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


                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended September 30, 2004


Commission File Number 1-8635

                          AMERICAN MEDICAL ALERT CORP.
             (Exact Name of Registrant as Specified in its Charter)

         New York                                               11-2571221
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification Number)

                3265 Lawson Boulevard, Oceanside, New York 11572
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (516) 536-5850
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No __

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable  date:  8,022,709 shares of $.01 par
value common stock as of November 10, 2004.


<PAGE>

                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

                                   INDEX                                    PAGE

Part I   Financial Information

            Report of Independent Registered Public Accounting Firm            1

            Condensed Consolidated Balance Sheets for September 30, 2004
            and December 31, 2003                                              2

            Condensed Consolidated Statements of Income for the                4
            Nine Months Ended September 30, 2004 and 2003

            Condensed Consolidated Statements of Income for the
            Three Months Ended September 30, 2004 and 2003                     5

            Condensed Consolidated Statements of Cash Flows for
            the Nine Months Ended September 30, 2004 and 2003                  6

            Notes to Condensed Consolidated Financial Statements               8

            Management's Discussion and Analysis of
            Financial Condition and Results of Operations                     14

            Controls and Procedures                                           31

Part II  Other Information                                                    32


<PAGE>


Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders
American Medical Alert Corp. and Subsidiaries
Oceanside, New York

We have reviewed the condensed  consolidated  balance sheet of American  Medical
Alert Corp. and Subsidiaries as of September 30, 2004 and the related  condensed
consolidated  statements of income for the  three-month  and nine-month  periods
ended  September  30, 2004 and 2003,  and cash flows for the  nine-months  ended
September  30,  2004  and  2003.  These  interim  financial  statements  are the
responsibility of the company's management.

We conducted our review in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially  less in scope  than an audit  conducted  in  accordance  with the
standards of the Public Company  Accounting  Oversight  Board,  the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the condensed  consolidated  interim financial statements referred to
above for them to be in conformity with accounting principles generally accepted
in the United States of America.

We have  previously  audited,  in  accordance  with the  standards of the Public
Company  Accounting  Oversight Board (United States),  the consolidated  balance
sheet of American  Medical Alert Corp. and Subsidiaries as of December 31, 2003,
and the related consolidated statements of income, shareholders' equity and cash
flows for the year then ended (not  presented  herein);  and in our report dated
March 10,  2004,  we  expressed  an  unqualified  opinion on those  consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  condensed  consolidated  balance  sheet as of December 31, 2003 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.


/s/ Margolin, Winer & Evens LLP

Margolin, Winer & Evens LLP
Garden City, New York

November 10, 2004

                                       1

<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                     ASSETS
                                                                                 September 30, 2004
                                                                                      (Unaudited)       Dec. 31, 2003
                                                                                      ------------       ------------
<S>                                                                               <C>                     <C>
CURRENT ASSETS
     Cash                                                                             $  2,334,559       $  2,192,113
     Accounts receivable
     (net of allowance for doubtful accounts of $661,500 and $643,000)                   4,119,391          3,295,752
     Notes and other receivables                                                            22,919             22,077
     Inventory                                                                             402,304            451,924
     Prepaid and refundable taxes                                                                -            155,093
     Prepaid expenses and other current assets                                             597,540            471,497
     Deferred income taxes                                                                 288,000            321,000
                                                                                      ------------       ------------
     Total Current Assets                                                                7,764,713          6,909,456
                                                                                      ------------       ------------

FIXED ASSETS
     (Net of accumulated depreciation and amortization)                                  7,068,599          6,739,165
                                                                                      ------------       ------------
OTHER ASSETS
       Long-term portion of notes receivable                                               104,018            121,314
       Intangible assets
            (net of accumulated amortization of $1,602,168 and $1,056,196)               1,638,194          1,834,166
       Goodwill (net of accumulated amortization of $58,868)                             2,563,864          2,086,815
       Other assets                                                                        140,870            148,664
       Deferred income taxes                                                               182,000             97,000
                                                                                      ------------       ------------
                                                                                         4,628,946          4,287,959
                                                                                      ------------       ------------
TOTAL ASSETS                                                                          $ 19,462,258       $ 17,936,580
                                                                                      ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Current portion of notes payable                                                 $    328,646       $    323,314
     Accounts payable                                                                      304,042            618,337
     Accrued expenses and taxes payable                                                  1,296,956          1,012,214
     Current portion of capital lease obligations                                           93,234             89,656
     Deferred revenue                                                                      104,012            106,409
                                                                                      ------------       ------------
     Total Current Liabilities                                                           2,126,890          2,149,930

DEFERRED INCOME TAX LIABILITY                                                              941,000            882,000
LONG-TERM PORTION OF NOTES PAYABLE                                                         577,962            769,525
LONG-TERM PORTION OF CAPITAL LEASE OBLIGATIONS                                              48,880            119,814
LONG-TERM PORTION OF PUT WARRANT OBLIGATION                                                240,000            200,000
ACCRUED RENTAL OBLIGATION                                                                  160,788            108,024
OTHER LIABILITIES                                                                           76,884                  -
                                                                                      ------------       ------------
     TOTAL LIABILITIES                                                                   4,172,404          4,229,293
                                                                                      ------------       ------------

COMMITMENTS AND CONTINGENT LIABILITIES                                                           -                  -

SHAREHOLDERS' EQUITY
     Preferred stock, $.01 par value - authorized, 1,000,000 shares; none issued
     and outstanding
     Common stock, $.01 par value - authorized 20,000,000
     shares; issued
     8,063,736 and 7,734,486 shares in 2004 and 2003, respectively                          80,637             77,345
     Additional paid-in capital                                                         10,543,005          9,573,863
     Retained earnings                                                                   4,772,244          4,162,111
                                                                                      ------------       ------------
                                                                                        15,395,886         13,813,319
     Less treasury stock, at cost (43,910 shares)                                         (106,032)          (106,032)
                                                                                      ------------       ------------
     Total Shareholders' Equity                                                         15,289,854         13,707,287
                                                                                      ------------       ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                            $ 19,462,258       $ 17,936,580
                                                                                      ============       ============
</TABLE>

See accompanying notes to condensed financial statements.

                                       2
<PAGE>
                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Nine Months Ended September 30,
                                                                   -------------------------------
                                                                       2004               2003
                                                                   ------------       ------------
<S>                                                                <C>                <C>
Revenues:
     Services                                                      $ 14,048,534       $ 11,896,156
     Product sales                                                      221,579            270,044
                                                                   ------------       ------------
                                                                     14,270,113         12,166,200
Costs and Expenses (Income):
     Costs related to services                                        6,530,238          5,641,982
     Costs of products sold                                             128,721            138,366
     Selling, general and administrative expenses                     6,627,392          5,926,496
     Interest expense                                                    44,985             64,746
     Other income                                                      (214,355)          (267,820)
                                                                   ------------       ------------

Income before Provision for Income Taxes                              1,153,132            662,430

Provision for Income Taxes                                              543,000            290,000
                                                                   ------------       ------------

NET INCOME                                                         $    610,132       $    372,430
                                                                   ============       ============

Net income per share:
     Basic                                                         $        .08       $        .05
                                                                   ------------       ------------
     Diluted                                                       $        .07       $        .05
                                                                   ------------       ------------

Weighted average number of common shares outstanding (Note 3)
     Basic                                                            7,862,958          7,436,685
                                                                   ============       ============

     Diluted                                                          8,425,940          7,621,842
                                                                   ============       ============
</TABLE>

See accompanying notes to condensed financial statements.


                                       3
<PAGE>


                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended September 30,
                                                                   -----------------------------
                                                                      2004               2003
                                                                   -----------       -----------
<S>                                                                <C>               <C>
Revenues:
     Services                                                      $ 4,866,217       $ 4,233,025
     Product sales                                                      78,967            78,323
                                                                   -----------       -----------
                                                                     4,945,184         4,311,348
Costs and Expenses (Income):
     Costs related to services                                       2,300,113         1,947,474
     Costs of products sold                                             50,504            39,331
     Selling, general and administrative expenses                    2,243,053         2,094,062
     Interest expense                                                   13,734            25,923
     Other income                                                      (60,030)          (57,971)
                                                                   -----------       -----------

Income before Provision for Income Taxes                               397,810           262,529

Provision for Income Taxes                                             168,000           105,000
                                                                   -----------       -----------

NET INCOME                                                         $   229,810       $   157,529
                                                                   ===========       ===========

Net income per share:
     Basic                                                         $       .03       $       .02
                                                                   -----------       -----------
     Diluted                                                       $       .03       $       .02
                                                                   -----------       -----------

Weighted average number of common shares outstanding (Note 3)
     Basic                                                           7,990,632         7,448,854
                                                                   ===========       ===========

     Diluted                                                         8,564,184         7,769,737
                                                                   ===========       ===========
</TABLE>


See accompanying notes to condensed financial statements.


