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  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">United
  States</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">Securities
  and Exchange Commission</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington, D.C. 20549</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">Form&nbsp;8-K</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">Current
  Report<br>
  Pursuant to Section&nbsp;13 or 15(d)&nbsp;of the<br>
  Securities Exchange Act of 1934</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date of Report (Date of earliest event reported):</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">May&nbsp;12, 2008</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">Prospect
  Medical Holdings,&nbsp;Inc.</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of Registrant as specified in its charter)</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Delaware</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other jurisdiction of incorporation)</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
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    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1-32203</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">33-0564370</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File Number)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(IRS Employer Identification No.)</font></p>
    </td>
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    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
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    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">400 Corporate Pointe, Suite&nbsp;525</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Culver City, California</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">90230</font></b></p>
    </td>
   </tr>
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    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of principal executive offices)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Zip Code)</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s telephone number, including area code: <b>(310) 338-8677</b></font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check
  the appropriate box below if the Form&nbsp;8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions:</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>&nbsp; Written communications pursuant to Rule&nbsp;425
  under the Securities Act (17 CFR 230.425)</p>
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>&nbsp; Soliciting material pursuant to Rule&nbsp;14a-12
  under the Exchange Act (17 CFR 240.14a-12)</p>
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-indent:-.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>&nbsp; Pre-commencement communications
  pursuant to Rule&nbsp;14d-2(b)&nbsp;under the Exchange Act (17 CFR
  240.14d-2(b))</p>
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt .25in;text-indent:-.25in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font>&nbsp; Pre-commencement communications
  pursuant to Rule&nbsp;13e-4(c)&nbsp;under the Exchange Act (17 CFR
  240.13e-4(c))</p>
  
  <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0in 0in 0in 0in;">
  
  <p style="border:none;margin:0in 0in .0001pt;padding:0in;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  </div>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='',FILE='C:\JMS\C900108\08-13838-2\task2946129\13838-2-ba.htm',USER='C900108',CD='May 16 23:34 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div style="font-family:Times New Roman;">
  
  <p style="font-weight:bold;margin:0in 0in .0001pt 74.8pt;page-break-after:avoid;text-indent:-74.8pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt 74.8pt;page-break-after:avoid;text-indent:-74.8pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Item 5.02</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Departure of Directors or Certain
  Officers; Election of Directors; Appointment of Certain Officers; Compensatory
  Arrangements of Certain Officers.</font></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt 74.8pt;page-break-after:avoid;text-indent:-74.8pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Effective May&nbsp;14, 2008, our
  Board of Directors appointed Samuel S. Lee as Chairman of the Board of
  Directors.&#160; Mr.&nbsp;Lee succeeds Jacob
  Y. Terner, M.D., who resigned as our Executive Chairman and as a member of the
  Board of Directors on May&nbsp;12, 2008.&#160;
  Dr.&nbsp;Terner intends to pursue other business and personal
  interests.&#160; Prospect&#146;s Board membership
  now stands at eight.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As previously disclosed, Mr.&nbsp;Lee
  was named our Chief Executive Officer effective March&nbsp;19, 2008.&#160; Mr.&nbsp;Lee was appointed to our Board of
  Directors and named as Chief Executive Officer of Alta Hospitals System, LLC (&#147;Alta&#148;)
  following our acquisition of Alta on August&nbsp;8, 2007.&#160; Mr.&nbsp;Lee&#146;s extensive background includes
  healthcare and technology related operational leadership, private equity
  investment management, entrepreneurship, mergers and acquisitions, and
  leveraged financing for various corporations. Prior to Alta, Mr.&nbsp;Lee was a
  General Partner with Kline Hawkes&nbsp;&amp; Co., a private equity firm located
  in Brentwood, California, that focuses on healthcare, technology, and business
  services. Mr.&nbsp;Lee has been the lead/principal investor and director of
  several private and public companies. Additionally, Mr.&nbsp;Lee worked for
  Andersen Consulting and Verizon. Mr.&nbsp;Lee received his Bachelor&#146;s degree in
  Industrial and Systems Engineering from Georgia Tech and Master&#146;s degree in
  Business Administration from Harvard Business School. Mr.&nbsp;Lee is an active
  member of the Young President&#146;s Organization of Los Angeles, and is also
  involved with civic and community organizations.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with his
  resignation as Chairman and a member of the Board of Directors, Dr.&nbsp;Terner
