UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


WASHINGTON,DC20549




FORM 10-QSB





(Mark
One)


xQuarterly
report under Section 13 or 15(d) of the Securities Exchange Act of
1934




For the quarterly period ended March 31,
2008





oTransition report under Section 13 or 15(d) of the Exchange
Act




For the transition period
from _________ to _________




Commission file number
0-27889





THE AMACORE GROUP,
INC.


(Name of small business issuer in its
charter)





Delaware
            
            59-3206480(State or Other Jurisdiction
      of
            
            (I.R.S.
      EmployerIncorporation or
      Organization)
            
            Identification
      No.)







1211 North Westshore Boulevard,
      Suite 512Tampa,Florida33607(Address of principal executive
      offices)







(813)
    289-5552(Issuer’s Telephone
      Number)







Check whether the
issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past twelve months (or 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.YesxNoo





Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).YesoNox




State the number of shares outstanding
of each of the issuer’s classes of common stock as of May 5,
2008:


113,469,915Class A Common
Shares


29,062,802Class B Common
Shares




Transitional Small Business Disclosure
Format (Check One):  YesoNox






















THE AMACORE GROUP,
INC.





FORM 10-QSB




PART I - FINANCIAL
INFORMATION





Page
      No.ITEM 1.Financial
      Statements
            3Condensed Consolidated Balance
      Sheets - March 31, 2008 and December 31, 2007
            3Condensed Consolidated Statements
      of Operations - For the Three Months Ended March 31, 2008 and
      2007
            4Condensed Consolidated Statements
      of Cash Flow - For the Three Months Ended March 31, 2008 and
      2007
            5Notes to Consolidated Financial
      Statements
            6ITEM 2. Management’s Discussion and Analysis of
      Financial Condition and Results of Operations
            19ITEM
      3A(T). Controls and Procedures
            24








PART II - OTHER
INFORMATION





Page
      No.ITEM
      1. Legal Proceedings
            25ITEM
      2. Unregistered Sales of Equity and Use of Proceeds
            25ITEM
      3. Defaults Upon Senior Securities
            25ITEM
      4. Submission of Matters to a Vote of Security Holders
            25ITEM
      5. Other Information
            25ITEM 6.
      Exhibits
            26Signatures
            26





THE AMACORE GROUP,
      INC.CONDENSED CONSOLIDATED BALANCE
      SHEETSMarch 31,
              
              
              December
31,2008
              
              
              2007ASSETSCurrent
    assetsCash
              
              $
              2,824,526
              
              
              $
              2,161,042Restricted
    cash
              
              
              566,935
              
              
              
              316,935Accounts receivable (net of $0
      allowancefor doubtful accounts in 2008 and
      2007, respectively)
              
              
              496,896
              
              
              
              470,049Non-trade receivables - related
      party
              
              
              75,469
              
              
              
              64,385Inventory
              
              
              37,814
              
              
              
              37,814Prepaid
      expenses
              
              
              3,920,234
              
              
              
              1,023,798Deposits
              
              
              87,814
              
              
              
              61,236Total current
      assets
              
              
              8,009,688
              
              
              
              4,135,259Fixed assets (net of accumulated
      depreciation of $179,367 and $132,387for 2008 and 2007,
      respectively)
              
              
              760,048
              
              
              
              418,356Other
assetsGoodwill
              
              
              492,145
              
              
              
              492,144Intangible assets -
      net
              
              
              593,678
              
              
              
              667,086Unallocated
      assets
              
              
              13,566,021
              
              
              
              13,566,020Total
assets
              
              $
              23,421,580
              
              
              $
              19,278,865LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      liabilitiesAccounts
      payable
              
              $
              2,427,449
              
              
              $
              2,639,200Accounts payable - related
      party
              
              
              527,930
              
              
              
              590,888Loans and notes
      payable
              
              
              1,150,610
              
              
              
              1,414,530Accrued expenses and payroll
      taxes
              
              
              4,746,895
              
              
              
              5,147,665Accrued
      dividends
              
              
              704,482
              
              
              
              479,896Deferred compensation - related
      party
              
              
              561,614
              
              
              
              602,344Deferred
      revenue
              
              
              1,660,395
              
              
              
              1,409,984Total current
      liabilities
              
              
              11,779,375
              
              
              
              12,284,507Long-Term
      Liabilities
              
              
              -
              
              
              
              -Total liabilities
              
              
              11,779,375
              
              
              
              12,284,507Stockholders'
    EquityPreferred Stock, $.001 par value,
      20,000,000 shares authorized;Series A mandatory convertible
      preferred stock; 1,500 shares authorized;155 shares issued and outstanding;
      aggregate liquidation value of$155,000 as of 3/31/08 and
      12/31/07.
              
              
              -
              
              
              
              -Series D mandatory convertible
      preferred stock; 689 shares authorized;689 and 689 shares issued and
      outstanding as of 3/31/08 and 12/31/07, respectively; aggregateliquidation value
      of  $7,415,556 and $7,306,076 as of 3/31/08 and 12/31/07,
      respectively.
              
              
              -
              
              
              
              -Series E mandatory convertible
      preferred stock; 139 shares authorized;139 and 139 issued and
      outstanding, respectively; aggregate liquidationvalue of  $1,490,380 and
      $1,468,396 as of 3/31/08 and 12/31/07,
respectively.
              
              
              -
              
              
              
              -Series G mandatory convertible
      preferred stock; 1000 shares authorized;1,000 and 300 shares issued and
      outstanding as of 3/31/08 and 12/31/07, respectively;aggregate liquidation value of
      $10,221,592 and $3,041,425 as of 3/31/08 and 12/31/07,
      respectively.
              
              
              1
              
              
              
              -Common Stock A, $.001 par value,
      1,500,000,000 shares authorized;114,674,450 and 110,149,148 shares
      issued and outstanding as of 3/31/08 and 12/31/07,
      respectively.
              
              
              114,674
              
              
              
              110,149Common Stock B, $.001 par value,
      120,000,000 shares authorized;29,062,802 and 27,562,802 shares
      issued and outstanding as of 3/31/08 and 12/31/07,
      respectively.
              
              
              29,063
              
              
              
              27,563Additional paid-in
      capital
              
              
              91,452,579
              
              
              
              83,956,054Accumulated
    deficit
              
              
              (79,954,112
              )
              
              
              (77,099,408
              )Total stockholders'
      equity
              
              
              11,642,205
              
              
              
              6,994,358Total liabilities and
      stockholders' equity
              
              $
              23,421,580
              
              
              $
              19,278,865See notes to consolidated
      financial statements


3


THE AMACORE GROUP,
      INC.CONDENSED CONSOLIDATED STATEMENTS
      OF OPERATIONSFor the Three Months Ended March
      31,2008
              
              
              2007REVENUESMembership
    fees
              
              $
              5,065,492
              
              
              $
              159,867Commissions
              
              
              136,743
              
              
              
              -Marketing
    fees
              
              
              254,213
              
              
              
              -Fulfillment
              
              
              12,885
              
              
              
              -Total
    revenue
              
              
              5,469,333
              
              
              
              159,867COST OF
    SALESSales
      commissions
              
              
              2,693,843
              
              
              
              66,100Benefit and service
      cost
              
              
              131,173
              
              
              
              -Total cost of
      sales
              
              
              2,825,016
              
              
              
              66,100GROSS
PROFIT
              
              
              2,644,317
              
              
              
              93,767OPERATING
      EXPENSESDepreciation
              
              
              46,980
              
              
              
              2,001Amortization
              
              
              66,471
              
              
              
              -Occupancy
    Rent
              
              
              90,282
              
              
              
              20,698Consulting
              
              
              168,575
              
              
              
              1,767,927Payroll and
      benefits
              
              
              1,823,253
              
              
              
              2,937,025Professional
      fees
              
              
              386,214
              
              
              
              73,954Insurance
              
              
              105,949
              
              
              
              32,340Travel and
      entertainment
              
              
              301,629
              
              
              
              111,314Contract
    labor
              
              
              122,546
              
              
              
              22,731Office related
      expense
              
              
              107,537
              
              
              
              4,359Utilities
              
              
              54,875
              
              
              
              6,771Litigation and legal
      costs
              
              
              43,818
              
              
              
              -Selling and
      marketing
              
              
              1,801,570
              
              
              
              47,440Total operating
      expenses
              
              
              5,119,699
              
              
              
              5,026,560Operating loss from operations
      before other income and expense
              
              
              (2,475,382
              )
              
              
              (4,932,793
              )OTHER INCOME
      (EXPENSE)Interest
    income
              
              
              14,872
              
              
              
              -Interest
      expense
              
              
              (35,537
              )
              
              
              (29,112
              )Loss on conversion of note
      payable
              
              
              (98,603
              )
              
              
              -Miscellaneous
              
              
              1,995
              
              
              
              -Total other income
      (expense)
              
              
              (117,273
              )
              
              
              (29,112
              )Net loss before income
      taxes
              
              
              (2,592,655
              )
              
              
              (4,961,905
              )Income
taxes
              
              
              -
              
              
              
              -Net loss
              
              
              (2,592,655
              )
              
              
              (4,961,905
              )Preferred stock dividend and
      accretion
              
              
              (317,300
              )
              
              
              (41,375
              )Net loss available to common
      stockholders
              
              $
              (2,909,955
              )
              
              $
              (5,003,280
              )Basic and diluted loss per
      share
              
              $
              (0.02
              )
              
              $
              (0.05
              )Basic and diluted weighted average
      number of  common shares outstanding
              
              
              138,595,460
              
              
              
              95,289,598See notes to consolidated
      financial statements






4






THE AMACORE GROUP,
      INC.CONDENSED CONSOLIDATED STATEMENTS
      OF CASH FLOWSThree Months Ended March
      31,2008
              
              
              2007Cash flows from operating
      activitiesNet loss
              
              $
              (2,592,655
              )
              
              $
              (4,961,905
              )Adjustment to reconcile net loss
      to net cash provided by(used) in operating
      activitiesIssuances of shares and warrants
      for consulting services
              
              
              870,942
              
              
              
              4,359,500Loss on conversion of note
      payable
              
              
              98,603
              
              
              
              -Amortization
              
              
              66,471
              
              
              
              -Depreciation
              
              
              46,980
              
              
              
              2,001Changes in operating assets and
      liabilities(Increase) decrease in accounts
      receivable
              
              
              (28,472
              )
              
              
              13,323(Increase) decrease in accounts
      receivable - related party
              
              
              (6,000
              )
              
              
              -(Increase) decrease in prepaid
      expenses
              
              
              (2,896,436
              )
              