                                       4
<PAGE>

                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                               Nine Months Ended September 30,
                                                                                -----------------------------
                                                                                   2004              2003
                                                                                -----------       -----------
<S>                                                                             <C>               <C>
Cash Flows From Operating Activities:

     Net income                                                                 $   610,132       $   372,430

     Adjustments to reconcile net income to net cash provided by operating
       activities:
     Provision for deferred income taxes                                              7,000            20,000
     Depreciation and amortization                                                2,236,289         1,780,545
     Valuation of put warrant                                                        40,000           190,666

     Decrease (increase) in:
       Accounts receivables                                                        (803,877)            1,544
       Inventory                                                                     49,620            53,076
       Prepaid and refundable taxes                                                 155,093            79,859
       Prepaid expenses and other current assets                                   (126,043)          (27,164)
       Other assets                                                                  (3,868)           17,779
     Increase (decrease) in:
       Accounts payable, accrued expenses and other                                 191,030           (85,809)
       Deferred revenue                                                              (2,397)          (90,479)
                                                                                -----------       -----------

Net Cash Provided by Operating Activities                                         2,352,979         2,312,447
                                                                                -----------       -----------

Cash Flows From Investing Activities:
     Expenditures for fixed assets                                               (1,983,089)       (1,242,613)
     Purchase of LMA                                                                      -        (1,686,720)
     Purchase of alphaCONNECT, Inc.                                                (767,956)                -
     Investments in marketable securities                                                 -         2,057,925
     Deposit on medical devices                                                           -            40,320
     Repayment of notes receivable                                                   16,454            70,442
     Increase in goodwill                                                          (103,855)         (116,019)
     Payment for account acquisitions and
      licensing agreement                                                           (90,934)         (566,982)
                                                                                -----------       -----------

Net Cash (Used In) Investing Activities                                          (2,929,380)       (1,443,647)
                                                                                -----------       -----------

Cash Flows From Financing Activities:
     Principal payments under capital lease obligation                              (67,356)         (158,995)
     Proceeds from notes payable                                                     62,065            16,049
     Repayment of notes payable                                                    (248,296)         (240,875)
     Proceeds upon exercise of stock options                                        972,434            59,314
                                                                                -----------       -----------

Net Cash Provided by (Used in) Financing Activities                                 718,847          (324,507)
                                                                                -----------       -----------
</TABLE>

See accompanying notes to condensed financial statements.


                                       5
<PAGE>

                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Nine Months Ended September 30,
                                                                                     --------------------------
                                                                                        2004            2003
                                                                                     ----------      ----------
<S>                                                                                  <C>             <C>
         Net Increase in Cash                                                        $  142,446      $  544,293

         Cash, Beginning of Period                                                    2,192,113         863,417
                                                                                     ----------      ----------

         Cash, End of Period                                                         $2,334,559      $1,407,710

                                                                                     ==========      ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

CASH PAID DURING THE PERIOD FOR INTEREST                                             $   41,235      $   64,746
                                                                                     ==========      ==========

CASH PAID DURING THE PERIOD FOR INCOME TAXES                                         $   92,960      $   66,065
                                                                                     ==========      ==========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
 AND FINANCING ACTIVITY:

  Fixed assets recorded under capital lease obligations                              $        -      $   75,000
</TABLE>


See Note 5 for assets and liabilities acquired in connection with the purchases
of LMA and alphaCONNECT, Inc.

See accompanying notes to condensed financial statements.


                                       6
<PAGE>

                  AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES


              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


1. General:

These financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 2003 included in
the Company's Annual Report on Form 10-KSB.

2. Results of Operations:

In the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the financial position as of September 30,
2004 and the results of operations for the nine and three months ended September
30, 2004 and 2003, and cash flows for the nine months ended September 30, 2004
and 2003.

The accounting policies used in preparing these financial statements are the
same as those described in the December 31, 2003 financial statements.

The results of operations for the nine and three months ended September 30, 2004
are not necessarily indicative of the results to be expected for any other
interim period or for the full year.

Certain amounts in the nine and three months ended September 30, 2003 financial
statements have been reclassified to conform to the 2004 presentation.

3. Accounting for Stock-Based Compensation:

The Company has two stock-based employee compensation plans and additional
outstanding options under a third plan which has expired. The Company accounts
for those plans under the recognition and measurement principles of APB Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
No stock-based employee compensation cost is reflected in net income, as all
options granted under those plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. The following table
illustrates the effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of FASB Statement No. 123,
"Accounting for Stock-Based Compensation," to stock-based compensation.


                                       7
<PAGE>

<TABLE>
<CAPTION>
                               Nine Months Ended September 30,  Three Months Ended September 30,
                                 ------------------------         -------------------------
                                   2004             2003             2004            2003
                                 --------        --------         ---------       ---------
<S>                             <C>             <C>               <C>             <C>
Net income, as reported         $ 610,132       $ 372,430         $ 229,810       $ 157,529
Deduct: Total stock-based
employee compensation
  expense determined under
  fair value based method        (184,033)       (183,585)          (27,409)              -
                                 --------        --------         ---------       ---------
Pro forma net income             $ 426,099       $ 188,845        $ 201,501       $ 157,529

Earnings per share:
  Basic - as reported            $    0.08       $    0.05        $    0.03       $    0.02
  Basic - pro forma              $    0.05       $    0.03        $    0.03       $    0.02
  Diluted - as reported          $    0.07       $    0.05        $    0.03       $    0.02
  Diluted - pro forma            $    0.05       $    0.02        $    0.02       $    0.02
</TABLE>


The weighted average grant date fair value of options granted during the nine
months ended September 30, 2004 and 2003 was $110,492 and $103,352,
respectively. During the three months ended September 30, 2004 and 2003 the fair
value of options granted was $24,443 and $-0-, respectively.

The fair value of options at date of grant was estimated using the Black-Scholes
model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                               Nine Months Ended September 30,  Three Months Ended September 30,
                                 ------------------------         -------------------------
                                   2004             2003             2004            2003
                                 --------        --------         ---------       ---------
<S>                             <C>             <C>               <C>             <C>
Expected life (years)                2               2                2               -
Risk free interest rate             2.42%          2.02%             2.68%            -
Expected volatility                42.75%         38.83%            43.07%            -
Expected dividend yield               -              -                 -              -
</TABLE>


4. Earnings Per Share:

Earnings per share data for the nine and three months ended September 30, 2004
and 2003 is presented in conformity with SFAS No. 128, "Earnings Per Share".

The following table is a reconciliation of the numerators and denominators in
computing earnings per share:

<TABLE>
<CAPTION>
                                                             Income                  Shares                Per-Share
Nine Months Ended September 30, 2004                       (Numerator)            (Denominator)             Amounts
------------------------------------                     -------------            -------------        ------------
<S>                                                      <C>                         <C>                  <C>
Basic EPS - Income available to
  common stockholders                                    $     610,132               7,862,958            $.08
                                                                                                          ====
Effect of dilutive securities -
 Options and warrants                                               -                  562,982
                                                         -------------           -------------
Diluted EPS - Income available
to common stockholders and
 assumed conversions                                     $     610,132               8,425,940            $.07
                                                         =============          ==============            ====
</TABLE>

                                       8
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 2004
-------------------------------------
<S>                                                      <C>                         <C>                  <C>
Basic EPS -Income available to
 common stockholders                                     $     229,810               7,990,632            $.03
                                                                                                          ====
Effect of dilutive securities -
 Options and warrants                                               -                  573,553
                                                         -------------          --------------
Diluted EPS - Income available to  common
stockholders and
 assumed conversions                                     $     229,810               8,564,184            $.03
                                                         =============          ===============           ====

Nine Months Ended September  30, 2003
-------------------------------------
Basic EPS - Income available to
 common stockholders                                     $     372,430              7,436,685             $.05
                                                                                                          ====
Effect of dilutive securities -
 Options and warrants                                                -                 185,157
                                                         -------------          --------------
Diluted EPS - Income available to common
stockholders and
 assumed conversions                                     $     372,430               7,621,842            $.05
                                                         =============          ==============            ====

Three Months Ended September 30, 2003
-------------------------------------
Basic EPS - Income available to
 common stockholders                                     $     157,529               7,448,854            $.02
                                                                                                          ====
Effect of dilutive securities -
 Options and warrants                                               -                  320,883
                                                         -------------          --------------
Diluted EPS - Income available to common
stockholders and
 assumed conversions                                     $     157,529               7,769,737            $.02
                                                         =============          ==============            ====
</TABLE>


5. Acquisitions:

On April 12, 2004, the Company acquired substantially all of the assets of
alphaCONNECT, Inc., a New Jersey based provider of telephone after-hour
answering services and stand-alone voice mail services. The purchase price was
$691,956 and consisted of an initial cash payment of $563,816 and future cash
payments of $51,256 and $76,884 to be paid to the Seller after the first and
second year anniversaries from the date of the executed agreement, respectively.
The Company also paid professional fees of $76,000. A potential exists for the
payment of additional purchase price consideration if certain thresholds
concerning revenue are met by the acquired business. The measurement date for
this potential additional purchase price consideration is April, 2005. The
purchase price exceeded the fair value of the net assets acquired as the Company
acquired this entity with the intention of consolidating this entity with Live
Message

                                       9
<PAGE>

America,  Inc., its  previously  acquired New Jersey based provider of telephone
answering  services,  and expanding its presence in this geographical  area. The
results of operations of  alphaCONNECT,  Inc. are included in the TAS segment as
of the date of acquisition.

The following table summarizes the fair values of the assets acquired at the
date of acquisition. The Company received a third party valuation of certain
intangible assets in determining the allocation of the purchase price.

