**U.S.
SECURITIES AND EXCHANGE COMMISSION**
 **WASHINGTON,
DC 20549**
 
 **FORM
10-QSB**
 
 
 
 (Mark
One)
  /X/     Quarterly
report under Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the
quarterly period ended March 31, 2005
 
 /_/     Transition
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.**
 
 
 Delaware
    59-3206480(State
      or Other Jurisdiction of
    (IRS
      EmployerIncorporation
      or Organization)
    Identification
      No.)
 
 
 1511
      North Westshore Boulevard,
      Suite
      925Tampa,
      Florida
    33607(Address
      of principal executive offices)
    (Zip
      Code)
 
 
 (813)
289-5552
 (Issuer’s
Telephone Number Including Area Code)
 
 
 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 12 months (or for such shorter period
that the registrant was required to such reports, and (2) registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days.
 
 Yes x No o


As of May
13, 2005, the issuer had outstanding 31,351,432 shares of common stock, $.001
par value.
 
 
 Transitional
Small Business Disclosure Format: Yes o No
x
 
 
  
   **THE
AMACORE GROUP, INC.**
 
 **FORM
10-QSB**
 
 **INDEX**
 
 
 PART
      1 FINANCIAL INFORMATIONITEM
      1
    FINANCIAL
      STATEMENTSCONDENSED
      CONSOLIDATED BALANCE SHEETS - March 31, 2005 and December 31,
      2004
    3CONDENSED
      CONSOLIDATED STATEMENT OF OPERATIONS - For the Three
MonthsEnded
      March 31, 2005 and 2004
    4CONDENSED
      CONSOLIDATED STATEMENT OF CASH FLOWS - For the Three Monthsended
      March 31, 2005 and 2004
    5NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
    6ITEM
      2
    MANAGEMENT’S
      DISCUSSION AND ANALYSISof
      Financial Condition and Results of Operations
    9PART
      II OTHER INFORMATIONITEM
      6.
    (a)
      EXHIBITS FILED:(b)
      REPORTS ON FORM 8-KSIGNATURES
 
 
  
  **PART
I - FINANCIAL INFORMATION**
 **Item
1.**
 **THE
AMACORE GROUP, INC.**
 **CONSOLIDATED
BALANCE** **SHEETS**
 
 **March
      31**
    
    **Dec.
      31****2005**
    
    **2004****(Unaudited)****ASSETS**Current
      assetsCash
    
    $
    168,251
    
    $
    7,408Accounts
      receivable (net of $50,000 allowance
      for
      doubtful accounts)
    
    
    41,453
    
    
    50,184Non-trade
      receivables and employee receivables
    
    
    25,818
    
    
    46,050Prepaid
      expenses and deposits
    
    
    76,450
    
    
    132,334Total
      current assets
    
    
    311,972
    
    
    235,976Fixed
      assets (net of accumulated depreciation)
    
    
    31,287
    
    
    33,514Goodwill
    
    
    483,000
    
    
    483,000Intellectual
      property (net of accumulation amortization)
    
    
    2,278,727
    
    
    2,307,572Total
      assets
    
    $
    3,104,986
    
    $
    3,060,062**LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)**Current
      liabilitiesAccounts
      payable
    
    $
    773,977
    
    $
    788,745Loans
      and notes payable
    
    
    802,450
    
    
    801,950Accrued
      expenses and payroll taxes
    
    
    291,722
    
    
    266,029Deferred
      compensation - related party
    
    
    545,698
    
    
    582,720Deferred
      revenue
    
    
    29,414
    
    
    32,945Total
      current liabilities
    
    
    2,443,261
    
    
    2,472,389Long
      Term LiabilitiesConvertible
      debenture
    
    
    675,000
    
    
    370,000Deferred
      Revenue
    
    
    125,340
    
    
    154,044Total
      liabilities
    
    
    3,243,601
    
    
    2,996,433Stockholders’
      Equity (Deficit)Preferred
      Stock, $.001 par value, 20,000,000 shares authorized;
      Series
      A convertible preferred stock;
      1,500
      shares authorized; 155 and 155 shares issued and
      outstanding
      respectively (aggregate liquidation value**:**$155,000,)
    
    
    -
    
    
    -Series
      C, mandatory convertible stock, 86 shares authorized; 86
      shares
      issued
      and outstanding. (aggregate liquidation value: $860,000)
    
    
    -
    
    
    -Common
      stock A ($.001 par value; 80,000,000 shares authorized;
      25,306,660
      and 22,832,670 shares issued and outstanding,
    respectively.)
    
    
    25,494
    
    
    23,170Common
      stock B ($.001 par value; 20,000,000 shares authorized;
      5,302,802
      shares and 4,462,802 shares issued and outstanding,
      respectively.)
    
