of Merger and the amendment of the Precis Certificate of Incorporation require the affirmative vote of at least a majority of the outstanding Precis common stock shares. Approval of the amended and restated Precis, Inc. 2002 Non-Employee Stock Option Plan requires the affirmative vote of at least a majority of the cast, abstaining and broker votes. All other matters presented at the Special Meeting require the affirmative vote of a majority of the Precis common stock shares present in person or by proxy at the Special Meeting.

Your Board of Directors unanimously recommends that you vote FOR approval of the matters being voted upon.

Your attendance or Proxy is important to assure a quorum at the Special Meeting. Shareholders who do not expect to attend the Special Meeting in person are requested to complete and return the enclosed Proxy, using the envelope provided, which requires no postage if mailed from within the United States. Any person giving a Proxy has the power to revoke it at any time prior to its exercise and, if present at the Special Meeting, may withdraw it and vote in person. Attendance at the Special Meeting is limited to Precis shareholders, their proxies and invited guests. All shareholders are cordially invited to attend the Special Meeting.

PROXY STATEMENT

Precis, Inc.
4929 Royal Lane, Suite 200
Irving, Texas 75063
Telephone: (866) 578-1665

SPECIAL SHAREHOLDERS MEETING
TO BE HELD ON JANUARY 30, 2007

SOLICITATION AND REVOCATION OF PROXIES

This Proxy Statement is furnished to the shareholders of Precis, Inc. in connection with the special meeting of the holders of Precis common stock to be held on January 30, 2007, 10:00 am local time at the Sheraton Grand Hotel at the Dallas / Fort Worth Airport, 4440 West John Carpenter Freeway, Irving, Texas, 75063 and any adjournment or postponement of the Special Meeting. This Proxy Statement and the accompanying Notice of Special Meeting of Shareholders and Proxy will be first mailed on or about December 29, 2006, to Precis’ shareholders of record on December 22, 2006.

If the accompanying Proxy is properly executed and returned, the shares of common stock represented by the Proxy will be voted at the Special Meeting. If you indicate on the Proxy a choice with respect to any matter to be voted on, your shares will be voted in accordance with your choice. If no choice is indicated, your shares of common stock will be voted FOR

·       approval of the Agreement and Plan of Merger, dated November 8, 2006, by and among Precis, Inc., and Insurance Capital Management USA Inc., the owner of Insuraco USA, L.L.C. and its subsidiaries, providing for the merger of Insurance Capital Management USA Inc. with and into Precis and effectively  resulting in the subsidiaries of Insurance Capital Management USA Inc. becoming wholly-owned by Precis;

·       approval of the Precis, Inc. 2002 Non-Employee Stock Option Plan, as amended and restated; and

·       approval of amendment of Precis’ Certificate of Incorporation to change its name to Access Plans USA, Inc.

In addition, your shares will also be considered and voted upon other business that properly comes before the Special Meeting or any adjournment or postponement. Our Board of Directors knows of no business that will be presented for consideration at the Special Meeting, other than matters described in this Proxy Statement. Once given, you may revoke your Proxy by

·       giving written notice of revocation to our Secretary at any time before your Proxy is voted,

·       executing another valid proxy bearing a later date and delivering this proxy to our Secretary prior to or at the Special Meeting, or

·       attending the Special Meeting and voting in person.

Neither the corporate laws of Oklahoma, the state in which we are incorporated, nor our Certificate of Incorporation or Bylaws have any provisions regarding the treatment of abstentions and broker non-votes. Our policy is (i) to count abstentions or broker non-votes for purposes of determining the presence of a quorum at the Special Meeting, (ii) to treat abstentions as votes not cast (except as specifically provided otherwise in this Proxy Statement) but to treat them as shares represented at the Special Meeting for determining results on actions requiring a majority vote, and (iii) to consider neither abstentions nor

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broker non-votes in determining results of plurality votes (except as specifically provided otherwise in this Proxy Statement).