     Accounts receivable                     $        19,762
     Fixed Assets                                     25,000
     Non-compete agreement                            25,000
     Customer List                                   325,000
     Goodwill                                        373,194
                                             ---------------

     Cost to acquire alphaCONNECT, Inc.      $       767,956
                                             ===============

On June 30, 2003, the Company acquired substantially all of the assets of Live
Message America, Inc. ("LMA"), a New Jersey based provider of telephone
after-hour answering services and stand-alone voice mail services. The purchase
price consisted of a cash payment of $1,607,818 plus professional fees of
$78,902. A potential exists for the payment of additional purchase price
consideration based on a percentage of revenue of the acquired business if
certain thresholds concerning revenue and earnings are met. The measurement date
for this potential additional purchase price consideration is June 30, 2005. The
purchase price exceeded the fair value of the net assets acquired as the Company
acquired this entity for the purpose of expanding its presence in the telephone
answering service business, and for the business' future cash flows and net
earnings as opposed to tangible net assets. The results of operations of LMA are
included in the TAS segment as of the date of acquisition.

The following table summarizes the fair values of the assets acquired and
liabilities assumed at the date of acquisition. The Company received a third
party valuation of certain intangible assets in determining the allocation of
the purchase price.

     Accounts receivable                     $       137,537
     Fixed Assets                                     75,000
     Non-compete agreement                            50,000
     Customer List                                   550,000
     Goodwill                                        892,570
     Customer deposits                               (18,387)
                                             ---------------

     Cost to acquire LMA                     $     1,686,720
                                             ===============

Unaudited pro forma results of operations for the nine and three months ended
September 30, 2004 and 2003 as if alphaCONNECT, Inc. and LMA had been
consolidated as of the beginning of the earliest period presented follow. The
pro forma results for the nine and three months ended September 30, 2004 and
2003, which include estimates which management believes are reasonable, are as
follows:


                                       10
<PAGE>
<TABLE>
<CAPTION>
                                     Nine Months Ended September 30,      Three Months Ended September 30,
                                     -------------------------------      --------------------------------
                                          2004             2003                 2004           2003
                                          ----             ----                 ----           ----
<S>                                  <C>               <C>                 <C>              <C>
Revenue                              $14,420,000       13,345,000          $ 4,945,000      4,460,000
Net income                               625,000          475,000              230,000        175,000
Net income per share
     Basic                                $.08             $.06                 $.03           $.02
                                          ====             ====                 ====           ====
     Diluted                              $.07             $.06                 $.03           $.02
                                          ====             ====                 ====           ====
</TABLE>

The unaudited pro forma results of operations for the nine and three months
ended September 30, 2004 and 2003 do not purport to represent what the Company's
results of operations would actually have been had the acquisition been effected
for the period presented, or to predict the Company's results of operations for
any future period.

6. Major Customers:

Since 1983, the Company has provided Personal Emergency Response Systems
("PERS") services to the City of New York's Human Resources Administration Home
Care Service Program ("HCSP"). The Company has been operating since 1993 with a
contract to provide HCSP with these services, which has been extended for 1-2
year periods since 1993, the last such extension through June 30, 2004. During
the nine months ended September 30, 2004 and 2003, the Company's revenues from
this contract represented 15% and 18%, respectively, of its total revenue.

In November 2002, a new Request for Proposals ("RFP") was issued by HRA to
provide emergency response services to HCSP from April 1, 2004 through March 31,
2007. After receiving notification from the City of New York's Human Resources
Administration ("HRA") that the Company was selected as the approved vendor
under the RFP to provide PERS services to the Home Care Services Program to
Medicaid Eligible individuals, the Company subsequently received notification
from HRA that it canceled the RFP "in the best interest of the City of New
York." Concurrently, the Company was advised of HRA's decision to issue a new
contract extension to the Company through December 2005 under the terms of the
contract that the Company has been operating under since 1993. HRA has also
advised the Company that they plan to issue a new RFP with respect to PERS
services in the future. The Company was advised that the cancellation of the RFP
is not related to any performance issue or a negative reflection upon the
Company.

The Company cannot determine (i) when the terms of the new RFP will be
published, (ii) what the terms of the new RFP will be, (iii) how long the
current contract terms will remain in effect or (iv) whether AMAC will be the
successful bidder on the new RFP (and if so, under what terms and conditions).
While the Company has reduced its dependence on revenue from HCSP, if subsequent
to December 2005, the Company does not maintain this contract, a significant
amount of the Company's revenue could be lost, albeit over a protracted period,
which could have a material adverse effect on operating results and cash flows.
The Company continues to implement a variety of operational efficiencies, as
well as continuing to enhance and diversify its other revenue streams, to offset
the impact, if any, of this occurrence.

                                       11
<PAGE>

As of September 30, 2004 and December 2003, accounts receivable from the
contract represented 20% and 29%, respectively, of accounts receivable and
medical devices in service under the contract represented approximately
18% and 22%, respectively, of medical devices.


7. Segment Reporting:

The Company has three reportable segments, (i) Personal Emergency Response
Systems ("PERS"), (ii) Telephone After-Hours Answering Services ("TAS"), and
(iii) Safe Com.

The table below provides a reconciliation of segment information to total
consolidated information for the nine and three months ended September 30, 2004
and 2003:

<TABLE>
<CAPTION>
                                                         2004

                                                   PERS            TAS             Safe Com      Consolidated
                                              -----------      -----------      -----------      -----------
<S>                                           <C>              <C>              <C>              <C>
Nine Months Ended September 30, 2004
Revenue                                       $10,025,417      $ 3,967,386      $   277,310      $14,270,113
Income before provision for income taxes          473,267          617,601           62,264        1,153,132
Total assets                                   12,300,412        6,538,481          623,365       19,462,258


                                                   PERS            TAS             Safe Com      Consolidated
                                              -----------      -----------      -----------      -----------
Three Months Ended September 30, 2004
Revenue                                       $ 3,413,430      $ 1,434,755      $    96,999      $ 4,945,184
Income before provision for income taxes          172,341          210,299           15,170          397,810


                                                         2003


                                                   PERS            TAS             Safe Com      Consolidated
                                              -----------      -----------      -----------      -----------
Nine Months Ended September 30, 2003
Revenue                                       $ 9,346,212      $ 2,591,355      $   228,633      $12,166,200
Income before provision for income taxes          155,512          506,685              233          662,430
Total assets                                   12,461,954        4,444,210          309,170       17,215,334


                                                   PERS            TAS             Safe Com      Consolidated
                                              -----------      -----------      -----------      -----------
Three Months Ended September 30, 2003
Revenue                                       $ 3,117,435      $ 1,111,892      $    82,021      $ 4,311,348
Income before provision for income taxes           28,281          226,567            7,681          262,529
</TABLE>

                                       12
<PAGE>

8. Commitments and Contingencies:

The Company is aware of various threatened or pending litigation claims against
the Company relating to its products and services and other claims arising in
the ordinary course of its business. The Company has given its insurance carrier
notice of such claims and it believes there is sufficient insurance coverage to
cover any such claims. Currently, there are no litigation claims for which an
estimate of loss, if any, can be reasonably made as they are in the preliminary
stages and therefore, no liability or corresponding insurance receivable has
been recorded.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion and analysis should be
read in conjunction with the consolidated financial statements contained in the
latest Annual Report on Form 10-KSB dated December 31, 2003.

Statements contained in this Quarterly Report on Form 10-QSB include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, including, in particular and without
limitation, statements contained herein under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the Company's actual results, performance and
achievements, whether expressed or implied by such forward-looking statements,
not to occur or be realized. These include uncertainties relating to government
regulation, technological changes, our expansion plans, our contract with the
City of New York and product liability risks. Such forward-looking statements
generally are based upon the Company's best estimates of future results,
performance or achievement, based upon current conditions and the most recent
results of operations. Forward-looking statements may be identified by the use
of forward-looking terminology such as "may," "will," "expect," "believe,"
"estimate," "project," "anticipate," "continue" or similar terms, variations of
those terms or the negative of those terms.

You should carefully consider such risks, uncertainties and other information,
disclosures and discussions which contain cautionary statements identifying
important factors that could cause actual results to differ materially from
those provided in the forward-looking statements. Readers should carefully
review the risk factors and any other cautionary statements contained in the
Company's Annual Report on Form 10-KSB and other public filings. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

                                       13
<PAGE>

Overview:

The Company's business is providing personal emergency response systems ("PERS")
and other healthcare communication products and services. The Company's products
and services are marketed to individuals through a network of intermediaries,
including home care durable medical equipment, hospital, hospice, managed care
and other healthcare oriented organizations. The Company also offers its
products and services directly to consumers. Until 2000, the Company's
principal business was the marketing of PERS, a device which allows a patient to
signal an emergency response center for help in the event of a debilitating
illness or accident. Beginning in 2000, the Company began a program of
diversification and expansion to decrease its reliance on the PERS product and
to leverage its customer base to offer complementary products and services to
the healthcare community.

The Company has diversified its products/service mix to include telephone
answering services ("TAS") for the medical profession. The decision to enter
this segment was made because the target market greatly overlaps the PERS
customer base, the ability to leverage existing infrastructure capability, and
the goal of establishing a significant revenue source generating immediate
positive cash flow. This was accomplished through three acquisitions, one each
in 2000, 2003 and 2004. The TAS segment now accounts for 28% of the Company's
revenues. The Company believes that TAS will continue to be a significant
business segment going forward and intends to pursue further acquisitions in
this area. The TAS business currently provides revenue of approximately $5.3
million per year and is the Company's most profitable segment. During 2004, the
Company has broadened its capabilities to service other specialized allied
healthcare providers including home care, hospice and other healthcare
subspecialties. The Company believes it has identified other communication needs
as expressed by the existing client base. In response to these expressed needs,
the Company has developed specialized healthcare communication solutions. These
solutions are creating additional opportunities for long-term revenue
enhancement. The Company intends to expand its offering of these services and to
significantly expand this reporting segment.

