**UNITED
        STATES**
 **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 June 30, 2007
 
 o     
        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.**
 (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,
                      Florida 33607(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. Yes x No o
 State
          the
          number of shares outstanding of each of the issuer’s classes of common stock as
          of August 14, 2007:
 **98,573,820** Class A
            Common Shares
 **22,962,802** Class B
            Common Shares
 Transitional
          Small Business Disclosure Format (Check One):  Yes o     
No x
 
 
 
 1
  
 
 **THE
        AMACORE GROUP, INC.**
 
 **FORM
        10-QSB**
  **PART I
        FINANCIAL INFORMATION**
 
 **ITEM
                    1. FINANCIAL
                    INFORMATION**CONDENSED
                    CONSOLIDATED BALANCE SHEETS - June 30, 2007 and December 31,
                    2006
              3CONDENSED
                    CONSOLIDATED STATEMENTS OF OPERATIONS - For the Six and Three Months
                    Ended June 30, 2007 and 2006
              4CONDENSED
                    CONSOLIDATED STATEMENTS OF CASH FLOWS - For the Six and Three
                    Months Ended
                    June 30, 2007 and 2006
              5NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
              6**ITEM
                  2. MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS**
              **13****PART
                  II OTHER INFORMATION**ITEM
                  6. (a) EXHIBITS FILED:
              18(b) REPORTS ON FORM 8-K
              18SIGNATURES
              19
 
 2
  
 **PART
        I - FINANCIAL INFORMATION**
 **Item
        1.  Financial Statements**
 **THE
        AMACORE GROUP, INC.**
 **CONSOLIDATED
        BALANCE** **SHEETS**






**June
                  30,**
                **2007**
              
              **December
                  31,**
                **2006****ASSETS**Current
                  assetsCash
              
              $
              3,611,074
              
              $
              135,046Accounts
                  receivable (net of $0 and $0 allowance
                for
                  doubtful accounts at 6/30/07 and 12/31/06, respectively)
              
              
              45,284
              
              
              54,756Prepaid
                  expenses and deposits
              
              
              89,458
              
              
              77,775Total
                  current assets
              
              
              3,745,816
              
              
              267,577Fixed
                  assets (net of accumulated depreciation)
              
              
              33,429
              
              
              21,113Other
                  assets
              
              
              83,250
              
              
              -Total
                  assets
              
              $
              3,862,495
              
              $
              288,690**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY (DEFICIT)**Current
                  liabilitiesAccounts
                  payable
              
              $
              735,308
              
              $
              760,158Loans
                  and notes payable
              
              
              1,846,950
              
              
              1,916,950Accrued
                  expenses and payroll taxes
              
              
              747,969
              
              
              438,396Deferred
                  compensation - related party
              
              
              763,793
              
              
              970,753Deferred
                  revenue
              
              
              28,708
              
              
              6,022Total
                  current liabilities
              
              
              4,122,728
              
              
              4,092,279Long
                  Term LiabilitiesDeferred
                  revenue
              
              
              31,289
              
              
              33,473Total
                  long-term liabilities
              
              
              31,289
              
              
              33,473Total
                  liabilities
              
              
              4,154,017
              
              
              4,125,751Stockholders’
                  Equity (Deficit)Preferred
                  stock, $.001 par value, 20,000,000 shares authorized;
                Series
                  A convertible preferred stock;
                1,500
                  shares authorized; 155 shares issued and
                outstanding
                  respectively (aggregate liquidation value**:**$155,000)
              
              
              -
              
              
              -Series
                  C, mandatory convertible stock, 86 shares authorized; 0 and 86
                shares
                  issued and outstanding, respectively (aggregate liquidation value
                  of
                $0
                  and $860,000, respectively)
              
              
              -
              
              
              -Series
                  D, mandatory convertible stock, 694.6 shares authorized; 694.6
                  and
                138.5
                  shares issued and outstanding respectively (aggregate liquidation
                value:$6,946,000
                  and $1,385,000, respectively)
              
              
              -
              
              
              -Series
                  E, mandatory convertible stock, 84 shares authorized, 84 and 84
                shares
                  issued and outstanding respectively (aggregate liquidation: $840,000
                and
                  $840,000, respectively)
              
              
              -
              
              
              -Common
                  stock A ($.001 par value; 860,000,000 shares authorized;
                98,573,820
                  and 91,303,820 shares issued and outstanding,
                  respectively)
              
              
              98,574
              
              
              91,304Common
                  stock B ($.001 par value; 120,000,000 shares authorized;
                22,962,802
                  shares and 3,302,802 shares issued and outstanding,
                  respectively)
              
              
              22,963
              
              
              3,303Additional
                  paid-in capital
              
              
              61,033,939
              
              
              51,346,720Accumulated
                  deficit
              
              
              (61,446,998
              )
              
              (55,277,388
              )Total
                  stockholders’ equity (deficit)
              
              
              (291,522
              )
              
              (3,837,061
              )Total
                  liabilities and stockholders’ equity (deficit)
              
              $
              3,862,495
              
              $
              288,691





**See
      notes to consolidated financial statements**








3





**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**




**FOR
                THE THREE**
              **MONTHS
                ENDED**
            
            **FOR
                THE SIX**
              **MONTHS
                ENDED****June
                30,**
            
            **June
                30,**
            
            **June
                30,**
            
            **June
                30,****2007**
            
            **2006**
            
            **2007**
            
            **2006****(Unaudited)**
            
            **(Unaudited)**
            
            **(Unaudited)**
            
            **(Unaudited)**REVENUESSales
                (net of refunds, returns & allowances of $188,099 and $0 for the six
                months ended 6/30/07and 6/30/06, respectively)
            