  also resigned from all officer/director and manager positions with various
  subsidiaries of the company, including: Prospect Medical Systems,&nbsp;Inc.,
  which is also sole shareholder of Pinnacle Health Resources; Sierra Medical
  Management,&nbsp;Inc.; ProMed Health Services Company, which is also the sole
  shareholder of ProMed Health Care Administrators; Prospect Hospital Advisory
  Services,&nbsp;Inc.; and Prospect Advantage Network,&nbsp;Inc. (collectively
  the &#147;subsidiaries&#148;).&#160; Dr.&nbsp;Terner
  also resigned as co-manager of Alta, leaving Mr.&nbsp;Lee as Alta&#146;s sole
  manager.&#160; Our Board of Directors
  appointed Mr.&nbsp;Lee to replace Dr.&nbsp;Terner in all officer and director
  positions in the subsidiaries.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to his
  resignation agreement, Dr.&nbsp;Terner has agreed to continue to serve on a
  temporary basis (but in no case for more than ninety days) as director, officer
  and sole shareholder of Prospect Medical Group,&nbsp;Inc., our affiliated
  California professional corporation; and as director and officer of each of our
  other affiliated physician organizations, and as holder of record title to Prospect
  Medical Group&#146;s shares in Nuestra Familia Medical Group until a suitable
  replacement can be identified for these positions.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; In consideration for Dr.&nbsp;Terner&#146;s
  resignation and other promises in his resignation agreement, and in
  satisfaction of our contractual obligations under Dr.&nbsp;Terner&#146;s employment
  agreement, we agreed to pay to his family trust the sum of $19,361.10 each
  month during the twelve-month period ending on April&nbsp;30, 2009 and the sum
  of $42,694.45 each month during the twenty-four month period ending on April&nbsp;30,
  2011, with all such sums being payable on the last business day of each month.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Item 9.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Financial
  Statements and Exhibits.</font></b></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>
  
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Exhibits</font></b></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
  following exhibits are filed with the Form&nbsp;8-K:</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="12%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:12.78%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit&nbsp;No.</font></b></p>
    </td>
    <td width="5%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:5.16%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="82%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:82.06%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Description</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="12%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:12.78%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>
    </td>
    <td width="5%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:5.16%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="82%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:82.06%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Press
    Release of Prospect Medical Holdings,&nbsp;Inc. dated May&nbsp;16, 2008</font></p>
    </td>
   </tr>
  </table>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='2',FILE='C:\JMS\C900108\08-13838-2\task2946129\13838-2-ba.htm',USER='C900108',CD='May 16 23:34 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURES</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant
  to the requirements of the Securities Exchange Act of 1934, the Registrant has
  duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.76%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="50%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:50.24%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PROSPECT
    MEDICAL HOLDINGS, INC.</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.76%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="50%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:50.24%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
   </tr>
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    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.76%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.82%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="45%" valign="top" style="padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
    </td>
    <td width="45%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/
    MIKE HEATHER</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="45%" valign="top" style="border:none;padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&nbsp;&nbsp;&nbsp; Mike Heather</font></p>
    </td>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="45%" valign="top" style="padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer</font></p>
    </td>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.82%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="45%" valign="top" style="padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
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    <td width="49%" valign="top" style="padding:0in .7pt 0in .7pt;width:49.76%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:
    May&nbsp;16, 2008</font></p>
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    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="45%" valign="top" style="padding:0in .7pt 0in .7pt;width:45.42%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
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text: United
  States
  Securities
  and Exchange Commission
  Washington, D.C. 20549
  Form 8-K
  Current
  Report
  Pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934
  Date of Report (Date of earliest event reported):
  May 12, 2008
  Prospect
  Medical Holdings, Inc.
  (Exact name of Registrant as specified in its charter)
  Delaware
  (State or other jurisdiction of incorporation)
  1-32203
  33-0564370
  (Commission File Number)
  (IRS Employer Identification No.)
