**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C.** **20549**




**FORM
      10-Q**





**QUARTERLY
      REPORT UNDER SECTION 13 OR 15 (d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**




For
      Quarter Ended March 31, 2006




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.
                  Employerincorporation
                  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
o





Indicate
      by check mark whether registrant is a large accelerated filer, accelerated
      filer
      or non-accelerated filer. See definition of accelerated filer and large
      accelerated filer in Rule 12b-2 of the Exchange Act.





Large
                  accelerated filer o
              Accelerated
                  filer o
              Non-accelerated
                  filer x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 on the Exchange Act) Yes
o
      No x





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date: 8,950,102 shares of $.01 par value
      common stock as of May 12, 2006.











AMERICAN
      MEDICAL ALERT CORP. AND SUBSIDIARIES


INDEX
              PAGEPart
                  I Financial InformationReport
                  of Independent Registered Public Accounting Firm
              1Condensed
                  Consolidated Balance Sheets for March 31, 2006 andDecember
                  31, 2005
              2Condensed
                  Consolidated Statements of Income for theThree
                  Months Ended March 31, 2006 and 2005
              3Condensed
                  Consolidated Statements of Cash Flows for the Three Months Ended
                  March 31,
                  2006 and 2005
              4Notes
                  to Condensed Consolidated Financial Statements
              6Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              15Quantitative
                  and Qualitative Disclosures About Market Risks
              30Controls
                  and Procedures
              30Part
                  II Other Information
              31











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 accompanying condensed consolidated balance sheet of American
      Medical Alert Corp. and Subsidiaries (the “Company”) as of March 31, 2006 and
      the related condensed consolidated statements of income and cash flows for
      the
      three-months ended March 31, 2006 and 2005. These interim financial statements
      are the responsibility of the Company's management.





We
      conducted our reviews 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 reviews, 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, 2005, 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
      17, 2006 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, 2005 is fairly stated,
      in all material respects, in relation to the consolidated balance sheet from
      which it has been derived.




/s/
              Margolin, Winer & Evens LLPMargolin, Winer & Evens
              LLPGarden City, New YorkMay 15, 2006




1


**PART
      I - FINANCIAL INFORMATION**


**Item
      1.** **Financial
      Statements** **.**




AMERICAN
      MEDICAL ALERT CORP. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED BALANCE SHEETS




ASSETSMarch
                31, 2006
              (Unaudited)
            
            Dec. 31,
                2005CURRENT
                ASSETSCash
            
            $
            1,920,488
            
            $
            2,638,984Accounts
                  receivable(net
                  of allowance for doubtful accounts of $508,000****and
                  $451,000)
            
            
            4,830,184
            
            
            4,354,744Note
                receivable
            
            
            24,700
            
            
            24,394Inventory
            
            
            288,190
            
            
            332,323Prepaid
                expenses and other current assets
            
            
            739,286
            
            
            684,336Deferred
                income taxes
            
            
            375,000
            
            
            309,000Total
                Current Assets
            
            
            8,177,848
            
            
            8,343,781FIXED
                ASSETS(Net
                of accumulated depreciation and amortization)
            
            
            8,644,085
            
            
            7,810,658OTHER
                ASSETSLong-term
                portion of note receivable
            
            
            67,422
            
            
            73,713Intangible
                assets (net of accumulated amortization of $2,449,525****and
                $2,229,045)
            
            
            4,874,332
            
            
            3,474,252Goodwill
                (net of accumulated amortization of $58,868)
            
            
            8,230,100
            
            
            6,086,428Other
                assets
            
            
            537,551
            
            
            806,50413,709,405
            
            
            10,440,897TOTAL
                ASSETS
            
            $
            30,531,338
            
            $
            26,595,336LIABILITIES
                AND SHAREHOLDERS' EQUITYCURRENT
                LIABILITIES:Current
                portion of notes payable
            
            $
            1,116,221
            
            $
            616,811Accounts
                payable
            
            
            1,137,567
            
            
            1,120,269Accounts
                payable - acquisitions
            
            
            1,427,179
            
            
            1,318,103Accrued
                expenses and taxes payable
            
            
            1,695,280
            
            
            1,305,091Current
                portion of capital lease obligations
            
            
            —
            
            
            24,082Deferred
                revenue
            
            
            163,931
            
            
            111,428Total
                Current Liabilities
            
            
            5,540,178
            
            
            4,495,784DEFERRED
                INCOME TAX LIABILITY
            
            
            1,037,000
            
            
            971,000LONG-TERM
                PORTION OF NOTES PAYABLE
            
            
            4,275,562
            
            
            2,429,396ACCRUED
                RENTAL OBLIGATION
            
            
            293,968
            
            
            190,230OTHER
                LIABILITIES
            
            
            163,200
            
            
            125,000TOTAL
                LIABILITIES
            
            
            11,309,908
            
            
            8,211,410COMMITMENTS
                AND CONTINGENT LIABILITIES
            
            
            —
            
            
            —SHAREHOLDERS’
                EQUITYPreferred
                stock, $.01 par value - authorized, 1,000,000 shares; none issued
                and
                outstandingCommon
                stock, $.01 par value - authorized 20,000,000 shares; issued 8,935,656
                in
                2006 and 8,765,415 shares in 2005
            
            
            89,357
            
            
            87,654Additional
                paid-in capital
            
            
            13,453,185
            
            
            12,897,151Retained
                earnings
            
            
            5,784,920
            
            
            5,505,15319,327,462
            
            
            18,489,958Less
                treasury stock, at cost (43,910 shares)
            
            
            (106,032
            )
            
            (106,032
            )Total
                Shareholders’ Equity
            
            
            19,221,430
            
            
            18,383,926TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY
            
            $
            30,531,338
            
            $
            26,595,336


See
      accompanying notes to condensed financial statements.




2


AMERICAN
      MEDICAL ALERT CORP. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)




Three
                Months Ended March 31,2006
            
            2005Revenues:Services
            
            $
            7,069,881
            
            $
            5,151,712Product
                sales
            
            
            80,330
            
            
            86,8587,150,211
            
            
            5,238,570Costs
                and Expenses (Income):Costs
                related to services
            
            
            3,404,112
            
            
            2,466,741Costs
                of products sold
            
            
            44,451
            
            
            29,656Selling,
                general and administrative expenses
            
            
            3,246,275
            
            
            2,376,038Interest
                expense
            
            
            62,042
            
            
            12,404Other
                income
            
            
            (124,436
            )
            
            (82,768
            )Income
                before Provision for Income Taxes
            
            
            517,767
            
            
            436,499Provision
                for Income Taxes
            
            
            238,000
            
            
            210,000NET
                INCOME
            
            $
            279,767
            
            $
            226,499Net
                income per share:Basic
            
            $
            .03
            
            $
            .03Diluted
            
            $
            .03
            
            $
            .03Weighted
                average number of common shares outstanding (Note 6)Basic
            
            
            8,774,571
            
            
            8,096,557Diluted
            
            
            9,271,554
            
            
            8,879,144


See
        accompanying notes to condensed financial statements.
 3
 AMERICAN
      MEDICAL ALERT CORP. AND SUBSIDIARIES





CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


Three
                  Months Ended March 312006
              
              2005Cash
                  Flows From Operating Activities:Net
                  income
              
              $
              279,767
              
              $
              226,499Adjustments
                  to reconcile net income to net cash provided by operating
                  activities:Provision
                  for deferred income taxes
              
              
              —
              
              
              10,000Depreciation
                  and amortization
              
              
              779,046
              
              
              714,336Stock
                  compensation charge
              
              
              42,500
              
              
              —Credit
                  for valuation of put warrant
              
              
              —
              
              
              (10,000
              )Decrease
                  (increase) in:Accounts
                  receivable
              
              
              (324,642
              )
              
              (509,015
              )Inventory
              
              
              44,133
              
              
              17,261Prepaid
                  expenses and other current assets
              
              
              (54,950
              )
              
              (112,035
              )Other
                  assets
              
              
              —
              
              
              3,887Increase
                  (decrease) in:Accounts
                  payable, accrued expenses and other
              
              
              501,224
              
              
              (83,007
              )Deferred
                  revenue
              
              
              52,503
              
              
              46,422Net
                  Cash Provided by Operating Activities
              
              
              1,319,581
              
              
              304,348Cash
                  Flows From Investing Activities:Expenditures
                  for fixed assets
              
              
              (1,129,834
              )
              
              (130,460
              )Repayment
                  of notes receivable
              
              
              5,985
              
              
              5,694Payment of
                  accounts payable - acquisitions
              
              
              (233,988
              )
              
              —Purchase
                  of Answer Connecticut, Inc.
              