              
              27,113(Increase) decrease in
      deposits
              
              
              (26,575
              )
              
              
              -Increase (decrease) in accounts
      payable  and accrued expenses
              
              
              (501,032
              )
              
              
              (35,781
              )Increase (decrease) in deferred
      compensation
              
              
              (114,111
              )
              
              
              (84,216
              )Increase (decrease) in deferred
      revenue
              
              
              248,616
              
              
              
              403Net cash used by operating
      activities
              
              
              (4,833,669
              )
              
              
              (679,562
              )Cash flows from investment
      activitiesPurchase of property and
      equipment
              
              
              (381,735
              )
              
              
              -Increase in restricted
      cash
              
              
              (250,000
              )
              
              
              -Net cash (used) provided by
      investing activities
              
              
              (631,735
              )
              
              
              -Cash flows from financing
      activitiesProceeds from sale of preferred
      stock
              
              
              7,000,000
              
              
              
              750,000Proceeds from private placement
      equity issuance
              
              
              500
              
              
              
              -Equity issuance
      costs
              
              
              (380,000
              )
              
              
              (180,000
              )Proceeds from exercise of common
      stock warrants
              
              
              42,000
              
              
              
              31,600Proceeds from promissory
      notes
              
              
              -
              
              
              
              4,815,000Net proceeds from lines of
      credit
              
              
              40,445
              
              
              
              -Payments made on notes
      payable
              
              
              (15,932
              )
              
              
              -Payments on and redemption of
      convertible notes
              
              
              -
              
              
              
              (20,000
              )Net cash provided by financing
      activities
              
              
              6,687,013
              
              
              
              5,396,600Increase in cash and cash
      equivalents
              
              $
              1,221,609
              
              
              $
              4,717,038Beginning cash and cash
      equivalents
              
              
              2,161,042
              
              
              
              135,046Ending cash and cash
      equivalents
              
              
              3,382,651
              
              
              $
              4,852,084SUPPLEMENTAL
      INFORMATION:Cash paid for
      interest
              
              $
              2,229
              
              
              $
              -Cash paid for
      taxes
              
              $
              -
              
              
              $
              -See notes to consolidated
      financial statements


5


THE AMACORE GROUP,
INC.


NOTES TO FINANCIAL
STATEMENTS


THREE MONTHS ENDED MARCH 31, 2008 &
2007








NOTE 1 – NATURE OF
OPERATIONS









Nature of
Operations




The Amacore Group, Inc. (Amacore or the
Company) was founded over 10 years ago and began selling memberships in our
discount vision program to retail customers in an effort to prove that a vision
discount plan with an ophthalmologic (a medical doctor specializing in eye care)
panel included would be not only accepted, but desired, by the general public
and prove to other marketers of various health plans the benefits of including
such a plan in their products. We sold the plan on a retail only basis for many
years proving that the general public did desire to have a vision plan with
their medical coverage.  Once proof of concept became a reality, we
shifted our emphasis to marketing our plan to marketers of health benefit plans.
Marketing programs on a retail basis requires a broad national marketing staff
which we were not financially prepared to support, whereas a much smaller staff
is needed to market to others on a wholesale basis. During the period in which
we were transitioning to and building our wholesale network, revenues decreased
and losses increased.  We continued to market the plan on a retail
basis with less emphasis and devoted most of our time to the continued
development of our wholesale network and developing contractual relationships
with other marketers of various health plans, including, but not limited to,
insurance companies and marketers of other discount plans such as dental, vision
(without a vision medical component), and prescription drugs.  Those
contracts did not produce a substantial amount of revenue but served to
establish Amacore as having a product capable of not only servicing the needs of
the general public, but servicing the marketers of other healthcare programs as
a lead generator for their agents.  It also served to position us with
marketers of other healthcare programs in such a way as to attract those
marketers to The Amacore Group from a management perspective.  We then
initiated activity designed to increase the scope of our product line; increase
our distribution channels for our product line and increase our ability to
generate sales leads for our distribution channels.  Integral to these
goals was the hiring of executive personnel, experienced in the design and
marketing of various types of healthcare programs ranging from discount programs
to insured components.  Additionally, it was important for us to
further develop the free eye exam component of our vision plan so that this
component could serve as a sales lead generator for a wide range of other
healthcare products.





NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES




Basis of
Presentation





The accompanying unaudited condensed
consolidated financial statements have been prepared in accordancewith the instruction to and requirements
ofForm 10-QSB and Article
10 of Regulation S-X.Accordingly, they do not include all of
the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary in order to make the financial
statements not misleading have been included. Results for the three month period
ended March 31, 2008 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2008. For further information, refer
to the financial statements and footnotes thereto included in The Amacore Group,
Inc. annual report on Form 10-KSB for the year ended December 31,
2007.





Principles
of Consolidation





The accompanying consolidated financial
statements include the accounts of Amacore and its wholly-owned subsidiaries
LBI, Inc. (LBI), LifeGuard Benefit Services, Inc. (LifeGuard), Zurvita, Inc.
(Zurvita) and JRM Benefits Consultants, LLC (JRM).  Intercompany
balances and transactions have been eliminated in
consolidation.





Industry
Segment





The products offered and operational
activities of JRM, Zurvita and LifeGuard are similar in nature to the Company’s
activities.   Management has not reported these entities as
separate reporting segments since in management’s opinion they are managed
collectively.  The Company’s subsidiary LBI had no activity during the
three months ended March 31, 2008; accordingly, LBI has not been considered a
reportable segment since in management’s opinion the results of LBI’s operations
are not used in decision making relating to the allocation of resources and in
the assessment of the Company’s overall performance.


6





Cash and
Cash Equivalents





For purposes of the statement of cash
flows, The Amacore Group considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash
equivalents.





Restricted
Cash





Pursuant to the merger agreement between
the Company and LifeGuard, the Company deposited $316,935 into escrow to be used
for the settlement of an Internal Revenue Service liability negotiated and
resolved during May 2008.  In addition, $250,000 was deposited during
the three months ended March 31, 2008 into escrow pursuant to a contract between
LifeGuard and Quality Resources Inc., to be used to guarantee commission
payments under that contract.  Assuming there is no claim made on
these funds, this amount will be released back to LifeGuard in June 2008 when
the escrow arrangement will terminate.





Inventory





Inventory includes raw materials used in
fulfillment of member packages, including paper, print materials, toner
cartridges, etc.  Inventory on hand is valued at the lower of cost or
market value using the First-In First-Out valuation method.





Software
Development Costs





The Company has adopted Statement of
Position 98-1, “Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use.” This statement requires that certain
costs incurred in purchasing or developing software for internal use be
capitalized as internal use software development costs and included in fixed
assets. Amortization of the software begins as software is ready for
its intended use. The Company has capitalized software development costs in
accordance with SOP 98-1 and is amortizing those costs over an estimated useful
life of three years.





Intangible
assets





Intangible assets consist primarily
of intellectual property. Effective January 1, 2004, in accordance with
SFAS 142 “Goodwill and
Other Intangibles”,
intangible assets with an indefinite life, namely goodwill, are not
amortized. Intangible assets with a definite life are amortized on a
straight-line basis with estimated useful lives of three (3) to twenty (20)
years. Intangible assets with indefinite lives are not amortized and will be
reviewed for impairment yearly or at such time of a change in a circumstance or
event that would indicate that the carrying amount may be impaired, should this
occur prior to the yearly review.




Impairment
of Assets





In accordance with the provisions of
Statement of Financial Accounting Standard No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets”, the Company’s policy is to evaluate
whether there has been a permanent impairment in the value of long-lived assets,
certain identifiable intangibles and goodwill when certain events have taken
place that indicate the remaining unamortized balance may not be recoverable.
When factors indicate that the intangibles assets should be evaluated for
possible impairment, the Company uses an estimate of related undiscounted cash
flows. Factors considered in the valuation include current operating results,
trends and anticipated undiscounted future cash flows. The Company has
designated October 1 as the annual impairment assessment date.  There
were no impairment losses recorded for the three months ended March 31, 2008 and
2007.





Concentration
of Credit Risk





For the three months ended March 31,
2008, LifeGuard’s revenue of$4,790,731represented approximatelyeighty-seven (87)percent of total consolidated revenue of$5,469,333.





Advertising
Costs





The Amacore Group charges its non-direct
response advertising costs to expense as incurred. During the three months ended
March 31, 2008 and 2007, advertising costs were$5,724and$0,respectively.




Use of
Estimates




The preparation of the Company’s
condensed consolidated financial statements in conformity with the Rules and
Regulations of the Securities and Exchange Commission require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues, if any, and
expenses during the reporting period. The accounting estimates that require
management’s most difficult and subjective judgments include capitalization of
certain assets, depreciable/amortizable lives, impairment of long-lived assets,
the expected volatility of common stock, and the fair value of common stock and
options issued for services as well as the allocation of proceeds from the
issuance of debt and equity instruments. Because of the uncertainty inherent in
such estimates, actual results may differ from these
estimates.


7





Revenues and
Commissions Recognition





The Company recognizes revenues in
accordance with SEC Staff Accounting Bulletin No. 101,Revenue Recognition
in Financial Statements(“SAB No. 101”) as amended by SEC Staff
Accounting Bulletin No. 104, “Revenue Recognition”, revised and updated (“SAB
No. 104”), which stipulates that revenue generally is realized or realizable and
earned, once persuasive evidence of an arrangement exists, delivery has occurred
or services have been rendered, the fee is fixed or determinable and
collectability is reasonably assured. In addition, we have reviewed the
reporting requirements discussed in EITF 99-19 entitled“Reporting Revenue
Gross as a Principal versus Net as an Agent”, issued by the Financial Accounting
Standards Board, and have determined that revenue from the sale of a number of
our bundled products sold through contracts with vendors should be reported on a
gross basis. The Company’s main source of revenue during the three months ended
March 31, 2008 was from the sales of bundled discount benefits with added
insurance components that have an annual or monthly renewal
period.  This revenue is recorded as earned.  We record a
provision for estimated refunds, returns, and allowances which are computed
based upon prior actual history of refunds, returns, and
allowances.  Commission expense associated with this revenue is
recorded at the time of sale and is adjusted for refunds, returns, and
allowances.   Revenueof$5,670,348was from the sale of the Company’s
programs with an estimate for membership refunds and returns of approximately$606,137.Another component of revenue
consists of straight commissions with no direct expense or ultimate risk related
to this type of revenue generation.  Commission revenue during the
three months ended March 31, 2008 was$5,065,492and$159,867for the corresponding period in
2007.During the three months ended March 31,
2007, revenues were generated primarily from membership fees and were recognized
over the life of the memberships which generally are one year from the month
after a member signs up for the program.  Also during the three months
ended March 31, 2007, the Company sold two (2) and three (3) year memberships
which the revenues were and, still are, amortized over the life of these
memberships.