            $
            432,590
            
            $
            90,195
            
            $
            592,457
            
            $
            157,111Cost
                of sales
            
            
            (367,819
            )
            
            -
            
            
            (433,919
            )
            
            -Gross
                profit
            
            $
            64,771
            
            $
            90,195
            
            $
            158,538
            
            $
            157,111OPERATING
                EXPENSESDepreciation
            
            
            2,435
            
            
            1,859
            
            
            4,436
            
            
            3,719Rent
            
            
            28,599
            
            
            20,530
            
            
            49,297
            
            
            53,008Consulting
                expense
            
            
            128,125
            
            
            20,960
            
            
            1,896,052
            
            
            102,001Payroll
                expense
            
            
            587,915
            
            
            290,188
            
            
            3,524,940
            
            
            590,535Professional
                expense
            
            
            90,269
            
            
            37,316
            
            
            164,224
            
            
            69,718Insurance
                expense
            
            
            40,139
            
            
            29,997
            
            
            72,479
            
            
            60,233Travel
                and entertainment
            
            
            115,091
            
            
            42,489
            
            
            226,403
            
            
            71,343Contract
                labor
            
            
            14,800
            
            
            15,000
            
            
            37,531
            
            
            28,000Bad
                debt expense
            
            
            -
            
            
            4,656
            
            
            -
            
            
            4,656Office
                expense
            
            
            9,676
            
            
            12,162
            
            
            14,035
            
            
            17,785Telephone
            
            
            18,996
            
            
            6,150
            
            
            25,767
            
            
            15,128Trade
                shows
            
            
            -
            
            
            3,500
            
            
            -
            
            
            3,500Selling,
                general and administrative expenses
            
            
            59,305
            
            
            (1,009
            )
            
            106,745
            
            
            20,596Total
                expenses
            
            
            1,095,350
            
            
            483,799
            
            
            6,121,909
            
            
            1,040,222Operating
                income/(loss) from operations before other income and
                expense
            
            
            (1,030,579
            )
            
            (393,604
            )
            
            (5,963,371
            )
            
            (883,111
            )OTHER
                INCOME (EXPENSE)Interest
                income
            
            
            49,722
            
            
            -
            
            
            49,722
            
            
            -Interest
                expense
            
            
            (84,739
            )
            
            (181,079
            )
            
            (113,851
            )
            
            (282,169
            )Derivative
                instrument income (expense), net
            
            
            -
            
            
            260,373
            
            
            -
            
            
            468,892Total
                other income (expense)
            
            
            (35,017
            )
            
            79,294
            
            
            (64,129
            )
            
            186,723Net
                Loss
            
            
            (1,065,596
            )
            
            (314,310
            )
            
            (6,027,500
            )
            
            (696,388
            )Preferred stock
                dividends and accretions
            
            
            (99,735
            )
            
            (353,704
            )
            
            (141,110
            )
            
            (549,810
            )Net
                Loss Applicable to Common Stockholders
            
            $
            (1,165,331
            )
            $
            (668,014
            )
            $
            (6,168,610
            )
            $
            (1,246,198
            )Basic
                and diluted loss per common share
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.06
            )
            $
            (0.02
            )Basic
                and diluted weighted average number of common shares
                outstanding
            
            
            98,408,325
            
            
            57,696,204
            
            
            96,857,577
            
            
            53,764,180





**See
      notes to consolidated financial statements**





4





**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**SIX
      MONTHS ENDED JUNE 30,**




**2007**
            
            **2006**Cash
                flows from operating activitiesNet
                loss
            
            $
            (6,027,500
            )
            $
            (696,388
            )Adjustment
                to reconcile net loss to net cash provided by (used) in operating
                activitiesAmortization
                of discount on convertible debt
            
            
            -
            
            
            214,872Issuances
                of shares and warrants for services and interest
            
            
            4,066,099
            
            
            3,333Depreciation
            
            
            4,436
            
            
            3,719Derivative
                instrument (income) expense, net
            
            
            -
            
            
            (468,892
            )Changes
                in operating assets and liabilities(Increase)
                decrease in accounts receivables
            
            
            9,472
            
            
            5,813(Increase)
                decrease in prepaid expenses
            
            
            (11,683
            )
            
            14,201Increase
                (decrease) in accounts payable and accrued expenses
            
            
            160,064
            
            
            (6,727
            )Increase
                (decrease) in deferred compensation
            
            
            (206,960
            )
            
            164,441Increase
                (decrease) in deferred revenue
            
            
            20,501
            
            
            (3,405
            )Net
                cash provided (used) by operating activities
            
            
            (1,985,571
            )
            
            (769,033
            )Cash
                flows from investing activitiesPurchase
                of other assets
            
            
            (83,250
            )
            
            -Purchase
                of property and equipment
            
            
            (16,751
            )
            
            -Sale
                of property and equipment
            
            
            -
            
            
            50,000Net
                cash provided (used) by investing activities
            
            
            (100,001
            )
            
            50,000Cash
                flows from financing activitiesProceeds
                from sale of preferred stock
            
            
            750,000
            
            
            -Proceeds
                from short term borrowings, loans and notes payable, net
            
            
            4,835,000
            
            
            974,000Proceeds
                from exercise of warrants
            
            
            31,600
            
            
            -Payments
                on and redemption of convertible notes
            
            
            (55,000
            )
            
            (215,624
            )Net
                cash provided by financing activities
            
            
            5,561,600
            
            
            758,376Increase
                (decrease) in cash
            
            
            3,476,028
            
            
            39,342Beginning
                cash and cash equivalents
            
            
            135,046
            
            
            21,761Ending
                cash and cash equivalents
            
            $
            3,611,074
            
            $
            61,103




June
                  30, 2007
              
              June
                  30, 2006SUPPLEMENTAL
                  INFORMATION:Cash
                  paid for interest
              
