UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-KSB





[X] 
      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934


FOR
      THE
      FISCAL YEAR ENDED December 31, 2005





[  
      ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934





*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 512


Tampa,
      Florida 33607


(Address
      of principal executive offices)





(813)
      289-5552


(Issuer's
      telephone number)





Securities
      Registered Under Section 12(b) of the Exchange Act: None





Securities
      Registered Pursuant to Section 12(g) of the Exchange Act: Class A Common Stock,
      par value $0.001 per share.





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  o





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB.   o





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


State
      issuer’s revenues for its most recent fiscal year: $364,807.





State
      the
      aggregate market value of the 94,046,581shares of common stock held by
      non-affiliates of the issuer as of April
      13,
      2007: $29,154,440 based upon the sale price of the common stock of $0.31 per
      share on April 13, 2007.





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock as
      of April 13 2007:




97,913,820
      Class A Common Shares


22,962,802
      Class B Common Shares





Documents
      incorporated by reference: None.


Transitional
      Small Business Disclosure Format (Check One): Yes  o       
No x








**AMACORE
      GROUP, INC.**





**FORM
      10-KSB**


**For
      the Year Ended December 31, 2006**





**TABLE
      OF CONTENTS**





PART
                I
            
            PAGE
                NO.ITEM
                1.
            DESCRIPTION
                OF BUSINESS.
            1ITEM
                2.
            DESCRIPTION
                OF PROPERTY.
            4ITEM
                3.
            LEGAL
                PROCEEDINGS.
            4ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS.
            4PART
                IIITEM
                5.
            MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
            5ITEM
                6.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
            7ITEM
                7.
            FINANCIAL
                STATEMENTS.
            16ITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE.
            33ITEM
                8A.
            CONTROLS
                AND PROCEDURES.
            33ITEM
                8B.
            OTHER
                INFORMATION.
            33PART
                IIIITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE
                GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                ACT.
            33ITEM
                10.
            EXECUTIVE
                COMPENSATION.
            36ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS.
            37ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE.
            38ITEM
                13.
            EXHIBITS.
            39ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES.

















**PART
      I**





**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





This
      report contains forward-looking statements that involve risks and uncertainties.
      We generally use words such as "believe," "may," "could," "will," "intend,"
      "expect," "anticipate," "plan," and similar expressions to identify
      forward-looking statements. You should not place undue reliance on these
      forward-looking statements. Our actual results could differ materially from
      those anticipated in the forward-looking statements for many reasons, including
      the risks described below in our “Risk Factor” section, elsewhere in this report
      and in our SEC filings from time to time. Although we believe the expectations
      reflected in the forward-looking statements are reasonable, they relate only
      to
      events as of the date on which the statements are made, and our future results,
      levels of activity, performance or achievements may not meet these expectations.
      We do not intend to update any of the forward-looking statements after the
      date
      of this document to conform these statements to actual results or to changes
      in
      our expectations, except as required by law.




**Item
      1. Description of Business**





**History**





We
      incorporated under the laws of Delaware on May 31, 1994 and merged with Eye
      Care
      International, Inc., a Florida corporation, in March 1995. In April 2005, we
      changed our name to The Amacore Group, Inc.





**Overview**





We
      originally began selling memberships in our discount vision program to retail
      customers in an effort to prove that a vision discount plan with an
      ophthalmologic panel included would be not only accepted, but desired, by the
      general public and prove to other marketers of various health plans the benefits
      of including such a plan in their products. We sold the plan on a retail only
      basis for many years proving that the general public did desire to have a vision
      plan with their medical coverage. Once proof of concept became a reality, we
      shifted our emphasis to marketing our plan to marketers of health benefit plans,
      or wholesalers. Marketing programs on a retail basis requires a broad national
      marketing staff which we were not financially prepared to support, whereas
      a
      much smaller staff is needed to market to others on a wholesale basis. During
      the transition/building period, revenues decreased and losses increased. We
      continued to market the plan on a retail basis with less emphasis and devoted
      most of our time to the continued development of our network and developing
      contractual relationships with other marketers of various health plans,
      including, but not limited to, insurance companies and marketers of other
      discount plans such as dental, vision - without a vision medical component,
      and
      prescription drugs. Those contracts did not produce a substantial amount of
      revenue but served to establish our Company as having a product capable of
      not
      only servicing the needs of the general public, but servicing the marketers
      of
      other healthcare programs as a lead generator for their agents. It also served
      to position us with marketers of other healthcare programs in such a way as
      to
      attract those marketers to our Company from a management
      perspective.





Commencing
      on the third quarter of 2006, we initiated activity designed to increase the
      scope of our product line, increase our distribution channels for our product
      line and increase our ability to generate sales leads for our distribution
      channels. Integral to these goals was the hiring of executive personnel,
      experienced in the design and marketing of various types of healthcare programs
      ranging from discount programs to insured components. Additionally, it was
      important for us to further develop the free eye exam component of our vision
      plan so that this component could serve as a sales lead generator for a wide
      range of other healthcare products.





**Developments
      in 2007**





In
      January 2007, we entered into long-term employment agreements with Mr. Jay
      Shafer, the former president of Protective Marketing Enterprises, Inc., a
      subsidiary of Protective Life Corporation, and Mr. Guy Norberg, the former
      Vice
      President of Sales and Marketing of Protective Marketing. We also entered into
      an agreement employing Mr. William Heneghan, former Director of Operations
      for
      Protective Marketing. As of January 2007, Mr. Shafer serves as our President,
      Mr. Norberg serves as our Senior Vice President of Sales and Marketing and
      Mr.
      William Heneghan serves as our Director of Operations. Along with the hiring
      of
      Messrs. Shafer, Norberg and Heneghan, we hired additional executive and support
      staff and opened a second office near Orlando, Florida.





1





During
      the first quarter of 2007, we concentrated our efforts on developing a wide
      range of both discount and insured products, which we intend 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 believe we have 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. All of the
      networks with whom we have now contracted had previously successful business
      relationships with Messrs. Shafer and Norberg.