Accounts
Receivable




Accounts receivable are stated at
estimated net realizable value.  Accounts receivable are primarily
comprised of balances due from memberships, net of estimated allowances for
uncollectible accounts.  In determining collectability, historical
trends are evaluated and specific customer issues are reviewed to arrive at
appropriate allowances.As of March 31, 2008 and
December 31, 2007, the allowance for uncollectible accounts was$0and$0respectively.





Fixed
Assets





Fixed Assets, consisting principally of
furniture and fixtures, equipment, computer equipment and capitalized purchased
and internally developed software programs, are recorded at cost. Depreciation
and amortization are provided for, using the straight-line method, in amounts
sufficient to relate the cost of depreciable and amortizable assets to
operations over their estimated useful lives. Repairs and maintenance are
charged to operations as incurred.





A summary of the estimated useful lives
of the property and equipment is presented below:





Estimated useful
      livesComputer
      hardware
            
            3 yearsComputer
      software
            
            3 yearsEquipment
            
            5 yearsFurniture and
      fixtures
            
            7 yearsLeasehold
      improvements
            
            Shorter of life of asset or lease
      term






Prepaid
Expenses




Prepaid expenses increased$2,896,436to$3,920,234as of March 31, 2008 from December 31,
2007.  This increase is attributable to LifeGuard’s deferred
commission expenses.  Commissions are paid at time of sale but are
amortized to expense over the expected membership life.




Stock-Based
Compensation





Effective January 1, 2006, we were
required to adopt Statement of Financial Accounting Standards (SFAS) No. 123R“Share
Based Payment”(SFAS 123R)
which replaces SFAS 123 and SFAS 148, and supersedes Accounting Principles Board
(APB) Opinion No. 25“ Accounting for
Stock Issued to Employees”.SFAS 123R requires the cost
relating to share-based payment transactions in which an entity exchanges its
equity instruments for goods and services from either employees or non-employee
be recognized in the financial statements as the goods are received or when the
services are rendered. That cost will be measured based on the fair value of the
equity instrument issued. We will no longer be permitted to follow the
previously-followed intrinsic value accounting method that APB 25 allowed which
resulted in no expense being recorded for stock option grants where the exercise
price was equal to or greater than the fair market value of the underlying stock
on the date of grant and further permitted disclosure-only pro forma
compensation expense effects on net income.  SFAS 123R now applies to
all of our existing outstanding unvested share-based stock option/warrant awards
as well as any and all future awards. We have elected to use the modified
prospective transition as opposed to the modified retrospective transition
method such that financial statements prior to adoption remain unchanged. The
Black-Scholes model will continue to be our method of compensation expense
valuation.


8





Convertible
Instruments





The Company reviews the terms of
convertible debt and equity securities for indications requiring bifurcation,
and separate accounting, for the embedded conversion feature. Generally,
embedded conversion features where the ability to physical or net-share settle
the conversion option is not within the control of the Company are bifurcated
and accounted for as derivative financial instruments. (SeeDerivative
Financial Instrumentsbelow). Bifurcation of the embedded derivative instrument requires allocation of
the proceeds first to the fair value of the embedded derivative instrument with
the residual allocated to the debt instrument. The resulting discount to the
face value of debt instrument is amortized through periodic charges to interest
expense using the Effective Interest Method.  The resulting discount
to the redemption value of convertible preferred securities is accreted through
periodic charges to dividends over the term of the instrument using the
Effective Interest Rate Method.  No convertible debt instruments were
issued during the quarter ended March 31, 2008 nor the year ended December 31,
2007.




Derivative
Financial Instruments





The Company has adopted Statement of
Financial Accounting Standard No. 133“Accounting for
Derivative Instruments and Hedging Activities”. The Company generally does not use
derivative financial instruments to hedge exposures to cash-flow or market
risks. However, certain other financial instruments, such as the embedded
conversion features of debt and preferred instruments that are indexed to the
Company’s common stock are classified as liabilities when either (a) the holder
possesses rights to net-cash settlement or (b) physical or net share settlement
is not within the control of the Company. In such instances, net-cash settlement
is assumed for financial accounting and reporting. Such financial instruments
are initially recorded at fair value and subsequently adjusted to fair value at
the close of each reporting period. Fair value for option-based derivative
financial instruments is determined using the Black-Scholes Valuation
Model.





Other convertible instruments that are
not derivative financial instruments are accounted for pursuant to EITF 98-5
“Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios”and EITF 00-27“Application of
Issue No. 98-5 to Certain Convertible Instruments”by recording the intrinsic value of the
embedded conversion feature (ECF) as a discount from the initial value of the
instrument and accreted back to face value over the term of the instrument using
the effective interest rate method.





Income
Taxes




The Amacore Group has adopted Statement
of Financial Accounting Standard No. 109“Accounting for
Income Taxes”.The
Amacore Group has not made a provision for income tax purposes due to incurring
losses since inception.  There is no current tax expense, and after
consideration of a valuation allowance, there is no deferred tax benefit. 
See note 4.





Loss Per
Common Share




Basic loss per common share was computed
using (a) as the numerator, net loss adjusted for preferred stock dividends and
accretions and (b) as the denominator, the weighted average number of shares
outstanding during the periods presented. Since the Company has a reported net
operating loss, diluted loss per common share is considered to be the same as
basic loss per common share since the effects of convertible securities and
common stock option equivalents, if included in the earnings per share
calculation, would have the effect of reducing the loss per common
share.





Recent
Accounting Pronouncements Issued But Not Yet Adopted




In September 2006, the FASB issued FASB
Statement No. 157,Fair Value
Measurements(“SFAS No.
157”), which defines fair value, establishes a framework for measuring fair
value under GAAP, and expands disclosures about fair value measurements. SFAS
No. 157 applies to other accounting pronouncements that require or permit fair
value measurements. The new guidance is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and for interim
periods within those fiscal years. The Company is evaluating the potential
impact, if any, of the adoption of SFAS No. 157 on its condensed consolidated
financial statements.





9


In February 2007, FASB issued Statement
No. 159,The Fair Value
Option for Financial Assets and Financial Liabilities(“SFAS No. 159”). SFAS No. 159 provides
a “Fair Value Option” under which a company may irrevocably elect fair value as
the initial and subsequent measurement attribute for certain financial assets
and liabilities. SFAS No. 159 will be available on a contract-by-contract basis
with changes in fair value recognized in earnings as those changes occur. SFAS
No. 159 is effective for fiscal years after November 15, 2007. SFAS No. 159 also
allows early adoption provided that the entity also adopts the requirements of
SFAS No. 157. The Company does not believe the adoption of SFAS No. 159 will
have a material impact, if any, on its condensed consolidated financial
statements.





In December 2007, the FASB issued SFAS
160 "Noncontrolling
Interests in Consolidated Financial Statements - An Amendment of ARB No. 51''(``SFAS 160''). SFAS 160
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. SFAS
160is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008. Earlier adoption is prohibited. The Company does not have any
noncontrolling interests in subsidiaries and believes that SFAS 160 will not
have a material impact on its financial statements.




In December 2007, the FASB issued SFAS
141 (Revised 2007)"Business
Combinations''(``SFAS
141R''). SFAS 141R establishes principles and requirements for the reporting
entity in a business combination, including recognition and measurement in the
financial statements of the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree. SFAS 141R also
establishes disclosure requirements to enable users of the financial statements
to evaluate the nature and financial effects of the business combination. SFAS
141R applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008, and interim periods within those fiscal
years.





Management does not believe that any
other recently issued, but not yet effected, accounting standards if currently
adopted would have a material effect on the Company’s condensed consolidated
financial statements.





NOTE 3 – NONCASH INVESTING AND FINANCING
ACTIVITIES





The following table presents a summary
of the various noncash investing and financing transactions that the Company
entered into during the three (3) months ended:





2008
              
              
              2007Common
      stock and warrants issued for compensation
              
              $
              136,644
              
              
              $
              -Preferred
      stock dividends and accretion
              
              $
              317,300
              
              
              $
              -Conversion
      value of notes payable and interest to common stock
              
              $
              640,165
              
              
              $
              -





NOTE 4 - INCOME
TAXES




In July
2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income
Taxes, and Interpretation of FASB Statement No. 109(“FIN 48”). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in a
company’s financial statements and prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in an income tax return. FIN 48
also provides guidance in derecognition, classification, interest and penalties,
accounting in interim periods, disclosures and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The adoption of FIN 48 did
not have a significant effect on the Company’s unaudited condensed consolidated
financial statements.











10


NOTE 5 – INCOME
TAXES








As of  March 31, 2008 and
December 31, ended March 31, 2008 and 2007, the temporary differences between
book income and taxable income consisted of the deferred compensation. 
Computation of any deferred tax asset is computed by multiplying these temporary
differences by the approximate applicable tax rate of38.6percent.  The Amacore Group has
had continued operating losses since inception and the prospect for utilization
is remote therefore, no deferred tax assets have been
recorded.





Income taxes for the three months ended
March 31, 2008 and 2007 differ from the amounts computed by applying the
effective income tax rateof38.6%to income before income taxes as a
result of the following:




Mar 31,
2008
                
                
                Dec 31,
2007Computed tax (benefit) expense at
      the statutory rate of 38.6%
                
                $
                (1,036,040
                )
                
                $
                (8,153,119
                )Change in deferred tax
      valuation
                
                
                1,036,040
                
                
                
                8,153,119Current income tax expense
      (benefit)
                
                $
                -
                
                
                $
                -Temporary differences that give
      rise to deferred tax assets and liabilities:Mar 31,
2008
                
                
                Dec 31,
2007Deferred tax
      assets:Net operating loss
      carryforward
                
                $
                28,595,144
                
                
                $
                27,502,170Allowance for sales
      returns
                
                
                7,840
                
                
                
                7,516Reserve for commission
      reversal
                
                
                4,469
                
                
                
                4,275Provision for litigation
      costs
                
                
                1,064,923
                
                
                
                1,170,796Depreciation of fixed
      assets
                
                
                3,783
                
                
                
                44,638Gross deferred tax
      asset
                
                
                29,676,159
                
                
                
                28,729,395Deferred tax asset -
      net
                
                
                29,676,159
                
                
                
                28,640,119Valuation
      allowance
                
                
                (29,676,159
                )
                
                
                (28,640,119
                )Net Deferred tax
      asset
                
                $
                -
                
                
                $
                -







As of
March 31, 2008, realization of The Amacore Group’s net deferred tax assets of
approximately $29,676,159 was not considered more likely than not, and
accordingly, a valuation allowance of an equal amount was provided. The net
change in the total valuation allowance during the three months ended March 31,
2008 was $1,036,040.