We will bear the expenses of this proxy solicitation, including the cost of preparing and mailing this Proxy Statement and accompanying Proxy. These expenses include the charges and expenses of banks, brokerage firms, and other custodians, nominees or fiduciaries for forwarding solicitation material regarding the Special Meeting to beneficial owners of our common stock. Solicitation of Proxies may be made by mail, telephone, personal interviews or by other means by our directors or employees without additional compensation other than reimbursement for their related out-of-pocket expenses.

All information contained in this Proxy Statement with respect to Precis and its subsidiaries and Insurance Capital Management USA Inc. and its subsidiaries was furnished by Precis and Insurance Capital Management USA Inc., respectively, for inclusion in this Proxy Statement.

SHAREHOLDERS ENTITLED TO VOTE

The shareholders entitled to vote at the Special Meeting are the holders of record, at the close of business on December 22, 2006 (the “Record Date”), of the 13,512,763 shares of common stock. Each holder of a share of common stock outstanding on the Record Date will be entitled to one vote for each share held on each matter presented at the Special Meeting. Our officers and directors own of record or are deemed to beneficially own a total of 3,563,080 shares, or 26% of the issued and outstanding common stock, and intend to vote their shares in approval of the merger-acquisition of Insurance Capital Management USA Inc. and intend to vote their shares in favor of the other matters to be voted upon at the Special Meeting. The presence in person or by proxy of the holders of a majority of the shares of common stock outstanding and represented at the Special Meeting will constitute a quorum for the transaction of business. Approval of the Agreement and Plan of Merger and the amended and restated Precis Certificate of Incorporation requires the affirmative vote of at least a majority of the outstanding Precis common stock shares. The affirmative vote of the holders of a majority of the votes cast for, against and abstaining from voting is required for approval of the Precis, Inc. 2002 Non-Employee Stock Option Plan. All other matters presented at the Special Meeting require the affirmative vote of a majority of the Precis common stock shares present in person or by proxy at the Special Meeting. Votes will be tabulated by an inspector of election appointed by our Board of Directors.

THIS PROXY STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION AND NEITHER THE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE FAIRNESS OR MERITS OF THESE TRANSACTIONS OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

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TABLE OF CONTENTS

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SUMMARY

The following summary of certain information in this Proxy Statement is intended only to provide certain facts and highlights from the material contained elsewhere in this Proxy Statement. We have summarized all material matters that are presented in this Proxy Statement. Our summarization is qualified in its entirety by the more detailed information elsewhere in this Proxy Statement and the accompanying appendices, all of which are important and should be carefully reviewed. This summary does not contain all the information that may be important to you. You should carefully read this Proxy Statement in its entirety. For additional information, see “Where You Can Find More Information” (page 96).

We have provided this Proxy Statement to you and the other record holders of our common stock shares for the Special Meeting of our Shareholders. Peter W. Nauert and the other shareholders of Insurance Capital Management USA Inc. have agreed to our proposed merger-acquisition of Insurance Capital Management USA Inc. therefore, we are not soliciting the consent or proxy of Insurance Capital Management USA Inc.’s shareholders. Mr. Nauert and Insurance Capital Management USA Inc. have provided the information in this Proxy Statement that relates to Insurance Capital Management USA Inc. and its subsidiaries (including, Insuraco USA, L.L.C.), and we have provided the other information contained in this Proxy Statement.

The Special Meeting

The Special Meeting of our shareholders will be held at the Sheraton Grand Hotel at Dallas/Ft. Worth Airport, 4440 West John Carpenter Freeway, Irving, Texas 75063, on January 30, 2007, commencing at 10:00 am., local time. Holders of record of our outstanding common stock shares at the close of business on December 22, 2006 (the “record date”), are entitled to notice of and to vote at the Special meeting. On the record date, there were 13,512,763 common stock shares outstanding, each of which will be entitled to one vote on each matter to be acted upon or that may properly be brought before the Special Meeting. Approval of the merger-acquisition of Insurance Capital Management USA Inc. (and its subsidiaries) and amendment of our Certificate of Incorporation requires the affirmative vote of the holders of a majority of the outstanding common stock shares entitled to vote. The affirmative vote of the holders of a majority votes cast for, against or abstaining from voting is required for approval of the Precis, Inc. 2002 Non-Employee Stock Option Plan. All other matters presented at the Special Meeting require the affirmative vote of a majority of the shares present in person or by proxy at the Special Meeting.