    
    5,303
    
    
    4,463Additional
      paid-in capital
    
    
    54,401,814
    
    
    53,392,671Accumulated
      deficit
    
    
    (54,571,226
    )
    
    (53,356,675
    )Total
      stockholders’ equity (deficit)
    
    
    (138,615
    )
    
    63,629Total
      liabilities and stockholders’ equity (deficit)
    
    $
    3,104,986
    
    $
    3,060,062
  **See
Notes to consolidated financial statements**
 3
   **THE
AMACORE GROUP, INC.**
 **CONSOLIDATED
STATEMENTS OF** **OPERATIONS**
 **For
the Three Months ended March 31, 2005 and 2004**
   
  **2005**
    
    **2004****(Unaudited)**
    
    **(Unaudited)**REVENUESMembership
      fees
    
    $
    88,461
    
    $
    37,246OPERATING
      EXPENSESDepreciation
    
    
    1,877
    
    
    370Amortization
      of Intellectual property
    
    
    28,845Rent
    
    
    32,378
    
    
    29,637Consulting
      expense
    
    
    715,543
    
    
    19,757,896Payroll
      expense
    
    
    252,317
    
    
    276,439Professional
      expense
    
    
    41,914
    
    
    104,714Insurance
      expense
    
    
    50,090
    
    
    29,893Travel
      and entertainment
    
    
    32,631
    
    
    72,408Contract
      labor
    
    
    16,865
    
    
    9,603Bad
      debt expense
    
    
    -
    
    
    --Office
      expense
    
    
    16,497
    
    
    25,310Relocation
      expense
    
    
    -
    
    
    -Telephone
    
    
    14,201
    
    
    13,863Trade
      shows
    
    
    4,833
    
    
    --Selling,
      general and administrative expenses
    
    
    67,683
    
    
    54,002Total
      expenses
    
    
    1,275,674
    
    
    20,374,135Operating
      loss from operations before other income and expense
    
    
    (1,187,213
    )
    
    (20,336,889
    )OTHER
      INCOME (EXPENSE)Interest
      expense
    
    
    (27,340
    )
    
    (398,810
    )Total
      other income (expense)
    
    
    (27,340
    )
    
    (393,810
    )Net
      loss available to common stockholders
    
    $
    (1,214,553
    )
    $
    (20,730,699
    )Basic
      and diluted loss per share
    
    $
    (0.05
    )
    $
    (1.61
    )Basic
      and diluted weighted average number of
      common
      shares outstanding
    
    
    24,253,863
    
    
    12,860,084
  **See
Notes to consolidated financial statements**
   4
  **THE
AMACORE GROUP, INC.**
 **CONSOLIDATED
STATEMENTS OF CASH FLOWS**
 **Three
Months ended March 31, 2005 and 2004**
   
  **2005**
    
    **2004****(Unaudited)**
    
    **(Unaudited)**Cash
      flow from operating activitiesNet
      loss
    
    $
    (1,214,553
    )
    $
    (20,730,699
    )Adjustment
      to reconcile net loss to net cash provided by (used)
      in
      operating activitiesIssuances of shares and warrants for services and interest
    
    
    589,808
    
    
    19,997,311Depreciation
    
    
    1,877
    
    
    370Amortization
      of intellectual property
    
    
    28,845Common stock issued for settlement
    
    
    --
    
    
    2,000Changes
      in operating assets and liabilities
    
    
    
    
    
    (73,850
    )(Increase) decrease in accounts receivables
    
    
    8,732
    
    
    (750
    )(Increase) decrease in prepaid expenses
    
    
    44,634
    
    
    2,640(Increase) decrease in other current assets
    
    
    20,232Increase (decrease) in accounts payable and accrued
    expenses
    
    
    22,175
    
    
    (3,334
    )Increase (decrease) in deferred compensation
    
    
    (37,022
    )
    
    90,294Increase (decrease) in deferred revenue
    
    
    (32,235
    )
    
    (3,166
    )Net
      cash provided (used) by operating activities
    
    
    (567,506
    )
    
    (646,065
    )Cash
      flow from investing activitiesPurchases of property and equipment
    
    
    350
    
    
    (2,959
    )Investment
      in intangibles
    
    
    -
    
    
    -Net
      cash provided (used) by investing activities
    
    
    350
    
    
    (2,959
    )Cash
      flow from financing activitiesProceeds from sales of common stock
    