              $
              27,010
              
              $
              3,260Cash
                  paid for taxes
              
              $
              -
              
              $
              -NON-CASH
                  INVESTING ANlD FINANCING ACTIVITIES:Conversion
                  value of note payable and interest to preferred stock
              
              $
              4,811,000
              
              $
              -Conversion
                  value of note payable and interest to common stock
              
              $
              -
              
              $
              3,260Conversion
                  value of notes payable to common stock
              
              $
              50,000
              
              $
              66,000Payment
                  of accounts payable with common stock
              
              $
              5,450
              
              $
              -FMV
                  of 1,750,000 shares returned @ $.025
              
              $
              -
              
              $
              42,051Adjust
                  derivative expense for change in fair value due to
                  conversions
              
              $
              -
              
              $
              272,742**See
                  notes to consolidated financial
                  statements**


5


**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      1 - NATURE OF OPERATIONS**




The
      Amacore Group, Inc. (the Company) markets, in addition to its discount vision
      plan, various discount
      programs that provide members with 5% to 50% savings on doctor visits, a
      hospital savings program, discounts on long-term care, and savings on
      alternative medicine, vitamins and nutritional supplements. Program members
      also
      have access to a 24-hour nurse hotline, 24-hour counseling and the services
      of a
      personal patient advocate. For travelers, the program offers worldwide
      assistance in over 200 countries and territories and a Global Med-Net ID that
      can get medical histories to medical service providers around the world. With
      the addition of these new programs, the Company changed its business from just
      a
      provider of vision care to a provider of an entire array of medical services. The
      Company is also in a position to market limited medical indemnity and accident
      group insurance programs.




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**




**Principles
      of Consolidation**





The
      consolidated financial statements as of and for the six months ended June 30,
      2007 and 2006 include the accounts of The Amacore Group, Inc. and its
      wholly-owned subsidiary LBI, Inc. Significant intercompany balances and
      transactions have been eliminated in consolidation.




**Industry
      Segment**





The
      activities of LBI, Inc. are immaterial for the first six months of 2007 and
      2006
      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 Amacore Group considers all highly
      liquid debt instruments purchased with a maturity of three months or less to
      be
      cash equivalents.





**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 Amacore
      Group’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 intangible assets
      should be evaluated for possible impairment, The Amacore Group 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 were no impairment losses during the first six months of 2007,
      thus
      no impairment loss is recorded. As noted above, there was an impairment loss
      in
      2006 due to the sale of intellectual property.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





**Concentration
      of Credit Risk**





Concentrations
      of credit risk with respect to sales existed during the six months ended June
      30, 2007 in that approximately 25% of total sales were to a single plan sponsor,
      down from 27% for the same period in 2006. The concentration of sales to a
      single plan sponsor
      to that extent creates a risk to the extent that if that customer is lost,
      revenues would be significantly affected. In addition, sales
      to
      three customers during the six months ended June 30, 2007 was 43% of total
      sales
      and 77% for the same period in 2006.  The
      Amacore Group continues to mitigate this risk by expanding its customer base,
      and expects to significantly reduce the impact
      of
      the three customers by the addition of several other significant plan sponsors
      and programs offered by the Company. In 2007, the Company has contracted with
      a
      number of discount networks, including dental, hearing, chiropractic,
      counseling, nurse line, emergency informational line (Contact 911), and
      pharmacy. Also, the Company has positioned itself to market limited medical
      indemnity and accident group insurance programs, and has contracted with a
      number of distribution channels experienced with the networks forming the
      components of the Company’s new program.  Gross
      sales from this new program was approximately $121,000 during the six
      months ended June 30, 2007.


6














**Advertising
      Costs**





The
      Amacore Group charges advertising costs to expense as incurred. During the
      six
      months ended June 30, 2007 and 2006, advertising costs were $0 and $0,
      respectively. .





**Intellectual
      Property**





In
      December 2004, The Amacore Group 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 Amacore Group purchased
      the
      technology for an initial payment of 937,500 shares of common A stock valued
      at
      approximately $2,307,572. The remainder of the purchase price was contingent
      on
      proving its marketability with a final payment due by October 2005 in the amount
      of 1,562,500 shares.  The Company had the right to not make the final
      payment when due, and as a result would forfeit all rights to the patent and
      technology.  The Amacore Group had obtained an independent valuation of the
      technology in excess of the purchase price. The Company had determined that
      the useful life for purposes of amortization of the PhotoScreener patent
      (intellectual property) was 20 years. SFAS 142 provides the criteria to be
      considered in determining the useful life. Those criteria are: a) the expected
      use of the patent by the Company, b) the expected useful life of other assets
      which the useful life of the patent may relate, c) any legal, regulatory or
      contractual provisions that may limit the useful life of the patent, d) any
      legal, regulatory or contractual provisions that enable renewal or extension
      of
      the PhotoScreener patent without substantial cost, e) effects of obsolescence,
      demand, competition and other economic factors, and f) the level of maintenance
      expenditures required to obtain expected future cash flows from the
      PhotoScreener. After reviewing the criteria the Company concluded that a) the
      useful life of the PhotoScreener patent is 20 years, b) there are no other
      assets with which the PhotoScreener patent relates, c) the Company has all
      legal
      rights to the PhotoScreener patent, d) the expected cost of renewing the patent
      is minimal - less than $10,000, e) the patent and related technology are unique
      and the Company expected significant revenues from the use of the technology,
      and f) the patent does not require any maintenance to obtain the expected cash
      flows. In March 2006, the Company sold its rights to the patents and technology
      of the PhotoScreener, and thus reduced the value on the Company’s books and
      records at December 31, 2005 by $2,348,020 to the net realizable value of
      $92,051. The asset was sold in March 2006 for $50,000 and the return of 1.75
      million shares of the Company’s common stock previously issued in the
      acquisition of the asset.