Proposal One—Merger-Acquisition of Insurance Capital Management USA Inc. (Page 17)

On November 8, 2006, we entered into an Agreement and Plan of Merger with Peter W. Nauert, and the other shareholders of Insurance Capital Management USA Inc., a Texas corporation (“ICM”). ICM is a fully integrated technology driven national health insurance marketing organization. ICM’s operations principally consist of the sales and marketing of individual health insurance products and related benefit plans, primarily through a broad network of independent agency channels. These operations, which are consolidated under Insuraco USA, LLC, (“Insuraco”) an intermediate holding company, commenced generating revenue in 2004 and, after incurring start-up losses through 2005, are generating earnings in 2006.

A copy of the Agreement and Plan of Merger is attached to the Proxy Statement as Appendix A. Under that agreement, subject to approval by our shareholders, we and the parties to the agreement agreed as follows.

·       Effective September 29, 2006, ICM transferred its ownership of Insurance Producers Group of America Agency (“IPA”) to the Peter W. Nauert Revocable Trust and consequently, IPA will not

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be acquired by us. ICM will also eliminate all other non-Insuraco activities prior to closing. Accordingly, Precis will only acquire the Insuraco operations.

·       The shareholders of ICM will cause ICM to merge with and into us and Insuraco and its subsidiaries will become our wholly-owned subsidiaries.

·       At closing, we will issue and deliver a number of shares of our common stock to ICM’s shareholders determined by a formula that multiplies Insuraco’s adjusted earnings, before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) (as further defined in the merger agreement) for the nine-month period ended September 30, 2006 times 5.4051056 shares per dollar of Adjusted EBITDA. This share amount would be 4,498,529 based on Adjusted EBITDA of $832,274 for the nine months ended September 30, 2006.

·       We will issue and deliver, as more fully discussed in the Proxy Statement, additional shares of our common stock to ICM’s shareholders provided the acquired companies’ Adjusted EBITDA during four consecutive calendar quarters ending on or prior to December 31, 2007 exceeds the Adjusted EBITDA for the nine-month period ended September 30, 2006.

·       The maximum number of shares to be issued and delivered to the ICM shareholders is 6,756,382.

·       Peter W. Nauert will become chief executive officer.

·       Andrew A. Boemi will become a member of our board of directors.

ICM shareholders are not obligated to return any of the common stock shares issued and delivered to them in conjunction with the merger-acquisition of ICM, if Insuraco and its subsidiaries later achieve a lower level of Adjusted EBITDA.

To illustrate the number of common stock shares to be issued and delivered at closing of the merger the following examples are presented:

Adjusted EBITDA/Common Share Ratio—

Assuming that ICM meets its target Adjusted EBITDA over four consecutive calendar quarters ending, on or before December 31, 2007 of $1,250,000, we will issue a total of 6,756,382 shares of our common stock to the shareholders of ICM. This results in a ratio of 5.4050156 shares of common stock for each $1 of Adjusted EBITDA.

Closing Example—

The actual combined operations of ICM during the nine months ended September 30, 2006 resulted in Adjusted EBITDA of $832,274. In this case, we would be obligated to issue and to deliver to the shareholders of ICM 4,498,529 shares of our common stock. This was determined by multiplying the $832,274 (i.e. the September 30 Adjusted EBITDA) by 5.4051056 (i.e. the number of shares of our common stock per $1.00 of Adjusted EBITDA).