              
              (30,493
              )
              
              —Purchase
                  of MD OnCall
              
              
              (2,877,649
              )
              
              —Purchase
                  of Prompt Response
              
              
              (45,000
              )
              
              —Deposit
                  on equipment and software
              
              
              (50,000
              )
              
              (139,625
              )Increase
                  in other assets
              
              
              (10,765
              )
              
              —Payment
                  for account acquisitions and licensing agreement
              
              
              (160,000
              )
              
              —Net
                  Cash (Used In) Investing Activities
              
              
              (4,531,744
              )
              
              (264,391
              )Cash
                  Flows From Financing Activities:Principal
                  payments under capital lease obligation
              
              
              (24,082
              )
              
              (23,256
              )Proceeds
                  from notes payable
              
              
              2,500,000
              
              
              —Repayment
                  of notes payable
              
              
              (154,424
              )
              
              (57,217
              )Proceeds
                  upon exercise of stock options and warrants
              
              
              172,173
              
              
              723,185Net
                  Cash Provided by Financing Activities
              
              
              2,
                  493,667
              
              
              642,712


See
      accompanying notes to condensed financial statements.


4


AMERICAN
        MEDICAL ALERT CORP. AND SUBSIDIARIES
 
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 (Unaudited)




Three
                Months Ended March 31,2006
            
            2005Net
                (Decrease) Increase in Cash
            
            $
            (718,496
            )
            $
            682,669Cash,
                Beginning of Period
            
            
            2,638,984
            
            
            3,186,852Cash,
                End of Period
            
            $
            1,920,488
            
            $
            3,869,521SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION:CASH
                PAID DURING THE PERIOD FOR INTEREST
            
            $
            30,284
            
            $
            9,404CASH
                PAID DURING THE PERIOD FOR INCOME TAXES
            
            $
            590,360
            
            $
            96,400SUPPLEMENTAL
                SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Common
                Stock issued in connection with acquisition
            
            $
            343,064
            
            
            —Accounts
                payable due seller in connection with acquisition
            
            
            343,064
            
            
            —






See
      accompanying notes to condensed financial statements.





5


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, 2005 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 March 31, 2006 and the results
      of
      operations and cash flows for the three months ended March 31, 2006 and
      2005.





Except
      as
      described in Notes 3 and 5, the accounting policies used in preparing these
      financial statements are the same as those described in the December 31, 2005
      financial statements.





The
      results of operations for the three months ended March 31, 2006 are not
      necessarily indicative of the results to be expected for any other interim
      period or for the full year.





3.
      New
      Pronouncements:





In
      June
      2005, the FASB issued SFAS No. 154, *Accounting
      Changes and Error Corrections* ,
      a
      replacement of APB No. 20 and SFAS No. 3. SFAS No. 154 applies to all voluntary
      changes in accounting principle and changes the requirements for accounting
      for
      and reporting of a change in accounting principle to be applied retrospectively
      with all prior period financial statements presented on the new accounting
      principle. SFAS No. 154 is effective for accounting changes and correction
      of
      errors made in fiscal years beginning after December 15, 2005. The Company
      adopted SFAS No. 154 and the adoption of this statement did not have a material
      impact on the consolidated results of operations or financial position.




In
      November 2004, the FASB issued FASB Statement No. 151, *Inventory
      Costs - An Amendment of ARB No. 43,*  *Chapter
      4* (“SFAS
      151”), which is the result of its effort to converge U.S. accounting standards
      for inventories with International Accounting Standards. SFAS 151 requires
      idle
      facility expenses, freight, handling costs, and wasted material (spoilage)
      costs
      to be recognized as current-period charges and not included in overhead. It
      also
      requires that allocation of fixed production overhead cost to inventory be
      based
      on normal capacity of the production facilities. SFAS 151 is effective for
      inventory costs incurred during fiscal years beginning after June 15, 2005.
      The
      adoption of SFAS 151 did not have a material impact on the Company’s financial
      condition or results of operations .




On
      January 1, 2006, the Company adopted FASB Statement No. 123 (revised 204),
      Share
      Based Payment (see Note 5).





6


4.
      Fixed
      Assets:





The
      Company’s PERS equipment is subject to approval from the Federal Communication
      Commission (“FCC”). In November 2004, the Company received an inquiry from the
      Federal Communications Commission. In response to that inquiry the Company
      has
      determined that certain versions of its PERS equipment emit levels of radio
      frequency energy that exceed applicable standards designed to reduce the
      possibility of interference with radio communications. Although this issue
      poses
      no safety or functionality risk to subscribers, the Company is in the process
      of
      establishing a corrective action plan with the FCC to satisfy this
      matter.




The
      Company is currently negotiating with the FCC to determine an action plan to
      establish a timeframe to complete an upgrade program for the affected PERS
      equipment and the amount of a potential payment to the FCC. At this time, the
      Company believes a voluntary payment of $75,000 associated with this matter
      will
      be required. At December 31, 2005, the Company accrued such amount. In addition,
      the Company believes the FCC will allow the upgrade program to run substantially
      parallel with the normal recycling of the Company’s PERS equipment. Under this
      assumption, the only additional cost to be incurred will be the incremental
      cost
      to bring the units into compliance with the FCC regulations.





Through
      March 31, 2006, the Company has recorded expenses of approximately $975,000
      in
      connection with this matter, of which approximately $65,000, primarily relating
      to costs associated with the replacement of equipment, legal fees and other
      professional fees, was recorded in the first quarter of 2006. Approximately
      $90,000, principally relating to legal and other professional fees, was recorded
      during the first quarter of 2005.





If
      the
      Company is required to complete the PERS equipment and related equipment
      modifications in a shorter period of time than is anticipated, significant
      additional costs will be incurred inasmuch as unscheduled service calls will
      be
      required.





5.
      Accounting for Stock-Based Compensation:




Prior
      to
      2006, the Company followed Accounting Principles Board Opinion (“APB”)
      No. 25, *Accounting
      for Stock Issued to Employees,* and
      related Interpretations in accounting for its stock-based compensation plans.
      Under APB No. 25, no compensation expense was recognized for stock options
      when the exercise price of the options equaled the market price of the stock
      at
      the date of grant. Compensation expense was recognized on a straight-line basis
      for stock awards based on the vesting period and the market price at the date
      of
      the award.




On
      January 1, 2006, the Company adopted FASB Statement No. 123 (revised
      2004), *Share-Based
      Payment* (“Statement
      No. 123(R)”), which requires the measurement and recognition of
      compensation expense for all share-based payments to employees, including grants
      of stock and employee stock options, based on estimated fair values. Statement
      No. 123(R) supersedes the Company’s previous accounting under APB
      No. 25 for periods beginning in 2006. The Company adopted Statement
      No. 123(R) using the modified prospective transition method. The
      Company’s condensed consolidated financial statements as of and for the three
      months ended, March 31, 2006, reflects the impact of Statement
      No. 123(R). In accordance with the modified prospective transition method,
      the Company’s condensed consolidated financial statements for prior periods have
      not been restated to reflect the impact of Statement
      No. 123(R).