We
      intend
      to leverage these relationships to broaden our mail-order contact lens
      department and enter into a formal relationship with a nationally recognized
      supplier of mail-order contact lenses that has agreed to a wide range of
      marketing/information support for our Company and our members.





In
      early
      2007 we developed two new discount health products, Smarthealth Plus and
      Smarthealth Premier that will expand our discount health offerings beyond
      optometric care. Smarthealth Plus and Smarthealth Premier are discount programs
      that provide members with savings of 5% to 50% on doctor visits, a hospital
      savings program, long-term care discounts, 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. On March 9, 2007, we entered
      into
      a sales agreement with Service Health Plans to offer our new programs directly
      to the public. With the addition of these new programs, we have changed the
      nature of our Company from just a provider of vision care to a provider of
      an
      entire array of medical services.





We
      have
      also entered into marketing and customer service agreements with TruPoint
      Marketing and the American Advantage Association. We believe these contracts
      position us to enroll existing and prospective members into limited medical
      indemnity and accident group insurance programs underwritten by insurance
      companies through licensed insurance brokers.





Furthermore,
      we have contracted with a number of distribution channels experienced not only
      in the sale of the types of products we designed, but with the networks forming
      the components of our new product line. During the first quarter of 2007, we
      entered into distribution agreements with, among others, Selective Health Plan,
      LLC and LA Marketing Plans, both companies being well experienced in the
      consumer direct response sales industry. We also contracted with Chase
      Paymentech Solutions, LLC, who we believe is one of the world’s largest merchant
      acquirers accepting payments at the point of sale, hospitality, internet,
      retail, catalogue and recurring billing. We launched this aspect of our
      distribution endeavors in March 2007, with the purpose, among other things,
      of
      testing the various electronic systems we employ in connection with our direct
      response sales. During the test period, we successfully streamlined this aspect
      of our operation and we will be launching, through the above-named distribution
      channels, a significant number of additional direct response sales rooms during
      the second quarter of 2007. Significantly, during the test period for the month
      of March 2007, we generated gross revenues equaling nearly one-third of our
      total gross revenues for 2006.





Of
      equal
      significance is that we substantially completed the development of various
      electronic systems designed to not only track our sales and revenues, but to
      facilitate the weekly payment of sales commissions to our sales agents - a
      payment program which we believe will significantly enhance our relationship
      with our various sales organizations.





The
      next
      distribution channel we plan to launch will be our direct sales operation
      through healthcare sales agents. We will launch this aspect of our sales efforts
      in the second quarter of 2007. This launch will be accomplished primarily
      through the efforts of Messrs. Shafer and Norberg with their long-standing
      broker relationships in the healthcare industry. Although this channel has
      not
      been officially launched, we have already successfully sold one or more of
      our
      programs to accounts of one or more of these agents. For example, one such
      agent
      has already contracted us for the sale of our healthcare program to FJC Security
      Services for the remaining two-year period of a previously existing three year
      contract (with another entity) for a total remaining gross sale price of
      $1,639,934 payable monthly. This program was launched in early April 2007.
      We
      expect to receive the first revenues generated by this program by April 30,
      2007.





Another
      distribution channel is the employer group channel serviced by large group
      sales
      agents. As with the program described above, this program is scheduled for
      launch in the second quarter of 2007.





In
      addition to all of the above, we have embarked upon a program to acquire certain
      of our distribution channel business associates who have expressed an intent
      to
      become part of our Company. While there can be no assurances that all, or any
      of
      our acquisition efforts will prove successful, we have reason to believe that
      we
      will, during the second quarter of 2007, acquire one or more of our distribution
      channels.





2











We
      believe that all of the above now places us in the forefront in terms of our
      ability to provide consumers with a wide range of affordable healthcare products
      and the ability to successfully distribute those products through a significant
      number of distribution channels.





Our
      vision plan and, in particular, a form of our free eye exam voucher, which
      contains a requirement that the recipient activate the voucher by way of inbound
      telephone and/or electronic communication, remains a significant aspect of
      all
      of the above programs in that the free eye exam voucher is positioned to be
      distributed as a give-away product with sales of all of our other products.
      We
      believe that the activation aspect of the voucher will serve as a significant
      lead generator for additional sales including sales of our discount vision
      program.





**Our
      Network in Fiscal Year 2006**





We
      believe we are the only national discount vision network with ophthalmologists
      who have agreed to discount all of their medical services and that we are the
      nation's largest optometric discount vision network. Our network has providers
      at nearly 13,000 locations and is comprised of over 2,000 ophthalmologic practices and over 11,000 optometric, optician and optical locations.
      Ophthalmologists, optometrists and opticians participating in our vision care
      network are located within reasonable proximity to all major metropolitan areas
      within the United States. Every surgical procedure, including all types of
      laser
      surgery such as LASIK, Radial Keratomy, or RK, and CO2 laser, are discounted.
      Our optometric network consists of both large chain companies and a wide variety
      of boutiques and specialty shops. We also have approximately 150 provider
      locations, or about 1.2% of our network, outside of the United
      States.





**Our
      Products in Fiscal Year 2006**





Members
      of our vision plan have access to a full range of eye care/eyewear services
      offered by our network of providers at discounted rates. They can also obtain
      a
      comprehensive eye care service package, including elective cosmetic surgical
      procedures such as LASIK or vision correction surgery, CO2 laser skin
      resurfacing or wrinkle removal surgery and other laser surgical procedures
      performed by ophthalmologists. These generally expensive procedures are
      traditionally not covered by insurance or Medicare. The procedures covered
      by
      Medicare are referred to as “coded” procedures and procedures not covered by
      Medicare are referred to as “non-coded” procedures. Members of our plan can
      obtain these non-coded elective procedures from our providers at a discount
      of
      20% from an ophthalmologist's usual and customary rate. We believe our rates
      with ophthalmologists exceed the lowest negotiated rates afforded to insurance
      carriers for all Medicare coded procedures. Our non-Medicare eligible members
      receive a 20% discount from the Medicare allowable fee schedule. For all
      non-coded, elective procedures, all members receive discounts of 20% below
      an
      ophthalmologist’s usual and customary rates. All of our members not eligible for
      Medicare may receive greater discounts for surgical procedures that are
      typically covered by Medicare, such as cataract surgery, since the 20% discount
      applies to the Medicare allowable rate for procedures rather than the
      ophthalmologist’s usual and customary rate, which generally is significantly
      higher. Although individuals eligible for Medicare may participate in our vision
      care program, they only receive discounts on surgical procedures not covered
      by
      Medicare.