**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**





The
      Company’s main source of revenue during the six months ended June 30, 2007 was
      from the sales of bundled discount benefits with added insurance components
      that
      have a monthly renewal period. This revenue is recorded as earned .  We
      record a provision for estimated refunds, returns, and allowances which is
      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. Approximately
      $620,000 of revenue was from the sale of the Company’s programs with with an
      estimate for refunds, returns, and allowances of approximately $187,000
      resulting in approximately $423,000 in sales revenue. 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 2007
      was
      immaterial. During 2006, 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 2006,
      the Company sold two and three year memberships which were and still are
      amortized over the life of these memberships. During 2007, these revenues
      are immaterial.





In
      March
      2007, the Company began selling two new programs entitled SmartHealth Plus
      and
      SmartHealth Premier, which are comprised of a group of bundled products acquired
      through contracts with other vendors, as well as the Company’s discount vision
      plan. 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 these two products should be reported on the gross
      basis.


7








**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





**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 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 collectibility, historical
      trends are evaluated and specific customer issues are reviewed to arrive at
      appropriate allowances. (See Note 5)




**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. (See Derivative
      Financial Instruments below). 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. (See Note 8) The resulting discount to the redemption
      value of redeemable preferred securities is accreted through periodic charges
      to
      retained earnings over the term of the instrument using the Effective Method.
      (See Note 9). In June 2006 the Company redeemed the convertible debt that had
      been identified as derivative financial instruments.





**Derivative
      Financial Instruments**





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 warrants to acquire common stock and 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, even when the terms of the
      underlying contracts do not provide for net-cash settlement. 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. (See Note 13).





**Income
      Taxes**


The
        Amacore Group has adopted SFAS 109.  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.  The cumulative net operating
        losses of approximately $ 61.5
        million can be carried forward to offset future taxable income. The
        net
        operating loss carry-forward begins expiring in 2012.





**Loss
      Per Common Share**




Basic
      loss per common share was computed using (a) net loss adjusted for preferred
      stock dividends and accretions as the numerator and (b) the weighted average
      number of shares outstanding during the periods presented as the denominator.
      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
      options equivalents are anti-dilutive.





**NOTE 3
      - INCOME TAXES**




For
      the six months ended June 30, 2007 and 2006, 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 of 34 percent. 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.




8








**NOTE 3
      - INCOME TAXES (Continued)**





Income
      taxes for the six months ended June 30, 2007 and 2006 differ from the amounts
      computed by applying the effective income tax rate of 34% to income before
      income taxes as a result of the following:




**2007**
            
            **2006**Computed
                tax (benefit) expense at the statutory rate 34%
            
            
            (2,098,900
            )
            
            (236,800
            )Permanent
              difference - Drerivative
              income/(expense) and other
            
            
            -
            
            
            (171,500
            )(408,300
            )Change
                in deferred tax valuation
            
            
            2,098,900
            
            
            408,300Current
                income tax expense (benefit)
            
            
            -
            
            
            -




Temporary
      differences that give rise to deferred tax assets and liabilities:




2007
            
            2006Deferred
                tax assets:Net
                operating loss carry forward
            
            $
            22,585,900
            
            $
            20,308,300Less
                valuation allowance
            
            
            (22,585,900
            )
            
            (20,308,300
            )Gross
                deferred tax asset
            
            
            -
            
            
            -Gross
                deferred tax liability
            
            
            -
            
            
            -Net
                deferred tax asset
            
            $
            -
            
            $
            -




As
      of June 30, 2007, realization of The Amacore Group’s net deferred tax assets of approximately
      $22,585,900 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 six months ended June 30, 2007 was
      $2,098,900.





**NOTE 4
      - DUE TO STOCKHOLDERS/OFFICERS**





As
      of June 30, 2007, due to stockholders/officers included deferred compensation
      of $763,793 **.**





**NOTE 5
      - ACCOUNTS RECEIVABLE, NET**




Accounts
      receivable, net of allowance for uncollectible accounts, was
      $45,284 as of June 30, 2007.





**NOTE 6
      - PROPERTY AND EQUIPMENT, NET**





As
      of June 30, 2007, property and equipment, net of accumulated depreciation of
      $89,215, was $33,429.





9


**NOTE 7
      - NOTES AND LOANS PAYABLE**





Notes
      and loans payable consist of the following as of June 30, 2007 and December
      31,
      2006:




June
                30, 2007
            
            December
                31, 2006Promissory
                notes payable to investors and shareholders; bearing interest ranging
                from
                8% to 10% per annum; due through June 2007; currently in
                default.
            
            $
            512,500
            
            $
            512,500Convertible
                promissory notes to investors and shareholders; bearing interestranging
                from 8% to 10% per annum; due through June 2007; currently indefault
            
            
            662,000
            
            
            692,000Promissory
                notes payable to investors and shareholders; bearing interest
                rangingfrom
                8% to 10% per annum; due through June 2008.
            
            
            160,000
            
            
            195,000Convertible
                promissory notes to investors and shareholders; bearing interestranging
                from 8% to 10% per annum; due through June 2007.
            
            
            397,500
            
            
            402,500Promissory
                note payable to shareholders; bearing 1.53% interest per annum through
                June 2004, increasing to 15% thereafter; currently in
                default.
            