Contingent Example—

The actual combined operations of ICM during the nine months ended September 30, 2006, resulted in Adjusted EBITDA of $832,274. In this case, we would be obligated to issue and to deliver to the shareholders of ICM 4,498,529 shares of our common stock at closing. This was determined by multiplying the $832,274 (i.e. the September 30 Adjusted EBITDA) by 5.4051056 (i.e. the number of shares of our common stock per $1.00 of Adjusted EBITDA).

Assume the combined operations of ICM during the 12 months ended December 31, 2006, resulted in Adjusted EBITDA of $1,000,000. In this case, we would be obligated to issue and to deliver to the shareholders of ICM an additional 906,577 shares of our common stock after the closing of the quarter ended December 31, 2006. This was determined by multiplying the $1,000,000 (i.e. the December 31

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Adjusted EBITDA) by 5.4051056 and subtracting from that result the number of shares previously issued and delivered to the ICM shareholders at closing (i.e. 4,498,529.)

Further assume the combined operations of ICM during the 12 months ended March 30, 2007 resulted in Adjusted EBITDA of $1,250,000 (and assuming that the above results are still true). In this case, we would be obligated to issue and to deliver to the shareholders of ICM an additional 1,351,276 shares of our common stock after the closing of the quarter ended March 30, 2006. This was determined by multiplying the $1,250,000 (i.e. the March 30, Adjusted EBITDA) by 5.4051056 (i.e. 6,765,382 shares) and subtracting from that the number of shares previously issued and delivered to the ICM shareholders (i.e. 4,498,529 and 906,577).

ICM is a privately-held company and there is no market for its common stock shares, while our common stock shares are traded on The Nasdaq Stock Market under the symbol “PCIS.” On June 12, 2006, the last trading day before we announced the merger-acquisition, our common stock closed at $1.35 per share. On November 8, 2006, the date upon which the detailed terms of the proposed merger were disclosed, the closing sale price of our common stock shares was $1.79.

Proposal Two—Amended and Restated 2002 Non-Employee Stock Option Plan (Page 31)

On November 8, 2006, our Board of Directors adopted our amended and restated 2002 Non-Employee Stock Option Plan, subject to shareholder approval. Under the amended and restated Plan, we have increased the number of shares of our common stock issuable upon exercise of stock options granted under the Plan from 500,000 to 1,500,000 common stock shares and we have extended the expiration date of the plan from March 31, 2007 to March 31, 2010. The purpose of the Plan is to strengthen our ability to attract and retain well-qualified directors, consultants, insurance agents, and independent marketing representatives to furnish additional incentive to those persons responsible, in part, for our success, and thereby to enhance shareholder value.

Proposal Three—Name Change Amendment to Certificate of Incorporation (Page 35)

We are proposing amendment of our Certificate of Incorporation, upon approval by the holders of a majority of our outstanding common stock shares, to change our name from “Precis, Inc.” to “Access Plans USA, Inc.” to more clearly reflect the savings programs and administrative services in the healthcare industry that we offer.

Our Board of Directors unanimously approved and recommends to you and our other shareholders approval of each of the foregoing proposals.

THE INSURANCE CAPITAL MANAGEMENT USA INC. MERGER-ACQUISITION

Insurance Capital Management USA Inc. (“ICM”) (Page 36)
4929 W. Royal Lane
Suite 200
Irving, Texas 75063

ICM was formed in October 2002 and commenced operations in 2003. ICM’s operations principally consist of  the sale and marketing of individual health insurance products and related benefit plans, primarily through a broad network of independent agency channels. These operations, which are consolidated under Insuraco USA, LLC, an intermediate holding company, commenced generating revenue in 2004 and, after incurring start-up losses through 2005, are generating earnings in 2006.

Insuraco and its subsidiaries provide sales and marketing services to their national network of independent agency channels by:

·       Leveraging their industry expertise and relationships to secure access to proprietary health insurance products.

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·       Utilizing web-based technology to streamline the agent appointment and sales application processes with the insurance carriers that Insuraco contracts with.

·       Providing lead generation programs to the agents—the leads identify individuals who are potentially seeking to purchase health insurance coverage.