Our
      providers offer eyewear products to our members at two times the nationally
      listed wholesale prices for providers participating in our Free Eye Exam Program
      and at one and one-half times the nationally listed wholesale price for
      providers not participating in the Free Eye Exam Program. We also offer a mail
      order program through which members of our vision care network may order
      replacement contact lenses and designer or non-designer sunglasses at nationally
      listed wholesale prices.





**Sales
      and Marketing in Fiscal Year 2006**




Our
      President and Senior Vice President of Sales and Marketing conduct most of
      our
      sales and marketing. We have historically marketed our plan to individuals
      on a
      retail basis. We continued such marketing in 2006. However, we also increased
      our focus on developing contractual relationships with marketers of various
      health plans, including, but not limited to, insurance companies and marketers
      of other discount plans such as dental, vision without a medical component
      and
      prescription drugs. We have had numerous wholesale contracts in place but these
      contracts have not produced revenues as quickly as we initially anticipated.
      This, combined with reduced retail revenue, caused revenues to suffer in 2006.
      We intend to emphasize marketing our plan to wholesalers and believe we now
      have
      contracts that are either in place or near completion of negotiations. We
      anticipate these new contracts will generate an increasing level of revenues
      for
      2007 and subsequent years.







3





**Customers
      in Fiscal Year 2006**





Our
      customer base is primarily comprised of memberships obtained through wholesalers
      who remarket our vision program. In 2006, three wholesalers represented 77%
      of
      our 2006 revenues: MD Select (35%), Care Entrée (27%) and United Health Programs
      of America (15%).





**Intellectual
      Property**





In
      December 2004, we acquired 100% of the rights to a number of patents and
      technology known as the PhotoScreener TM .
      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 PhotoScreener 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. We 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.  We had the right to not make the final payment when
      due, and as a result would forfeit all rights to the patent and
      technology.  In March 2006, we sold our rights to the patents and
      technology of the PhotoScreener.





**Employees**





As
      of
      December 31, 2006, we had seven full-time officers and employees and two
      part-time employees.




**Item
      2. Description of Property**





Our
      executive offices are located at 1211 North Westshore Boulevard, Suite 512,
      Tampa, Florida 33607. Our telephone number is (813) 289-5552. These facilities
      are leased and consist of approximately 3,000 square feet. Our lease expires
      on
      June 1, 2007, with four one-year renewal periods. Rent expense associated with
      these premises and charged to operations for the twelve month period ending
      December 31, 2006 was $80,156..





**Item
      3. Legal Proceedings**





In
      January 2005, we filed a suit in the Thirteenth Judicial Circuit Court of
      Hillsborough County, Florida against Motivano, a wholesaler of our vision plan,
      to enforce our rights to audit the books and records of Motivano to verify
      that
      the correct number of memberships had been reported to Amacore Group and that
      Amacore Group was paid therefor. In March 2006, the parties agreed upon a
      settlement, including an audit of Motivano’s books and records. As of April 16,
      2007, we have not performed such audit.




We
      may be
      involved from time to time in ordinary litigation, negotiation and settlement
      matters that will not have a material effect on our operations or finances.
      Other than the litigation described above, we are not aware of any pending
      or
      threatened litigation against us or our officers and directors in their capacity
      as such that could have a material impact on our operations or
      finances.





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





There
      were no matters submitted to a vote of our stockholders during the fourth
      quarter of fiscal year 2006.





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








4










**PART
      II**




**Item
      5. Market for Common Equity and Related Stockholder
      Matters.**





**Market
      Information**





Our
      Class
      A common stock is listed and traded principally on the OTC Bulletin Board under
      the symbol "ACGI." Set forth below are the high and low closing prices for
      our
      Class A common stock on the OTC Bulletin Board for each quarter of the years
      ending December 31, 2006 and 2005. These quotations reflect inter-dealer prices,
      without retail mark-up, mark-down or commission, and may not represent actual
      transactions.





Quarter
                Ended
            High
            LowMarch
                31, 2005
            0.99
            0.21June
                30, 2005
            0.37
            0.14September
                30, 2005
            0.22
            0.11December
                31, 2005
            0.185
            0.045March
                31, 2006
            0.05
            0.02June
                30, 2006
            0.05
            0.01September
                30, 2006
            0.09
            0.01December
                31, 2006
            0.06
            0.02





**Holders**





As
      of
      April 13, 2007, 97,913,820 shares of our Class A common stock are issued and
      outstanding and there were approximately 300 stockholders of record. There
      were
      also six stockholders holding 3,302,802 shares of Class B common
      stock.





**Dividends**





The
      payment of dividends is within the discretion of our Board of Directors and
      depends in part upon our earnings, capital requirements and financial condition.
      We have never paid any dividends on our Class A common stock and we do not
      anticipate paying such dividends in the foreseeable future. We currently intend
      to retain earnings, if any, to finance our operations.





**Sales
      of Unregistered Securities**





In
      October 2006, we entered into a convertible Promissory Note and a Securities
      Purchase Agreement with Vicis Capital Master Fund. We issued a convertible
      promissory note for $550,000 and immediately received $500,000 which is net
      of
      $25,000 prepaid interest. Under the terms of the agreements the maturity of
      the
      Note is December 31, 2006, but may be converted into our common stock at a
      conversion price yet to be determined.