            
            114,950
            
            
            114,950Total
                notes and loans payable
            
            $
            1,846,950
            
            $
            1,916,950




As
      of June 30, 2007, all notes and loans payable were classified as current
      maturities.





**NOTE
      8—CONVERTIBLE DEBENTURES**





There
      were no convertible debentures as of June 30, 2007 and December 31,
      2006.





**NOTE
      9—PREFERRED STOCK**





Series
      C Mandatory Redeemable 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, 6% Cumulative, Preferred Stock, par
      value $0.001 per share (the “Series C Preferred Stock”) and (b) detachable
      warrants to acquire 400,000 shares of 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 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 were 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 had the right to purchase up to 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.





As
      a result of the aforementioned allocation, the Series C Preferred Stock had
      no
      initial carrying value, but it was to be accreted to its redemption value of
      $860,000 through periodic charges to retained earnings over the period through
      the redemption date. Accretions on the Series C Preferred Stock amounted to
      $0
      and $353,704 during the six months ended June 30, 2007 and 2006,
      respectively.





In
      July
      2006, pursuant to a Preferred Stock Purchase and Exchange Agreement with VICIS
      Capital Master Fund (“Vicis”), The Amacore Group, Inc. (the “Company”) exchanged
      86 shares of its Series C Mandatory Convertible Preferred Stock held by Vicis
      and having a maturity date of July 30, 2006, for 86 shares of a newly-created
      6%
      Series D 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. In addition, Vicis purchased for approximately $840,000, 84 shares of
      a
      newly-created 6% Series E 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. Both of the 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.


10





The
      Company has the right to redeem the Series E Preferred Stock at any time,
      provided (a)
      the
      closing trading price of the Class A Common Stock exceeds $.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





In
      January 2007, the Company raised $750,000 by issuing 75 shares of Series D
      Mandatory convertible preferred stock to Vicis Capital Master Fund; another
      $1,500,000 by issuing an additional 150 shares of the same series stock to
      Vicis
      Capital Master Fund, and on March 30 , raised $3.3 million through the issuance
      of a mandatory convertible promissory note to Vicis Capital Master Fund, which,
      along with accrued interest of 4%, was converted into 331.1 shares of the same
      series stock on May 1, 2007. The Company has the right to redeem 90% of the
      331.1 shares during the period ending December 1, 2007.





**NOTE
      10 - COMMON STOCK**




In
      January 2007, The Amacore Group received approval from its shareholders, to
      increase its authorized shares from six hundred forty million shares to one
      billion shares. The authorized shares for Class A common stock were increased
      from five hundred million shares to eight hundred sixty million; its Class
      B
      common stock remained at one hundred twenty million shares and its preferred
      shares remained at twenty million 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 per share.




**NOTE
      11 - WARRANTS**





During
      the six months ended June 30, 2007 and 2006, The Amacore Group issued warrants
      to purchase 10,525,000 and 1,400,000 shares of Class A common stock,
      respectively.  At June 30, 2007 there were 17,511,000 warrants to purchase
      common stock outstanding, exercisable at varying prices through
      2012.




**NOTE
      12 - 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 six months ended June 30, 2007 and 2006:




2007
            
            2006Numerator:Net
                income (loss)
            
            $
            (6,027,500
            )
            $
            (696,388
            )Less
                preferred stock dividend and accretions
            
            
            (141,110
            )
            
            (549,810
            )Net loss
                applicable to common stockholders
            
            $
            (6,168,610
            )
            $
            (1,246,198
            )Denominator:Weighted
                average basic share outstanding
            
            
            96,857,577
            
            
            53,764,180Weighted
                average fully diluted shares outstanding
            
            
            96,857,577
            
            
            53,764,180Net
                earnings per common share - basic and diluted
            
            $
            (0.06
            )
            $
            (0.02
            )




During
      the period presented, common stock equivalents were not considered as their
      effect would be anti-dilutive.


11





**NOTE
      13—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 8—Convertible Debentures and Note 9—Redeemable
      Preferred Stock). As of June 30, 2006, the Company redeemed the convertible
      notes that had been determined to be derivative financial instruments, which
      resulted in the recording of a gain on extinguishment of debt of $493,695.
      Derivative financial instrumentdo not exist as of June 30, 2007





**NOTE
      14 - LITIGATION AND CONTINGENCIES**





At
      June 30, 2007, The Amacore Group 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 that
      the ultimate outcome of these matters will be significant to its results of
      operations or cash flows.




**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 Amacore Group as a going concern. 
However, The Amacore Group has sustained operating losses in recent years. 
Further for the six months ended June 30, 2007, The Amacore Group had negative
      working capital of approximately
      $376,900, a net loss of $6,027,500 and has incurred substantial losses in previous years
      resulting in an accumulated deficit of approximately $61,450,000. 
      Although these factors raise substantial doubt about the ability of The Amacore Group
      to
      continue as
      a
      viable entity, The Amacore Group has taken several actions to ensure that The
      Amacore Group will continue through June 30, 2008.  The Company obtained
      additional financing in the first six months of 2007 totaling $4.8 million from
      Vicis Capital Master and has generated significant revenues from new
      product sales.





12


**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 our business, financial condition, liquidity, results of operations,
      plans and objectives. 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 number
      of
      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 many possible events or factors, including those events and factors described
      in "Risk Factors" in the prospectus, not all of which are known to the Company.
      Neither the Company nor any other person assumes responsibility for the accuracy
      or completeness of these statements. The Company will update this information
      only to the extent required under applicable securities laws. 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.