·       Proving competitive agent commission rates supplemented by various agent incentive programs.

·       Providing product support, including agent and product training, providing a variety of marketing materials and compilation of weekly newsletters that deliver important news and updates to the agents.

ICM and Insuraco maintain their web-site information at www.icmusa.com

Precis, Inc. (Page 55)
4929 W. Royal Lane,
Suite 200
Irving, Texas 75063
(866) 578-1665

We provide affordable consumer-driven healthcare solutions as alternatives to traditional health insurance. Through our subsidiaries, we market non-insurance healthcare savings programs, and offer third-party claims administration, provide network management, and utilization management services for employer groups that utilize partially self-funded strategies to finance their employee benefit programs. We maintain web-site information at www.precis-pcis.com, and www.accesshealthsource.com.

Reasons for the Merger-Acquisition (Page 20)

Our Board of Directors believes the merger-acquisition of ICM and its subsidiaries will benefit our other shareholders and us for a number of reasons:

·       You and our other shareholders will own an interest in a larger and more diversified company having a significantly increased potential for growth in revenue and return to profitability. Although this will place you and our other shareholders at risk with regard to the aspects of the business of ICM and its subsidiaries, the acquisition of ICM and its subsidiaries will provide other sources of revenues, channels for distribution of our products and services and potentially return us to profitability. Consequently, our success and profitability will be more diversified and less dependent upon our current operations, especially the dependence on our Care Entrée membership program.

·       We anticipate that we will obtain a significantly greater rate of return on our capital resources through the use of our common stock shares to acquire ICM and its subsidiaries and their business operations.

·       We believe that ICM and its established and developing marketing channels will compliment and provide broader market channels for our Care Entrée program and private-label healthcare savings programs.

·       Because of the decline since 2003 in the members in our Care Entrée program and the accompanying losses from operations, we believe it is essential that additional marketing channels be established for our healthcare savings programs and we believe ICM and its subsidiaries will provide these additional marketing channels.

·       ICM and its subsidiaries, through their contractual arrangements with various insurance companies, will provide a source of leading-edge insurance products that are not currently available to us and that would require devotion of a substantial portion of our financial and personnel resources, as well as time, to develop.

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·       Management of ICM and its subsidiaries has proven experience in the development, marketing and distribution of insurance products and financial services that we lack and may be viewed as unique.

Our expected or anticipated effects of the merger-acquisition, of course, are forward-looking and there is no assurance that our expectations and anticipations will be realized.

Conditions That Must Be Satisfied to Complete the Merger-Acquisition (Page 30)

Completion of the merger-acquisition depends on a number of conditions being met. These conditions are contained in the Agreement and Plan of Merger. Some of these conditions are the following:

·       our shareholders must approve the Agreement and Plan of Merger;

·       there must be no governmental order blocking completion of the merger-acquisition and no governmental proceeding threatening to block the merger-acquisition;

·       the Nasdaq Capital Markets must approve the listing of our common stock shares that will be issued in the merger-acquisition;

·       the operating results of ICM and its subsidiaries for the nine months ended September 30, 2006 must achieve, on a combined basis, Adjusted EBITDA (excluding non-acquired operations and subject to certain adjustments) of $600,000; (Actual Adjusted EBITDA was $832,274 for the nine months ended September 30, 2006.) and

·       Neither ICM nor Mr. Nauert knows of any reason that ICM and its subsidiaries will not substantially achieve or exceed the projected results of operations for the year ending December 31, 2006.

Unless prohibited by law, we, ICM or Mr. Nauert and the Peter W. Nauert Revocable Trust, ICM’s majority shareholder, may waive any condition to the merger-acquisition (other than our shareholders’ approval) that has not been satisfied and complete the merger-acquisition. We cannot be certain whether or when any of these conditions will be satisfied or waived, if possible. We cannot be certain that we will complete the merger-acquisition.