7


Stock-based
      compensation expense recognized during the period is based on the value of
      the
      portion of share-based payment awards that is ultimately expected to vest during
      the period. Stock-based compensation expense recognized in the Company's
      condensed consolidated statements of income for the three months ended
      March 31, 2006 includes compensation expense for share-based payment awards
      granted prior to, but not yet vested as of December 31, 2005 based on the
      grant date fair value estimated in accordance with the pro forma disclosure
      provisions of Statement No. 123 and compensation expense for the
      share-based payment awards granted subsequent to December 31, 2005 based on
      the grant date fair value estimated in accordance with the provisions of
      Statement No. 123(R).





No
      options were granted during either of the three month periods ended March 31,
      2006 and 2005.





The
      following table summarizes stock option activity for the first quarter ended
      March, 31, 2006 .




Number
                    ofOptions
              
              WeightedAverageOption
                  Price
              
              WeightedAverageRemainingContractualTerm
                  (years)
              
              AggregateIntrinsicValueBalance
                  at January 1
              
              
              1,287,283
              
              
              3.56Granted
              
              
              —
              
              
              —Exercised
              
              
              99,298
              
              
              1.47Expired/Forfeited
              
              
              3,102
              
              
              3.82Balance
                  at March 31
              
              
              1,184,883
              
              
              3.74
              
              
              5.29
              
              $
              2,996,659Vested
                  and exercisable
              
              
              1,184,883
              
              
              3.74
              
              
              5.29
              
              $
              2,996,659


The
      aggregate intrinsic value of options exercised during the first quarter ended
      March 31, 2006 and 2005 was $451,413 and $323,894, respectively. At January
      1,
      2006 there were 7,500 nonvested stock options outstanding. During the three
      months ended March 31, 2006, 2,500 options vested and 5,000 options were
      forfeited. There are no nonvested stock options outstanding as of March 31,
      2006.





The
      following table summarizes stock-based compensation expense related to all
      share-based payments recognized in the condensed consolidated statements of
      income.


Three Months Ended March 31,2006
              
              2005Stock
                  options
              
              $
              1,825
              
              $
              —Service
                  based awards
              
              
              20,000
              
              
              —Perfomance
                  based awards
              
              
              20,675
              
              
              —Tax
                  benefit
              
              
              (19,125
              )
              
              —Stock-based
                  compensation expense, net of tax
              
              $
              23,375
              
              $
              —






8


Service
      Based Awards





In
      2006,
      the Company granted 60,000 restricted shares to certain executives at no cost.
      These shares vest ratably over periods ranging from 3 to 5 years, on December
      31
      of each year. As of March 31, 2006, no shares were vested. Fair value for
      restricted stock awards is based on the Company's closing common stock price
      on
      the date of grant. The grant date fair value of restricted stock granted during
      the three months ended March 31, 2006 was $360,000. As of March 31, 2006, the
      Company had $340,000 of total unrecognized compensation costs related to
      unvested restricted stock units expected to be recognized over a weighted
      average period of 2.74 years.





Performance
      Based Awards





In
      2006,
      the Company granted share awards for 90,000 shares (up to 18,000 shares per
      year
      for the next five years) to an executive. Vesting of such shares is contingent
      upon the Company achieving certain specified consolidated gross revenue and
      Earnings before Interest and Taxes (“EBIT”) objectives in each of the next five
      fiscal years ending December 31. The fair value of the performance shares is
      based on the closing trading value of the Company’s stock on the date of grant
      and assumes that performance goals will be achieved. The fair value of the
      shares is expensed over the performance period for those shares that are
      expected to ultimately vest. If such objectives are not met, no compensation
      cost is recognized and any recognized compensation cost is reversed. As of
      March
      31, 2006, no shares were vested. As of March 31, 2006, there was $517,500 of
      total unrecognized compensation costs related to unvested share awards; that
      cost is expected to be recognized over a period of 4.75 years.




9


The
      following table illustrates pro forma net income and pro forma earnings per
      share as if the Company had applied the fair value recognition provision of
      Financial Accounting Standards Board (“FASB”) Statement No. 123, *Accounting
      for Stock-Based Compensation* (“Statement
      No. 123”), to stock-based employee compensation in 2005.




Three
                  Months Ended
                March
                  31,2005Net
                  income, as reported
              
              $
              226,499Deduct:
                  Total stock-based employee compensation expensedetermined
                  under fair value based method, net of tax
              
              
              (11,652
              )Pro
                  forma net income
              
              $
              214,847Earnings
                  per share:Basic
                  - as reported
              
              $
              0.03Basic
                  - pro forma
              
              $
              0.03Diluted
                  - as reported
              
              $
              0.03Diluted
                  - pro forma
              
              $
              0.02
  6.  Earnings
      Per Share:





Earnings
      per share data for the three months ended March 31, 2006 and 2005 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:




March
                  31, 2006
              
              Income
                (Numerator)
              
              Shares
                (Denominator)
              
              Per-Share
                AmountsBasic
                    EPS - Income available tocommon
                    shareholders
              
              $
              279,767
              
              
              8,774,571
              
              $
              .03Effect
                  of dilutive securities -
                Options
                  and warrants
              
              
              —
              
              
              496,983Diluted
                    EPS - Income available tocommon
                    shareholders and assumed conversions
              
              $
              279,767
              
              
              9,271,554
              
              $
              .03March
                  31, 2005Basic
                    EPS -Income available tocommon
                    shareholders
              
              $
              226,499
              
              
              8,096,557
              
              $
              .03Effect
                    of dilutive securities -
                  Options
                    and warrants
              
              
              —
              
              
              782,587Diluted
                    EPS - Income available to common shareholders andassumed
                    conversions
              
              $
              226,499
              
              
              8,879,144
              
              $
              .03


10


7.  Acquisitions:





On
      March
      10, 2006, the Company acquired substantially all of the assets of MD
      OnCall, a Rhode Island based company and Capitol Medical
      Bureau, **** a
      Maryland based company (collectively “MD OnCall”) ,
      providers of telephone after-hour answering services and stand-alone voice
      mail
      services. The purchase price of $3,382,443 and consisted of an initial cash
      payment of $2,696,315, common stock valued at $343,064 and future cash payments
      of $343,064 to be paid to the Seller within twelve months from the date of
      the
      executed agreement. The Company also recorded finder and professional fees
      of
      approximately $180,000. A potential exists for the payment of additional
      purchase price consideration if certain thresholds concerning revenues and
      earnings of the acquired business are met as of March 31, 2007, 2008 and 2009.
      The results of operations of MD OnCall are included in the Telephone Based
      Communications Services (“TBCS”) 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.


Accounts
                  receivable
              
              $
              138,798Fixed
                  assets
              
              
              260,000Non-compete
                  agreement
              
              
              50,000Customer
                  list
              
              
              1,050,000Goodwill
              
              
              2,113,179Customer
                  deposits
              
              
              (48,200
              )Cost
                  to acquire MD OnCall
              
              $
              3,563,777


On
      December 9, 2005, the Company acquired substantially all of the assets of Answer
      Connecticut, Inc. (“ACT”), a Connecticut based provider of telephone after-hour
      answering services and stand-alone voice mail services. The purchase price
      was
      $3,088,923 and consisted of an initial cash payment of $2,316,692, common stock
      valued at $154,446 and $617,785 to be paid within twelve months from the date
      of
      the executed agreement. The Company paid $154,446 towards the balance due in
      January 2006. The Company also recorded professional fees of approximately
      $32,000. A potential exists for the payment of additional purchase price
      consideration if certain thresholds concerning revenues and earnings of the
      acquired business are met as of December 31, 2006, 2007 and 2008. The results
      of
      operations of ACT are included in the TBCS segment as of the date of
      acquisition.