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-KSB. This report contains
      forward-looking statements that involve risks and uncertainties. Actual results
      in future periods may differ materially from those expressed or implied in
      such
      forward-looking statements as a result of a number of factors, including, but
      not limited to, the risks discussed under the heading "Risk Factors" and
      elsewhere in this Form 10-KSB.





**Introductory
      Overview**





Eye
      Care
      International (ECI) was founded over 10 years ago to market memberships in
      a
      comprehensive, national, non-insurance based, quality discount eye care/eyewear
      plan. The memberships entitle plan participants to obtain eye care services
      and
      products from our network of providers at rates which range from 20% to 60%
      below retail. At that time, it was management’s belief that, once established,
      its quality, discount vision plan could be marketed through the marketers of
      other healthcare programs, such as Aetna, Protective Life, United Health, etc.,
      and through those marketing efforts, we would ultimately reach large numbers
      of
      the U.S. population. It was also management’s belief that once so marketed, the
      Company would be positioned to accumulate significant amounts of data through
      those memberships and ultimately market other healthcare and healthcare-related
      programs to the same membership population and beyond.





It
      took
      significantly longer than management anticipated to construct what management
      believed to be the quality discount vision program it contemplated in terms
      of
      national coverage and general depth. It also took significantly longer than
      management anticipated to enter into the mainstream of the marketers of other
      healthcare programs as their privately labeled vision plan.





A
      significant breakthrough occurred in June, 2003, when the Company entered into
      an agreement with Protective Marketing Enterprises, Inc. (PME), a subsidiary
      of
      Protective Life Corporation (Protective). That agreement provided, among other
      things, that the M.D. (ophthalmologist) portion of ECI's Vision Network would
      automatically be combined with all PME programs that contained a vision
      component. In June, 2005, the Company’s agreement with PME was modified in two
      major respects: (i) PME expanded its relationship with the Company so that
      it
      included the optometric portion of the Company’s network, thus giving PME access
      and the obligation to use as it vision plan the Company’s entire network of eye
      care/eyewear providers; and (ii) the cost on a per membership per month basis
      was increased by 100%.





Some
      time
      prior to January, 2007 ,
      the Company’s management believed that the management at Protective had made a
      decision to wind down its non-life insurance business and exit the healthcare
      business. Through a series of negotiations, the Company entered into long-term
      employment agreements with Mr. Jay Shafer, the former president of PME, and
      Mr.
      Guy Norberg, the former Vice President of Sales and Marketing of PME. The
      Company 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. Effective January 15, 2007, Mr. Jay Shafer
      serves as the Company’s President, Mr. Guy Norberg serves as its Senior Vice
      President of Sales and Marketing and Mr. William Heneghan serves as its Director
      of Operations. Along with the hiring of Messrs. Shafer, Norberg and Heneghan,
      since January, 2007, all senior and middle-level management formerly with PME,
      with one exception, have joined the Company. The Company has also hired other
      staff members to support the Company’s expanding programs. During Messrs.
      Shafer’s and Norberg’s last year of employment at PME, PME’s gross sales,
      achieved primarily through the efforts of Messrs. Shafer and Norberg, were
      approximately $35 million. The Company has also opened a second office near
      Orlando, Florida.





During
      the first quarter of 2007, the Company concentrated its efforts on developing
      a
      wide range of both discount and insured products, which it 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
      other discount networks and we have now positioned ourselves to provide not
      only
      vision programs but discount dental programs, hearing programs, chiropractic
      programs, counseling programs, a nurse line program, an emergency informational
      system called Contact 911, and pharmacy programs. In all, the Company now has
      a
      healthcare product range of approximately 67 different programs. All of the
      networks with whom we have now contracted had previous successful business
      relationships with Messrs. Shafer and Norberg while they were with
      PME.


13





Furthermore,
      we have now contracted with a significant number of healthcare product
      distribution channels experienced, not only in the sale of the types of products
      we designed, but with the actual networks forming the components of our new
      and
      significantly expanded product line. During the first quarter of 2007, we
      entered into distribution agreements with, among others, Selective Health Plan,
      LLC and LA Marketing Plans, LLC, both companies being well experienced in the
      direct response sales market. We also contracted with Chase Paymentech
      Solutions, LLC, who is one of the world’s largest merchant acquirers accepting
      payments at the point of sale, hospitality, internet, retail, catalogue and
      recurring billing. During the same period, we simultaneously worked on
      developing various electronic systems necessary not only for the sale of the
      Company’s products, but the tracking of its revenue and payment of commissions
      to its sales agents on a weekly basis - a payment schedule unique in the
      healthcare industry. In March, 2007, we began testing the various systems we
      were developing that related to our direct response sales. During the test
      period, we were able to successfully streamline this aspect of operations and
      expect to be launching through the above-named distribution channels a
      significant number of additional direct response sales rooms during the third
      and
      fourth  quarter of 2007. Significantly,
      during the four-month test period, the Company generated gross revenues equaling
      an approximate 100% increase over the total gross revenues which the Company
      earned for the entire calendar year of 2006.





Of
      equal significance is the completion of the electronic systems designed to
      not
      only track our sales and revenues, but to facilitate the weekly payment of
      sales
      commissions to our sales agents, as described above. Management believes that
      this type of payment schedule will significantly strengthen our relationships
      with our various sales organizations. On May 1, in a remarkable 60-day program
      build, we completed the development of the Amacore 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 now allows
      Amacore to transition existing ECI business to a monthly renewal
      model.





Today,
      we can collect any data a client would want for any high volume transaction
      and
      bill or assist in any commerce transaction that could exist in the recurring
      fee
      market space. Reporting capabilities can be built in a matter of days due to
      the
      design of the technology. With the intent of having each piece of data operating
      independently, we can query data without the limitation of hard coding. To
      that
      end, our new backend administrative system has allowed us to expeditiously
      build
      and test market driven programs that generated for the Company over a half
      million dollars of gross revenue in the 2 nd quarter alone.