Termination of the Merger-Acquisition (Page 30)

We, ICM, Mr. Nauert, and the Peter W. Nauert Revocable Trust may agree to terminate the Agreement and Plan of Merger, even if previously approved by our shareholders. Furthermore, any of those parties may terminate at any time prior to filing of certificate of merger with the Secretary of State of Delaware and Oklahoma, referred to as the “effective time,” for a number of reasons, including:

·       if the merger-acquisition is not completed by March 30, 2007; or

·       if there is a non-appealable final order, decree or ruling or other action having the effect of permanently restraining, enjoining or otherwise prohibiting the merger-acquisition; or

·       if we on the one hand or ICM and Mr. Nauert on the other hand materially violates any of our or their (as the case may be) representations, warranties, covenants or obligations under the Agreement and Plan of Merger.

We on one hand, or ICM, Mr. Nauert and the Peter W. Nauert Revocable Trust on the other hand, cannot seek to terminate the Agreement and Plan of Merger if we or they, as the case may be, caused the reason for termination or material breach. In the event the merger-acquisition is not completed, we will bear our costs and expenses as well as all fees, costs and expenses of preparation and filing of this Proxy

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Statement, while ICM will bear its costs and expenses without reimbursement by us. In the event of the consummation of the merger, we will indirectly bear these costs as a result of our ownership of ICM.

Federal Income Tax Consequences (Page 25)

We expect that you, our other shareholders, will not recognize any gain or loss for U.S. federal income tax purposes in connection with the merger-acquisition. We will receive an opinion of our legal counsel that this is the case. However, this opinion will not be binding on the Internal Revenue Service, which could take an opposing view.

Accounting Treatment (Page 24)

For accounting purposes, ICM and its subsidiaries will be considered to have been purchased by us. On a pro forma basis, the purchase price of ICM and its subsidiaries, assuming that all contingent consideration is earned and conveyed, will be approximately $10,540,000, which, along with the $1,817,000 accumulated deficit of ICM at September 30, 2006 and estimated merger-acquisition costs of $475,000, will result in $12,832,000 being recorded as goodwill and other intangible assets. The goodwill will not be amortized, but will be subject to write-off or write-down as an impairment following periodic review (not less than annually) of the value of the goodwill. Intangible assets, if any, which may be recorded, would be amortized over their estimated life. The Company is currently in the process of determining the allocation of the purchase price for the various assets and liabilities.

Shareholders Do Not Have Appraisal Rights (Page 23)

Although we are seeking approval of the merger-acquisition of ICM and its subsidiaries, because our common stock shares are publicly traded, you and our other shareholders will not have any rights of appraisal under the Oklahoma General Corporation Act.

Management Changes After the Merger-Acquisition (Page 23)

Upon completion of the merger-acquisition, the number of directors serving on our Board of Directors will be limited to seven and Peter W. Nauert and Andrew A. Boemi will become members of our Board of Directors.

Interests of Our Executive Officers and Directors in the Merger-Acquisition (Page 24)

Our executive officers and directors do not have an interest in the merger-acquisition of ICM and its subsidiaries that is different from your and our other shareholders’ interests.

Our Recommendation (Page 23)

Our Board of Directors believes the merger-acquisition of ICM and its subsidiaries is fair to you and our other shareholders and in your and their best interests, as well as ours. Our Board unanimously recommends that you vote “FOR” approval of the Agreement and Plan of Merger.

Vote Required (Page 26)

To approve the merger-acquisition of ICM and its subsidiaries, a majority of our outstanding common stock shares must vote to approve the Agreement and Plan of Merger. Together, our executive officers and directors and their affiliates hold of record 26% of our outstanding common stock and each have signed an agreement committing to vote “FOR” approval of the merger-acquisition of ICM and its Subsidiaries.

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SUMMARY HISTORICAL AND UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL INFORMATION

Insurance Capital Management USA Inc. and Its Subsidiaries Selected Historical Financial Information

ICM’s operations comprise:

·       Sale and marketing of individual health insurance products and related benefit plans, primarily through a broad network of independent agency channels. These operations, which are consolidated under Insuraco USA, LLC, an intermediate holding company, commenced generating revenue in 2004 and, after incurring start-up losses through 2005, are generating earnings in 2006.