11


The
      following table summarizes the fair values of the assets acquired at the date
      of
      acquisition.




Accounts
                  receivable
              
              $
              95,182Fixed
                  assets
              
              
              150,000Non-compete
                  agreement
              
              
              50,000Customer
                  list
              
              
              1,000,000Goodwill
              
              
              1,825,380Cost
                  to acquire ACT
              
              $
              3,120,562




On
      October 3, 2005, the Company acquired substantially all of the assets of North
      Shore Answering Service (“NSAS”), a Long Island, New York based provider of
      telephone after-hour answering services. The purchase price was $2,719,461
      and
      consisted of an initial cash payment of $2,175,569 and $543,892 to be paid
      twelve months from the date of the executed agreement. The Company also recorded
      professional fees of approximately $82,000. The results of operations of NSAS
      are included in the TBCS segment as of the date of acquisition.





The
      following table summarizes the fair values of the assets acquired at the date
      of
      acquisition.


Accounts
                  receivable
              
              $
              24,760Fixed
                  assets
              
              
              60,000Non-compete
                  agreement
              
              
              50,000Customer
                  list
              
              
              1,200,000Goodwill
              
              
              1,466,489Cost
                  to acquire NSAS
              
              $
              2,801,249


On
      May
      17, 2005, the Company acquired substantially all of the assets of Long Island
      Message Center, Inc., a Long Island, New York based provider of telephone
      after-hour answering services. The purchase price was $397,712 and consisted
      of
      an initial cash payment of $318,170 and $79,542 which was paid in February
      2006.
      The Company also recorded finder and professional fees of approximately $46,000.
      The results of operations of Long Island Message Center, Inc. are included
      in
      the TBCS segment as of the date of acquisition.





The
      following table summarizes the fair values of the assets acquired at the date
      of
      acquisition.


Accounts
                  receivable
              
              $
              12,948Non-compete
                  agreement
              
              
              25,000Customer
                  list
              
              
              175,000Goodwill
              
              
              230,695Cost
                  to acquire Long Island Message Center, Inc.
              
              $
              443,643
  In
      the
      case of each of the acquisitions, the Company received a third party valuation
      from Chartered Capital Advisors, Inc. of certain intangible assets in
      determining the allocation of purchase price.





The
      purchase price of each acquisition exceeded the fair value of the identifiable
      net assets acquired inasmuch as these acquisitions were consummated to enable
      the Company to expand its presence in the telephone answering service business
      into new regions or to strengthen its position in areas where it was already
      operating. Furthermore, the acquisitions were done for the business' future
      cash
      flows and net earnings as opposed to solely for the identifiable tangible and
      intangible assets.





12


Unaudited
      pro forma results of operations for the three months ended March 31, 2006 and
      2005 as if Long Island Message Center, North Shore Answering Service, Answer
      Connecticut, Inc., and MD OnCall had been acquired as of the beginning of
      the earliest period presented follow. The pro forma results for the three months
      ended March 31, 2006 and 2005, which include estimates which management believes
      are reasonable, are as follows:




Three
                  Months Ended
                March
                  31,2006
              
              2005Revenue
              
              $
              7,825,000
              
              $
              7,131,000Net
                  income
              
              
              282,000
              
              
              269,000Net
                  income per shareBasic
              
              $
              .03
              
              $
              .03Diluted
              
              $
              .03
              
              $
              .03




The
      unaudited pro forma results of operations for the three months ended March
      31,
      2006 and 2005 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.





8.  Notes
      Payable:





In
      March
      2006, the Company’s credit facility was amended whereby an additional $2,500,000
      was obtained in the form of a term loan. The proceeds were used to finance
      the
      acquisition of MD
      OnCall .
      Under
      the amended credit facility, this portion of the term loan is payable in equal
      monthly principal payments of $41,667. In addition, certain of the covenants
      were amended.




As
        of
        March 31, 2006 the Company was not in compliance with one of its financial
        covenants in its loan agreement. The lender waived the non-compliance as
        of such
        date and agreed to enter into an amendment to the credit facility which
        management believes will enable the Company to meet the covenant in the
        future.





9.  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,
      2006.  During
      the three months ended March 31, 2006 and 2005, the Company’s revenue from this
      contract represented 9 % and
      13%,  respectively,
      of its total revenue.




13


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.” The Company was advised that the cancellation of the RFP is not related
      to any performance issue or negative reflection upon the Company. Concurrently,
      the Company was advised of HRA’s decision to issue a new contract extension to
      the Company through June 2005 under the terms of the contract that the Company
      has been operating under since 1993. The Company has since received this
      contract extension and also has received a subsequent extension which goes
      through June 2006. In accordance with the original contract and consistent
      with
      previous extensions, HRA has the right to terminate the contract without cause
      or “in the best interest of the City of New York” upon thirty days written
      notice. HRA has also advised the Company that HRA plans to issue a new RFP
      with
      respect to PERS services in the future. As of May 12, 2006, a new RFP has not
      been issued.




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 June 2006,
      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, in the event of this occurrence.




As
      of
      March 31, 2006 and December 2005, accounts receivable from the contract
      represented 10% and 11%, respectively, of accounts receivable and medical
      devices in service under the contract represented approximately 16% and 17%,
      respectively, of medical devices.




10.
Segment
      Reporting:




The
      Company has three reportable segments, (i) Health
      and Safety Monitoring Systems (“HSMS”), (ii) Telephone Based Communication
      Services (“TBCS”) and (iii) Safe Com.




14


The
      table below provides a reconciliation of segment
      information to total consolidated information for the three months ended March
      31, 2006 and 2005:





2006HSMS
            
            TBCS
            
            Safe
                Com
            
            ConsolidatedRevenue
            
            $
            3,784,158
            
            $
            3,236,141
            
            $
            129,912
            
            $
            7,150,211Income
                before provision for income taxes
            
            
            1,161
            
            
            492,784
            
            
            23,822
            
            
            517,767Total
                assets
            
            
            10,204,211
            
            
            19,983,765
            
            
            343,362
            
            
            30,531,338




2005HSMS
            
            TBCS
            
            Safe
                Com
            
            ConsolidatedRevenue
            
            $
            3,538,729
            
            $
            1,578,561
            
            $
            121,280
            
            $
            5,238,570Income
                before provision for income taxes
            
            
            145,324
            
            
            275,544
            
            
            15,631
            
            
            436,499Total
                assets
            
            
            12,394,244
            
            
            7,319,611
            
            
            770,787
            
            
            20,484,642


11.  Commitments and Contingencies:





In
      addition to the FCC inquiry in Note 4, 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, 2005.




*Statements
      contained in this Quarterly Report on Form 10-Q 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.*




15


*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.*




**Overview:**




The
      Company’s primary business is the provision of healthcare communication services
      through (1) the development and marketing of healthcare solutions and monitoring
      systems ( “ HSMS ” )
      that
      include personal emergency response systems, telehealth/disease management
      monitoring systems and medication management systems; (2) telephony based
      communication services and solutions primarily for the healthcare community
      (“TBCS”); (3) pharmacy security monitoring systems. The Company’s products and
      services are primarily marketed to the healthcare community, including home
      care, durable medical equipment, medical facility, hospice, pharmacy, managed
      care and other healthcare oriented organizations. The Company also offers
      certain products and services directly to consumers. Until 2000, the Company’s
      principal business was the marketing of personal emergency response systems
      ( “ PERS ” ),
      a
      device that allows a patient to signal an emergency response center for help
      in
      the event of a debilitating illness or accident. The Company provides PERS
      nationwide to private pay customers, Medicaid programs as well as to healthcare
      related entities. In 2003, the Company initiated a relationship with a large,
      west coast managed care organization that recognized the value associated with
      provisioning PERS to its senior population and contracted AMAC to roll out
      its
      PERS product to approximately 3,000 beneficiaries. Today, that program has
      almost doubled to approximately 6,000 units on line and continues to expand
      throughout the west coast. In 2005, the Company's PERS product was selected
      by
      McKesson Corporation as its solution to launch a remote patient monitoring
      product offering, to be marketed as McKesson Telehealth GuardianTM, a step which
      the Company believes will permit further expansion of its PERS business through
      McKesson's distribution network.