NOTE 6 – FIXED ASSETS,
NET





Fixed assets, net of accumulated
depreciation, consist of the following:





Mar 31,
2008
              
              
              Dec 31,
2007Furniture &
      Equipment
              
              $
              736,291
              
              
              $
              503,470Printing
      Equipment
              
              
              163,192
              
              
              
              7,341Leasehold
      Improvements
              
              
              39,932
              
              
              
              39,932939,415
              
              
              
              550,743Less accumulated
      depreciation
              
              
              (179,367
              )
              
              
              (132,387
              )Total
              
              $
              760,048
              
              
              $
              418,356











11


NOTE 7 – INTANGIBLE ASSETS,
NET





Mar 31,
2008
              
              
              Dec 31,
2007Software
              
              $
              625,000
              
              
              $
              625,000Website development
      costs
              
              
              83,250
              
              
              
              83,250708,250
              
              
              
              708,250Less accumulated
      amortization
              
              
              (114,572
              )
              
              
              (41,164
              )$
              593,678
              
              
              $
              667,086




The below table details the estimated
amortization expense for each of the next five (5) fiscal
years.





Current
              
              $
              126,9442009
              
              $
              178,5332010
              
              
              175,0642011
              
              
              113,0872012
              
              
              -$
              593,678





NOTE 8 – UNALLOCATED
ASSETS





As ofMarch31, 2008, unallocated assets was$13,566,021.This amount relates to all
the assets acquired in the acquisition of JRM on August 31, 2007 and LifeGuard
on October 9, 2007.  Assets include all tangible assets such as plant
and equipment, fixtures and fittings and non-tangible assets which include
customer lists and intellectual property.  The Company is in the
process of obtaining fair market values with respect to all such assets and will
reallocate to the appropriate asset categories when
completed.








NOTE 9 - NOTES AND LOANS
PAYABLE





Notes and loans payable consist of the
following as of March 31, 2008 and December 31, 2007:





2008
              
              
              2007Promissory notes payable to
      investors and shareholders; bearing interest ranging from 8% to 10% per
      annum; due through December 2006; currently in
    default
              
              $
              432,500
              
              
              $
              532,500Convertible promissory notes
      payable to investors and shareholders; bearing interest ranging from 8% to
      10% per annum; due through December 2006; currently in
      default
              
              
              122,000
              
              
              
              122,000Promissory notes payable to
      investors and shareholders; bearing interest ranging from 8% to 10% per
      annum; due through June 2008
              
              
              25,000
              
              
              
              40,000Convertible promissory notes
      payable to investors and shareholders; bearing interest ranging from 8% to
      10% per annum; due through December 2007; currently in
      default
              
              
              7,000
              
              
              
              357,000Promissory notes payable to
      investors and shareholders; bearing interest of 1.53% per annum; due
      through June 2004, increasing to 15% thereafter, currently in
      default
              
              
              114,950
              
              
              
              114,950Revolving consumer credit
      cards
              
              
              269,001
              
              
              
              228,557Capital lease
      obligation
              
              
              161,567
              
              
              
              -Promissory notes payable to
      related parties (at call @ 0% int pa)
              
              
              18,592
              
              
              
              19,523Total notes and loans
      payable
              
              $
              1,150,610
              
              
              $
              1,414,530




12


At the date of issue of each of the
convertible notes, the conversion price was equal to or exceeded the stock price
at that time of issue, and as such, no intrinsic value was allocated to the
embedded option of each note.  As of March 31, 2008, all notes and
loans payable were classified as current maturities.





The Company notes that approximately
$701,450 of the above listed notes in default are held by investors who have
been supporters of the Company over the past years.  The Company is in
the process of negotiating a conversion to equity for these
notes.  While the Company believes that such a conversion is likely,
it cannot assure that this will be the eventual outcome.





Two notes included in the table of above
listed notes in default, totaling approximately $385,000,are currently in dispute by the
Company.  The Company believes that these notes are not payable but
has retained the notes on the balance sheet at March 31, 2008 and will continue
to do so until such notes are legally extinguished.





On February 13, 2008, the Company
received notice to convert a promissory note in the amount of $100,000 with
accrued interest of $44,049 into 1,617,680 shares of Class A common stock which
were issued on or about February 13, 2008.





On March 31, 2008, the Company received
notice to convert a promissory note in the amount of $350,000 with accrued
interest of $53,162 into 4,031,620 shares of Class A common stock which were
issued on or about March 31, 2008.





NOTE 10—PREFERRED
STOCK





In August 2004, the Company raised a
total of $602,000 from the sale of (a) 86 shares of Mandatory Convertible Series
C, six percent (6%) Cumulative, Preferred Stock, par value $0.001 per share
(Series C Preferred Stock) and (b) detachable warrants to acquire 400,000 shares
of Class A common stock at a strike price of $2.40 per share over a term of five
years (the Warrants).





Each share of Series C Preferred Stock
was to be converted at any time until July 30, 2006, when conversion became
mandatory. At the time of conversion, each share would have been deemed to have
a value of $10,000 and convertible into Class A common stock at the lesser of
$2.88 per common share or seventy-five percent (75%) of the lowest closing bid
price during the five days immediately prior to the conversion. As part of the
agreements with the purchaser, the Company agreed to register shares which were
issuable upon the conversion of the Warrants and the Series C Preferred Stock.
In addition, for each share of Series C Preferred Stock purchased by them, they
had the right to purchase up to one percent (1) of the issuances of equity
securities issued under subsequent funding transactions.





The embedded conversion feature on the
Series C Preferred Stock and the Warrants were required to be carried separately
as derivative liabilities because physical or net-share settlement under these
contracts is not within the control of the Company. Further, since proceeds from
the sale of Series C Preferred Stock and Warrants were less than the fair values
of the embedded conversion feature of the Series C Preferred Stock ($1,071,782)
and the Warrants ($976,000), the amount received was allocated to the embedded
conversion feature, immediately followed by charges to derivative instrument
expense in the amounts of $469,782 and $976,000 to increase the derivative
instruments to fair value.





In July 2006, pursuant to a Preferred
Stock Purchase and Exchange Agreement with VICIS Capital Master Fund (Vicis),
the Company exchanged 86 shares of its Series C Preferred Stock held by Vicis
and having a maturity date of July 30, 2006, for 86 shares of a newly-created
six (6) percent Series D Mandatory Convertible Preferred Stock, convertible into
Class A common stock of the Company at a price of $.01 per share and having a
maturity date of July 15, 2011 (Series D Preferred Stock). In addition, Vicis
purchased for approximately $840,000, 84 shares of a newly-created six (6)
percent Series E Mandatory Convertible Preferred Stock, convertible into Class A
Common Stock of the Company at a price of $.02 per share and having a maturity
date of July 15, 2011 (Series E Preferred Stock). Holders of such preferred
stock series may be converted into the Company’s Class A common stock at their
respective convertible prices at any time after July 11,
2008.





The Company at its option may call for
redemption of all  the Series E Preferred Stock at any time, provided
(a) the closing trading price of the Class A common stock exceeds $0.50 per
share (as quoted on the principal exchange, including for this purpose, the
Nasdaq National Market on which it is then listed, or if it is not so listed,
the closing bid price per share for such stock, as reported by Nasdaq, the OTC
Bulletin Board, the National Quotation Bureau, Incorporated or other similar
service which regularly reports closing bid quotations for such stock) for 15
trading days during any 20-trading day period; and (b) there is at the time of
the call for redemption by the Corporation, and has been for the period
specified in (a) above preceding such call, an effective registration statement
covering the resale of the shares of Class A common stock underlying the Series
E Preferred Stock. The Company shall effect any redemption of the Series E
Preferred Stock by paying in cash in exchange for each share of Series E
Preferred Stock to be redeemed a sum equal to 150% of the stated value of such
shares of Series E Preferred Stock plus all accruing dividends accrued but
unpaid thereon, whether or not declared, with respect to such
share.





On January 30, 2007 and March 28, 2007,
the Company issued 75 shares and 150 shares, respectively, of its Series D
Preferred Stock to Vicis for $750,000 and $1,500,000, respectively. The shares
of Series D Preferred Stock, which are convertible into common stock of the
Company at a conversion price of $0.01 per share at any time after January 31,
2009 and March 28, 2009, respectively.





13


In January 2007, the Company raised
$750,000 by issuing another 75 shares of Series D Preferred Stock to Vicis;
another $1,500,000 by issuing an additional 150 shares of the Series
D Preferred Stock to Vicis, and on April 1, 2007, raised $3,300,000
through the issuance of a mandatory convertible promissory note to Vicis, which,
along with accrued interest of four (4) percent, was converted into 331.1 shares
of Series D Preferred Stock on May 1, 2007.  The Company had the right
to redeem ninety (90) percent of the 331.1 shares during the period ending March
31, 2008.  The Company has yet to exercise this
right.





Series D Preferred Stock and Series E
Preferred Stock are entitled to receive dividends payable on their respective
stated values at a rate of six percent (6%) per annum, which shall be
cumulative, accrue daily from the issuance date and be due and payable on the
first day of each calendar quarter. Such dividends accrue whether or not
declared, but no dividend shall be paid unless there are profits, surplus or
other funds of the Corporation legally available for the payment of
dividends.  The accumulation of unpaid dividends shall bear interest
at a rate of six (6) percent per annum.  Series D and Series E accrued
dividends as of March 31, 2007 were$456,905and$96,450respectively and accrued interest on
accrued dividends as of March 31, 2008 were$12,651and$3,930respectively.





In connection with Series D Preferred
Stock and Series E Preferred Stock issuances, the Company recorded an
aggregate beneficial conversion feature of $6,410,000 associated with Series D
Preferred Stock and $970,000 associated with Series E Preferred
Stock.  The resulting discounts are accounted for as a return to the
preferred shareholders over the minimum period from the date of issuance to the
date at which the preferred shareholders can exercise the conversion feature,
using the effective yield method. Accretion recognized as of March 31, 2008 and
March 31, 2007 was$57,566and$0, respectively.