In furtherance of its diversification efforts, the Company also reduced the
concentration in the PERS segment on the contract with the City of New York.
This was accomplished through expansion of its customer base outside the City of
New York, reducing the Company's reliance on this contract from 47% of the
Company's revenues in 1998 to 15% as of September 30, 2004.

The Company continues to view its two core businesses, PERS and TAS, as the main
contributors to the Company's cash flow from operations.

                                       14
<PAGE>

In 2001, the Company realized a new market opportunity was soon approaching
based on demographic trends indicating that the aging of the Baby Boomer
generation, combined with longer life expectancies, was expected to manifest a
larger, fragile and chronically ill elderly population with a preference to
access medical advice and treatment from home. The advent of new technologies
being developed permits the reporting of certain vital signs and indicia of a
patient's well-being without the presence and cost of a visiting nurse or other
home healthcare personnel. With an established presence in the home from our
PERS market, the Company entered into a marketing and technology agreement, with
certain exclusive rights, with Health Hero Network, Inc. in 2001 to embark on a
long-term research and development project. The result of the program was the
commercial introduction in the fourth quarter of 2003 of a device known as the
PERS Buddy(R). This appliance combines the Company's traditional emergency
response device with Health Hero's interactive dialogues which allows patients
to self-report on various conditions to enable daily monitoring and proactive
intervention by the healthcare community. The PERS Buddy is designed for
patients with chronic conditions such as congestive heart failure, diabetes,
asthma and coronary artery disease. The device also accepts vital signs data
directly from a variety of approved meters (thereby eliminating the need for the
patients to input the data) including weight scale, blood glucose and blood
pressure devices. In order to utilize the systems' direct vital signs reporting
capability, approval from the Federal Drug Administation (FDA) is required. The
Company has filed the required application with the FDA and is awaiting approval
which it expects to receive in the first quarter of 2005. The Company believes
that the new field of reporting and monitoring, which is becoming widely known
as "telehealth", will continue to expand based on increasing acceptance by the
medical profession and government reimbursement policies, as well as further
clinical and econometric studies concluding that telehealth is both clinically
effective and reduces costs. The Company has devoted in excess of $500,000 in
research and development of the PERS Buddy over the last two and a half years
and intends to further expand and diversify product and service offerings in the
telehealth field going forward.

To round out the Company's portfolio of home monitoring offerings, the Company
secured certain exclusive rights to a medication reminder appliance in 1999,
which is marketed under the name MedTime. The Company sells its device to the
same customer base utilizing PERS services as well as through web retailers and
directly to consumers. The Company is planning to redesign and upgrade the
appliance in 2005 based on customer feedback.

The Company's third reporting segment, SafeCom, offers equipment and safety
monitoring to pharmacies and other 24/7 retail organizations. Currently 459
stores are monitored with this technology. SafeCom monitoring services are
provided at the Company's communication center in Long Island City, New York.
Although currently providing a small annual revenue contribution, the Company
believes a significant opportunity exists and will continue to test the market
potential into 2005.

The Company believes that the overall mix of cash flow generating businesses,
i.e., PERS and TAS, combined with its emphasis on developing products and
services in the telehealth field, provides the correct blend of stability and
growth opportunity. The Company believes this strategy will enable it to
maintain and increase its role in the healthcare communications field.


                                       15
<PAGE>


Components of Statements of Income by Operating Segment
-------------------------------------------------------
The following table shows the components of the Statement of Income for the
three and nine months ended September 30, 2004 and 2003.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
In thousands (000's)                              Three Months Ended Sept 30,               Nine Months Ended Sept 30,
----------------------------------------------------------------------------------------------------------------------------
                                                 2004     %        2003      %          2004       %        2003      %
----------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>      <C>      <C>       <C>        <C>         <C>      <C>       <C>
Revenues
  PERS                                          3,413    69%      3,117     72%        10,026      70%      9,346     77%
  TAS                                           1,435    29%      1,112     26%         3,967      28%      2,591     21%
  Safe Com                                         97     2%         82      2%           277       2%        229      2%

     Total Revenues                             4,945   100%      4,311    100%        14,270     100%     12,166    100%

Cost of Services and Goods Sold
  PERS                                          1,546    45%      1,379     44%          4,495     45%      4,337     46%
  TAS                                             747    52%        554     50%          2,024     51%      1,300     50%
  Safe Com                                         57    59%         53     65%            140     51%        143     62%

Total Cost of Services and Goods Sold           2,350    48%      1,986     46%          6,659     47%      5,780     48%


Gross Profit
  PERS                                          1,867    55%      1,738     56%          5,531     55%      5,009     54%
  TAS                                             688    48%        558     50%          1,943     49%      1,291     50%
  Safe Com                                         40    41%         29     35%            137     49%         86     38%

     Total Gross Profit                         2,595    52%      2,325     54%          7,611     53%      6,386     52%

Selling, General & Administrative               2,243    45%      2,094     49%          6,627     46%      5,927     49%
Interest Expense                                   14     0%         26      0%             45      0%         65      1%
Other Income                                      (60)  (1)%        (58)   (1)%           (214)   (2)%       (268)    (2)%

Income before Income Taxes                        398     8%        263      6%          1,153      8%        662       5%

Provision for Income Taxes                        168               105                    543                290

Net Income                                        230               158                    610                372
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Note: The  percentages  for Cost of Services and Goods Sold and Gross Profit are
calculated based on a percentage of revenue.


                                       16
<PAGE>

Results of Operations:

The Company has three distinct operating business segments, which are PERS, TAS
and Safe Com. The PERS and TAS are the two significant segments which generate
and produce approximately 98% of the Company's revenue and net income, while
Safe Com has a minimal impact on these areas; therefore, the operations of Safe
Com are not further analyzed below.

Three Months Ended  September 30, 2004 Compared to Three Months Ended  September
30, 2003

Revenues:

      PERS

Revenues, which consist primarily of monthly rental revenues, increased
approximately $296,000, or 9%, for the three months ended September 30, 2004 as
compared to the same period in 2003. Monthly rental revenues represent revenues
that are generated from the leasing and monitoring of the medical device placed
in subscriber's residences. The increase is primarily attributed to the
following factor:

      []    In November 2003, the Company entered into an agreement whereby over
            3,000 Personal  Emergency Response Systems (PERS) were placed online
            from December  2003 through the first  quarter of 2004.  The Company
            continues to service this account  which now has grown to over 3,500
            PERS online and has generated  approximately $185,000 of revenue for
            the three months ended September 30, 2004.

There were various other smaller items that accounted for the remaining increase
in PERS revenue as compared to the same period in 2003.

      TAS

The increase in revenues of approximately $323,000, or 29%, for the three months
ended September 30, 2004 as compared to the same period in 2003 was primarily
due to the following:

      []    On April 12, 2004,  the Company  purchased the assets of a telephone
            answering service business, alphaCONNECT, Inc., located in Voorhees,
            New Jersey.  For the three months  ended  September  30,  2004,  the
            Company generated  approximately  $150,000 of revenues.  The Company
            has now  consolidated  its operations  into the Audubon,  New Jersey
            facility.

      []    The Company experienced revenue growth within its existing telephone
            answering service business of approximately $170,000, as compared to
            the same  period  in  2003.  This  growth  is  primarily  due to the
            execution   of  new   agreements   with   healthcare   and  hospital
            organizations.   The  Company  has  experienced  strong  growth  and
            anticipates that it will continue to grow this business segment with
            further expansion into healthcare and hospital  organizations and to
            physicians through its marketing strategies.

                                       17
<PAGE>

Costs Related to Services and Goods Sold:

      PERS

Costs related to services and goods increased by approximately $167,000 for the
three months ended September 30, 2004 as compared to the same period in 2003, an
increase of 12%, primarily due to the following:

      []    With the  execution  of an agreement in November of 2003 to place in
            excess of 3,000 PERS online,  the Company  hired  subcontractors  to
            perform the initial  installation  and service  associated with this
            new business.  These  subcontractors are still being utilized,  at a
            reduced number,  to perform the current  installations,  service and
            removals  associated  with this account and other  accounts  located
            within  the  same   geographical   area.   This  has  accounted  for
            approximately  $30,000 of expense as  compared to the same period in
            2003 when no expense was incurred.

      []    Depreciation has increased by  approximately  $30,000 as compared to
            the same period in 2003, due to the Company producing and purchasing
            additional  PERS  and  enhanced  PERS,  as a result  of the  Company
            growing its customer base and placing additional systems in service.
            As the Company  continues to grow its customer  base, the Company is
            purchasing additional PERS and enhanced PERS systems which are being
            depreciated  over their  useful  lives.  For the three  months ended
            September 30, 2004 and 2003, the Company  recorded  depreciation  of
            approximately $455,000 and $425,000,  respectively,  charged to Cost
            of Services and Goods Sold.