  400 Corporate Pointe, Suite 525
  Culver City, California
  90230
  (Address of principal executive offices)
  (Zip Code)
  Registrant's telephone number, including area code:
  (310) 338-8677
  Check
  the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions:
  o
  Written communications pursuant to Rule 425
  under the Securities Act (17 CFR 230.425)
  o
  Soliciting material pursuant to Rule 14a-12
  under the Exchange Act (17 CFR 240.14a-12)
  o
  Pre-commencement communications
  pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
  240.14d-2(b))
  o
  Pre-commencement communications
  pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
  240.13e-4(c))
  Item 5.02
  Departure of Directors or Certain
  Officers; Election of Directors; Appointment of Certain Officers; Compensatory
  Arrangements of Certain Officers.
  (b)           Effective May 14, 2008, our
  Board of Directors appointed Samuel S. Lee as Chairman of the Board of
  Directors.  Mr. Lee succeeds Jacob
  Y. Terner, M.D., who resigned as our Executive Chairman and as a member of the
  Board of Directors on May 12, 2008. 
  Dr. Terner intends to pursue other business and personal
  interests.  Prospect's Board membership
  now stands at eight.
  As previously disclosed, Mr. Lee
  was named our Chief Executive Officer effective March 19, 2008.  Mr. Lee was appointed to our Board of
  Directors and named as Chief Executive Officer of Alta Hospitals System, LLC ("Alta")
  following our acquisition of Alta on August 8, 2007.  Mr. Lee's extensive background includes
  healthcare and technology related operational leadership, private equity
  investment management, entrepreneurship, mergers and acquisitions, and
  leveraged financing for various corporations. Prior to Alta, Mr. Lee was a
  General Partner with Kline Hawkes & Co., a private equity firm located
  in Brentwood, California, that focuses on healthcare, technology, and business
  services. Mr. Lee has been the lead/principal investor and director of
  several private and public companies. Additionally, Mr. Lee worked for
  Andersen Consulting and Verizon. Mr. Lee received his Bachelor's degree in
  Industrial and Systems Engineering from Georgia Tech and Master's degree in
  Business Administration from Harvard Business School. Mr. Lee is an active
  member of the Young President's Organization of Los Angeles, and is also
  involved with civic and community organizations.
  In connection with his
  resignation as Chairman and a member of the Board of Directors, Dr. Terner
  also resigned from all officer/director and manager positions with various
  subsidiaries of the company, including: Prospect Medical Systems, Inc.,
  which is also sole shareholder of Pinnacle Health Resources; Sierra Medical
  Management, Inc.; ProMed Health Services Company, which is also the sole
  shareholder of ProMed Health Care Administrators; Prospect Hospital Advisory
  Services, Inc.; and Prospect Advantage Network, Inc. (collectively
  the "subsidiaries").  Dr. Terner
  also resigned as co-manager of Alta, leaving Mr. Lee as Alta's sole
  manager.  Our Board of Directors
  appointed Mr. Lee to replace Dr. Terner in all officer and director
  positions in the subsidiaries.
  Pursuant to his
  resignation agreement, Dr. Terner has agreed to continue to serve on a
  temporary basis (but in no case for more than ninety days) as director, officer
  and sole shareholder of Prospect Medical Group, Inc., our affiliated
  California professional corporation; and as director and officer of each of our
  other affiliated physician organizations, and as holder of record title to Prospect
  Medical Group's shares in Nuestra Familia Medical Group until a suitable
  replacement can be identified for these positions.
  (e)           In consideration for Dr. Terner's
  resignation and other promises in his resignation agreement, and in
  satisfaction of our contractual obligations under Dr. Terner's employment
  agreement, we agreed to pay to his family trust the sum of $19,361.10 each
  month during the twelve-month period ending on April 30, 2009 and the sum
  of $42,694.45 each month during the twenty-four month period ending on April 30,
  2011, with all such sums being payable on the last business day of each month.
  Item 9.01               Financial
  Statements and Exhibits.
  (d)           Exhibits
  The
  following exhibits are filed with the Form 8-K:
  Exhibit No.
  Description
  99.1
  Press
    Release of Prospect Medical Holdings, Inc. dated May 16, 2008
  2
  SIGNATURES
  Pursuant
  to the requirements of the Securities Exchange Act of 1934, the Registrant has
  duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.
  PROSPECT
    MEDICAL HOLDINGS, INC.
  By:
  /s/
    MIKE HEATHER
  Mike Heather
  Chief Financial Officer
  Dated:
    May 16, 2008
  3