The
      security issued in the foregoing transaction was made in reliance upon Rule
      506
      of Regulation D under the Securities Act of 1933, as amended, by the fact
      that:





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





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





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





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





5











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





**Equity
      Compensation Plans**





In
      May
      1997, our Board of Directors adopted, and our stockholders approved, the 1997
      Stock Option Plan. The stock option plan is to be administered by the Board
      of
      Directors or a committee of the Board. Pursuant to the plan, options to purchase
      750,000 shares of Class A Common Stock may be granted to directors, employees
      (including officers) and consultants. As of December 31, 2006, no options have
      been granted under the plan.





**Securities
      Authorized for Issuance under Equity Compensation Plans**




As
      of
      December 31, 2006, we did not have securities authorized for issuance under
      equity compensation plans.















6








**Item
      6. Management's Discussion and Analysis or Plan of
      Operations**





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.





**Overview**





We
      market
      memberships in a comprehensive, national, non-insurance based, quality discount
      eye care and 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. In late 2004, we acquired LBI Brokerage,
      a
      managing general agency for group health and life insurance products. A managing
      general agency is an agency appointed by an insurance company for the express
      purpose of distributing its products to its downline general agents, and in
      turn, marketing its product line to its downline agents and producers.





In
      December 2004, we acquired the technology and patent rights related to the
      PhotoScreener TM, a camera embodying technology designed to detect various
      disorders of the eye in young and even preverbal children. The PhotoScreener
      technology has been approved by the FDA. We sold the PhotoScreener in 2006
      and
      retained certain future royalty rights for future sales of the PhotoScreener
      and
      image interpretation fees.





Substantially
      all of our revenues are derived from:




·
            membership
                fees paid to us by wholesalers, which are other health care companies
                that
                include our vision program with their various programs;


·
            individual
                subscribers; and


·
            sponsoring
                organizations that offer or purchase our vision care program for
                their
                employees/members.





We
      have
      experienced losses since we commenced operations in 1994, including net losses
      of $2,189,746 and $4,566,139 for the fiscal year ending December 31, 2006 and
      2005, respectively. Our ability to operate profitably depends upon market
      acceptance of our vision care plan and the development of an effective marketing
      organization. We are presently unable to predict when and if we will generate
      sufficient revenues to become profitable.





**Developments
      in 2007**





In
      January 2007, we entered into long-term employment agreements with Mr. Jay
      Shafer, the former president of Protective Marketing Enterprises, Inc., a
      subsidiary of Protective Life Corporation, and Mr. Guy Norberg, the former
      Vice
      President of Sales and Marketing of Protective Marketing. We also entered into
      an agreement employing Mr. William Heneghan, former Director of Operations
      for
      Protective Marketing. As of January 2007, Mr. Shafer serves as our President,
      Mr. Norberg serves as our Senior Vice President of Sales and Marketing and
      Mr.
      William Heneghan serves as our Director of Operations. Along with the hiring
      of
      Messrs. Shafer, Norberg and Heneghan, we hired additional executive and support
      staff and opened a second office near Orlando, Florida.





During
      the first quarter of 2007, we concentrated our efforts on developing a wide
      range of both discount and insured products, which we intend 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 believe we have 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. All of the
      networks with whom we have now contracted had previously successful business
      relationships with Messrs. Shafer and Norberg.





We
      intend
      to leverage these relationships to broaden our mail-order contact lens
      department and enter into a formal relationship with a nationally recognized
      supplier of mail-order contact lenses that has agreed to a wide range of
      marketing/information support for our Company and our members.





7








In
      early
      2007 we developed two new discount health products, Smarthealth Plus and
      Smarthealth Premier that will expand our discount health offerings beyond
      optometric care. Smarthealth Plus and Smarthealth Premier are discount programs
      that provide members with savings of 5% to 50% on doctor visits, a hospital
      savings program, long-term care discounts, 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. On March 9, 2007, we entered
      into
      a sales agreement with Service Health Plans to offer our new programs directly
      to the public. With the addition of these new programs, we have changed the
      nature of our Company from just a provider of vision care to a provider of
      an
      entire array of medical services.





We
      have
      also entered into marketing and customer service agreements with TruPoint
      Marketing and the American Advantage Association. We believe these contracts
      position us to enroll existing and prospective members into limited medical
      indemnity and accident group insurance programs underwritten by insurance
      companies through licensed insurance brokers.





Furthermore,
      we have contracted with a number of distribution channels experienced not only
      in the sale of the types of products we designed, but with the networks forming
      the components of our new product line. During the first quarter of 2007, we
      entered into distribution agreements with, among others, Selective Health Plan,
      LLC and LA Marketing Plans, both companies being well experienced in the
      consumer direct response sales industry. We also contracted with Chase
      Paymentech Solutions, LLC, who we believe is one of the world’s largest merchant
      acquirers accepting payments at the point of sale, hospitality, internet,
      retail, catalogue and recurring billing. We launched this aspect of our
      distribution endeavors in March 2007, with the purpose, among other things,
      of
      testing the various electronic systems we employ in connection with our direct
      response sales. During the test period, we successfully streamlined this aspect
      of our operation and we will be launching, through the above-named distribution
      channels, a significant number of additional direct response sales rooms during
      the second quarter of 2007. Significantly, during the test period for the month
      of March 2007, we generated gross revenues equaling nearly one-third of our
      total gross revenues for 2006.





Of
      equal
      significance is that we substantially completed the development of various
      electronic systems designed to not only track our sales and revenues, but to
      facilitate the weekly payment of sales commissions to our sales agents - a
      payment program which we believe will significantly enhance our relationship
      with our various sales organizations.





The
      next
      distribution channel we plan to launch will be our direct sales operation
      through healthcare sales agents. We will launch this aspect of our sales efforts
      in the second quarter of 2007. This launch will be accomplished primarily
      through the efforts of Messrs. Shafer and Norberg with their long-standing
      broker relationships in the healthcare industry. Although this channel has
      not
      been officially launched, we have already successfully sold one or more of
      our
      programs to accounts of one or more of these agents. For example, one such
      agent
      has already contracted us for the sale of our healthcare program to FJC Security
      Services for the remaining two-year period of a previously existing three year
      contract (with another entity) for a total remaining gross sale price of
      $1,639,934 payable monthly. This program was launched in early April 2007.
      We
      expect to receive the first revenues generated by this program by April 30,
      2007.