In November 2007, the Company issued 300
shares of its Series G Mandatory Convertible Preferred Stock to (Series G
Preferred Stock) Vicis for $3,000,000.  Shares of Series
G Preferred Stock, which have a maturity date of July 15, 2011, and are
convertible into Class A common stock of the Company at a conversion price equal
to $5.00. Series G Preferred Stock is entitled to receive dividends payable on
the stated value of the Series G Preferred Stock at a rate of six percent
(6%) per annum, which shall be cumulative, accrue daily from the issuance date
and be due and payable on the first day of each calendar quarter. Such dividends
accrue whether or not declared, but no dividend shall be paid unless there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends.  The accumulation of unpaid dividends shall bear
interest at a rate of six percent (6%) per annum.  Accrued
dividends and accrued interest on accrued dividends was$86,425and$ 621, respectively, as of December 31,
2007.  Accretion recognized as of March 31, 2008 and March 31, 2007
was $42,194and$0, respectively.




The Series G Preferred
stock issued 2008 included 45,000,000 detachable warrants that are accounted for
under EITF 00-27 and EITF 98-5 as a discount from the preferred stock
issued.  The fair value of the warrants were determined using the
BlackScholes Option model with a volatility of 212%, risk free rate of 2.78 a
five year life and no dividends.  The fair value exceeded the face amount
of the Series G Preferred stock and under EITF 00-27, the discount is limited to
the face amount and therefore created a discount of $4,000,000 to be accreted
back to face as a dividend expense using the effective interest method and an
assumed effective interest rate of 131.61%.


On November 7, 2009, if the current
market price is less than the conversion price of $5.00, the Series G Preferred
Stock conversion price shall be reduced, but in no event increased, to such
market price.  If the conversion price is reduced below $1.50 as a
result of the aforementioned, the Company may at its option elect to call for
redemption all the shares of Series G Preferred Stock outstanding at price equal
to one hundred fifty percent (150%) of the stated value of such share less all
dividends paid thereon.





In the event of any liquidation,
dissolution or winding up of the affairs of the Company, whether voluntary or
involuntary, and before any junior security of the Company, the holders of
preferred stock shall be entitled to be paid out of the assets of
the Company available for distribution to its stockholders an amount per
share equal to the stated value of holder’s respective preferred stock series
plus the aggregate amount of accumulated but unpaid dividends on each share of
preferred stock.  If, upon a liquidation event, the assets of the
Company are insufficient to permit payment in full to such holders of the
aggregate amount that they are entitled to be paid by their respective terms,
then the entire assets, or proceeds thereof, available to be distributed to the
Company’s stockholders shall be distributed to the holders of the preferred
stock ratably in accordance with the respective amounts that would be payable on
such shares if all amounts payable were paid in full.





On January 15, 2008 and March 13, 2008,
the Company issued 300 shares and 400 shares, respectively, of its Series G
Preferred Stock to Vicis for $3,000,000 and $4,000,000,
respectively.








NOTE 11 - COMMON
STOCK




In December 2007, the Company received
approval from its shareholders, to increase its authorized shares from one
billion (1,000,000,000) shares to one billion five hundred million
(1,500,000,000) shares. The authorized shares for its Class A common stock was
increased from eight hundred sixty million (860,000,000) shares to one billion
three hundred sixty million (1,360,000,000) shares; the authorized shares for
its Class B common stock remained at one-hundred twenty million (120,000,000)
shares and the authorized shares for its preferred stock remained at twenty
million (20,000,000) shares.  On all matters required by law to be
submitted to a vote of the holders of common stock, each share of Class A common
stock is entitled to one vote per share, and each share of Class B common stock
is entitled to five votes.







14


NOTE 12 - WARRANTS





During the three months ended March 31,
2008 and 2007, the Company issued warrants to purchase an aggregate of
45,200,000 and $9,625,000 shares of common stock, respectively.  At March
31, 2008 there were 65,437,850 and 7,965,000 warrants outstanding to purchase
Class A and Class B common stock, respectively, exercisable at varying prices
through 2013.  The following table summarizes this warrant
activity:







Class A
      Warrants2008
              
              
              2007Warrants
              
              
              Weighted
                Average
                Exercise
                Price
              
              Warrants
              
              
              Weighted
                Average
                Exercise
                PriceWarrants outstanding, December 31,
      2007
              
              
              20,127,850
              
              
              $
              0.35
              
              
              
              7,747,000
              
              
              $
              0.33Warrants
    issued
              
              
              45,200,000
              
              
              
              0.38
              
              
              
              9,625,000
              
              
              
              0.13Warrants cancelled or
      expired
              
              
              (15,000
              )
              
              
              0.05
              
              
              
              (502,000
              )
              
              
              0.03Warrants
      exercised
              
              
              (200,000
              )
              
              
              0.21
              
              
              
              (3,210,000
              )
              
              
              0.01Warrants outstanding, March 31,
      2008
              
              
              65,112,850
              
              
              $
              0.37
              
              
              
              13,660,000
              
              
              $
              0.27Class B
      Warrants2008
              
              2007Warrants
              
              
              Weighted
                Average
                Exercise
                Price
              
              Warrants
              
              
              Weighted
                Average
                Exercise
                PriceWarrants outstanding, December 31,
      2007
              
              
              7,965,000
              
              
              $
              0.44
              
              
              
              4,100,000
              
              
              $
              0.06Warrants
    issued
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Warrants cancelled or
      expired
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Warrants
      exercised
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Warrants outstanding, March 31,
      2008
              
              
              7,965,000
              
              
              $
              0.44
              
              
              
              4,100,000
              
              
              $
              0.06





The following table summarizes the
status of warrants outstanding at March 31, 2008:





Exercisable
      and Outstanding WarrantsExercise
      Price
              
              
              Number
      of
                Warrants
              
              Weighted
      average remaining
                contractual
      life in years$
              0.01
              
              
              
              762,850
              
              2.13$
              0.03
              
              
              
              6,000,000
              
              3.99$
              0.10
              
              
              
              350,000
              
              3.07$
              0.15
              
              
              
              200,000
              
              1.30$
              0.16
              
              
              
              2,375,000
              
              2.10$
              0.30
              
              
              
              3,700,000
              
              3.98$
              0.32
              
              
              
              50,000
              
              4.46$
              0.38
              
              
              
              45,000,000
              
              4.95$
              0.39
              
              
              
              200,000
              
              4.82$
              0.50
              
              
              
              13,465,000
              
              4.68$
              1.25
              
              
              
              900,000
              
              1.96$
              2.40
              
              
              
              400,000
              
              1.9673,402,850


During
the three months ended March 31, 2008 and 2007, the Company recognized $94,451
and $1,207,500, respectively, of compensation expense associated with warrants
issued to directors, employees and consultants.  Compensation expense
was determined using the Black-Scholes Option Model with a volatility ranging
between 212% and 249%, a risk free interest rate ranging between 2.78% and 4.48%
, a life of five years and a zero dividend rate.  All warrants listed
in above table were recorded at fair value at time of issuance as warrants were
granted with immediate vesting terms.


15








NOTE 13 - EARNINGS (LOSS) PER
SHARE





Earnings (loss) per share are computed
using the basic and diluted calculations on the face of the statement of
operations. Basic earnings (loss) per share are calculated by dividing net
income (loss) available to common shareholders by the weighted average number of
shares of common stock outstanding for the period. Diluted earnings (loss) per
share is calculated by dividing the net income (loss) by the weighted average
number of shares of common stock outstanding for the period, adjusted for the
dilutive effect of common stock equivalents, using the treasury stock method.
Convertible debt and warrants, officer, employee and non-employee stock options
that are considered potentially dilutive are not included in the fully diluted
shares calculation.





The following sets for the computation
of basic and diluted net earnings (loss) per common share for the three months
ended March 31, 2008 and 2007:




2008
              
              
              2007Numerator:Net loss
              
              $
              (2,592,653
              )
              
              $
              (4,961,905
              )Less preferred stock dividend and
      accretions
              
              
              (317,300
              )
              
              
              (41,375
              )Net loss applicable to common
      stockholders
              
              $
              (2,909,953
              )
              
              $
              (5,003,280
              )Denominator:Weighted average basic and fully
      diluted shares outstanding
              
              
              138,595,460
              
              
              
              95,289,598Net earnings per common share -
      basic and diluted$
              (0.02
              )
              
              $
              (0.05
              )








During the three months ended March 31,
2008 and 2007, the effect of outstanding exercisable warrants, convertible debt,
and convertible preferred stock were not included within the Company’s earnings
(loss) per share calculation as their effect would be
anti-dilutive.  Weighted average shares outstanding include both Class
A and Class B common stock. There is no difference between the dividend rights
and earnings allocation of Class A and Class B common stock.  As of
March 31, 2008 and 2007, 73,077,850 and17,760,000, respectively, of warrants that were
exercisable have been excluded as they were anti-dilutive.








NOTE 14—FINANCIAL
INSTRUMENTS





Fair Value
of Financial Instruments (other than Derivative Financial
Instruments)





The carrying amount of cash, accounts
receivable, accounts payable and accrued expenses approximates fair value
because of their short maturity. The carrying amount of loans and notes payable
approximates fair value based on interest rates that approximate market interest
rates for these instruments.





Derivative
Financial Instruments





The caption derivative financial
instruments consists of (a) the embedded conversion feature bifurcated from the
7% Convertible Debentures, (b) the embedded conversion feature bifurcated from
the Series C Preferred Stock, (c) the Warrants issued in connection with the
Series C Preferred Stock, and (d) Other Warrants. (Also See Note 9—Redeemable
Preferred Stock). There are no derivative financial instruments as of March 31,
2008.





16


NOTE 15 - GOING
CONCERN




The accompanying financial statements
have been prepared in conformity with accounting principles generally accepted
in the United States of America, which contemplates continuation of the Company
as a going concern.  However, the Company has sustained operating losses in
recent years.  Further for the quarter ended March 31, 2008, the Company
had negative working capital of$3,769,687, a net loss of$2,909,953and has incurred substantial losses in
previous years resulting in an accumulated deficit of approximately$79,954,112.  Although these factors raise
substantial doubt about the ability of the Company to continue as a going
concern, the Company has taken several actions that it believes will allow it to
continue as a going concern through March 31, 2009.  Now that the
Company has begun to generate substantial revenues, we believe that our current
cash resources, together with anticipated revenue, will be sufficient to sustain
our current planned operations for the next 12 months. The Company raised $9
million from Vicis Capital in three tranches completed in January 2008, March
2008 and April 2008.  Although management believes that the Company’s
current cash position and anticipated revenue in 2008 will be sufficient to meet
its current levels of operations, additional cash resources may be required
should the Company wish to accelerate salesor complete one or more
acquisitions.  In addition, additional cash resources may be needed if
the Company does not meet its sales targets, exceeds its projected operating
costs or if unanticipated expenses arise or are incurred.  The Company
does not currently maintain a line of credit or term loan with any commercial
bank or other financial institution and has not made any other arrangements to
obtain additional financing.  We can provide no assurance that we will
not require additional financing.  Likewise, we can provide no
assurance that if we need additional financing that it will be available in an
amount or on terms acceptable to us, if at all.  If we are unable to
obtain additional funds when they are needed or if such funds cannot be obtained
on terms favorable to us, we may be unable to execute upon our business plan or
pay our costs and expenses as they are incurred, which could have a material,
adverse effect on our business, financial condition and results of
operations.