·       Sale and marketing of health insurance products through Insurance Producers Group of America Agency (IPA), a career agency channel that commenced operations in the second half of 2005 and continues to incur start-up losses. Effective September 29, 2006, ICM transferred its ownership of IPA to Peter W. Nauert and IPA and its operations will not be acquired by us.

·       Costs attributable to certain parent company selling and promotions activities not directly related to Insuraco’s or IPA’s operations. ICM has agreed to eliminate these costs prior to closing.

The majority of ICM’s operating expenses are attributable to sales and marketing initiatives, many of which occur prior to the initial sale of an insurance policy. However, these related costs are expensed as incurred prior to the recognition of commission and policy fee revenue, which is generally recognized as earned on a monthly basis until such time as the underlying policy holder contract is terminated. Accordingly, through December 31, 2005, ICM incurred considerable start-up losses. Although Insuraco generated earnings during the nine-month period ended September 30, 2006, these earnings were more than offset by continuing IPA start-up losses and by ICM parent company costs.

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Insurance Capital Management USA Inc., Selected Financial Information

The following tables present selected historical financial data of ICM and its subsidiaries adjusted to eliminate revenues and expenses of ICM’s operations that will not be acquired in the proposed transaction. The financial data presented below as of December 31, 2005 and for each of the years ended December 31, 2005, and 2004 have been derived from the unaudited pro forma condensed consolidated financial statements of ICM and its subsidiaries that are included elsewhere in this Proxy Statement. The financial data as of September 30, 2006 and for the nine months ended September 30, 2006 and 2005 are unaudited and derived from the unaudited condensed consolidated financial statements of ICM and its subsidiaries that are also included elsewhere in this Proxy Statement. You should read this information together with those financial statements and their notes along with Management’s Discussion and Analysis of Financial Condition and Results of Operations of ICM and its subsidiaries that are presented elsewhere in this Proxy Statement.

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Precis, Inc. Selected Historical Financial Information

The following table presents our selected historical financial data. The financial data presented below as of December 31, 2005 and 2004 and for each of the five years in the period ended December 31, 2005 have been derived from our audited consolidated financial statements that are included elsewhere in this Proxy Statement and our prior annual reports on Form 10-K. The financial data presented below as of September 30, 2006 and for the nine months ended on September 30, 2006 and 2005 are derived from our unaudited condensed consolidated financial statements that appear elsewhere in this Proxy Statement. You should read this information together with our financial statements and their notes and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations that appear elsewhere in this Proxy Statement.

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(1)          On June 18, 2004, we completed our acquisition of Access HealthSource, Inc. (“Access”) for $3,666,000, consisting of 488,486 common stock shares valued at $1,400,000 ($2.87 per share), and $2,000,000 in cash and acquisition cost of investment banking, valuation and legal and accounting

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fees of $266,000. In addition, we agreed to make additional purchase price payments and share deliveries based upon the earnings before interest, taxes, depreciation and amortization (i.e., EBITDA) of Access through December 31, 2006. The maximum purchase price payments and share deliveries and investment banking, valuation and legal and accounting fees, is $9,774,000. The amount of contingency payments and share deliveries are based upon a 3.22 multiple of EBITDA of Access determined on a quarterly basis, with effective correcting adjustments as of December 31, 2004, 2005 and 2006. Through September 30, 2006, we have made quarterly cash payments totaling $2,232,000 and issued and delivered 1,656,997 common stock shares valued at $2,232,000. The number of shares issued was based upon the average trading price for the last 10 days of each calendar quarter. The cumulative purchase price, including contingent payments made or earned through September 30, 2006, is $8,130,000. Although we were not required to make any additional payments and share deliveries through September 30, 2006, Access may achieve additional EBITDA levels that require additional purchase price payments and share deliveries that are not currently determinable. Any additional purchase price payments and share deliveries will be accounted for as a decrease in our cash and cash equivalents for the amount paid, an increase to stockholders’ equity for the fair value of shares issued and a corresponding increase in goodwill for any payments and common stock share deliveries.