In
      2001,
      the Company entered the emerging telehealth market, an industry in its embryonic
      stage, recognizing the opportunity to provide new monitoring technologies to
      assist healthcare professionals in home-based, health management activities.
      Management believes the provision of health monitoring technologies and services
      is a natural extension to its safety monitoring offering.





With
      an
      established presence in the home from its PERS product, the Company entered
      into
      a marketing and technology agreement with certain exclusive rights with Health
      Hero Network, Inc. in 2001. The Company’s marked its entrance into the
      telehealth/disease management monitoring market initially as a provider of
      the
      Health Buddy Ò System.
      In the fourth quarter of 2003, the Company launched the commercial introduction
      of a device known as the PERS Buddy®.





16


The
      Company believes the telehealth market will continue to provide opportunity
      for
      AMAC’s expansion as a full source provider of remote patient monitoring
      technologies and services based on increasing acceptance as further clinical
      and
      econometric studies concluding that telehealth is both clinically effective
      and
      reduces cost. During the fourth quarter of 2005, the Company commenced plans
      to
      expand its telehealth offering through the creation of new services that
      integrate telehealth monitoring technology with comprehensive health management.





Beginning
      in 2000, the Company began a program of product diversification and customer
      base **** expansion
      to decrease its reliance on a single product line by marketing complementary
      call center and monitoring services to the healthcare community.




The
      Company diversified its products/service mix to include telephony based
      communication services ( “ TBCS ” )
      for
      professionals in the healthcare community. The rationale to enter this segment
      had several components. These include targeting existing customer relationships,
      leveraging existing infrastructure capability, and establishing an additional
      significant revenue source. T he
      Company entry into the TBCS market was
      accomplished initially **** through
      acquisition and later
      through internally generated sales growth coupled
      with acquisitions .
      The
      TBCS segment accounted for 45% of the Company’s revenues in the first quarter of
      2006. The Company believes that TBCS will continue to be a significant business
      segment going forward and intends to pursue further acquisitions in this
      area.




The
      Company has since further expanded its communication infrastructure and capacity
      and now operates a total of seven communication centers located in Long Island
      City, and Port Jefferson in New York, New Jersey, Maryland, Connecticut,
      Massachusetts and Rhode Island.




The
      Company believes it has identified other communication needs as expressed by
      the
      expanded TBCS **** 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 has
      broadened its service offerings and is in the process of significantly expanding the
      TBCS reporting segment.




The
      Company continues to view its two core business segments, HSMS and TBCS, as
      the
      main contributors to the Company’s cash flow from operations.




The
      Company’s third reporting segment, SafeCom pharmacy security monitoring systems,
      offers equipment and security monitoring to pharmacies and other 24/7 retail
      organizations. Currently, over 700 stores are monitored with this technology.
      SafeCom monitoring services are provided at the Company’s communication center
      in Long Island City, New York. The SafeCom platform utilizes the basic PERS
      technology with a modified application. Although currently providing a small
      annual revenue contribution, the Company believes a significant opportunity
      exists and will continue to test the market potential into 2006.




17


The
      Company believes that the overall mix of cash flow generating businesses from
      PERS and TBCS, 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.





**Components
      of Statements of Income by Operating Segment**


The
      following table shows the components of the Statement of Income for the three
      months ended March 31, 2006 and 2005.




In
                thousands (000’s)
            
            Three
                Months Ended March 31,2006
            
            
            %
            
            
            2005
            
            
            %RevenuesHSMS
            
            
            3,784
            
            
            **53**
            **%**
            
            3,539
            
            
            **68**
            **%**TAS
            
            
            3,236
            
            
            **45**
            **%**
            
            1,579
            
            
            **30**
            **%**Safe
                Com
            
            
            130
            
            
            **2**
            **%**
            
            121
            
            
            **2**
            **%**Total
                Revenues
            
            
            7,150
            
            
            **100**
            **%**
            
            5,239
            
            
            **100**
            **%**Cost
                of Services and Goods SoldHSMS
            
            
            1,746
            
            
            **46**
            **%**
            
            1,650
            
            
            **47**
            **%**TAS
            
            
            1,638
            
            
            **51**
            **%**
            
            776
            
            
            **49**
            **%**Safe
                Com
            
            
            64
            
            
            **49**
            **%**
            
            71
            
            
            **59**
            **%**Total
                Cost of Services and Goods Sold
            
            
            3,448
            
            
            **48**
            **%**
            
            2,497
            
            
            **48**
            **%**Gross
                ProfitHSMS
            
            
            2,038
            
            
            **54**
            **%**
            
            1,889
            
            
            **53**
            **%**TAS
            
            
            1,598
            
            
            **49**
            **%**
            
            803
            
            
            **51**
            **%**Safe
                Com
            
            
            66
            
            
            **51**
            **%**
            
            50
            
            
            **41**
            **%**Total
                Gross Profit
            
            
            3,702
            
            
            **52**
            **%**
            
            2,742
            
            
            **52**
            **%**Selling,
                General & Administrative
            
            
            3,246
            
            
            **45**
            **%**
            
            2,376
            
            
            **45**
            **%**Interest
                Expense
            
            
            62
            
            
            **1**
            **%**
            
            12
            
            
            **0**
            **%**Other
                Income
            
            
            (124
            )
            
            **(2**
            **)%**
            
            (82
            )
            
            **(2**
            **)%**Income
                before Income Taxes
            
            
            518
            
            
            **7**
            **%**
            
            436
            
            
            **8**
            **%**Provision
                for Income Taxes
            
            
            238
            
            
            
            
            
            210Net
                Income
            
            
            280
            
            
            
            
            
            226


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





18


**Results
      of Operations:**





The
      Company has three distinct operating business segments, which are HSMS, TBCS
      and
      Safe Com. The HSMS and TBCS 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 March 31, 2006 Compared to Three Months Ended March 31,
      2005**





**Revenues** **:**





**** **HSMS**





Revenues,
      which consist primarily of monthly rental revenues, increased approximately
      $245,000, or 7%, for the three months ended March 31, 2006 as compared to the
      same period in 2005. The increase is primarily attributed to the following
      factors:





§
            The
                Company continues to experience growth primarily in its existing
                customer
                base. The largest growth continues to be as a result of an agreement,
                which was executed in November 2003, whereby over 3,000 Personal
                Emergency
                Response Systems (“PERS”) were placed online from December 2003 through
                the first quarter of 2004. This account, which now has grown to
                approximately 6,000 PERS online, has resulted in approximately $90,000
                more revenue in the first quarter of 2006 as compared to the same
                period
                in 2005. The Company anticipates that the growth in this account
                will
                continue in 2006.





§
            In
                late 2004, the Company initiated and executed a new agreement with
                a home
                healthcare agency whereby PERS were placed online. Since inception,
                this
                account has grown to approximately 1,100 subscribers and accounted
                for an
                approximate $40,000 increase in revenue during 2006 as compared to
                the
                same period in the prior year.




§
            The
                remaining increase in revenue is from the increase in the execution
                of new
                agreements as well as monthly fee increases to certain subscribers.
                The
                Company anticipates that it will continue to grow its subscriber
                base and
                corresponding revenue through its continued sales and marketing
                efforts.