Furthermore,
      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,
      the addition of the program Global MedNet distributes personal medical records
      worldwide in the event of an emergency medical crisis.




By
      2 nd quarter end, we also finalized a
      strategic development agreement with Bridgeport, Connecticut-based Optimus
      Companies, 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. Amacore and Optimus are
      planning to launch in the 4 th quarter
      of 2007 a series of expansive tier-one call center marketing campaigns to
      endorsed files that are expected to vastly increase Amacore's overall membership
      base, membership based revenue, and corporate brand exposure over the balance
      of
      2007, with plans to rapidly expand efforts through advanced call center, and
      marketing partner activity in 2008.




The
      next series of distribution channels we plan to launch will be our (i) employer
      group channel serviced by large group sales agents, scheduled for launch in
      the
      third quarter of 2007; and (ii) direct sales operation through licensed
      insurance agents which we expect to launch in the fourth quarter of
      2007.





In
      addition, management is also exploring various possible acquisition
      opportunities for purposes of further enhancing the Company’s anticipated lineal
      structure and the capturing of a segment of our sales force.





The
      Company believes that all of the above now places it in the healthcare forefront
      in terms of the Company’s ability to effectively market its products to a wide
      range of consumers at affordable prices. The Company has assembled, what some
      would consider, the most complete array of healthcare products currently
      available in the marketplace; significant numbers of distribution channels
      capable of quickly and effectively bringing those products to market; a
      full-service front and back office administrative/electronic system; and an
      experienced management team with a long history of successes in the healthcare
      industry.




14





**RESULTS
      OF OPERATIONS**





**Revenue:**





Gross
      revenue includes approximately $780,000 in membership fees **** for
      the six months ended June 30, 2007, an increase of approximately **$** 623,000
      from gross revenue for the same period in 2006. This increase is the direct
      result of our initiating a new website development and design, completing
      enrollment capabilities for our marketing partners, and adding new members
      during the 2 nd quarter of 2007. An estimate for refunds of $188,100 has been included in
      membership fees and $118,700 has been included in cost of sales for the six
      months ended June 30, 2007 to result in membership fees of approximately
      $592,000 and commissions of $447,000. Cost of sales includes commissions and
      product costs approximating $434,000 for the six months ended June 30, 2007.
      The
      Company negotiates with health insurance companies to offer their programs
      in
      various combinations with other 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.





**Selling,
      General and Administrative Expenses:**




Our
      selling, general and administrative expenses for the six months ended June
      30,
      2007 were $ 6,121,909 .
      This
      was an increase of $ 5,081,687  over
      $1,040,222 for the same period of 2006. Comparison of the more significant components of selling, general and
      administrative expenses follows:


Six
                  Months Ended June 30,2007
              
              2006
              
              Increase
                (Decrease)Depreciation
              
              $
              4,436
              
              $
              3,719
              
              $
              717Payroll
                  and Related Expenses
              
              
              3,524,940
              
              
              590,535
              
              
              2,934,405Business
                  Travel/Trade Shows
              
              
              226,403
              
              
              74,843
              
              
              151,560Insurance
              
              
              72,479
              
              
              60,233
              
              
              12,246Professional/Consulting
                  Fees
              
              
              2,060,276
              
              
              171,719
              
              
              1,888,557Rent
              
              
              49,297
              
              
              53,008
              
              
              (3,711
              )All
                  OtherSelling,
                  General and Administrativeexpenses
              
              
              184,078
              
              
              86,165
              
              
              97,913Total
              
              $
              6,121,909
              
              $
              1,040,222
              
              $
              5,081,687




Depreciation
      expense, which is computed on a straight-line method over the assets estimated
      lives, was nearly the same as the prior year because we have made no major
      fixed
      asset purchases.





Salaries
      and related expenses for the six months ended June 30, 2007, of $3,524,940
      increased $2,934,405 over the same period of 2006 due to including fair market
      value of shares/warrants, totaling $ 2.7 million, issued to the officers and directors of the Company as well as adding
      new employees during the six period ended June 30, 2007.





Business
      travel/trade show expenses for the first six months of 2007 of $226,403 were
      about **$** 151,500
      more than the $74,843 for the same period in 2006. The increase resulted mainly
      because of additional travel required in negotiating contracts for the Company’s
      new programs, promoting additional sales, and completing the financings that
      occurred during the first six months of 2007.





Insurance
      expense of $72,479 for the six months ended June 30, 2007 was $12,246 more
      than
      the same period of 2006 of $60,233 because more employees were covered by the
      medical plan.





Professional/consulting
      fees for the six months ended June 30, 2007 were $2,060,276, an increase of
      $1,888,557 over $171,719 during the same period in 2006. The increase was
      primarily the result of the Company hiring more consultants, during the current
      year, to assist us with continuing the development of the business model as
      originally designed from the Company’s inception. The compensation was measured
      at the fair value of the shares and warrants given for the services
      received.





Rent
      expense of $49,297 was $3,711 less than the $53,008 for the same period in
      2006
      because the Company relocated its corporate offices in June 2006 and negotiated
      a lower per square foot rate for the new facilities. The Company opened an
      office in Orlando beginning in March 2007 which decreased the difference between
      2007 and 2006.





Other
      selling, general and administrative expenses for the six months ended June
      30,
      2007, of $184,078 increased by $97,913 over the $86,165 for the six months
      ended
      June 30, 2006 because of fees paid to our new public relations firm.