    
    37,000Proceeds
      from sale of long-term debt
    
    
    305,500Proceeds from short term borrowings loans and notes
payable
    
    
    391,500
    
    
    458,675Proceeds from exercise of warrants
    
    
    --
    
    
    210,350Payments
      on long term notes
    
    
    --Payments on convertible notes
    
    
    (6,000
    )Net
      cash provided by financing activities
    
    
    728,000
    
    
    669,025Increase
      (decrease) in cash
    
    
    160,843
    
    
    20,001Beginning
      cash and cash equivalents
    
    
    7,408
    
    
    1,426Ending
      cash and cash equivalents
    
    $
    168,251
    
    $
    21,427Supplemental
      disclosures
      Interest paid
    
    $
    --
    
    $
    217,324Common stock and warrants issued for
      services
    
    $
    520,790
    
    $
    19,997,311Taxes paid
    
    $
    --
    
    $
    -
  See notes
to consolidated financial statements
   5
  
 **PART
I - FINANCIAL INFORMATION**
 
 **THE
AMACORE GROUP, INC.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 
  **NOTE
1 - NATURE OF OPERATIONS**
 
 The
Amacore Group, Inc. (the Company) markets vision care benefit plans and
enhancements to plans provided by others. The Company's benefit plans and plan
enhancements provide members and members of its plan sponsors (employers,
associations and other organizations) the opportunity to obtain discounted eye
care services and products from the Company’s national network of ophthalmic
physicians, optometrists, eyewear suppliers, etc. The Company changed its name
from Eye Care International, Inc. to The Amacore Group, Inc. as of March 31,
2005. These financial statements reflect the new name throughout.
 ****
 **NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
  **Basis
of Presentation**
 
 The
accompanying unaudited financial information has been prepared by The Amacore
Group, Inc. (the Company) in accordance with accounting principals generally
accepted in the United States of America for interim financial information, and
in accordance with the instructions to Form 10-QSB, and Item 310(b) of
Regulation S-B, of the Securities and Exchange Commission (SEC). In the opinion
of management, all adjustments (consisting of normal and recurring adjustments)
considered necessary for a fair representation have been included. Financial
results for the interim three-month period are not necessarily indicative of the
results that may be expected for the year ending December 31, 2005. The December
2004 comparative balance sheet presented was derived from audited financial
statements, but does not include all disclosures required with the audited
annual statements. This financial information should therefore be read in
conjunction with the financial statements and notes included with the Company’s
Annual Report on Form 10-KSB for the year ended December 31, 2004.
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
  **Principles
of Consolidation**
 
 The
consolidated financial statements as of and for the quarter ended March 31, 2005
and 2004 include the accounts of The Amacore Group, Inc. and its wholly-owned
subsidiary LBI, Inc. LBI, Inc was not acquired until July 2004. Significant
intercompany balances and transactions have been eliminated in
consolidation.
 
 **Industry
Segment**
 
 The
activities of LBI Inc. are immaterial for the first quarter of 2005 and,
therefore, are not reported as a segment since in management’s opinion; they do
not utilize the results of LBI Inc’s operations in decision making relating to
the allocation of resources and in the resulting assessment of their overall
performance.
 
 **Cash
and Cash Equivalents**
 
 For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash
equivalents.
 
 **Intangible
assets**
 
 Intangible
assets consist primarily of goodwill and intellectual property. Effective
January 1, 2004 in accordance with SFAS 142. “Goodwill and Other Intangibles”,
intangible assets with an indefinite life, namely goodwill and the intellectual
property are not amortized. Intangible assets with a definite life are amortized
on a straight-line basis with estimated useful lives of 3-17 years. Indefinite
lived intangible assets will be tested for impairment yearly and will be tested
for impairment between the annual tests should an event occur or should
circumstances change that would indicate that the carrying amount may be
impaired. The company has selected July 1, as the annual date to test these
assets for impairment. The unamortized balance of goodwill as of March 31, 2005
is $483,000. The unamortized balance of the intellectual property as of March
31, 2005 was approximately $2,307,572.
  6
  
 
 **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. There has been no impairment losses recorded.
  **Concentration
of Credit Risk**
 
 Concentrations
of credit risk with respect to sales to customers existed for 2004 in that
approximately 46% of total sales were to a single plan sponsor. The
concentration of sales to one sponsor to that extent creates a risk that if that
customer is lost, revenues would be significantly affected. The Company has
expanded its customer base and expects to reduce the impact of that one customer
in 2005 by the addition of several other significant plan sponsors.
 ****
 **Acquisition**
 
 In July
2004, the Company acquired 100% of the outstanding stock of LBI, Inc. (LBI) in
exchange for $130,000 in cash and 100,000 shares of common A stock. Based upon
the current trading value of the outstanding stock, the total purchase price was
$483,000. LBI is a marketing company providing the brokerage of various
insurance products for employees for commission income to various large
international corporations. LBI is a service company and had no material assets
or liabilities at the date of acquisition and the entire purchase price has bee
recorded as Goodwill. The principals of LBI have a long history of successful
business activity and relationships with customers. It is anticipated that the
activity of LBI will produce significant revenues and operating income for the
Company as well as provide additional customers for its main service
offerings.
 