Another
      distribution channel is the employer group channel serviced by large group
      sales
      agents. As with the program described above, this program is scheduled for
      launch in the second quarter of 2007.





In
      addition to all of the above, we have embarked upon a program to acquire certain
      of our distribution channel business associates who have expressed an intent
      to
      become part of our Company. While there can be no assurances that all, or any
      of
      our acquisition efforts will prove successful, we have reason to believe that
      we
      will, during the second quarter of 2007, acquire one or more of our distribution
      channels.





We
      believe that all of the above now places us in the forefront in terms of our
      ability to provide consumers with a wide range of affordable healthcare products
      and the ability to successfully distribute those products through a significant
      number of distribution channels.





Our
      vision plan and, in particular, a form of our free eye exam voucher, which
      contains a requirement that the recipient activate the voucher by way of inbound
      telephone and/or electronic communication, remains a significant aspect of
      all
      of the above programs in that the free eye exam voucher is positioned to be
      distributed as a give-away product with sales of all of our other products.
      We
      believe that the activation aspect of the voucher will serve as a significant
      lead generator for additional sales including sales of our discount vision
      program.





8








**Critical
      Accounting Policies**





**General**





Management’s
      discussion and analysis of its financial condition and results of operations
      is
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with U.S. generally accepted accounting principles. The
      consolidated financial statements as of and for the fiscal year ended December
      31, 2006 and 2005 include the accounts of Amacore Group, Inc. and our
      wholly-owned subsidiary LBI, Inc. Significant intercompany balances and
      transactions have been eliminated in consolidation. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amounts of assets, liabilities, revenue
      and
      expenses, and related disclosure of contingent assets and liabilities. On an
      on-going basis, we evaluate our estimates, including those related to the
      reported amounts of revenues and expenses, bad debt, investments, intangible
      assets, income taxes, and contingencies and litigation. We base our estimates
      on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results could differ from these
      estimates under different assumptions or conditions.





**Industry
      Segment**





The
      activities of LBI, Inc. are immaterial for 2006 and 2005 and therefore are
      not
      reported as a segment since we 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, we consider 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 intellectual property. Effective January 1,
      2004 in accordance with SFAS 142. “Goodwill and Other Intangibles”, intangible
      assets with an indefinite life, namely goodwill is not amortized.
      Intangible assets with a definite life are amortized on a straight-line basis
      with estimated useful lives of 3-20 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. We have selected July 1,
      as
      the annual date to test these assets for impairment. The asset was sold in
      March
      2006.




**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, our 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, we use an estimate of related undiscounted
      cash flows. Factors considered in the valuation include current operating
      results, trends and anticipated undiscounted future cash flows.




**Intellectual
      Property**





In
      December 2004, we acquired 100% of the rights to a number of patents and
      technology known as the PhotoScreener. 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
      PhotoScreener 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. We 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.  We
      had the right to not make the final payment when due, and as a result would
      forfeit all rights to the patent and technology.  We obtained an
      independent valuation of the technology in excess of the purchase price. We
      have determined that the useful life for purposes of amortization of the





9





PhotoScreener
      patent is 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 we 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) we have 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 we expect
      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, we
      sold our rights to the patents and technology of the PhotoScreener, and thus
      reduced the value on our books and records aat
      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 1,750,000 shares
      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**




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,
      we
      also sell smaller amounts of two and three year memberships which are amortized
      over their respective periods. We recognize 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.  We also
      receive a minor amount of commission on sale of products. We 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.




**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, 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.





**Convertible
      Instruments**





We
      review
      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 our control, 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. 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. In June 2006, the Company redeemed this convertible
      debt.





10








**Stock-Based
      Compensation**





Effective
      January 1, 2006, we were required to adopt Statement of Financial Accounting
      Standards (SFAS) No. 123R “Share Based Payment” (SFAS 123R) which replaces SFAS
      123 and SFAS 148, and supersedes Accounting Principles Board (APB) Opinion
      No.
      25 “ Accounting for Stock Issued to Employees.” SFAS 123R requires the cost
      relating to share-based payment transactions in which an entity exchanges its
      equity instruments for goods and services from either employees or non-employee
      be recognized in the financial statements as the goods are received or when
      the
      services are rendered. That cost will be measured based on the fair value of
      the
      equity instrument issued. We will no longer be permitted to follow the
      previously-followed intrinsic value accounting method that APB 25 allowed which
      resulted in no expense being recorded for stock option grants where the exercise
      price was equal to or greater than the fair market value of the underlying
      stock
      on the date of grant and further permitted disclosure-only pro forma
      compensation expense effects on net income.





SFAS
      123R
      now applies to all of our existing outstanding unvested share-based stock
      option/warrant awards as well as any and all future awards. We have elected
      to
      use the modified prospective transition as opposed to the modified retrospective
      transition method such that financial statements prior to adoption remain
      unchanged. The Black-Scholes model will continue to be our method of
      compensation expense valuation.





**Derivative
      Financial Instruments**





We
      generally do 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 our 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 our control.
      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 at the close
      of
      each reporting period. Fair value for 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 may result in material changes to the fair values of our derivative
      financial instruments. The increase in the derivative instrument income noted
      above is largely due to the decline in the trading stock price of our common
      stock. Continuing declines in our trading stock price will result in additional
      credits to income. However, increases in our trading stock prices will result
      in
      charges to income. We will continue to adjust our derivative financial
      instruments to fair value until we achieve the ability to net-share settle
      these
      instruments.





**Income
      Taxes**




We
      have
      adopted SFAS 109.  We have 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 Common Share**




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







11





**Results
      of Operations**





**Revenue:**





For
      the
      year ended December 31, 2006, our gross income was $364,807, a decrease of
      $97,068 compared to the gross income recorded for the same period of 2005 of
      $461,875. Approximately $52,000 of this decrease resulted from less commission
      income being earned by LBI during the year 2006. In addition, approximately
      $114,000 of our 2005 revenue resulted from a one-time cash payment received
      in
      2004 from a wholesale company, but not recorded as revenue until 2005 because
      of
      the revenue recognition policy of recording revenue as it is earned over the
      life of the memberships. These decreases were partially offset by increases
      to
      other wholesale companies.