NOTE 16 - RELATED PARTY
TRANSACTIONS





During the three month period ending
March 31, 2008, LifeGuard marketed a membership product which it licenses from
DirectMed, a company thirty-three percent (33%) owned by Ty Bruggemann who is
the President of LifeGuard.   LifeGuard pays DirectMed a branding fee
based on the number of memberships sold.  During the three month
period ended March 31, 2008, LifeGuard paidDirectMed $60,370 in branding
fees.  Accounts payable at March 31, 2008 associated with DirectMed
was $535,636.








At March 31, 2008, LifeGuard had Notes
Payable totaling $18,592 (FY2007 $18,592) to LifeGuard Marketing Corporation, a
company fifty (50) percent owned by Ty Bruggemann.  This note is not
accruing interest.





As part of the acquisition agreement
between the Company and JRM, the Company assumed $287,143 of liabilities of
which $159,536 and $69,240 represent personal credit card balances and business
credit lines, respectively. The Company will continue to pay the monthly
required payments for eighteen (18) months and will continue to do so if the
eighteen (18) month minimum sales target of JRM is met. The liabilities are
personally guaranteed by both James Reed and James Mignogna and are recorded
within the Company’s notes and loans payable category of the balance
sheet.  As of March 31, 2008, the outstanding balance of said
liabilities was$217,413.











NOTE 17 – SUBSEQUENT
EVENTS





On April 1, 2008, the Company acquired
USHB, a call center-based marketing company that engages in the marketing of
association membership programs and health insurance plans to individuals and
families throughout the United States.  USHBG utilizes its proprietary
call center software application (LeadMaster) to connect consumers who are
searching online for a health care quote with sales agents in one of its
multiple call centers.





The consideration for the acquisition is
a combination of cash and stock.  The agreed value of the acquisition
is $14,300,000 and is payable as follows:





·
            Cash at closing
      $1,140,910


·
            1,800,000 unregistered shares of
      our Class A common stock with a deemed value of $5.00 per share
      ($9,000,000 equivalent)


·
            Deferred cash of $1,609,090
      payable in equal installments quarterly in advance over a three year
      period; and


·
            Earn out equal to $2,550,000,
      being $850,000 per annum based on USHBG attaining an audited net
      contribution of $2,000,000 (Target Contribution) in each of the next three
      (3) years.  This amount will be reduced if USHBG does not
      achieve the Target Contribution or will be or increased if it exceeds the
      Target Contribution.


17





The purchase agreement provides for a
share adjustment, if necessary, eighteen (18) months from the acquisition’s
effective date.  Within the immediate preceding thirty (30) day period
prior to the share adjustment date if the Company’s common stock has an average
trading price below $5.00 per share, additional shares of the Company’s common
stock will be issued such that the aggregate number of shares issued under the
terms of the merger agreement has a value equal to the agreed-upon value of
$9,000,000.  In the event the Company’s common stock has an average
trading price for the said period of $5.00 or more, no adjustment shall be made
to the amount of common stock previously issued and the previous stock issuance
shall be deemed final and not subject to further adjustment.  However,
in the event the average common stock price is below $1.50 for the said
adjustment period, the Company has the right to effectively unwind the merger
and irrevocably transfer 100% of USHBG’s acquired stock to previous USHBG
shareholders.  In addition, the Company has the right to receive from
USHBG shareholders 80% of the Company’s common stock issued as
consideration.





The USHBG group includes three
companies:


·
            US Healthcare Plans, Inc, a health
      benefit discount plan marketing
company;


·
            On The Phone, Inc., a consulting
      company that receives overrides on all Health Care Sales;
      and


·
            US Health Benefits Group, Inc., a
      health benefit plan marketing
company.





USHBG’ largest partner is LifeGuard and
USHBG markets LifeGuard’s DirectMed association membership program, which
currently generates approximately $1,000,000 a month in revenues for LifeGuard,
resulting in approximately in $500,000 per month in revenue for
USHBG.





Although the Company executed a purchase
agreement with the stockholder of USHBG dated March 31, 2008, the Company did
not transfer any consideration of cash or shares for the acquisition until April
1, 2008 and did not assume control of USHBG until April 1, 2008.  In
addition, the purchase agreement specifies that the effective date for the
acquisition was April 1, 2008 and therefore will be recorded in the second
quarter of 2008.





With regard to the USHBG acquisition,
the Company is in the process of obtaining fair market values of the net
identifiable assets for allocating the purchase price.  The Company
will allocate the purchase price after fair market determination has been
completed.





On April
30, 2008, the Company entered into an agreement with Vicis Capital Master Fund
to sell Vicis $2,000,000 worth of our Convertible Preferred stock, convertible
at $5.00 per share. In addition, the Company issued Vicis a five (5) year
warrant to purchase up to 22,500,000 shares of the Company’s Class A Common
Stock at an exercise price of $0.375 per share.


18





Item 2.  MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS








SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS




Information contained in this
discussion, other than historical information, is considered “forward-looking
statements” that are subject to risks and uncertainties. These forward-looking
statements include information about possible or assumed future results of ourbusiness, financial
condition, liquidity, results of operations, plans and objectives including,
without limitation, statements about the Company’s ability to continue
operations throughMarch2009, the liability of the Company for
claims made in pending litigation, plans for future products,strengthening our relationship with our
various sales organizations, our marketing intentions, our anticipated products,
efforts to expand distribution channels, Zurvita’s anticipated growth in sales
and margins, our ability to achieve profitability.   In some cases, you
may identify forward-looking statements by words such as "may," "should,"
"plan," "intend," "potential," "continue," "believe," "expect," "predict,"
"anticipate" and "estimate," the negative of these words or other comparable
words. These statements are only predictions. One should not place undue
reliance on these forward-looking statements. The forward-looking statements are
qualified by their terms and/or important factors, many of which are outside the
Company's control, involve a numberof risks, uncertainties and other
factors that could cause actual results and events to differ materially from the
statements made. The forward-looking statements are based on the Company's
beliefs, assumptions and expectations of our future performance, taking into
account information currently available to the Company. These beliefs,
assumptions and expectations can change as a result of manypossible events or factors, including
those events and factors described in "Risk Factors" in the Company’s Annual
Report on Form10-KSB for
the year ended December 31, 2007filed with the Securities and Exchange
Commission, not all of which are known to the Company.  If a change
occurs, the Company's business, financial condition, liquidity and results of
operations may vary materially from those expressed in the aforementioned
forward-looking statements.  In addition, actual results in future
periods may differ materially from those expressed or implied in such
forward-looking statements as a result of many possible events or factors,
including those events and factors described in "Risk Factors" in the Company’s
Annual Report on Form 10-KSB for the year ended December 31, 2007.  The Company will update
this forward-looking information only to the extent required under applicable
securities laws. Neither the Company nor any other person assumes responsibility
for the accuracy or completeness of these forward-looking
statements.





The following discussion and analysis
should be read in conjunction with the consolidated financial statements and
notes thereto, and other financial information included elsewhere in this Form
10-QSB. This report contains forward-looking statements that involve risks and
uncertainties.





Introductory
Overview





The Company was founded over 10 years
ago and began selling memberships in our discount vision program to retail
customers in an effort to prove that a vision discount plan with an
ophthalmologic (a medical doctor specializing in eye care) panel included would
be not only accepted, but desired, by the general public and prove to other
marketers of various health plans the benefits of including such a plan in their
products.  We sold the plan on a retail only basis for many years proving
that the general public did desire to have a vision plan with their medical
coverage.  Once proof of concept became a reality, we shifted our
emphasis to marketing our plan to marketers of health benefit plans.
 Marketing programs on a retail basis requires a broad national marketing
staff which we were not financially prepared to support, whereas a much smaller
staff is needed to market to others on a wholesale basis.  During the
period during which we were transitioning to and building up our wholesale
network, revenues decreased and losses increased.  Our retail
marketing efforts were reduced and we devoted most of our time to the continued
development of our wholesale network and developing contractual relationships
with other marketers of various health plans, including, but not limited to,
insurance companies and marketers of other discount plans such as dental, vision
(without a vision medical component), and prescription drugs.  Those
contracts did not produce a substantial amount of revenue but served to
establish The Amacore Group as having a product capable of not only servicing
the needs of the general public, but servicing the marketers of other healthcare
programs as a lead generator for their agents.  It also served to
position us with marketers of other healthcare programs in such a way as to
attract those marketers to The Amacore Group from a management
perspective.  We then initiated activity designed to increase the
scope of our product line; increase our distribution channels for our product
line and increase our ability to generate sales leads for our distribution
channels.  Integral to these goals was the hiring of executive
personnel, experienced in the design and marketing of various types of
healthcare programs ranging from discount programs to insured
components.  Additionally, it was important for us to further develop
the free eye exam component of our vision plan so that this component could
serve as a sales lead generator for a wide range of other healthcare
products.




In January, 2007, we entered into
long-term employment agreements with Mr. Jay Shafer, the former president of
Protective Marketing Enterprises, Inc. (PME), and Mr. Guy Norberg, the former
vice president of sales and marketing of PME. We also entered into an agreement
employing Mr. William Heneghan, former vice president of operations for
Innovative HealthCare Benefits, Inc., which had an intimate relationship with
PME. Mr.


Shafer now serves as Amacore Group’s
President, Mr. Norberg serves as its Senior Vice President of Sales and
Marketing and Mr. Heneghan serves as its Director of Operations. Along with the
hiring of Messrs. Shafer, Norberg and Heneghan, we have also hired other staff
members to support our expanding programs and opened a second office near
Orlando, Florida.