 **Intellectual
Property**
 
 In
December 2004, the Company acquired 100% of the rights to a number of patents
and technology known as the PhotoScreener (Screener). The PhotoScreener
technology and related patents enable the owner to manufacture devices that can
quickly scan individual eyes to discover medical abnormalities to be referred
for treatment. The Screener can be used for preverbal infants as young as six
months up to adults and has been effective in revealing early stage eye
abnormalities that can be treated effectively. The technology is an integral
part of the overall service offerings of the company and will provide
opportunity for expanding into other licensing and sale of the Screeners in the
future. The Company purchased the technology for 937,500 shares of common A
stock valued at approximately $2,307,572. The Company has obtained an
independent valuation of the technology in excess of the purchase price. The
PhotoScreener is being amortized over a period of twenty years beginning in
January 2005.
  **Estimates**
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires 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 and expenses during the reporting period.
Actual results could differ from those estimates
 ****
 **Revenues
and Commissions Recognition**
  Revenues
from memberships are recognized over the life of the memberships which generally
are one year from the month after a member signs up for the program. However,
the Company also sells smaller amounts of two and three year memberships which
are amortized over their respective periods. The Company recognizes income from
the sale of memberships on a wholesale basis over the life of the contract
(where applicable) or on a month to month basis as plan sponsors report usage of
memberships. The Company also receives orders by telephone and uses a
fulfillment center to complete the sale.  Those revenues are recognized
when the product is shipped and paid for by the customer.  Revenues from
commissions are immaterial in amount.
  7
  
  **Property
and Equipment**
 
 Property
and equipment are recorded at cost.  Depreciation is calculated using the
straight line method over the estimated useful lives of the assets, generally
ranging from 5 to 7 years. Additions and major improvements to property and
equipment are capitalized. Repair and maintenance expenditures are charged to
expense as incurred. As property or equipment is sold or retired, the applicable
cost and accumulated depreciation are eliminated from the accounts and any gain
or loss is recorded.
 ****
 **Accounts
Receivable**
 
 Accounts
receivable, net, are stated at estimated net realizable value. Accounts
receivable are mostly comprised of balances due from memberships and product
endorsements, net of estimated allowances for uncollectible accounts. In
determining collectibility, historical trends are evaluated and specific
customer issues are reviewed to arrive at appropriate allowances.
 ****
 **Income
Taxes**
 
 The
Company has adopted SFAS 109.  The Company 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.
 ****
 **Loss
Per Share**
  The
Company has adopted SFAS 128, Earnings per Share issued by the Financial
Accounting Standards Board.
 
 Net loss
per share was computed based on the weighted average number of shares
outstanding during the periods presented.  All weighted average shares
outstanding have been restated to reflect the 1 for 5 reverse stock split
occurring in June 2003.
 
 Diluted
loss per share is considered to be the same as basic loss per share since the
effect of common stock options and warrants and preferred stock are
anti-dilutive.
 ****
 **NOTE
3 - DUE TO STOCKHOLDERS/OFFICERS**
 
 As of
March 31, 2005, due to stockholders/officers included the deferred compensation
of $545,698.
 ****
 **NOTE
4 - ACCOUNTS RECEIVABLE, NET**
 
 Accounts
receivable, net of allowance for uncollectibles of $50,000 was $41,453 as of
March 31, 2005.
 ****
 **NOTE
5 - PROPERTY AND EQUIPMENT, NET**
 
 As of
March 31, 2005, Property and equipment, net of accumulated depreciation of
$71,751, was $31,287.
 
  8
  
 
 **NOTE
6 - NOTES AND LOANS PAYABLE**
 
 Notes and
loans payable consist of the following as of March 31, 2005:
 
 Notes
      payable to investors and shareholders; bearinginterest
      ranging from 5.75% through 12% per annum;due
      through December 2004; currently in default.
    
    $
    687,500Promissory
      note payable to shareholder investor;bearing
      1.53% interest per annum through June 2004,increasing
      to 15% thereafter; currently in default.
    
    
    114,950Total
      notes and loans payable
    
    
    802,450
 
 
 
  As of
March 31, 2005, all notes and loans payable were classified as current
maturities.
  