There were other increases in cost of services and goods sold which arose out of
the normal course of business such as fees paid to Health Hero Network, Inc.
(HHN), based on number of subscribers using the enhanced PERS, payroll relating
to operations and expenses incurred from third parties for PERS services
performed.

      TAS:

Costs related to services and goods increased by approximately $193,000 for the
three months ended September 30, 2004 as compared to the same period in 2003, an
increase of 35%, primarily due to the following:

      []    With the  acquisition of  alphaCONNECT,  Inc. in 2004, the Company's
            costs increased by approximately $50,000. This is due to the Company
            recording   three  months  of  expense  in  2004  relating  to  this
            acquisition  and no expense in 2003.  In the third  quarter of 2004,
            the Company consolidated its operations into its Audubon, New Jersey
            facility.  The Company  believes  this  consolidation  will  realize
            efficiencies,  without  negatively  impacting  service,  which  will
            result in decreased costs and increased margins.

      []    During the second and third quarter of 2004,  the Company  purchased
            and  installed  new  telephony  equipment  into LMA,  the  telephone
            answering  service  business  purchased  in  2003.  As  part of this
            installation process, the Company incurred increased personnel hours
            worked,  including  overtime,  by its  supervisors  and operators to
            learn and train on this system,  which resulted in  approximately  a
            $45,000  increase  in costs as  compared to the same period in 2003.
            The  implementation of this equipment is now substantially  complete
            and the Company  believes the  significant  hours  incurred over the
            last four to six months will now start to decline. Although this has
            a  short-term  negative  impact  on cost of  services  and the gross
            profit  percentage,  the Company believes this conversion to the new
            telephony  equipment was necessary for the  consolidation of its New
            Jersey  based  telephone  answering  service  acquired  in 2004  and
            anticipates that cost efficiencies will be realized going forward.

                                       18
<PAGE>

      []    With the  increase in business in its existing  telephone  answering
            service,  the Company hired additional  telephone  answering service
            supervisors  and operators in its Long Island City  location.  These
            personnel  additions  along  with  general  pay rate  increases  has
            accounted for approximately  $100,000 of increased costs as compared
            to the same  period in 2003.  As the Company  continues  to grow its
            customer base and revenues, it will continue to evaluate personnel
            levels and determine if additional personnel are necessary.


Selling, General and Administrative Expenses:

Selling, general and administrative expenses increased by approximately $149,000
for the three months ended September 30, 2004 as compared to the same period in
2003, an increase of 7%. The increase is primarily attributable to the
following:

      []    The  acquisition  of  alphaCONNECT,  Inc.  in 2004,  resulted in the
            Company incurring  approximately $35,000 of administrative costs for
            the three months ended  September 30, 2004.  These expenses  consist
            primarily of payroll and amortization expense.  Amortization relates
            to a  non-compete  agreement  and  customer  list,  which are being
            amortized over a five year period.

      []    Depreciation expense in 2004 increased by approximately  $40,000, as
            compared  to the same  period in 2003,  as a result  of the  Company
            purchasing  additional  workstations,  including  licenses,  in  its
            telephone  answering  service  location  in Long  Island City due to
            increased  business  and  related  call  volume,  and as a result of
            purchasing  new  telephony  equipment  for its  telephone  answering
            service located in Audubon, New Jersey.

      []    In  executing  its  agreement  with a  company  whereby  over  3,000
            Personnel Emergency Response Systems were placed online, the Company
            opened  an  office  in  early  2004  on the  West  Coast  and  hired
            additional  personnel,  where  previously  there was only a salesman
            located in the West Coast.  This  resulted in the Company  recording
            approximately $40,000 of additional expense, as compared to the same
            period in 2003.

There were other smaller increases in selling, general and administrative
expenses which arose out of the normal course of business such as equipment,
accounting and insurance fees.

Theses increase in the selling, general and administrative expenses were
partially offset by:

      []    In  connection  with the HCI  acquisition,  the  Company  issued two
            warrants to purchase 133,333.33 and 105,000 shares, respectively, of
            the Company's  common stock.  Each warrant  contained a "Put Option"
            giving the holder the  option,  only  during a specific  period,  to
            require the  Company,  under  certain  circumstances,  to redeem the
            warrants  at  specified  prices  of $5 and $6 per  share  (the  "Put
            price"),  respectively,  less the warrant  exercise  price of $2 per
            share. In lieu of honoring the Put Option, the Company has the right
            to request the exercise of the warrant,  and in that case, upon such
            exercise,  paying the holder  only the  difference  between  the Put
            Price and the market  price of the common  stock at the time of such
            exercise.  In November 2003, the holder  exercised the Put Option on
            the first warrant  (133,333.33  shares) and the Company enforced its
            right to

                                       19
<PAGE>

            request  the holder to exercise  the  warrant  such that the Company
            only paid to the holder the difference between the Put Price and the
            market price of the common stock at the time of such exercise. Since
            inception,  the Company has been  recording a liability  for the Put
            Option and adjusting it based on valuations  that take into account,
            among other things, the current market value of the Company's common
            stock.  For the three months ended  September 30, 2004,  the Company
            did not record any  expense  while  during  the three  months  ended
            September  30,  2003,  an expense of $79,333  was  recorded  for the
            warrants then outstanding.

Interest Expense:

Interest expense decreased by approximately $12,000 for the three months ended
September 30, 2004 as compared to the same period in 2003, a decrease of 46%.
The decrease was primarily due to the Company continuing to pay down its term
loan as well as fully satisfying certain of its previously executed capital
leases.

Other Income:

Other income for the three months ended September 30, 2004 and 2003 was
approximately $60,000 and $58,000, respectively. Other Income for the three
months ended September 30, 2004 and 2003 includes a Relocation and Employment
Assistance Program ("REAP") credit in the approximate amounts of $51,000 and
$60,000, respectively. In connection with the relocation of certain operations
to Long Island City, New York, the Company became eligible for the REAP credit
which is based upon the number of employees relocated to this designated REAP
area. The REAP is in effect for a twelve year period; during the first
five years the Company will be refunded the full amount of the eligible credit
and, thereafter, any credit will be applied only against city income taxes.

Income Before Provision for Income Taxes:

The Company's income before provision for income taxes for the three months
ended September 30, 2004 was approximately $398,000 as compared to $263,000 for
the same period in 2003. The increase of $135,000 for the three months ended
September 30, 2004 primarily resulted from an increase in the Company's service
revenues offset by an increase in the Company's costs related to services and
selling, general and administrative costs.


Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30,
2003

Revenues:

      PERS

Revenues,  which  consist  primarily  of  monthly  rental  revenues,   increased
approximately  $680,000,  or 7%, for the nine months ended September 30, 2004 as
compared to the same period in 2003. The increase is primarily attributed to:

                                       20
<PAGE>

      []    In November 2003, the Company entered into an agreement whereby over
            3,000 Personnel Emergency Response Systems (PERS) were placed online
            from December  2003 through the first  quarter of 2004.  The Company
            continues to service this account  which now has grown to over 3,500
            PERS online and has generated  approximately $500,000 of revenue for
            the nine months ended September 30, 2004.

      []    The Company has  increased  its sales with  respect to its  enhanced
            PERS.  In late 2003,  the Company  began to market its enhanced PERS
            and has increased  its customer  base along with its revenue,  which
            has  increased  by  approximately  $100,000  as compared to the same
            period in 2003.  The  Company  is  continuing  to  evaluate  further
            additions to its enhanced  PERS and is  aggressively  marketing  its
            product to continue to grow its customer base and revenues.

    TAS

The increase in revenues of approximately $1,376,000, or 53%, for the nine
months ended September 30, 2004 as compared to the same period in 2003 was
primarily due to the following:

      []    On June 30, 2003,  the Company  purchased  the assets of a telephone
            answering service business, LMA, located in Audubon, New Jersey. For
            the  nine  months  ended   September  2004  the  Company   generated
            $1,100,000,  while in the same period for 2003 the Company  recorded
            approximately  $350,000 in revenue.  Since the acquisition,  LMA has
            had minimal revenue growth  primarily due to the Company focusing on
            installing  a  new  and  upgraded   telephony   system  as  well  as
            consolidating  the April 2004 acquired  answering  service into this
            location.  The Company has  substantially  completed these items and
            believes that the business will start to grow its revenues.

      []    On April 12,  2004,  the  Company  purchased  the  assets of another
            telephone answering service business, alphaCONNECT, Inc., located in
            Voorhees,   New  Jersey.   In  2004,   the  Company  has   generated
            approximately  $300,000 of revenues  since the time of  acquisition.
            The Company has now  consolidated  this  operation into the Audubon,
            New Jersey facility.

      []    The Company has  experienced  growth  within its existing  telephone
            answering  service  business  which was purchased in November  2000.
            Revenues  increased  from  this  internal  growth  by  approximately
            $325,000  as  compared  to the same  period in 2003.  This growth is
            primarily due to the execution of new agreements with healthcare and
            hospital  organizations.  The Company has experienced growth in each
            of the years since it purchased this  answering  service in 2000 and
            anticipates that it will continue to grow this business with further
            expansion  into the  healthcare  and hospital  organizations  and to
            physicians through its marketing strategies.