**Selling,
      General and Administrative Expenses:**





Our
      Selling, General and Administrative expenses for the year ended December 31,
      2006 were $2,624,381. This was a decrease of **$** 1,168,846 from
      $ 3,793,227
      during the year
      ended December 31, 2005. Comparison of the more significant components of
      Selling, General and Administrative expenses follows:





Year
                Ended December 312006
            
            2005
            
            Increase
              (Decrease)Depreciation
            
            $
            7,496
            
            $
            7,379
            
            $
            117Amortization
                of intellectual property
            
            
            -
            
            
            117,554
            
            
            (117,554
            )Payroll
                and Related Expenses
            
            
            1,333,328
            
            
            1,320,969
            
            
            12,359Business
                Travel/Trade Shows
            
            
            237,855
            
            
            211,827
            
            
            26,028Insurance
            
            
            114,804
            
            
            132,535
            
            
            (17,731
            )Professional/Consulting
                Fees
            
            
            574,645
            
            
            1,520,169
            
            
            (945,524
            )Rent
            
            
            80,156
            
            
            127,601
            
            
            (47,445
            )All
                OtherSelling,
                General and Administrativeexpenses
            
            
            276,097
            
            
            355,193
            
            
            (79,096
            )Total
            
            $
            2,624,381
            
            $
            3,793,227
            
            $
            (1,168,846
            )





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 made no major fixed
      asset purchases during either year.





Since
      the
      PhotoScreener was sold in March 2006, there was no amortization during 2006. Amortization
      of the PhotoScreener was $117,554 for the 2005, which was the first year that
      any amortization was recorded.





Salaries
      and related expenses for the year ended December 31, 2006 of $1,333,328
      increased only $12,359 over the year ended December 31, 2005.





Insurance
      expense of $114,804 for the year ended December 31, 2006 was $17,731 less than
      the same period 2005 of $132,535 because fewer employees were covered by the
      medical plan and because of a lower premium obtained for directors and officers
      liability insurance.





Professional/consulting
      fees for the year ended December 31, 2006 were $574,645, a decrease of $945,524
      from $1,520,169 during the same period in 2005. During the fiscal year ended
      December 31, 2006, we recorded approximately $980,000 less in non-cash charges
      related to the issuance of stocks and warrants to consultants compared to the
      same period in 2005. However, increased consulting activities partially offset
      this decrease. In 2006, we also recorded about $40,000 less in accounting fees
      than in 2005 primarily because additional accounting work required for the
      filing of a registration statement in 2005.




Other
      expenses for the year ended December 31, 2006 declined $79,079 to $276,097
      mainly because of a $40,000 reduction in commissions paid by LBI, a reduction
      of
      $26,000 reduction in postage and printing and a $27,000 reduction in marketing
      expenses, partially offset by a $15,000 increase in contract labor.





12








**Interest
      Expense:**





Interest
      expense for the
      year
      ended December 31, 2006 was $439,260, a decrease of $177,790 compared to $617,050 at December
      31, 2005.
      Interest expense 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 year ended
      December 31, 2006
      was
      $221,904, compared to $92,484 for the same period in 2005.





Amortization
      of the discounts on our convertible debentures for the year ended
      December 31, 2006
      was
      $132,362 compared to $61,275 for the same period in 2005. 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 year ended
      December 31, 2006
      amounted to $11,100 compared to $87,920 for 2005. Liquidating damages will
      continue to accrue at 2% of the face value of the convertible debentures each
      month until an effective registration statement for the underlying securities
      is
      obtained.





The
      loss
      on the conversion of convertible debentures during the year ended
      December 31, 2006
      amounted to $118,610. Losses on conversions of convertible debentures may
      continue to arise if the creditors convert their securities.





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





Derivative
      instrument income (expense), net for the year 2006 amounted to **$** 468,892
      compared to **$** 1,849,235
      for the year 2005. 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.
      However, the debentures that were determined to be derivative financial
      instruments were redeemed in June 2006, which resulted in a Gain on
      Extinguishment of Debt of $493,695.





**Extraordinary
      Loss:**





In
      March
      2006, we sold our rights to the patents and technology of the PhotoScreener.
      As
      a result, in 2005, we wrote down the value of the intangible asset down to
      the
      value received from the sale, which resulted in a charge to non-operating
      expense of $2,348,020.





In
      June
      2006, we redeemed certain convertible promissory notes totaling $380,692 plus
      accrued interest of $72,517 and paid a callable premium of $77,895. The notes
      had been determined to be derivative financial instruments. Upon redemption,
      we
      recognized a Gain on Extinguishment of Debt of $493,695.





**Net
      loss:**





Our
      net
      loss amounted to **$** 2,189,746
      for the year ended December 31, 2006 compared to **$** 4,566,139
      for the year ended December 31, 2005. The significant decline in our net loss
      is
      more fully discussed above in the details of changes in our account balances. However,
      the largest components of change are the substantial decrease in our consulting
      expenses and the writedown of the Photoscreener in 2005.





13








**Preferred
      stock dividends and accretions:**





Preferred
      stock dividends and accretions amounted to $453,498 for the year ended December
      31, 2006 compared to $221,004 for the year ended December 31, 2005. Preferred
      stock will continue to be accreted until the preferred stock is converted into
      common stock or redeemed.





**Loss
      per common share:**





Loss
      per
      common share amounted to $0.03 for the year ended December 31, 2006 compared
      to
      $0.13 for the year the year ended December 31, 2005. Loss per common share
      is
      calculated by dividing loss applicable to common stockholders by the weighted
      average number of common shares outstanding. Loss per common share does not
      give
      effect to warrants to acquire common stock and convertible securities because,
      while in a loss position, the effects would be anti-dilutive.