 **NOTE
7 - CONVERTIBLE DEBENTURES**
 
 During
2004, the Company entered into a debt agreement to issue up to $400,000
convertible debentures. The debentures are immediately convertible into common
stock of the Company, together with 7% interest, which is payable in either cash
or freely traded common stock, at the option of the Company. The conversion
price is the lesser of (a) 120% of the closing bid on the closing day, or (b)
75% of the lowest closing bid price of the common stock during the five trading
days immediately preceding the conversion date. As of March 31, 2005, the
balance of the convertible debentures was $370,000.
  In March
2005, **** an
agreement was signed whereby Divine Capital would raise up to $1million of
three-year, six percent convertible debentures. In March, 2005 the Company
received an initial investment of $305,000 from that financing arrangement. The
debentures are convertible into shares of the Company’s A common stock at a
conversion price equal to 75% of the lowest closing bid price per share for the
twenty days immediately preceding the date of conversion, or as otherwise
provided in the debentures. The debentures mature on the third anniversary date
of the final closing. The Company has agreed to file a registration statement to
cover the resale of the shares issuable upon the conversion of the debentures.
The debentures will be issued to less than thirty five accredited investors in
reliance upon the exemption provided by Rule 506 of Regulation D promulgated
under the Securities Act of 1933, as amended.
  
 
 **NOTE
8 - PREFERRED STOCK**
  Series A
Convertible preferred stock is nonvoting and bears no dividends.  Each
share is redeemable by the Company on the third anniversary of issuance at
$1,000, per share, and convertible into 400 shares after the reverse split of
Class A common stock, subject to adjustment.  Upon a public offering of
$5,000,000 or greater, the shares are automatically convertible.
   In August
2004, the Company raised a total of $602,000 from the issuance of 86 shares of
mandatory convertible Series C, 6% cumulative, preferred stock, par value $0.001
per share. Each share may be converted at any time until July 30, 2006, when
conversion becomes mandatory. At the time of conversion, each share shall be
deemed to have a value of $10,000 and is convertible into Class A common stock
at the lesser of $2.88 per common share or 75% of the lowest closing bid price
during the five days immediately prior to the conversion. As part of the
agreements with these two entities, the Company agreed to register shares which
are issuable upon the conversion of the warrants and the Series C Convertible
Preferred Stock. In addition, for each share of Series C Convertible Preferred
Stock purchased by them, they have the right to purchase up to 1% of the
issuances of equity securities issued under subsequent funding transactions.
  
  9
  **NOTE
9 - COMMON STOCK**
  In 2004,
the Company received approval from its shareholders, to increase its authorized
shares from fifty million shares to one hundred twenty million shares,
consisting of eighty million shares of Class A common stock, twenty million
shares of Class B common stock and twenty million shares of its preferred stock.
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 per
share.
 
 In
January 2005, Amacore Group raised $37,000 from the sale of 840,000 shares of
class B common stock.
   **NOTE
10 - WARRANTS**
  During
the first quarter ending March 31, 2005, the Company issued warrants to purchase
200,000 shares of Class A common stock.  At March 31, 2005 there were
2,647,090 warrants to purchase Class A common stock outstanding.
 
 **NOTE
11 - 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 included
in the fully diluted share calculation at March 31, 2005.
 
 The
following sets for the computation of basic and diluted net earnings (loss) per
common share for the three months ended March 31, 2005 and 2004:
 
 2005
    
    2004Numerator:Net
      income (loss) available to common stockholders
    
    $
    (1,214,553
    )
    $
    (20,730,699
    )Denominator:Weighted
      average basic share outstanding
    
    
    24,253,863
    
    
    12,860,084Stock
      optionsWarrantsConvertible
      noteWeighted
      average fully diluted shares outstanding
    
    
    24,253,863
    
    
    12,860,084Net
      earnings per common share - basic and diluted
    
    $
    (0.05
    )
    $
    (1.61
    )
 
  During
the period presented, common stock equivalents were not considered as their
effect would be anti-dilutive.
 
 **NOTE
12 - FAIR VALUES OF FINANCIAL INSTRUMENTS**
 
 The
carrying amount of cash, accounts receivable, accounts payable and other current
liabilities approximates fair value because of their short maturity.  The
carrying amount of notes payable approximates fair value based on stated
interest rates, shares and warrants being approximate to current market interest
rates.
 ****
 **NOTE
13 - LITIGATION AND CONTINGENCIES**
 
 At March
31, 2005, the Company was involved in various lawsuits, claims or disputes
arising in the normal course of business.  The settlement of such claims
cannot be determined at this time.  Management does not believe the
ultimate outcome of these matters will be significant to its results of
operations or cash flows.
  10
  
  **NOTE
14 - SUBSEQUENT EVENTS**
 
 The
Company has filed a lawsuit against one of its significant customers (a
wholesaler) to enforce its rights to audit the books and records of the
wholesaler with the expectation that additional revenues are due to the Company
and have not been remitted to date. Management believes its audit rights will be
sustained and ultimately result in a determination that a significant sum is due
the Company. The Company also contacted a second wholesaler, who determined that
due to system problems, the wholesaler does owe the Company a substantial amount
of enrollment fees for prior years. The Company expects to receive the fees in
2005, but has not recorded the receivable due to the uncertainty of estimation
and payment.
 