Cost Related To Services and Goods Sold:

      PERS

Costs related to services and goods increased by approximately $158,000 for the
nine months ended September 30, 2004 as compared to the same period in 2003, an
increase of 4%, primarily due to the following:

                                       21
<PAGE>

      []    With the  execution  of an agreement in November of 2003 to place in
            excess of 3,000 PERS online, the Company added both customer service
            and emergency  response  center  personnel to handle the call volume
            and  maintenance  of this account.  The Company  believes it has now
            hired  sufficient  personnel to handle this  account  along with its
            other  accounts.  This  additional  personnel along with general pay
            rate  increases  represents  approximately  a  $95,000  increase  in
            payroll costs as compared to the same period last year.

      []    Also,   with  regard  to  this  new  business,   the  Company  hired
            subcontractors  to perform  the  initial  installation  and  service
            associated with this new business.  These  subcontractors  are still
            being  utilized,  at  a  reduced  number,  to  perform  the  current
            installations, service and removals associated with this account and
            other accounts located within the same  geographical  area. This has
            accounted for approximately  $120,000 of the increase as compared to
            the same period in 2003.

      []    Depreciation has increased by  approximately  $90,000 as compared to
            the same period in 2003, due to the Company placing  additional PERS
            and  enhanced  PERS in service  and  occupying  its new call  center
            facility  in April of 2003.  As the  Company  continues  to grow its
            customer  base,  the  Company  is  purchasing  additional  PERS  and
            enhanced PERS systems which are being  depreciated over their useful
            lives.  Upon occupying its new facility,  depreciation  commenced on
            the cost associated with the build-out of the new facility which was
            approximately  $1,100,000.  As of September  30, 2004 and 2003,  the
            Company  recorded  depreciation  of  approximately   $1,370,000  and
            $1,280,000,  respectively,  charged  to Cost of  Services  and Goods
            Sold.

      []    The Company has experienced a decrease of approximately $135,000, as
            compared to the same period in 2003, in its upgrade and repair costs
            associated  with the medical  devices it supplies to its  customers.
            The  decrease  is  primarily  due to  the  Company  requiring  fewer
            upgrades in 2004 as many devices were upgraded in prior years.

      TAS:

Costs related to services and goods increased by approximately $724,000 for the
nine months ended September 30, 2004 as compared to the same period in 2003, an
increase of 56%, primarily due to the following:

      []    With the acquisitions of the telephone answering service businesses,
            LMA and alphaCONNECT, in 2003 and 2004, respectively,  the Company's
            costs  increased  by  approximately  $460,000.  This  is  due to the
            Company  recording  nine  months  and six  months of expense in 2004
            relating to these  acquisitions  as opposed to only three  months of
            expense,  relating to the 2003  acquisition,  in 2003.  In the third
            quarter of 2004, the Company  consolidated its two acquisitions into
            one   location   and  the  Company   believes   this  will   realize
            efficiencies,  without  negatively  impacting  service,  which  will
            result in decreased costs and increased margins.

      []    With the  increase in business in its existing  telephone  answering
            service  and the  Company's  continued  focus on a  higher  level of
            service to its  customers,  the Company hired  additional  telephone
            answering service  supervisors and operators in its Long Island City
            location.  These  personnel  additions  along with  general pay rate
            increases  has  accounted  for  approximately  $200,000 of increased
            costs  as  compared  to the same  period

                                       22
<PAGE>

            in 2003.  As the Company  continues  to grow its  customer  base and
            revenues,  they will  continue  to  evaluate  personnel  levels  and
            determine if additional personnel are necessary.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses increased by approximately $700,000
for the nine months ended September 30, 2004 as compared to the same period in
2003, an increase of 12%. The increase is primarily attributable to the
following:

      []    The  acquisitions  of LMA and  alphaCONNECT,  Inc. in 2003 and 2004,
            respectively,   resulted  in  the  Company  incurring  approximately
            $590,000 of administrative costs for the nine months ended September
            30,  2004,  as compared to $153,000 in the same period in 2003.  The
            most  significant  expenses in 2004 are payroll and related benefits
            of approximately  $275,000 and  amortization  expense of $125,000 in
            2004.  Amortization  relates to non-compete  agreements and customer
            lists, which are being amortized over a five year period.

      []    Amortization expense, excluding LMA and alphaCONNECT,  Inc., in 2004
            increased by approximately  $170,000, as compared to the same period
            in 2003, as a result of the Company  commencing  amortization of its
            costs associated with its cooperative  licensing agreement with HHN,
            as certain  milestones  were met,  in July 2003.  Amortization  will
            continue on this  cooperative  licensing  agreement with HHN through
            November 2006, the end of the initial term of the agreement.

      []    In  executing  its  agreement  with a  company  whereby  over  3,000
            Personal  Emergency  Response Systems (PERS) were placed online, the
            Company  opened  an office  on the West  Coast and hired  additional
            personnel. This has resulted in approximately a $150,000 increase in
            expense as compared to the same period in 2003.

      []    During 2004,  the Company  expanded its customer  service  personnel
            relating to the  expansion  of the  enhanced  PERS into an increased
            number of  patients  residences.  This,  along  with  other  general
            increases  in  compensation  levels,  increased  payroll and related
            benefits by approximately $75,000, as compared to the same period in
            2003.

These increases in the selling, general and administrative expenses were
partially offset by:

      []    In  connection  with the HCI  acquisition,  the  Company  issued two
            warrants to purchase 133,333.33 and 105,000 shares, respectively, of
            the Company's  common stock.  Each warrant  contained a "Put Option"
            giving the holder the  option,  only  during a specific  period,  to
            require the  Company,  under  certain  circumstances,  to redeem the
            warrants  at  specified  prices  of $5 and $6 per  share  (the  "Put
            price"),  respectively,  less the warrant  exercise  price of $2 per
            share. In lieu of honoring the Put Option, the Company has the right
            to request the exercise of the warrant,  and in that case, upon such
            exercise,  paying the holder  only the  difference  between  the Put
            Price and the market  price of the common  stock at the time of such
            exercise.  In November 2003, the holder  exercised the Put Option on
            the first warrant  (133,333.33  shares) and the Company enforced its
            right to request  the holder to exercise  the warrant  such that the
            Company only paid to the holder the difference between the Put Price
            and  the  market  price  of the  common  stock  at the

                                       23
<PAGE>

            time of  such  exercise.  Since  inception,  the  Company  has  been
            recording a liability  for the Put Option and  adjusting it based on
            valuations that take into account,  among other things,  the current
            market  value of the  Company's  common  stock.  For the nine months
            ended  September  30, 2004,  the Company  recorded an expense and an
            increase in the liability of $40,000 for the one  remaining  warrant
            while during the nine months ended September 30, 2003, an expense of
            $190,666 was recorded for the two warrants then outstanding.

      []    Commissions,  which are paid to outside third parties,  decreased in
            2004 as  compared to the same  period in 2003  primarily  due to the
            termination of certain PERS  contracts in late 2003.  Commissions in
            the amount of  approximately  $30,000 per quarter  were  recorded on
            these contracts prior to termination,  or $90,000 for the nine month
            period ended September 30, 2003.

Interest Expense:

Interest expense decreased by approximately $20,000 for the nine months ended
September 30, 2004 as compared to the same period in 2003, a decrease of 31%.
The decrease was primarily due to the Company continuing to pay down its term
loan as well as fully satisfying certain of its previously executed capital
leases.

Other Income:

Other income for the nine months ended September 30, 2004 and 2003 was
approximately $214,000 and $268,000, respectively. Other Income for the nine
months ended September 30, 2004 and 2003 includes Relocation and Employment
Assistance Program ("REAP") credits in the approximate amounts of $170,000 and
$120,000, respectively. In connection with the relocation of certain operations
to Long Island City, New York, the Company became eligible for the REAP credit
which is based upon the number of employees relocated to this designated REAP
area. The REAP is in effect for a twelve year period; during the first five
years the Company will be refunded the full amount of the eligible credit and,
thereafter, any credit will be applied only against city income taxes. The
Company believes employee levels will remain sufficient to recognize
approximately $225,000 per annum. Other income for the nine months ended
September 30, 2003 also includes approximately $80,000 relating to the
replacement of activators. Early in 2002, it was found that certain activators
supplied by a vendor may be subject to battery failure, necessitating the
replacement of all potentially affected activators. The vendor replaced these
activators and reimbursed the Company for costs incurred in connection with this
replacement program. As of March 31, 2003, the replacement program was
substantially completed and the vendor paid all costs incurred by the Company in
connection with this program.

Income Before Provision for Income Taxes:

The Company's income before provision for income taxes for the nine months ended
September 30, 2004 was approximately $1,153,000 as compared to $662,000 for the
same period in 2003. The increase of $491,000 for the nine months ended
September 30, 2004 primarily resulted from

                                       24
<PAGE>

an  increase  in the  Company's  service  revenues  offset by an increase in the
Company's  costs  related to services  and selling,  general and  administrative
costs.

Liquidity and Capital Resources

The Company has a credit facility of $3,000,000, which includes a term loan of
$1,500,000 and a revolving credit line that permits maximum borrowings of
$1,500,000 (based on eligible receivables, as defined). Borrowings under the
term loan will bear interest at either (a) LIBOR plus 3.5% or (b) the prime rate
or the federal funds effective rate plus .5%, whichever is greater, plus 1.0%
and the revolving credit line will bear interest at either (a) LIBOR plus 3.0%
or (b) the prime rate or the federal funds effective rate plus .5%, whichever is
greater, plus .5%. The Company has the option to choose between the two interest
rate options under the term loan and revolving credit line. The term loan is
payable in equal monthly principal payments of $25,000 over five years while the
revolving credit line is available through May 2005. The outstanding balance on
the term loan at September 30, 2004 was $825,000. There were no amounts
outstanding on the revolving credit line at September 30, 2004.