**** **TBCS**





The
      increase in revenues of approximately $1,657,000, or 105%, for the three months
      ended March 31, 2006 as compared to the same period in 2005 was primarily due
      to
      the following:





§
            The
                Company experienced revenue growth within its existing telephone
                answering
                service businesses of approximately $284,000, as compared to 2005.
                This
                growth is due to the execution of new agreements with healthcare
                and
                hospital organizations as a result of new daytime communication service
                offerings, as well as increases in the physician base. The Company
                has
                experienced strong growth in this business segment and anticipates
                that it
                will continue to grow this business segment with further expansion
                into
                healthcare and hospital organizations, as evidenced by its latest
                agreement with a hospital organization in which the providing of
                daytime
                services commenced in January 2006, and to physicians through its
                marketing strategies.




19




§
            During
                2006 and 2005, the Company purchased the assets of four separate
                telephone
                answering service businesses which resulted in additional revenue
                for the
                three months ended March 31, 2006, as compared to the same period
                in 2005,
                of approximately $1,412,000. The acquisitions were as follows:





o
            In
                May 2005, the Company purchased the assets Long Island Message Center,
                Inc. (“LIMC”). As a result of this acquisition, the Company realized
                approximately $60,000 of revenue in the first quarter of 2006.


o
            In
                October 2005, the Company purchased the assets of North Shore Answering
                Service (“NSAS”). As a result of this acquisition, the Company realized
                approximately $518,000 of revenue in the first quarter of 2006. The
                Company believes the acquisition of LIMC and NSAS will help facilitate
                its
                growth within the Long Island/New York geographical
                area.


o
            In
                December 2005, the Company purchased the assets of Answer Connecticut,
                Inc. (“ACT”). As a result of this acquisition, the Company realized
                approximately $680,000 of revenue in the first quarter of 2006. The
                Company believes this acquisition will help facilitate its expansion
                into
                the Northeast geographical area.


o
            In
                March 2006, the Company purchased the assets of MD OnCall and Capital
                Medical Beueau (collectively “MD OnCall”). As a result of this
                acquisition, the Company realized approximately $154,000 of revenue
                in the
                first quarter of 2006.





§
            Along
                with the plan to grow the TBCS segment through its daytime communication
                service offerings, the Company intends to continue to acquire additional
                TBCS businesses in 2006.





**Costs
      Related to Services and Goods Sold:**





**HSMS**





Costs
      related to services and goods increased by approximately $96,000 for the three
      months ended March 31, 2006 as compared to the same period in 2005, an increase
      of 6%, primarily due to the following:





§
            The
                Company recorded approximately $60,000 more of expense relating to
                the
                upgrade of certain versions of its PERS and related equipment, as
                compared
                to the same period in 2005. In November 2004, the Company received
                an
                inquiry from the Federal Communications Commission ("FCC"). In response
                to
                that inquiry the Company determined that certain versions of its
                PERS
                equipment emit levels of radio frequency energy that exceed applicable
                standards designed to reduce the possibility of interference with
                radio
                communications. Based on this, and as a result of the Company's decision
                to accelerate the remediation of certain effected PERS units, the
                Company
                has repaired and upgraded more units during the first quarter of
                2006 as
                compared to the same period of 2005. Additionally, the Company incurred
                costs of approximately $30,000 in connection with its decision to
                accelerate the remediation of certain affected PERS
                units.




20




§
            During
                2005 and into 2006, the Company has increased the number of personnel
                working in its Emergency Response Center (“ERC”) department which
                accounted for increased costs of approximately $45,000 in 2006 as
                compared
                to the same period in 2005. The Company hired additional personnel
                due to
                the increased volume of calls which is directly correlated to the
                increased subscriber base.





This
      increase was partially offset by a reduction of personnel in the customer
      service department and a reduction in fees relating to its agreement relating
      to
      its telehealth product. These reductions amounted to approximately
      $35,000.





**** **TBCS:**





Costs
      related to services and goods increased by approximately $862,000 for the three
      months ended March 31, 2006 as compared to the same period in 2005, an increase
      of 111%, primarily due to the following:





§
            With
                the continued increase in business in its existing telephone answering
                services, specifically in its daytime answering service, the Company
                continued to hire additional telephone answering service supervisors
                and
                operators in its Long Island City location, especially in the second
                half
                of 2005 as a result of the Company executing agreements with hospital
                organizations throughout 2005. The increase in daytime service business
                has continued into 2006 as evidenced by an additional hospital commencing
                service in January 2006. In addition, in July 2005 the Company initiated
                a
                pay rate increase to all its supervisors and operators in an effort
                to
                stabilize employee tenure with the Company. These personnel additions
                along with general pay rate increases and associated payroll taxes
                has
                accounted for approximately $230,000 of increased costs as compared
                to the
                same period in 2005. 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.




§
            During
                2006 and 2005, as discussed above, the Company purchased the assets
                of
                four separate telephone answering service businesses which resulted
                in
                additional costs related to sales for the three months ended March
                31,
                2006 of approximately $534,000. The costs related to sales in regard
                to
                the acquisitions were as follows: LIMC - $45,000; NSAS - $158,000;
                ACT -
                $267,000 and MD OnCall - $64,000.




21


**Selling,
      General and Administrative Expenses:**





Selling,
      general and administrative expenses increased by approximately $870,000 for
      the
      three months ended March 31, 2006 as compared to the same period in 2005, an
      increase of 37%. The increase is primarily attributable to the
      following:





§
            In
                2006, the Company took possession of additional space located in
                Long
                Island City with the intention of consolidating its warehouse and
                distribution center and accounting department into the location which
                currently houses its principal New York HSMS and TBCS call center.
                As a
                result of taking possession of this premises, the Company recorded
                approximately $95,000 of expense for the three months ended March
                31,
                2006. The Company anticipates occupancy of this additional space
                in May
                and June of 2006. The Company’s lease obligations for its warehouse and
                distribution center will cease as of June 30,
                2006.





§
            Certain
                executives entered into new employment agreements whereby effective
                January 1, 2006 there salaries were increased and they received certain
                stock grants. As a result of these new agreements, the Company recorded
                approximately $65,000 of additional compensation expense, including
                payroll taxes, as compared to the same period in 2005.





§
            The
                Company incurred approximately $550,000 of selling, general and
                administrative expenses as a result of the acquisition of four telephone
                answering service businesses during 2006 and 2005. The largest expenses
                relate to salaries, including related payroll taxes and amortization
                relating to customer lists and non-compete
                agreements.





**Interest
      Expense:**





Interest
      expense increased by approximately $50,000 for the three months ended March
      31,
      2006, as compared to the same period in 2005. The increase was primarily due
      to
      the Company increasing its term loan in December 2005 by $2,550,000 and again
      in
      March 2006 by an additional $2,500,000 for the purpose of financing its
      acquisitions of ACT and MD OnCall, respectively.





**Other
      Income:**





Other
      income for the three months ended March 31, 2006 and 2005 was approximately
      $124,000 and $83,000, respectively. Other Income for the three months ended
      March 31, 2006 and 2005 includes a Relocation and Employment Assistance Program
      (“REAP”) credit in the approximate amounts of $97,000 and $75,000, 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, the benefit
      will be available only as a credit against New York City income taxes.





22


**Income
      Before Provision for Income Taxes:**





The
      Company’s income before provision for income taxes for the three months ended
      March 31, 2006 was approximately $518,000 as compared to $436,000 for the same
      period in 2005. The increase of $82,000 for the three months ended March 31,
      2006 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.





**Liquidity
      and Capital Resources**





In
      March
      2006, the Company obtained an additional $2,500,000 term loan, the proceeds
      of
      which were utilized to finance the acquisition of MD OnCall and Capitol Medical
      Bureau.





