SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS.

ITEM 1.01 Entry into a Material Definitive Agreement.

On September 19, 2005, Patient Infosystems, Inc. (the “Registrant”) announced the execution of an Agreement and Plan of Merger, dated September 19, 2005, by and among the Registrant, PATY Acquisition Corp, Inc., a newly formed wholly-owned subsidiary of the Registrant (“Merger Sub”) and CCS Consolidated, Inc. (“CCS”), pursuant to which Merger Sub will merge with and into CCS (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, CCS will become a wholly-owned subsidiary of the Registrant and the current CCS stockholders will receive currently authorized but newly issued shares of the Registrant’s Common Stock. Immediately after the consummation of the transactions contemplated by the Merger Agreement, the current CCS stockholders will own approximately but not exceeding sixty-five percent (65%) of the issued and outstanding shares of the Registrant’s Common Stock. The Merger Agreement has been approved by the Boards of Directors of all three companies. The consummation of the transactions contemplated by the Merger Agreement is subject to, among other standard closing conditions, a condition that the Registrant raise, through the sale of its equity securities, no less than $6,000,000 to be used for working capital. The sale of such equity securities has not been and will not be registered under the Securities Act of 1933, as amended. Furthermore, the terms of such sale or such sales have not been established and there are no assurances that such sales can or will be completed. Additionally, the consummation of the transactions contemplated by the Merger Agreement is subject to the condition that all outstanding shares of the Registrant’s Preferred Stock be converted into the Registrant’s Common Stock.

Prior to the consummation of the transactions contemplated by the Merger Agreement, the Registrant will issue a dividend of up to 13,000,000 shares of American Caresource Holdings, Inc., (“ACS”) its wholly-owned subsidiary, to holders of its equity securities. The Registrant may retain up to 1,000,000 shares of ACS which it may sell into the market. It is intended that the proceeds of such sales would be used to extinguish debt of the Registrant.

Upon the consummation of the transactions contemplated by the Merger Agreement, two of the Registrant’s stockholders, John Pappajohn and Derace Schaffer, who also serve as directors of the Registrant, may be obligated to purchase shares of the Registrant’s Common Stock at a price based upon a market driven formula. The proceeds of such sale could be as much as $6,000,000 and would be used to extinguish existing debt of the Registrant that has not been repaid by December 31, 2005. Under a Stockholders Agreement to be executed at the closing, stockholders who will hold more than a majority of the outstanding shares of the Registrant’s Common Stock after the consummation of the transactions contemplated by the Merger Agreement, have agreed to vote their shares in favor of the election of Mr. Pappajohn, Dr. Schaffer and five other designees of such stockholders to the Registrant’s Board of Directors.

In connection with the Merger Agreement, the Registrant entered into employment agreements dated September 19, 2005, which become effective upon the consummation of the transactions contemplated by the Merger Agreement with each of Chris Paterson and Glen