19


During 2007, we concentrated our efforts
on developing a wide range of both discount and insured products, which we
intended to market through a significant number of distribution channels with
whom Messrs. Shafer and Norberg had worked in the past. We successfully
contracted with a number of distribution channels experienced not only in the
sale of the types of products designed by us, but as with the networks forming
the components of our new product line.  As a result, we have now
positioned ourselves to provide not only vision programs, but also discount
medical doctor visit programs, hospital savings programs, dental programs,
hearing programs, chiropractic programs, pharmacy programs, an emergency
informational system called Contact 911, long-term care programs, emergency
medical travel and savings on alternative medicine, vitamins and nutritional
supplements.  Some program features include access to a 24-hour nurse
hotline, 24-hour counseling, a service which can get medical histories delivered
to medical service providers around the world and the services of a personal
patient advocate.  We are also in a position to market limited medical
indemnity and accident group insurance programs.  In addition, we
added an innovative network product of state-licensed, primary care physicians
that diagnose routine, non-emergency, medical problems and recommend treatment
and prescribe medication with a phone call called TelaDoc. Further, we have also
added Global MedNet, a program that distributes personal medical records
worldwide in the event of an emergency medical crisis.





We contracted with Chase Paymentech
Solutions, LLC, who is one of the world’s largest merchant acquirers accepting
payments at the point of sale. During the same period, we simultaneously worked
on developing various electronic systems necessary not only for the sale of our
products, but the tracking of our revenue and payment of commissions to our
sales agents on a weekly basis - a payment schedule we believe is unique to the
healthcare industry. Management believes that this type of payment schedule will
significantly strengthen our relationships with our various sales organizations.
On May 1, in a 60-day program build, we completed the development of The Amacore
Group gateway for transactions that include direct response, call center and web
enrollment integrating commerce engines, our direct lease line to Paymentech and
commission reconciliation for the benefit of our marketing partners. Further,
this development allowed us to transition existing ECI business to a monthly
renewal model.





We also entered into a strategic
development agreement with Bridgeport, Connecticut-based OPTIMUS Solutions
Consulting LLC (OPTIMUS), a privately held pioneer in the field of integrated
solution development, as part of our continuing strategic initiative to
aggressively expand healthcare services distribution channels. OPTIMUS has fully
integrated the development of our back office system with the OPTIMUS front-end,
call center marketing system and they are on target to launch two licensed call
centers (containing licensed representatives able to sell insurance products)
that are expected to produce sales in the second quarter of
2008.  With the development now complete, the focus now will be on
expanding distribution through additional call center relationships under
OPTIMUS’s management.




STRATEGIC
INITIATIVES





Our strategic initiatives in 2007
focused around a three-staged plan.  The plan had, as its initial
stage, the development of an electronic system capable of supporting a full
administrative array of services involved in the healthcare
industry.  In particular:  (a) total agent support,
including the payment of agent commissions on a weekly basis; (b) customer
support; and (c) full carrier support.  The second stage involved the
development of a substantially enhanced array of products, and the third stage
involved the establishment of six major distribution channels – direct response
banking, direct response marketing, direct sales, agent sales, private label and
wholesale transactions.





In developing this plan, we were well
aware of the fact that the first two stages of development would produce little
to no revenue and could take the better part of the entire 2007
year.  That notwithstanding, we were also acutely aware of the fact
that without the proper development of the first two stages, whatever sales that
might inure to Amacore through the development of the third stage (distribution
channels) might well be short-lived.  With that in mind, we entered
into the strategic plan as outlined above.





During the first two quarters of 2007,
we devoted substantially the entirety of our time to the development of our
back-office systems as described above.  Revenues during the first two
quarters were, in the aggregate, less than $600,000.  During the third
quarter of 2007, we initiated the testing phase of those systems, including our
inbound telemarketing system.  During this quarter, we generated
approximately $215,000 in revenues but, more importantly, we were able to refine
all of our systems and position ourselves for launch during the fourth quarter
of 2007.





By the fourth quarter, we believed that
we had properly developed our electronic system; developed a substantially
enhanced array of products totaling approximately 86 different modular programs
and had well advanced our acquisition and contractual arrangements with
distribution channels.  Simply put, by the fourth quarter, we believed
we had achieved a forefront position in the healthcare industry.  In
particular, with respect to our distribution channels, we had either purchased
or put in place contracts to secure these channels.  On August 31,
2007, we acquired JRM a ten-seat inbound telemarketing call center with
additional agent distribution channels available to it.  On October 9,
2007, we acquired LifeGuard Benefit Services, Inc. (LifeGuard), which brought us
an additional 52 inbound telemarketing seats plus significant agent distribution
channels plus an array of additional company-owned products complementary to
those products already either owned or otherwise being marketed by
us.  LifeGuard also provides us with an established vertical
administrative electronic system capable of tracking distribution, sales
fulfillment, commission payments and a patient advocacy program unique in the
healthcare industry.  Prior to these acquisitions, we had also
contracted with OPTIMUS Solutions Consulting LLC (OPTIMUS) which provided us
with access to approximately 150 inbound telemarketing rooms plus additional
distribution channels, and OPTIMUS’s obligation to construct an additional
electronic system, customized to our needs, to track sales of our products
through our various distribution channels including affiliate internet marketing
partners, credit card service centers, infomercial inbound centers and banking
channels.  The cost of the construction of this system was borne
exclusively by the OPTIMUS group.  We believe that these efforts
helped us to achieve gross revenues in the fourth quarter of
approximately $3,500,000.





20


In January 2008, the Company formed a
wholly owned subsidiary, Zurvita, Inc., to establish a multilevel marketing
distribution channel that would deliver products to the consumer
directly.  Zurvita hired Mark Jarvis as its President, a veteran in
this field with aproven
track record at building sales.  Through Zurvita, the Company has
begun to access a new market for its existing products.  Zurvita’s
official launch occurred on
February 29, 2008and, with
its sales force trained on only one product, Zurvita achieved sales of
approximately $300,000
through March 31, 2008.  We are extremely pleased
with these results and anticipate substantial growth in sales and margins as
more Amacore products are added to Zurvita’s portfolio.





Leading into 2008, we had already
commenced discussions to acquire yet another distribution channel, US Health
Benefits Group (USHBG)(See Note 16 –
Subsequent Events), a fifty-seat, inbound telemarketing
call center that engages in the marketing of association membership programs and
health insurance plans to individuals and families throughout the United States.
USHBG utilizes its proprietary call center software application (LeadMaster) to
connect consumers who are searching online for a health care quote with sales
agents in one of its multiple call centers.  USHBG
markets LifeGuard’s DirectMed association membership program generating
approximately $1 million a month in gross revenue for LifeGuard, resulting in
$500,000 per month in commission revenue to USHGB.





During the first quarter of 2008,wefocusedourefforts on driving strong organic
growth.  By drivingourproducts through established
distribution channels,we
wereable to achieve total
revenue for the quarter of$5,469,333, an increase of56%when compared to the fourth quarter of
2007.  This is a
remarkable achievement as all the growth during the quarter was
organic.We
wereable to pay advance
commissions toourmarketing partnersallowingthem to focus on establishingourproducts in the market
place.  The accelerated sales have continued during the beginning of
the second quarter.





While we continue to focus on increasing
our revenues during the remainder of 2008 and beyond, we are also focusing our
attention on reducing losses and are working hard to achieve our objective of
profitability during the fourth quarter of this year.Our efforts during the first quarter of
2008 resulted in a basic & diluted loss per share of $0.02, a significant
reduction from a basic & diluted loss per share of $0.12 in the fourth
quarter of 2007.We cannot guarantee we will become
profitable in Q4of this
year, however, we believe
that the successful execution of our strategic plan and the achievement of our
forecast sales and margins will place Amacore well in its stated
objectiveto achieve
operational profitability.


All these activities are in line with
our aim of vertical integration.  Through well planned vertical
integration, we believe we will be able to own even more of the products we sell
and own more of our distribution channels, allowing us to retain more of the end
dollar spent by each customer.




RESULTS OF
OPERATIONS





Revenue:





Total revenue was$5,469,333for the three months ended March 31,
2008, an increase of approximately$5,309,466from total revenue for the same period
in 2007. New product offerings and growth in Amacore’s membership base as well
as the acquisitions of LifeGuard and JRM contributed to the significant increase
in revenue earned during the quarter ended March 31, 2008.An estimate for refunds of $20,325 has
been included in membership fees and $11,585 has been included in cost of sales
for the three months ended March 31, 2008. Cost of sales includes commissions
and product costs approximating $2,789,334 for the three months ended March 31,
2008.The Company
negotiates with health insurance companies to offer their programs in various
combinations withother
programs at a reduced rate from separate contracts. The Company is obligated to
pay the insurance company for the coverage at the time of sale regardless of
refunds to the ultimate consumer of the product. Different geographic areas
result in different combinations of products and the Company alters its
combinations over time depending or consumer surveys and other variables.
Commission expense is recorded at the time of sale and is adjusted for
refunds.





21


Operating Expenses:




Our operating expenses for the three
months ended March 31, 2008 were$5,119,698($5,026,560for the same period of 2007).
Comparison of the more significant components of selling, general and
administrative expenses follows:





Three Months Ended March
      31,
              
              
              Increase2008
              
              
              2007
              
              
              (Decrease)Depreciation &
      Amortization
              
              $
              113,451
              
              
              $
              2,001
              
              
              $
              111,450Payroll and Related
      Expenses
              
              
              1,823,253
              
              
              
              2,937,025
              
              
              
              (1,113,772
              )Business Travel/Trade
      Shows
              
              
              301,629
              
              
              
              111,314
              
              
              
              190,315Insurance
              
              
              105,949
              
              
              
              32,340
              
              
              
              73,609Professional/Consulting Fees &
      Warrants
              
              
              721,152
              
              
              
              1,864,612
              
              
              
              (1,143,460
              )Rent
              
              
              90,282
              
              
              
              20,698
              
              
              
              69,584All Other Selling, General and
      Administrative expenses
              
              
              1,963,981
              
              
              
              58,570
              
              
              
              1,905,411Total
              
              $
              5,119,698
              
              
              $
              5,026,560
              
              
              $
              93,138





Depreciation & Amortization expense,
which is computed on a straight-line method over the assets estimated lives, for
the three months ended March 31, 2008, was$113,451, an increase of$111,450over the same period of 2007 due to the
inclusion of the fair value of the assets purchased in the LifeGuard
acquisition.





Payroll and related expenses for the
three months ended March 31, 2008 were$1,823,253, adecrease of$1,113,772over the same period of
2007.During the
first quarter of 2007, the Company incurred a significant expense by issuing
stock to retain its President, Senior VP of Sales and Director of
Operations.