At September 30, 2004, the Company was in compliance with its loan covenants
under the agreement dated May 20, 2002 and as amended on August 11, 2003.

The following table is a summary of contractual obligations as of September 30,
2004:

<TABLE>
<CAPTION>
-------------------------------------- -----------------------------------------------------------------------------------
                                                                     Payments Due by Period
-------------------------------------- -----------------------------------------------------------------------------------
<S>                                    <C>              <C>              <C>             <C>             <C>
Contractual  Obligations               Total            Less   than   1  1-3 years       4-5 years       After 5 years
                                                        year
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Revolving Credit Line                  $     - 0 -
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Debt  (a)                              $     906,608    $   328,646      $   570,765     $     7,197
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Capital Leases (b)                     $     142,114    $    93,234      $    48,880
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Operating Leases (c)                   $   5,050,371    $   436,858      $ 1,188,130      $  643,735       $ 2,781,648
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Put Warrant Obligation (d)             $     240,000    $         -      $   240,000
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
Total Contractual Obligations          $   6,339,093    $   858,738      $  2,047,775      $ 650,932       $ 2,781,648
-------------------------------------- ---------------- ---------------- --------------- --------------- -----------------
</TABLE>


(a)   - Debt includes the Company's  term loan of $825,000 which matures in June
      2007, as well as loans associated with the purchase of automobiles.

(b)   - Capital  lease  obligations  relate to the purchase of the Company's new
      Customer Service/Emergency Response software and the purchase of telephone
      answering  service  equipment.  Both of these  capital  leases  mature  in
      January 2006.

                                       25
<PAGE>

(c)   - Operating  leases  include  rental of  facilities  at various  locations
      within the United States. These operating leases include the rental of the
      Company's  call  center,  warehouse  and  the  office  facilities.   These
      operating leases have various maturity dates. The Company currently leases
      office space from the Chief  Executive  Officer and principal  shareholder
      pursuant to a lease which expires in September  2007. The Company leased a
      second building from the Chief Executive Officer and principal shareholder
      until  October  2004,  at which time the  Company  was  released  from its
      obligation.

(d)   - Put Warrant  obligation  represents  an obligation  associated  with the
      Harriett  Campbell,  Inc.  acquisition  in November  2000.  One warrant to
      purchase 105,000 shares of the Company's common stock is outstanding. This
      warrant contains a "Put Option" giving the holder the option,  only during
      a specific period, to require the Company, under certain circumstances, to
      redeem the warrants at  specified  price of $6 per share (the "Put Price")
      less the warrant  exercise price of $2 per share,  or at the option of the
      Company to pay the difference between the Put Price and fair market value.

The primary sources of liquidity are cash flows from operating activities. Net
cash provided by operating activities was approximately $2.4 million for the
nine months ended September 30, 2004 as compared to approximately $2.3 million
for the same period in 2003. During 2004, increases in cash provided by
operating activities from depreciation and amortization of approximately $2.2
million, net earnings of approximately $.6 million and other smaller increases
of approximately $.4 million were offset by an increase in trade receivables of
approximately $.8 million. The increase in trade receivables is primarily due to
the increase in the receivable number of days outstanding in the PERS segment,
which represents approximately $.5 million of the increase. This is a result of
a select number of customers whose accounts became further in arrears. The
Company is now concentrating a greater emphasis on collections and achieving a
reduced receivables number of days outstanding.

Net cash used in investing  activities  for the nine months ended  September 30,
2004 was  approximately  $2.9  million as compared  to $1.4  million in the same
period in 2003. The primary components of net cash used in investing  activities
in 2004 and 2003 were capital  expenditures and  acquisitions.  Net cash used in
investing   activities  for  capital   expenditures   for  2004  and  2003  were
approximately  $2.0 and $1.2  million,  respectively  and for  acquisitions  was
approximately $.8 and $1.7 million, respectively.  Capital expenditures for 2004
primarily  relate  to the  production  and  purchase  of the  enhanced  PERS and
traditional  PERS  systems  and  the  continued  enhancement  of  its  telephony
equipment.  In 2003,  the capital  expenditures  related to the  production  and
purchase  of  traditional  PERS  systems,  the build out of the call  center and
enhancements to the management  information  systems. In addition,  in both 2004
and 2003,  the  Company  purchased  the assets of  telephone  answering  service
businesses. In 2003, cash used in investing activities also included payments of
licensing  fees of  approximately  $.5 million.  The 2003 cash used in investing
activities  was  offset by the  liquidation  of  approximately  $2.0  million of
marketable  securities,  the  proceeds  of  which  were  primarily  used  for an
acquisition and capital expenditures.

Cash flows for the nine months ended September 30, 2004 from financing
activities were approximately $.7 million compared to cash used in financing
activities of $.3 million for the same period in 2003. The increase in the cash
flows from financing is primarily due an increase of approximately $.9 million
in proceeds from the exercise of both stock options and warrants.

                                       26
<PAGE>

During the next twelve months, the Company anticipates it will make capital
expenditures of approximately $2.3 - $2.7 million for the production and
purchase of the enhanced PERS and traditional PERS systems and enhancements to
its computer operating systems. This amount is subject to fluctuations based on
customer demand. In addition, the Company anticipates incurring approximately
$.5 - $.7 million of costs relating to research and development and the FDA
approval of its enhanced PERS.

As of September 30, 2004 the Company had approximately $2.3 million in cash and
the Company's working capital was approximately $5.7 million. The Company
believes that with its present cash and with operations of the business
generating positive cash flow, this will enable it to meet its cash, working
capital and capital expenditure needs for at least the next 12 months. The
Company also has a revolving credit line that permits borrowings up to $1.5
million of which -0- was outstanding at September 30, 2004.

Off-Balance Sheet Arrangements:

As of September 30, 2004, the Company has not entered into any off-balance sheet
arrangements that are reasonably likely to have an impact on the Company's
current and future financial condition.

Other Factors:

On April 12, 2004, the Company acquired substantially all of the assets of
alphaCONNECT, Inc., a New Jersey based provider of telephone after-hour
answering services and stand-alone voice mail services. The purchase price was
$691,956 and consisted of an initial cash payment of $563,816 and future cash
payments of $51,256 and $76,884 to be paid to the Seller after the first and
second year anniversaries from the date of the executed agreement, respectively.
The Company also paid professional fees of $76,000. A potential exists for the
payment of additional purchase price consideration if certain thresholds
concerning revenue are met by the acquired business. The measurement date for
this potential additional purchase price consideration is April, 2005.

On June 30, 2003, the Company acquired substantially all of the assets of Live
Message America, Inc. ("LMA"), a New Jersey based provider of telephone
after-hour answering services and stand-alone voice mail services. The purchase
price consisted of a cash payment of $1,607,818 plus professional fees of
$78,902. A potential exists for the payment of additional purchase price
consideration based on a percentage of revenue of the acquired business if
certain thresholds concerning revenue and earnings are met. The measurement date
for this potential additional purchase price consideration is June 30, 2005.

On January 14, 2002, the Company entered into an operating lease agreement for
space in Long Island City, New York in an effort to consolidate its HCI and
Oceanside ERC and Customer Service facilities. The Company believes that
centralization of the ERC, Customer Service and H-LINK(R) OnCall operations will
provide additional efficiencies and facilitate the continued projected growth of
the H-LINK and PERS divisions. The fifteen (15) year lease term

                                       27
<PAGE>

commenced in April 2003 when the property was first occupied by the Company. The
lease  calls for  minimum  annual  rentals of  $269,500,  subject to a 3% annual
increase plus reimbursement for real estate taxes.

On November 1, 2001, the Company entered into a Cooperative Licensing,
Development, Services and Marketing Agreement with HHN (the "HHN Agreement")
pursuant to which the Company developed, with the assistance of HHN, a new
integrated appliance combining the features of the Company's PERS product with
HHN's technology. Pursuant to the HHN Agreement, the Company is the exclusive
manufacturer and distributor in the United States, of an enhanced PERS system
that combines the Company's traditional safety monitoring features with HHN's
internet based disease management monitoring technology. The Company's right to
maintain such exclusivity is based on achievement of certain thresholds, all of
which have been met to date, and the next threshold to be met is in April 2005.
The HHN Agreement has a minimum five-year term, and also provides for the
payment by the Company of certain fees based on the service revenue derived from
the enhanced PERS product. The cost of the licensing component of $1,115,000,
including $115,000 of professional fees, is being amortized over a 40-month
period which commenced in July 2003 upon the Company meeting certain milestones
under the agreement and concludes at the end of the initial term of the
Agreement. As of September 30, 2004, $204,836 of the license fee is still due to
HHN and is included in accrued expenses. This remaining portion is due to HHN in
November 2004.

Since 1983, the Company has provided Personal Emergency Response Systems
("PERS") services to the City of New York's Human Resources Administration Home
Care Service Program ("HCSP"). The Company has been operating since 1993 with a
contract to provide HCSP with these services, which has been extended for 1-2
year periods since 1993, the last such extension through June 30, 2004. During
the nine months ended September 30, 2004 and 2003, the Company's revenues from
this contract represented 15% and 18%, respectively, of its total revenue.