 As
discussed in Note 7, Convertible Notes, the Company signed an agreement with
Divine Capital in March 2005. In April 2005 the Company received an additional
$50,000 investment through this financial arrangement.
 
 During
the second quarter of 2005, the Company has issued $75,000 of one-year, ten
percent promissory notes to three accredited investors, who immediately
converted the notes into 480,393 shares of the Company’s class A common stock.
During the second quarter, the Company also issued 74,075 shares of its class A
common stock for consulting services.
 
  11
  ***THE
AMACORE GROUP, INC.***
   **Item
6.  Management's Discussion and Analysis of Financial Condition and Results
of Operations**
 
 CAUTIONARY
STATEMENTS FOR FORWARD-LOOKING INFORMATION
  We made
forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995) in this report that are subject to risks and
uncertainties, such as statements about our plans, objectives, projections,
expectations, assumptions, strategies, or future events. Other written or oral
statements, which constitute forward-looking statements, also may be made from
time to time by or on behalf of the Company.  Words such as "may,"
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"will," "should," "could," variations of such words, and similar expressions are
intended to identify such forward-looking statements.  Similarly,
statements that describes future plans, objectives, or goals also are
forward-looking statements.  These statements are not guarantees of future
performance and are subject to a number of risks, uncertainties, and other
factors, including those discussed below and elsewhere in this report, that
could cause actual results to differ materially from future results,
performances, or achievements expressed or implied by such forward-looking
statements. Consequently, reliance should not be placed on these forward-looking
statements. Amacore Group undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
  Factors
that could cause actual results to differ materially from what is expressed or
forecasted in such forward-looking statements include, but are not limited to:
(i) the inability of the Company's products to attain broad market acceptance;
(ii) inability of Amacore Group to complete its product development; (iii) the
impact of competitive products and pricing; (iv) Amacore Group's ability to
expand its sales and marketing programs; (vii) dependence on key personnel; (ix)
the availability, terms and deployment of capital; and (x) general economic and
business conditions. Subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth above and contained
elsewhere in this Annual Report on Form 10-KSB.
 ****
 **Introductory
Overview**
  Amacore
Group originally began selling memberships in its discount vision program to
retail customers in an effort to prove that a vision discount plan with an
ophthalmologic (Eye M.D.) panel included would be not only accepted, but
desired, by the general public and prove to other marketers of various health
plans of the benefits of including such a plan in their products. Amacore Group
sold the plan on a retail only basis for many years proving that the general
public did desire to have a vision plan with medical coverage before it was
determined that it was time to change its emphasis to marketing its plan to
other marketers of health benefit plans (“wholesalers”). Marketing programs on a
retail basis requires a broad national marketing staff which Amacore Group was
not financially prepared to support, whereas a much smaller staff is needed to
market to others on a wholesale basis. During the transition period, Amacore
Group has continued to market the plan on a retail basis but with less emphasis
and has devoted most of its time to 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. Amacore Group has
numerous wholesale contracts in place but these contracts have not produced a
substantial amount of revenue as quickly as anticipated by management. This,
combined with reduced retail revenue, have caused revenues to suffer. Amacore
Group continues to place its emphasis on marketing its plan to wholesalers and
believes it now has contracts that are either in place or near completion of
negotiations for new contracts, which will generate a much higher level of
revenue for 2005 and subsequent years.
  In late
2004, Amacore Group acquired another company, LBI Brokerage, a managing general
agency for group health and life insurance products (products that are
synergistic with Amacore Group’s vision plan). A managing general agency is an
agency appointed by an insurance company for the express purpose of distributing
its products to downline general agents and in turn market its product line
(including Amacore Group’s vision plan) downline to its agents and producers.
LBI has been appointed the managing general agency for Transamerica, which is a
part of the AEGON Insurance Group, one of the top 50 largest public financial
companies in the world, ranked by assets. LBI is rapidly developing its
distribution system and expects to contribute to Amacore Group’s bottom line in
2005 and to increase its contribution level in subsequent years.
  Also in
late 2004, Amacore Group acquired the technology and patent rights for the
PhotoScreenerTM, a camera especially designed to detect vision disorders in young
and preverbal children. This technology, which has been approved by the FDA, has
the potential to significantly add to Amacore Group’s bottom line in 2005 and
beyond.
   12
  