As
      of
      March 31, 2006, the Company has a credit facility of $6,850,000, which includes
      a term loan of $5,350,000 and a revolving credit line that permits maximum
      borrowings of $1,500,000 (based on eligible receivables, as defined). Borrowings
      under the term loan bear interest at either (a) LIBOR plus 2.25% or (b) the
      prime rate or the federal funds effective rate plus .5%, whichever is greater,
      and the revolving credit line will bear interest at either (a) LIBOR plus 2.0%
      or (b) the prime rate or the federal funds effective rate plus .5%, whichever
      is
      greater. The term loan is payable in equal monthly principal payments of $91,667
      over five years while the revolving credit line is available through May 2008.
      The outstanding balance on the term loan at March 31, 2006 was $5,350,000 and
      there were no amounts outstanding on the revolving credit line at March 31,
      2006.




As
        of
        March 31, 2006 the Company was not in compliance with one of its financial
        covenants in its loan agreement. The lender waived the non-compliance as
        of such
        date and agreed to enter into an amendment to the credit facility which
        management believes will enable the Company to meet the covenant in the
        future.





The
      following table is a summary of contractual obligations as of March 31,
      2006:




Payments
                Due by PeriodContractual
                Obligations
            
            Total
            
            Less
                than 1 year
            
            1-3
                years
            
            4-5
                years
            
            After
                5 yearsRevolving
                Credit Line
            
            $
            -
                0 -Debt
                (a)
            
            $
            5,391,783
            
            $
            1,116,221
            
            $
            3,325,562
            
            $
            950,000Operating
                Leases (b)
            
            $
            9,717,977
            
            $
            948,105
            
            $
            2,461,171
            
            $
            1,474,065
            
            $
            4,834,636Total
                Contractual Obligations
            
            $
            15,109,760
            
            $
            2,064,326
            
            $
            5,786,733
            
            $
            2,424,065
            
            $
            4,834,636




23




(a)
            -
                Debt includes the Company’s term loan of $5,350,000 which matures in March
                2012, as well as loans associated with the purchase of
                automobiles.




(b)
            -
                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. The lease obligations include two recently executed leases
                which will commence rent payments upon the Landlord delivering possession
                of the premises. It is estimated that rent will commence in May and
                June
                2006, respectively.





Net
      cash
      provided by operating activities was approximately $1.3 million for the three
      months ended March 31, 2006, as compared to approximately $0.3 million for
      the
      same period in 2005. During the first quarter of 2006, increases in cash
      provided by operating activities from depreciation and amortization of
      approximately $0.8 million, increase in liabilities of $0.5 and net earnings
      of
      approximately $0.3 million were partially offset by an increase in trade
      receivables of approximately $0.3 million. The increase in liabilities is due
      to
      an increase in straight-line rent, purchase of its telehealth product and the
      timing of payments of other expenses in the ordinary course of
      business. The increase in trade receivables is primarily due to the Company
      consummating an acquisition which resulted in approximately $0.2 million of
      increased receivables through the normal course of business.




Net
      cash
      used in investing activities for the three months ended March 31, 2006 was
      approximately $4.5 million as compared to $0.3 million in the same period in
      2005. The primary components of net cash used in investing activities in the
      first quarter of 2006 were the acquisition of telephone answering service
      businesses and capital expenditures. The acquisition of telephone answering
      service businesses was approximately $3.1 million and capital expenditures
      were
      approximately $1.1 million. Capital expenditures for the first quarter of 2006
      primarily relate to the continued production and purchase of the traditional
      PERS system as well as construction performed on new facilities. The primary
      components of net cash used in investing activities in the first quarter of
      2005
      were capital expenditures and deposits on equipment and software.




Cash
      flows for the three months ended March 31, 2006 provided by financing activities
      were approximately $2.5 million compared to $0.6 million for the same period
      in
      2005. The primary components of cash flow provided by financing activities
      in
      the first quarter of 2006 were proceeds received from additional borrowings.
      The
      proceeds from the borrowing were $2.5 million and were primarily used for the
      acquisition of a telephone answering service. The primary components of cash
      flow provided by financing activities in the first quarter of 2005 were proceeds
      received from the exercise of stock options and warrants. The proceeds from
      the
      exercise of both stock options and warrants were approximately $0.7 in the
      first
      quarter of 2005.




24


During
      the next twelve months, the Company anticipates it will make capital
      expenditures of approximately $3.0 - $3.5 million for the production and
      purchase of the traditional PERS systems and telehealth systems, enhancements
      to
      its computer operating systems and the production of its Med-Time pill
      dispenser. This amount is subject to fluctuations based on customer demand.
      The
      Company also anticipates incurring approximately $0.2 - $0.4 million of costs
      relating to research and development of its telehealth product and Med-Time
      dispenser. In July 2005, the Company entered into a technology, licensing,
      development, distribution and marketing agreement with a supplier for its HSMS
      sector. Pursuant to this agreement the Company anticipates expending
      approximately $0.3 - $0.5 million over the next twelve to eighteen months.
      In
      addition, assuming the upgrade program which the Company is working with the
      FCC
      to finalize is to run substantially parallel with the normal recycling of the
      Company’s PERS equipment, the Company anticipates paying approximately $0.2
      million relating to the FCC matter over the next twelve months.




As
      of
      March 31, 2006, the Company had approximately $1.9 million in cash and the
      Company’s working capital was approximately $2.6 million. The Company believes
      that with its present cash balance and with operations of the business
      generating positive cash flow, it will be able to meet its cash, working capital
      and capital expenditure needs for at least the next twelve months. The Company
      also has a revolving credit line, which expires in May 2008 that permits
      borrowings up to $1.5 million of which no amounts were outstanding at March
      31,
      2006.




Off-Balance
      Sheet Arrangements:




As
      of
      March 31, 2006, 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
      March
      10, 2006, the Company acquired substantially all of the assets of MD
      OnCall, a Rhode Island based company and Capitol Medical
      Bureau, **** a
      Maryland based company ,
      providers of telephone after-hour answering services and stand-alone voice
      mail
      services. The purchase price was $3,430,643 and consisted of an initial cash
      payment of $2,696,315, common stock valued at $343,064 and future cash payments
      of $343,064 to be paid to the Seller within twelve months from the date of
      the
      executed agreement. The Company also recorded finder and professional fees
      of
      approximately $180,000. A potential exists for payments of additional purchase
      price consideration if certain thresholds concerning revenue and earnings are
      met.




On
      December 9, 2005, the Company acquired substantially all of the assets of Answer
      Connecticut, Inc. (“ACT”), a Connecticut based provider of telephone after-hour
      answering services and stand-alone voice mail services. The purchase price
      was
      $3,088,923 and consisted of an initial cash payment of $2,316,692, common stock
      valued at $154,446 and $617,785 to be paid to the Seller within twelve months
      from the date of the executed agreement. The Company paid $154,446 towards
      the
      balance due in January 2006. The Company also recorded professional fees of
      approximately $62,000. A potential exists for the payment of additional purchase
      price consideration if certain thresholds concerning revenue and earnings are
      met as of December 31, 2006, 2007 and 2008.





25


On
      October 3, 2005, the Company acquired substantially all of the assets of North
      Shore Answering Service (“NSAS”), a Long Island, New York based provider of
      telephone after-hour answering services. The purchase price was $2,719,461
      and
      consisted of an initial cash payment of $2,175,569 and $543,892 to be paid
      twelve months from the date of the executed agreement. The Company also recorded
      professional fees of approximately $82,000.




On
      May
      17, 2005, the Company acquired substantially all of the assets of Long Island
      Message Center, Inc., a Long Island, New York based provider of telephone
      after-hour answering services. The purchase price was $397,712 and consisted
      of
      an initial cash payment of $318,170 and $79,542 which was paid in February
      2006.
      The Company also recorded finder and professional fees of approximately $46,000.