15





**Interest
      Expense:**





Interest
      expense for the
      six months ended June 30, 2007 was $113,851, a decrease of $168,318 compared to $282,169 at June 30, 2006. Interest
      expense for the first six months of 2006 includes a number of components
      including (a) interest on our notes payable, (b) amortization of the discount
      on
      our convertible debentures, using the effective method, (c) liquidating damages
      on our convertible debentures for not obtaining an effective registration
      statement related to securities into which the debentures are convertible and
      (d) losses on the conversion of convertible debentures.





Interest
      expense on our notes payable for the six
      months ended June 30, 2007 was $73,081,
      was nearly the same as the $62,417 for the same period in 2006.





Amortization
      of the discounts on our convertible debentures for the six
      months ended June 30, 2007 was $0
      compared to $63,174 for the same period in 2006. Applying the effective interest
      method to the amortization of debt discounts results in increasing charges
      to
      interest expense as such discounts are amortized. Accordingly, our interest
      expense arising from amortization of discounts will increase through the
      maturity dates of the debentures, unless they are converted.





Liquidating
      damages for the six
      months ended June 30, 2007 amounted
      to $0 compared to $11,100 for the same period in 2006. Liquidating damages
      accrued at 2% of the face value of the convertible debentures each month until
      an effective registration statement for the underlying securities would have
      been obtained.





The
      loss
      on the conversion of convertible debentures during the six
      months ended June 30, 2007 amounted
      to $0 compared to $118,610 for the first quarter of 2006.





Since
      these instruments were redeemed in June 2006, no expenses discussed in the
      first
      paragraph of this section, other than the typical interest charge for our notes
      payable, occurred in the first six months of 2007.





**Derivative
      instrument income (expense), net:**





Derivative
      instrument income (expense), net for the six months ended June 30,
      2007  amounted
      to **$** 0
      compared to **$** 468,892
      for the first six months ended June 30, 2006. Derivative instrument income
      arises from fair value adjustments for certain financial instruments, such
      as
      warrants to acquire common stock and the embedded conversion features of debt
      and preferred instruments that are indexed to the Company’s common stock, and
      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, even when the terms of the underlying
      contracts do not provide for net-cash settlement. Such derivative financial
      instruments are initially recorded at fair value and subsequently adjusted
      to
      fair value through charges or credits to income at the close of each reporting
      period.





Fair
      value for our option-based derivative financial instruments is determined using
      the Black-Scholes Valuation Model. The Black-Scholes Model requires the
      development of highly-subjective assumptions, such as the expected term of
      exercise and volatility. Changes to these assumptions may arise from both
      internal (e.g. contract renegotiation) and external factors (e.g. changes in
      the
      trading market value of our common stock); such changes could have resulted
      in
      material changes to the fair values of our derivative financial instruments.





The
      debentures that were determined to be derivative financial instruments were
      redeemed in June 2006, and therefore no income/(expense) was recorded after
      the
      redemption.





**Net
      loss:**





Our
      net
      loss amounted to **$** 6,027,500 for
      the
      six months ended June 30, 2007 compared to $696,388 for the
      six months ended June 30, 2006. The significant change in our net loss is more
      fully discussed above in the details of changes in our account
      balance **s.**





**Preferred
      stock dividends and accretions:**





Preferred
      stock dividends and accretions amounted to $141,110 for the six months ended
      June 30, 2007 compared to $549,810 for the same period in 2006. The decrease
      was
      due to the elimination in June 2006 of the instruments that had been identified
      as derivative financial instruments.





**Loss
      per common share:**





Loss
      per
      common share amounted to $ 0. 06
      for
      the six months ended June 30, 2007 compared to $0.02 for the six months ended
      June 30, 2006. 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.


16





**Loans
      to Stockholders and Officers:**





As
      of
      June 30, 2007, there were no loans or advances to officers.





**CONTRACTUAL
      OBLIGATIONS**





Lease
      Commitments: See Note 15 Commitments
      and Contingency in our
      annual financial statements for information about non-cancelable commitments
      under our lease agreements.





**OFF
      BALANCE SHEET ARRANGEMENTS**





We
      do not
      have any off balance sheet arrangements as of June 30, 2007.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      following table compares our cash flows for the six months ended June 30:





**2007**
            
            **2006**Net
                cash used by operating activities
            
            $
            (1,985,571
            )
            $
            (769,033
            )Net
                cash used by investing activities
            
            
            (100,001
            )
            
            50,000Net
                cash provided by financing activities
            
            
            5,561,600
            
            
            758,376Net
                increase (decrease) in cash
            
            $
            3,476,028
            
            $
            39,342








We
      funded our operations primarily through the issuance of notes payable, amounting
      to $3,315,000, and the sale of preferred stock amounting to $2,250,000 during
      the first six months of 2007.





During
      the first six months of 2007, we issued 8,270,000 shares of Class A common
      stock
      and cancelled 1 million shares due to the lack of consideration. A total of
      3
      million shares were issued to new officers of the Company; 960,000 shares were
      issued upon conversion of notes payable, 3,210,000 shares were issued due to
      warrants being exercised, and 840,000 shares were issued in exchange of Class
      B
      common stock.





17








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 the 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 January 15, 2007, for the purpose of reporting
                the Company’s hiring of a new President and a new Senior Vice President of
                Sales and Marketing.****Current
                Report on Form 8-K dated January 31, 2007 for the purpose of reporting
                the
                Company’s completion of the sale of 75 shares of Series D Preferred Stock.**

















**SIGNATURES**





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





Dated**:**August
                20,
                2007
            /s/*Clark
                A. Marcus*Clark
                A. MarcusChief
                Executive Officer



















18







**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







19