Business travel/trade show expenses for
the first three months ended March 31, 2008 were$301,629, an increase of$190,315over the same period of 2007. The
increase resulted mainly
from additional travel required in negotiating contracts for the Company’s new
programs, promoting additional sales, acquisitions and completing the financings
that occurred during the first three months of 2008.





Insurance expense of$105,949for the three months ended March 31,
2008 increased$73,609over the same period of 2007 because
more employees were covered by theCompany’s medical plan and additional
property and casualty insurance associated with the Company’s new
subsidiaries.





Professional/consulting and Warrant
expenses for the three months ended March 31, 2008 were $721,152,a decreaseof$1,143,460over the same period in 2007. Thedecreasewas primarily the result of the Companyissuing less warrants in
the corresponding period.





Rent expense for the three months ended
March 31, 2008 was$90,282, an increase of$69,584over the same period in 2007 because
the of Company’s additional offices located in Orlando, New Jersey, Dallas and
Houston.





Other selling, general and
administrative expenses for the three months ended March 31, 2008, of$1,963,981increased by$1,905,411over the same period in 2007because ofthe increased sales and membership
revenue.





Interest Expense:





Interest expense for the three months
ended March 31, 2008 was$35,537, compared to$29,112for the same period in 2007. Interest
expense relates to interest on our notes payable.





Net loss:





Our net loss amounted to$2,909,953for the three months ended March 31,
2008 compared to$5,003,280for the three months ended March 31,
2007. The significant change in our net loss is more fully discussed above in
the details of changes in our account balances.





22


Preferred stock dividends and
accretions:





Preferred stock dividends and accretions
amounted to$317,300for the three months ended March 31,
2008 compared to$41,375for the same period in 2007. The
increase was due to the additional preferred stock issued by the Company over
the course of 2007 and 2008.





Loss per common
share:





Loss per common share amounted to$   0.02for the three months ended March 31,
2008 compared to$   0.05for the three months ended March 31,
2007. Loss per common share is calculated by dividing loss applicable to common
stockholders by the weighted average number of common shares outstanding. Loss
per common share does not give effect to warrants to acquire common stock and
convertible securities because, while in a loss position, the effects would be
anti-dilutive.





Loans to Stockholders and
Officers:





As of March 31, 2008, there were no
loans or advances to officers.





CONTRACTUAL
OBLIGATIONS





Lease Commitments:For information about non-cancelable
commitments under our lease agreements, seeNote 18“Commitmentsand Contingency”in our annual financial statementscontained in the Company’s
Form 10-KSB for the year ended December 31, 2008filed with the Securities and Exchange
Commission on April 15, 2008, which Note 18in incorporated herein by
reference.








OFF BALANCE SHEET
ARRANGEMENTS





We do not have any off balance sheet
arrangements as of March 31, 2008.





LIQUIDITY AND CAPITAL
RESOURCES





The following table compares our cash
flows for the three months ended March 31:





2008
              
              
              2007Net cash used by operating
      activities
              
              $
              (4,833,669
              )
              
              $
              (679,562
              )Net cash used by investing
      activities
              
              
              (631,735
              )
              
              
              -Net cash provided by financing
      activities
              
              
              6,687,013
              
              
              
              5,396,600Net increase (decrease) in
      cash
              
              $
              1,221,609
              
              
              $
              4,717,038





During the first three months of
2008,significant equity
transactions consist of the issuance of 700 shares of preferred stock for
$7,000,000 and the issuance of 5,649,300 shares of common stock through
conversion of certain notes payables and accrued interest in the amount of
$547,211.


23





Item 3.  Controls and
Procedures








Evaluation of Disclosure Controls and
Procedures





Our management, with the participation
of our principal executive and principal financial officer, evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this quarterly report on Form 10-QSB. Based on this evaluation, our
principal executive and principal financial officer concluded that our
disclosure controls and procedures are ineffective to ensure that information we
are required to disclose in reports that we file or submit under the Exchange
Act (i) is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms, and (ii) is accumulated and communicated to
our management, including our principal executive and principal financial
officers, as appropriate to allow timely decisions regarding required
disclosure. Presently, our disclosure controls and procedures are not designed
adequately to provide reasonable assurance that such information is accumulated
and communicated to our management. This conclusion was based on the material
weaknesses identified with regard to internal controls over financial reporting,
as described in the Company’s Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2007 and filed with the SEC on April 15, 2008 (the “2007 Annual
Report”).





There was no change in our internal
control over financial reporting that occurred during the quarter covered by
this Quarterly Report on Form 10-QSB that materially affected, or is reasonably
likely to materially affect, our control over financial
reporting.





24





PART II - OTHER
INFORMATION




Item 1. Legal
Proceedings





As of March 31, 2008, there were no
material changes in the Company’s legal proceedings as previously disclosedin the Company’s 2007
Annual Report.  Please refer to the 2007 Annual Report for information
regarding legal proceedings.








Item 2. Unregistered Sales of Equity and
Use of Proceeds





On January 15, 2008,the Company entered into a Preferred
Stock Purchase Agreement with Vicis Capital Master Fund (“Vicis”) for the
purchase by Vicis of 300 shares of the Company’s Series G Convertible Preferred
Stock, par value $.001 per share, for an aggregate cash purchase price of
$3,000,000.





On March
13, 2008, the Company entered into a Preferred Stock Purchase Agreement with
Vicis for the purchase by Vicis of (a) 400 shares of the Company’s Series
G Convertible Preferred Stock, par value $0.001 per share for an aggregate cash
purchase price of $4,000,000 and (b) warrants to acquire 45,000,000 shares of
the Company’s Class A Common Stock, par value $0.001 per share, exercisable for
five years at an exercise price of $0.375 per share.





The
securities issued by the Company in the foregoing transaction were
issued  in a private placement transaction in reliance upon exemptions
from registration pursuant to Section 4 (2) of The Securities Act of 1933, as
amended, and/or Rule 506 of Regulation D promulgated pursuant thereto based upon
the following:





-
            the
      sale was made to a sophisticated or accredited investor, as defined in
      Rule 502;


-
            the
      Company gave the purchaser the opportunity to ask questions and receive
      answers concerning the terms and conditions of the offering and to obtain
      any additional information which the Company possessed or could acquire
      without unreasonable effort or expense that was necessary to verify the
      accuracy of information furnished;


-
            at
      a reasonable time prior to the sale of security, the Company advised the
      purchasers of the limitations on resale in the manner contained in Rule
      502(d)2;


-
            neither
      the Company nor any person acting on our behalf sold the security by any
      form of general solicitation or general advertising;
  and


-
            the
      Company exercised reasonable care to assure that the purchaser of the
      security is not an underwriter within the meaning of Section 2(11) of the
      Securities Act of 1933 in compliance with Rule
  502(d).











Item 3. Defaults Upon
Senior Securities





The information set forth inNote 7
– Notes and Loans Payableis incorporated herein by
reference.





The Company notes that approximately
$701,450 of the notes in default listed inNote 7 – Notes and
Loans Payable, are held by
investors who have been supporters of the Company over the past
years.  The Company is in the process of negotiating a conversion to
equity for these notes.  While the Company believes that such a
conversion is likely, it cannot assure that this will be the eventual
outcome.





Two notes included in the notes in
default listed inNote 7 – Notes and
Loans Payable, totaling
approximately $385,000, are currently in dispute by the Company.  The
Company believes that these notes are not payable but has retained the notes on
the balance sheet at March 31, 2008 and will continue to do so until such notes
are legally extinguished.





Item
4. Submission of Matters to a Vote of Security Holders.


None.





Item
5. Other Information.


None.





25


Item 6. Exhibits





(a)
    Exhibits:
            3.1   Amended
      Certificate of Incorporation(incorporated by reference to Exhibit
      3.1 to the Company’s Current Report filed on Form 8-K on January 14, 2008
      (the “1/14/2008 8-K”))3.2   Amended
      Certificate of Designation of Series G Convertible Preferred Stock filed
      with the Delaware Secretary of State onMay 8, 2008(filed
      herewith).10.1Preferred Stock
      Purchase Agreement by and between The Amacore Group, Inc. and Vicis
      Capital Master Fund dated January 15, 2008 (incorporated by reference to
      Exhibit 1.1 to the 1/14/2008 8-K).10.2 Registration Rights Agreement
      by and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      January 15, 2008(incorporated by reference to Exhibit 1.2 to the
      1/14/2008 8-K).10.3Preferred Stock
      Purchase Agreement by and between The Amacore Group, Inc. and Vicis
      Capital Master Fund dated March 13, 2008 (filed herewith).10.4Warrant Agreement by
      and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      March 13, 2008 (filed herewith).10.5 Registration Rights Agreement
      by and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      March 13, 2008 (filed herewith).31.1 Certification of Chief
      Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2 Certification of the Chief
      Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232.1 Certification of the Chief
      Executive Officer  and Chief Financial Officer Pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002





SIGNATURES





In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, the Company has caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.





Dated:May 20,
2008
            /s/Clark
      A. MarcusClark A.
    MarcusChief Executive
      OfficerDated:May 20,
2008
            /s/Giuseppe
      CrisafiGiuseppe
      CrisafiChief Financial
      Officer











26





EXHIBIT INDEX














3.1   Amended
      Certificate of Incorporation(incorporated by reference to Exhibit
      3.1 to the Company’s Current Report filed on Form 8-K on January 14, 2008
      (the “1/14/2008 8-K”))3.2   Amended
      Certificate of Designation of Series G Convertible Preferred Stock filed
      with the Delaware Secretary of State on May 8, 2008(filed
      herewith).10.1Preferred Stock
      Purchase Agreement by and between The Amacore Group, Inc. and Vicis
      Capital Master Fund dated January 15, 2008 (incorporated by reference to
      Exhibit 1.1 to the 1/14/2008 8-K).10.2 Registration Rights Agreement
      by and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      January 15, 2008(incorporated by reference to Exhibit 1.2 to the
      1/14/2008 8-K).10.3Preferred Stock
      Purchase Agreement by and between The Amacore Group, Inc. and Vicis
      Capital Master Fund dated March 13, 2008 (filed herewith).10.4Warrant Agreement by
      and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      March 13, 2008 (filed herewith).10.5 Registration Rights Agreement
      by and between The Amacore Group, Inc. and Vicis Capital Master Fund dated
      March 13, 2008 (filed herewith).31.1 Certification of Chief
      Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2 Certification of the Chief
      Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232.1 Certification of the Chief
      Executive Officer  and Chief Financial Officer Pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002












27