During
      2005, the Company entered into two operating lease agreements for additional
      space at its Long Island City, New York location with the intention of
      consolidating its warehouse and distribution center and accounting department
      into the location which currently houses its principal New York HSMS and TBCS
      call center. The leases expire in March 2018, call for minimal annual rentals
      of
      $220,000 and $115,000, respectively, and are subject to increases in accordance
      with the term of the agreements. The Company is also responsible for the
      reimbursement of real estate taxes.




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® 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 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 was 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 HHN Agreement, which had a minimum
      five-year term (“initial term”), and provided for the payment by the Company of
      certain fees based on the service revenue derived from the enhanced PERS
      product, was amended on June 30, 2005. The amendment includes an extension
      of
      the initial term for an additional three years ,
      and
      converted the exclusive license to a non-exclusive one .
      The
      cost of the licensing component of $1,115,000, including $115,000 of
      professional fees, which has been paid in full, was being amortized over a
      40-month period which commenced in July 2003 upon the Company meeting certain
      milestones under the agreement. With this extension of the initial term, the
      Company is amortizing the remaining value of the licensing component as of
      June
      30, 2005 over the revised initial term of the Agreement. Additionally, if
      certain acceptance criteria were met, the Company would have been required
      to
      purchase a minimum of 1,500 devices over the term of the Agreement at an
      estimated aggregate cost of $450,000. Such criteria were not met; therefore,
      the
      Company is not obligated to purchase a minimum of 1,500 devices.





26


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, 2006.




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.” The Company was advised that the cancellation of the RFP is not related
      to any performance issue or negative reflection upon the Company. Concurrently,
      the Company was advised of HRA’s decision to issue a new contract extension to
      the Company through June 2005 under the terms of the contract that the Company
      has been operating under since 1993. The Company has since received this
      contract extension and also has received a subsequent extension which goes
      through June 2006. In accordance with the original contract and consistent
      with
      previous extensions, HRA has the right to terminate the contract without cause
      or “in the best interest of the City of New York” upon thirty days written
      notice. HRA has also advised the Company that HRA plans to issue a new RFP
      with
      respect to PERS services in the future. As of May 12, 2006, a new RFP has not
      been issued.




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 greatly reduced its dependence on revenue from HCSP, if subsequent
      to June 2006, the Company does not maintain this contract, approximately 9%
      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.




As
      of
      March 31, 2006 and 2005, accounts receivable from the contract represented
      10%
      and 11%, respectively, of accounts receivable and medical devices in service
      under the contract represented approximately 16% and 17%, respectively, of
      medical devices.




The
      Company’s PERS equipment is subject to approval from the Federal Communication
      Commission (“FCC”). In November 2004, the Company received an inquiry from the
      Federal Communications Commission. In response to that inquiry the Company
      has
      determined that certain versions of its PERS equipment emit levels of radio
      frequency energy that exceed applicable standards designed to reduce the
      possibility of interference with radio communications. Although this issue
      poses
      no safety or functionality risk to subscribers, the company is in the process
      of
      establishing a corrective action plan with the FCC to satisfy this
      matter.




27


The
      Company is currently negotiating with the FCC to determine an action plan to
      establish a timeframe to complete an upgrade program for the affected PERS
      equipment and the amount of a payment to the FCC. At this time, the Company
      believes a voluntary payment of $75,000 associated with this matter will be
      required. At December 31, 2005, the Company has accrued such amount. In
      addition, the Company believes the FCC will allow the upgrade program to run
      substantially parallel with the normal recycling of the Company’s PERS
      equipment. Under this assumption, the only additional cost to be incurred will
      be the incremental cost to bring the units into compliance with the FCC
      regulations.




Through
      March 31, 2006, the Company has expensed approximately $975,000 in connection
      with this matter, of which approximately $65,000, primarily relating to costs
      associated with the replacement of equipment, legal fees and other professional
      fees, was recorded in 2006. The Company anticipates the total charge to complete
      this upgrade program to range from $1,100,000 to $1,300,000. If the Company
      is
      required to complete the PERS equipment and related equipment upgrades in a
      shorter period of time than is anticipated, significant additional costs will
      be
      incurred inasmuch as unscheduled service calls will be required.





**Recent
      Accounting Pronouncements:**




In
      June
      2005, the FASB issued SFAS No. 154, *Accounting
      Changes and Error Corrections* ,
      a
      replacement of APB No. 20 and SFAS No. 3. SFAS No. 154 applies to all voluntary
      changes in accounting principle and changes the requirements for accounting
      for
      and reporting of a change in accounting principle to be applied retrospectively
      with all prior period financial statements presented on the new accounting
      principle. SFAS No. 154 is effective for accounting changes and correction
      of
      errors made in fiscal years beginning after December 15, 2005. The Company
      adopted SFAS No. 154 and the adoption of this statement did not have a material
      impact on the consolidated results of operations or financial position.




In
      November 2004, the FASB issued FASB Statement No. 151, *Inventory
      Costs - An Amendment of ARB No. 43,*  *Chapter
      4* (“SFAS
      151”), which is the result of its effort to converge U.S. accounting standards
      for inventories with International Accounting Standards. SFAS 151 requires
      idle
      facility expenses, freight, handling costs, and wasted material (spoilage)
      costs
      to be recognized as current-period charges and not included in overhead. It
      also
      requires that allocation of fixed production overhead cost to inventory be
      based
      on normal capacity of the production facilities. SFAS 151 is effective for
      inventory costs incurred during fiscal years beginning after June 15, 2005.
      The
      adoption of SFAS 151 did not have a material impact on our  financial
      statements.


**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.





28


**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 $508,000 as of March 31,
      2006,
      which is equal to 9.5% 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 $53,000. 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 $53,000.





**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 to 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 $175,000 per annum. 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 $140,000
      per annum.




**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 $8,230,100 and
      $6,086,428 at March 31, 2006 and December 31, 2005, respectively. If the Company
      were to experience a significant adverse impact on goodwill, it would negatively
      impact the Company’s net income.





29


**Item
      3. Quantitative and Qualitative Disclosure About Market
      Risk**





We
      are
      exposed to market risk related to changes in interest rates.





*Interest
      Rate Risk*





We
      are
      exposed to market risk from changes in interest rates primarily through our
      financing activities. Interest on our outstanding balances on our term loan
      under our credit facility accrues at a rate of LIBOR plus 2.25%. Our ability
      to
      carry out our business plan to finance future working capital requirements
      and
      acquisitions of TBCS businesses may be impacted if the cost of carrying debt
      fluctuates to the point where it becomes a burden on our resources.




**Item
      4.** **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 March 31, 2006 that has materially affected,
      or is reasonably likely to affect, the Company’s internal control over financial
      reporting.





30


**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
      6.** **Exhibits** **.**




No.
              Description31.1
              Certification
                  of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of
                  200231.2
              Certification
                  of President Pursuant to Section 302 of the Sarbanes Oxley Act
                  of
                  200231.3
              Certification
                  of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of
                  200232.1
              Certification
                  of CEO Pursuant to Section 906 of the Sarbanes Oxley Act of
                  200232.2
              Certification
                  of President Pursuant to Section 906 of the Sarbanes Oxley Act
                  of
                  200232.3
              Certification
                  of CFO Pursuant to Section 906 of the Sarbanes Oxley Act of
                  2002


31


**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:
              May 12, 2006
            By:
            /s/ Howard
              M.
              SiegelName:
              Howard M. SiegelTitle:  
              Chairman of the Board, Chief Executive
              Officer


By:
            /s/ Richard
              RalloName:
              Richard RalloTitle:  
              Chief Financial Officer


32