  The
following discussion and analysis of our financial condition and results of
operation should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this report.
 ****
 **RESULTS
OF OPERATIONS**
 ****
 **Revenue:**
  For the
quarter ended March 31, 2005, Amacore Group’s gross income of $88,461 was
approximately $51,000 more than Amacore Group’s gross income recorded in the
same timeframe in 2004 of $37,246. This increase in revenue, derived from the
sales of memberships, resulted from Amacore Group shifting its emphasis, as
discussed above, from retail marketing of memberships to the wholesale marketing
of its memberships and to the development of a more diversified and expanded
wholesale customer base; one which will include Amacore Group’s program as a
premium benefit under the wholesale customer’s label. Approximately
$27,000 of the increase was attributable to the recognition of revenues received
in late 2004 from a wholesale customer but partially earned during the first
quarter of 2005.
  Implementation
of the wholesale sales has taken longer than anticipated by Amacore Group. 
Several of the private label wholesale agreements provide that Amacore Group’s
vision plan will be automatically included with all sales offerings of the
customer’s products or services. Amacore Group anticipates that additional
commission income will be derived from an agreement with a mail order
fulfillment provider once the wholesale contracts are implemented.  Amacore
Group also offers its vision program through its website, www.eyecareintl.com , to the
general public.
 ****
 **Selling,
General and Administrative Expenses (SG&A):**
  Amacore
Group’s SG&A expenses for the quarter ending March 31, 2005 of $1,275,674
decreased by approximately $19,098,000 from the same quarter in 2004. 
Comparison of the more significant components of SG&A expenses
follows:
  Three
      Months Ended March 312005
    
    2004
    
    Increase
      (Decrease)Depreciation
    
    $
    1,877
    
    $
    370
    
    $
    1,507Amortization
      of intellectual property
    
    
    28,845
    
    
    --
    
    
    28,845Payroll
      & Related Expenses
    
    
    252,317
    
    
    276,439
    
    
    (24,122
    )Business
      Travel/Trade Shows
    
    
    37,464
    
    
    72,408
    
    
    (34,944
    )Insurance
    
    
    50,090
    
    
    29,893
    
    
    20,197Professional/Consulting
      Fees
    
    
    757,457
    
    
    19,862,610
    
    
    (19,105,153
    )Rent
    
    
    32,378
    
    
    29,637
    
    
    2,741All
      Other SG&A expenses
    
    
    115,246
    
    
    102,778
    
    
    12,468Total
    
    $
    1,275,674
    
    $
    20,374,135
    
    $
    (19,098,461
    )
 
  Salaries
and related expenses for the quarter ended March 31, 2005 declined about $24,000
to $252,317, primarily because the Company had fewer employees in the first
quarter of 2005 as compared to the same period in 2004.
  Insurance
expense of $50,090 was approximately $20,000 more than the first quarter of 2004
because of increased rates and more employees being covered by the medical
plan.
  Professional/consulting
fees of $757,457 were approximately $19,105,000 less than the same period in
2004. In the first quarter of 2004, Amacore Group issued stock and/or warrants
to consultants and the resultant non-cash charge to expense was $19,641,000 as
compared to a non-cash charge in the first quarter of 2005 for shares/warrants
issued to consultants of $590,000. The Company also incurred a non-cash charge
to legal expenses in the first quarter of 2004 of approximately $47,000 because
of stock/warrants being issued to attorneys.
   13
  
  Other
expenses for the current period increased nearly $12,000 to $115,246 mainly
because of the expenses Amacore Group incurred with its private placement
financings.
 ****
 **Interest
Expense:**
  Interest
expense for the first quarter of 2005 of $27,341 decreased by approximately
$366,000 from the same period of 2004. In early 2004 Amacore Group issued shares
of common stock in lieu of cash and issued warrants with promissory notes which
resulted in a non-cash charge to interest expense of nearly $360,000. In
addition, during the first quarter of 2004, many of Amacore Group’s accredited
investors converted their promissory notes into common stock, which assisted
Amacore Group in reducing its interest expense, as well as its debt.
 ****
 **Depreciation
Expense** :
  Depreciation
expense, which is computed on a straight-line method over the assets’ estimated
lives, increased by $1,507 over the same period in 2004, because Amacore Group
purchased some computers late in 2004.
  **Amortization
Expense:**
  Amortization
of the PhotoScreener (intellectual property) was $28,845 for the first quarter
of 2005, which was the first period that any amortization was
recorded.
   **Loans
to Stockholders and Officers:**
  As of
March 31, 2005, there were no loans or advances to officers.
   