In November 2002, a new Request for Proposals ("RFP") was issued by HRA to
provide emergency response services to HCSP from April 1, 2004 through March 31,
2007. After receiving notification from the City of New York's Human Resources
Administration ("HRA") that the Company was selected as the approved vendor
under the RFP to provide PERS services to the Home Care Services Program to
Medicaid Eligible individuals, the Company subsequently received notification
from HRA that it canceled the RFP "in the best interest of the City of New
York." Concurrently, the Company was advised of HRA's decision to issue a new
contract extension to the Company through December 2005 under the terms of the
contract that the Company has been operating under since 1993. HRA has also
advised the Company that they plan to issue a new RFP with respect to PERS
services in the future. The Company was advised that the cancellation of the RFP
is not related to any performance issue or a negative reflection upon the
Company.

The Company cannot determine (i) when the terms of the new RFP will be
published, (ii) what the terms of the new RFP will be, (iii) how long the
current contract terms will remain in effect or (iv) whether AMAC will be the
successful bidder on the new RFP (and if so, under what terms and conditions).
While the Company has reduced its dependence on revenue from HCSP, if subsequent
to December 2005, the Company does not maintain this contract, a significant
amount of

                                       28
<PAGE>

the Company's revenue could be lost, albeit over a protracted period, which
could have a material adverse effect on operating results and cash flows. The
Company continues to implement a variety of operational efficiencies, as well as
continuing to enhance and diversify its other revenue streams, to offset the
impact, if any, of this occurrence.

As of September 30, 2004 and December 2003, accounts receivable from the
contract represented 20% and 29%, respectively, of accounts receivable and
medical devices in service under the contract represented approximately 18% and
22%, respectively, of medical devices.

No other single  contract or customer  represents  more than 6% of the Company's
revenue.


Critical Accounting Policies:

In preparing the financial statements, the Company makes estimates, assumptions
and judgments that can have a significant impact on our revenue, operating
income and net income, as well as on the reported amounts of certain assets and
liabilities on the balance sheet. The Company believes that the estimates,
assumptions and judgments involved in the accounting policies described below
have the greatest potential impact on its financial statements due to the
materiality of the accounts involved, and therefore, considers these to be its
critical accounting policies. Estimates in each of these areas are based on
historical experience and a variety of assumptions that the Company believes are
appropriate. Actual results may differ from these estimates.

      Reserves for Uncollectible Accounts Receivable
      The Company makes ongoing  assumptions  relating to the  collectibility of
      its accounts  receivable.  The accounts  receivable  amount on the balance
      sheet  includes  a  reserve  for  accounts  that  might  not be  paid.  In
      determining  the  amount  of  the  reserve,   the  Company  considers  its
      historical level of credit losses.  The Company also makes judgments about
      the  creditworthiness  of  significant  customers  based on ongoing credit
      evaluations, and it assesses current economic trends that might impact the
      level of credit losses in the future.  The Company  recorded  reserves for
      uncollectible  accounts  receivable  of $661,500 as of September 30, 2004,
      which is equal to 7.23% of total  accounts  receivable.  While the Company
      believes that the current  reserves are adequate to cover potential credit
      losses, it cannot predict future changes in the financial stability of its
      customers and the Company cannot guarantee that its reserves will continue
      to be adequate.  For each 1% that actual credit losses exceed the reserves
      established,  there would be an  increase  in general  and  administrative
      expenses and a reduction in reported net income of approximately  $48,000.
      Conversely,  for each 1% that  actual  credit  losses  are  less  than the
      reserve,  this would  decrease the  Company's  general and  administrative
      expenses and increase the reported net income by approximately $48,000.

                                       29
<PAGE>

      Fixed Assets

      Fixed assets are stated at cost. Depreciation for financial reporting
      purposes is being provided by the straight-line method over the estimated
      useful lives of the related assets. The valuation and classification of
      these assets and the assignment of useful depreciable lives involves
      significant judgments and the use of estimates. Fixed assets are reviewed
      for impairment whenever events or changes in circumstances indicate that
      the carrying amount of an asset may not be recoverable. Historically,
      impairment losses have not been required. Any change in the assumption of
      estimated useful lives could either result in a decrease or increase the
      Company's financial results. A decrease in estimated useful life would
      reduce the Company's net income and an increase in estimated useful life
      would increase the Company's net income. If the estimated useful lives of
      the PERS medical device were decreased by one year, the cost of goods
      related to services would increase and net income would decrease by
      approximately $165,000. Conversely, if the estimated useful lives of the
      PERS medical device were increased by one year, the cost of goods related
      to services would decrease and net income would increase by approximately
      $135,000.

      Valuation of Goodwill

      Pursuant to Statement of Financial Accounting Standards No. 142, "Goodwill
      and Other  Intangible  Assets,"  goodwill and indefinite  life  intangible
      assets  are no longer  amortized,  but are  subject  to annual  impairment
      tests.  To  date,  the  Company  has not been  required  to  recognize  an
      impairment of goodwill. The Company tests goodwill for impairment annually
      or more frequently when events or circumstances  occur indicating goodwill
      might be  impaired.  This  process  involves  estimating  fair value using
      discounted  cash  flow  analyses.   Considerable  management  judgment  is
      necessary to estimate  discounted future cash flows.  Assumptions used for
      these  estimated  cash  flows were based on a  combination  of  historical
      results and current internal forecasts. The Company cannot predict certain
      events that could adversely  affect the reported value of goodwill,  which
      totaled  $2,563,864 at September  30, 2004 and  $2,086,815 at December 31,
      2003. If the Company were to experience a  significant  adverse  impact on
      goodwill, it would negatively impact the Company's net income.


Item 3.  Controls and Procedures.

As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of its Chief
Executive Officer, President and the Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, the Chief Executive Officer, President and
the Chief Financial Officer concluded that the Company's controls and procedures
are effective to ensure that information required to be disclosed by the Company
in the reports filed by it under the Securities and Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and include controls and procedures
designed to ensure that information required to be disclosed by the Company in
such reports is accumulated and communicated to the Company's management,
including the Chief Executive Officer, President and Chief Financial Officer of
the Company, as appropriate to allow timely decisions regarding required
disclosure.

There were no changes in the Company's internal control over financial reporting
that occurred during the quarter ended September 30, 2004 that has materially
affected, or is reasonably likely to affect, the Company's internal control over
financial reporting.

                                       30
<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings. The Company is aware of various threatened or pending
litigation claims against the Company relating to its products and services and
other claims arising in the ordinary course of its business. The Company has
given its insurance carrier notice of such claims and it believes there is
sufficient insurance coverage to cover any such claims. Currently, there are no
litigation claims for which an estimate of loss, if any, can be reasonably made
as they are in the preliminary stages and therefore, no liability or
corresponding insurance receivable has been recorded.

Item 4.   Submission of Matters to a Vote of Security Holders.
On July 22, 2004, the Company held its 2004 Annual Meeting of Shareholders (the
"2004 Meeting").

At the 2004 Meeting, the Company's shareholders (i) elected seven directors to
serve until the 2005 Annual Meeting of Shareholders and until their successors
shall be elected and qualified, and (ii) ratified the selection of Margolin,
Winer & Evens LLP as the Company's independent auditors for the fiscal year
ending December 31, 2004.

1.    The vote with respect to the election of directors was as follows:

               Name                        For             Authority Withheld
               ----                        ---             ------------------
(a)      Howard M. Siegel               7,101,599               198,644
(b)      James LaPolla                  7,150,974               149,269
(c)      Jack Rhian                     7,150,374               149,869
(d)      Frederick Siegel               7,061,169               239,074
(e)      Ronald Levin                   6,463,622               836,621
(f)      Yacov Shamash                  7,150,474               149,769
(g)      Delphine Mendez-de Leon        7,150,974               149,269

2.    The proposal to ratify the selection of Margolin, Winer & Evens LLP as the
      Company's  independent  auditors  for the fiscal year ending  December 31,
      2004, was approved by the following vote:

                    For                  Against              Abstain
                    ---                  -------              -------
                 7,169,579               127,544               3,120

Item 5.  Other Information.

On November 11, 2004, the Company's Chief Executive Officer and principal
shareholder released the Company from its obligations under a lease for office
space, retroactive to November 1, 2004. The annual lease payments for this
property were approximately $100,000.

                                       31
<PAGE>

Item 6.  Exhibit and Reports on Form 8-K.

(a) Exhibits:

No.               Description
---               -----------

31.1  Certification  of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of
      2002

31.2  Certification  of President  Pursuant to Section 302 of the Sarbanes Oxley
      Act of 2002

31.3  Certification  of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of
      2002

32.1  Certification  of CEO Pursuant to Section 906 of the Sarbanes Oxley Act of
      2002

32.2  Certification  of President  Pursuant to Section 906 of the Sarbanes Oxley
      Act of 2002

32.3  Certification  of CFO Pursuant to Section 906 of the Sarbanes Oxley Act of
      2002


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<PAGE>

                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.



                                              AMERICAN MEDICAL ALERT CORP.


Dated: November 15, 2004                      By: /s/ Howard M. Siegel
                                                  ------------------------------
                                                  Name:  Howard M. Siegel
                                                  Title: Chairman of the Board,
                                                         Chief Executive Officer



                                              By: /s/ Richard Rallo
                                                  ------------------------------
                                                  Name:  Richard Rallo
                                                  Title: Chief Financial Officer


                                       33