(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, 2005 and 2004, 25,375 shares and 54,863 shares, respectively, related to outstanding stock options were not included in the calculation of fully diluted earnings per share because the inclusion would have been anti-dilutive.

(4)          The amortization of goodwill ceased in 2001 pursuant to a new accounting pronouncement.

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Summary Unaudited Pro Forma Combined Financial Information

The following tables present selected historical information for us and ICM and selected pro forma combined financial information assuming that the merger of ICM and its subsidiaries occurred on the date of the balance sheet and at the beginning of each period for which results of operations are presented. The information presented below is derived from, and should be read in conjunction with, our financial statements and the financial statements of ICM and its subsidiaries, our unaudited pro forma combined financial information and other information related to ICM and its subsidiaries and us, all presented elsewhere in this Proxy Statement. The pro forma information is presented for illustrative purposes only, is not necessarily indicative of the results of operations or financial position that would have been achieved if the transactions included in the pro forma adjustments had been consummated in accordance with the assumptions set forth in the notes to our unaudited pro forma combined financial statements, and is not necessarily indicative of our future operating results or financial position. However, the pro forma earnings per share amounts as compared to those originally reported, would have been accretive to our earnings in 2006.

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Unaudited Pro Forma Comparative Per Share Information

1)               The unaudited statement of operations and comparative per share information are presented for informational purposes only and do not give effect to any synergies that may occur due to the combining of ICM’s and our operations. We expect to incur legal, accounting, proxy printing and distribution expenses of approximately $475,000 in connection with the merger-acquisition. These charges are included in the unaudited balance sheet but are not reflected in the unaudited pro forma combined statements of operations.

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2)               Total assets include $9,309,000 of intangible assets related to the merger-acquisition.  This represents the  purchase price of $7,017,000 (which is based on Adjusted EBITDA of $832,274 for the nine months ended September 30, 2006), the accumulated deficit of ICM of $1,816,000 at September 30, 2006 and the estimated acquisition costs of $475,000.

3)               The ICM per share pro forma equivalent for the merger is calculated by dividing the results for ICM activities which are included in the acquired business, by the common stock shares assumed to be issued to ICM’s shareholders at closing.

4)               The net tangible book value per share for the pro forma combined presentation is based upon the number of common stock shares outstanding at the end of the period, adjusted to include the shares of common stock assumed to be issued at closing. Net tangible book value per share represents the amount of our tangible net worth (total tangible assets less total liabilities) divided by the total number of common stock shares outstanding at the end of the period. Tangible assets represent total assets less goodwill and other intangibles.

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RISK FACTORS

In addition to the other information in this Proxy Statement, you should carefully consider the risk factors discussed below in evaluating the merger-acquisition of Insurance Capital Management USA Inc. and its subsidiaries. Many of the factors discussed below are not within ICM’s or our control. We provide no assurance that, following completion of the merger-acquisition, one or more of these factors will not adversely affect the market price of our common stock, our future operations, and our business, financial condition, or results of operations. The occurrence of these factors following completion of the merger-acquisition of ICM and its subsidiaries may ultimately require significant reduction or discontinuance of our operations, require us to seek a merger partner or require us to sell additional common stock shares on terms that are highly dilutive to you and our other shareholders.

We are providing some forward-looking information.

We have included some forward-looking statements in this section and other places in this Proxy Statement regarding our expectations after completion of our merger-acquisition of ICM and its subsidiaries. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, levels of activity, performance or achievements, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Some of these forward-looking statements can be identified by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategies that involve risks and uncertainties. You should read statements that contain these words carefully because they:

·       discuss our future expectations;

·       contain pro forma projections of our future operating results or of our future financial condition; or