**Loans
      to Stockholders and Officers:**





As
      of
      December 31, 2006, there were no loans or advances to officers.





**Sale
      of PhotoScreener:**





In
      March
      2006, we sold our rights to the patents and technology of it PhotoScreener.
      In
      March 2006 the asset was sold for $50,000 and the return of 1.75 million shares
      of our common stock previously issued in the acquisition of the
      asset.





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 December 31, 2006.





SUBSEQUENT
      EVENTS





In
      January 2007, we entered into long-term employment contracts with Mr. Jay
      Shafer, our President, and with Mr. Guy Norberg, our Senior Vice President
      of
      Sales and Marketing. Both were previously employed by Protective Marketing
      Enterprises, Inc., or PME, a subsidiary of Protective Life Corporation. Upon
      their employment, we opened an office in the Orlando, Florida area and hired
      a
      support staff, including Mr. William Heneghan, former Director of Operations
      for
      PME.





On
      January 31, 2007, we issued 75 shares of our Series D, Mandatory Convertible,
      6%
      Preferred Stock to Vicis Capital Master Fund in exchange for $750,000. The
      Series D preferred shares, which have a maturity date of July 15, 2011, are
      convertible into our common stock at a conversion price of $0.01 per share
      at
      any time after January 31, 2009.





In
      February 2007, the Company entered into a six-year consulting contract with
      James Koenig, former Chief Financial Officer of the Company. Mr. Koenig will
      receive a weekly retainer plus compensation for hours worked for the Company.
      As
      part of the contract, Mr. Koenig agreed to forgive the Company of his deferred
      compensation that had accumulated over the period of 2003 through 2006 totaling
      approximately $505,000.





On
      March
      28, 2007 we issued 150 shares of our Series D, Mandatory Convertible, 6%
      Preferred Stock to Vicis Capital Master Fund in exchange for $1.5 million
      dollars. The Series D preferred shares, which have a maturity date of July
      15,
      2011, are convertible into our common stock at a conversion price of $0.01
      per
      share at any time after January 31, 2009.





On
      March
      30, 2007, we received a loan from Vicis Capital Master Fund in the amount of
      $3.3 million. The loan, which accrues interest at the rate of 4% compounded
      monthly, can be redeemed, in part or in whole and including accrued interest,
      until May 1, 2007, when it is converted into Series D Preferred Stock. However,
      we may redeem any amount of the preferred shares, up to ninety percent issued
      on
      May 1, 2007 through December 1, 2007.





14











**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      following table compares our cash flows for the fiscal years ended December
      31,








2006
            
            2005Net
                cash used by operating activities
            
            $
            (2,291,307
            )
            $
            (1,767,197
            )Net
                cash provided by investing activities
            
            
            47,715
            
            
            350Net
                cash provided by financing activities
            
            
            2,357,417
            
            
            1,781,200Net
                increase (decrease) in cash
            
            
            113,285
            
            $
            14,353








We
      funded
      our 2006 operations through the issuance of notes payable, amounting to
      $1,666,500, and the sale of preferred stock amounting to $1,365,000. We also
      paid or redeemed $969,833 of convertible promissory notes.





During
      2006, we issued 45,731,250 shares of Class A common stock. A total of 7,459,240
      shares were issued for services that either have been or will be performed
      by
      consultants, 1,750,000 shares were cancelled due to the sale of the technology
      and patent rights related to the PhotoScreenerTM, 31,697,010 shares were issued
      upon conversion of notes payable and accrued interest, 7,325,000 shares were
      issued due to warrants being exercised, and 1 million shares were issued in
      exchange of Class B common stock.





15










**ITEM
      7. FINANCIAL STATEMENTS.**




**REPORT
      OF INDEPENDENT REGISTERED**


**PUBLIC
      ACCOUNTING FIRM**




Audit
      Committee


The
      Amacore Group, Inc.


Tampa,
      Florida




We
      have
      audited the accompanying consolidated balance sheets of The Amacore Group,
      Inc.
      as of December 31, 2006 and 2005 and the related consolidated statements of
      operations, stockholders’ deficit and cash flows for the years then ended. 
These consolidated financial statements are the responsibility of The Amacore
      Group's management. Our responsibility is to express an opinion on these
      financial statements based on our audit.




We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of The Amacore Group, Inc.
      as
      of December 31, 2006 and 2005 and the results of operations, changes in
      shareholders’ deficit and cash flows for the years then ended in conformity with
      accounting principles generally accepted in the United States.




The
      Company is not required to have, nor were engaged to perform, an audit of its
      internal control over financial reporting. Our audit included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion.







***/s/Brimmer,
      Burek & Keelan LLP***




Brimmer,
      Burek & Keelan LLP


Certified
      Public Accountants


Tampa,
      Florida





April
      17,
      2007








16





**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**As
      of December 31, 2006 and 2005**


**2006**
            
            **2005****ASSETS**Current
                assetsCash
            
            $
            135,046
            
            $
            21,761Accounts
                receivable (net of $0 and $50,000 allowance
              for
                doubtful accounts in 2006 and 2005 respectively)
            
            
            54,756
            
            
            25,923Non-trade
                receivables and employee receivables
            
            
            0
            
            
            0Prepaid
                expenses and deposits
            
            
            77,775
            
            
            42626Total
                current assets
            
            
            267,577
            
            
            90,310Fixed
                assets (net of accumulated depreciation)
            
            
            21,113
            
            
            25,785Intellectual
                property
            
            
            -
            
            
            92,051Total
                assets
            
            $
            288,690
            
            $
            208,146**LIABILITIES
                AND STOCKHOLDERS’ EQUITY (DEFICIT)**Current
                liabilitiesAccounts
                payable
            
            $
            760,158
            
            $
            862,210Loans
                and notes payable
            
            
            1,916,950
            
            
            801,074Accrued
                expenses and payroll taxes
            
            
            438,396
            
            
            626,896Deferred
                compensation - related party
            
            
            970,753
            
            
            783,801Deferred
                revenue
            
            
            6,022
            
            
            8,766Derivative
                financial instruments
            
            
            -
            
            
            1,982,604Total
                current liabilities
            
            
            4,092,279
            
            
            5,065,351Long
                Term LiabilitiesConvertible
                debenture
            