  **LIQUIDITY
AND CAPITAL RESOURCES**
  The
following table compares Amacore Group’s cash flows for the quarters ended March
31, 2005 and 2004:
  2005
    
    2004Net
      cash used by operating activities
    
    $
    (567,506
    )
    $
    (646,065
    )Net
      cash used by investing activities
    
    
    350
    
    
    (2,959
    )Net
      cash provided by financing activities
    
    
    728,000
    
    
    669,025Net
      increase or (decrease) in cash
    
    $
    160,843
    
    $
    20,001
 
  From time
to time, we experience cash flow shortages due to current demands of our market
development and enhancement program and lack of capital resources. We have
funded Amacore Group’s operations through the issuance of short-term and
long-term notes payable, amounting to $697,000 during the first quarter of 2005.
Nearly all of the short-term notes, $385,000, issued during the first quarter of
2005 have been converted to Class A common shares. In addition, during the first
quarter of 2005, the Company received an initial investment of $305,000 through
a financing arrangement with Divine Capital, and an additional $50,000
investment has been received during the second quarter. The financing agreement
was signed in March 2005 whereby Divine Capital would raise up to $1 million of
three-year, six percent, convertible debentures. The debentures are convertible
into class A common stock at a conversion price equal to 75% of the lowest
closing price per share for the twenty days immediately preceding the date of
conversion, or as otherwise provided in the debentures. The debentures will be
issued to less than thirty-five accredited investors in reliance upon the
exemption provided by Rule 506 of Regulation D promulgated under the Securities
and Exchange Act of 1933, as amended.
  In
January 2005, Amacore Group sold 840,000 shares of its class B common stock for
$37,000.
   14
  
  During
the first quarter of 2005, the Company issued $385,000 of one-year, ten percent
promissory notes to eight accredited investors. The investors immediately
converted the promissory notes into 1,069,999 shares of the Company’s class A
common stock.
 
 The
Company has filed a lawsuit against one of its significant customers (a
wholesaler) to enforce its rights to audit the books and records of the
wholesaler with the expectation that additional revenues are due to the Company
and have not been remitted to date. Management believes its audit rights will be
sustained and ultimately result in a determination that a significant sum is due
the Company. The Company also contacted a second wholesaler, who determined that
due to system problems, the wholesaler does owe the Company a substantial amount
of enrollment fees for prior years. The Company expects to receive the fees in
2005.
 
 Although
management to date has been able to manage the cash flow shortfalls without
interruption to our business, there can be no assurances that necessary
financing will continue to be available. Management is seeking additional
working capital to satisfy daily operating requirements. There can be no
assurance that such additional financing will be available on terms acceptable
to us.
  CONTRACTUAL
OBLIGATIONS
  Other
than the lease agreement for our corporate offices, we do not have any material
contractual obligations currently outstanding requiring payments over the next
five years.
 
 OFF
BALANCE SHEET ARRANGEMENTS
  We do not
have any off balance sheet arrangements as of March 31, 2005 or as of the date
of this report.
 
 SUBSEQUENT
EVENTS
  During
the second quarter of 2005, the Company has issued $75,000 of one-year, ten
percent promissory notes to three accredited investors, who immediately
converted the notes into 480,393 shares of the Company’s class A common stock.
During the second quarter, the Company also issued 74,075 shares of its class A
common stock for consulting services.
 
 As
discussed above, in March 2005 the Company entered into an arrangement with
Divine Capital whereby Divine would raise up to $1 million of convertible
debentures. In April 2005, the Company received an investment of $50,000 through
this arrangement, bringing the total amount of capital raised by Divine Capital
to $355,000.
  15
  PART
II: OTHER
INFORMATION
 
 
 
 Item 6.
Exhibits and Reports on Form 8-K
 
 (a)
      Exhibits Filed:
    31.1
    Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200231.2
    Certification
      of Acting Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
    Certification
      of the Chief Executive Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
    Certification
      of the Acting Chief Financial Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.(b)
      Reports on Form 8-K:
    Current
      Report on Form 8-K dated March 29, 2005, for the purpose of reporting a
      financing arrangement with Divine Capital to raise up to $1 million of six
      percent convertible debentures.
 
  
 
 
  16
  
 **Signatures**
 
 In
accordance with the requirements of the Exchange Act, the registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 THE AMACORE GROUP,
      INC.Date:  May 16, 2005
    By:
    /s/ James L.
  KoenigJames
      L. Koenig
      Acting
      Chief Financial Officer
 
  
 
  17
  
 
 
 
 
 
 
 **EXHIBIT
INDEX**
 
 
 31.1
    Certification
      of the Chief Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
 
 31.2
    Certification
      of the Acting Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
 
 32.1
    Certification
      of the Chief Executive Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
 
 32.2
    Certification
      of the Acting Chief Financial Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
 
 
  18