            
            -
            
            
            13,138Deferred
                Revenue
            
            
            33,473
            
            
            37,365Total
                long-term liabilities
            
            
            33,473
            
            
            50,503Total
                liabilities
            
            
            4,125,751
            
            
            5,115,854Redeemable
                preferred stock:Series
                C Mandatory Redeemable Preferred Stock,
              86
                shares authorized, issued and outstanding
              (aggregate
                liquidation value:  $860,000)
            
            
            -
            
            
            244,021Stockholders’
                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 shares
                issued and outstanding respectively. (aggregate liquidation
              value:
                $0 and $860,000, respectively)
            
            
            -
            
            
            -Series
                D, mandatory convertible stock, 363.5 shares authorized; 138.5 and
                0
              issued
                and outstanding respectively. (aggregate liquidation
              value:$1,385,000
                and $0, respectively)
            
            
            -
            
            
            -Series
                E, mandatory convertible stock, 84 shares authorized, 84 and 0
              shares
                issued and outstanding respectively. (aggregate
              liquidation:
                $840,000 and $0, respectively)
            
            
            -
            
            
            -Common
                stock A ($.001 par value; 1,000,000,000 shares authorized;
              91,303,820
                and 45,496,840 shares issued and outstanding, respectively and $0,
                respectively.)
            
            
            91,304
            
            
            45,573Common
                stock B ($.001 par value; 120,000,000 shares authorized;
              3,302,802
                shares and 4,302,802 shares issued and outstanding,
                respectively.)
            
            
            3,303
            
            
            4,303Additional
                paid-in capital
            
            
            51,346,720
            
            
            47,712,431Accumulated
                deficit
            
            
            (55,277,388
            )
            
            (52,914,038
            )Total
                stockholders’ equity (deficit)
            
            
            (3,837,061
            )
            
            (
                5,151,729
            )Total
                liabilities and stockholders’ equity (deficit)
            
            $
            288,691
            
            $
            208,146




**See
      notes to consolidated financial statements**











17








**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**For
      the Years ended December 31, 2006 and 2005**




**2006**
            
            **2005**REVENUESMembership
                fees
            
            $
            364,807
            
            $
            461,875OPERATING
                EXPENSESDepreciation
            
            
            7,496
            
            
            7,379Amortization
            
            
            -
            
            
            117,554Rent
            
            
            80,156
            
            
            127,601Consulting
                expense
            
            
            363,070
            
            
            1,199,766Payroll
                expense
            
            
            1,333,328
            
            
            1,320,969Professional
                expense
            
            
            211,575
            
            
            320,403Insurance
                expense
            
            
            114,804
            
            
            132,535Travel
                and entertainment
            
            
            228,607
            
            
            194,359Contract
                labor
            
            
            78,183
            
            
            62,866Bad
                debt expense
            
            
            5,167
            
            
            (23,358
            )Office
                expense
            
            
            60,640
            
            
            30,482Telephone
            
            
            32,706
            
            
            44,665Trade
                shows
            
            
            9,248
            
            
            17,468Selling,
                general and administrative expenses
            
            
            99,401
            
            
            240,538Total
                expenses
            
            
            2,624,381
            
            
            3,793,227Operating
                loss from operations before other income and expense
            
            
            (2,259,575
            )
            
            (3,332,352
            )OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            (439,260
            )
            
            (617,050
            )Derivative
                instrument income (expense, net)
            
            
            468,892
            
            
            1,849,235Settlement
                expense
            
            
            -
            
            
            (20,500
            )Write-down
                of PhotoScreener
            
            
            
            
            
            (2,224,468
            )Extinguishment
                of Debt
            
            
            493,695
            
            
            -Total
                other income (expense)
            
            
            523,327
            
            
            (1,012,783
            )Net
                loss
            
            
            (1,736,248
            )
            
            (4,345,135
            )Preferred
                stock dividend and accretions
            
            
            (453,498
            )
            
            (221,004
            )Net
                loss available to common stockholders
            
            $
            (2,189,746
            )
            $
            (4,566,139
            )Basic
                and diluted loss per share
            
            $
            (0.03
            )
            $
            (0.13
            )Basic
                and diluted weighted average number of
              common
                shares outstanding
            
            
            68,306,991
            
            
            34,317,405




**See
      notes to consolidated financial statements**








18











**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)**


**For
      The Years ended December 31, 2006 and 2005**









Preferred
                    Stock
                
                Common
                    StockSeries
                    A
                
                Series
                    c
                
                Series
                    D
                
                Series
                    A
                
                Series
                    BShares
                
                Amount
                
                Shares
                
                Amount
                
                Shares
                
                Amount
                
                Shares
                
                Amount
                
                Shares
                
                Amount
                
                Paid-In
                  Capital
                
                Retained
                  Deficit
                
                TotalBalance
                    - December 31, 2004 (Restated)
                
                
                155
                
                $
                0
                
                
                0
                
                $
                23,017
                
                
                0
                
                $
                
                
                
                23,170,173
                
                $
                23,170
                
                
                4,462,802
                
                $
                4,463
                
                $
                48,643,295
                
                $
                (52,567,850)
                
                $
                (3,873,905
                )Conversion
                    of Common B to Common A
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,000,000
                
                $
                1,000
                
                
                (1,000,000)
                
                $
                (1,000)
                
                
                
                
                
                
                
                
                -Common
                    Stock issued for cash
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                840,000
                
                
                840
                
                
                36,660
                
                
                
                
                
                37,500Conversion
                    of Debt to Common
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                18,114,024
                
                
                18,113
                
                
                
                
                
                
                
                
                1,555,552
                
                
                
                
                
                1,573,590Common
                    Stock issued for asset
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,562,500
                
                
                1,563
                
                
                
                
                
                
                
                
                248,437
                
                
                
                
                
                250,000Common
                    Stock issued for interest (cancelled)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (150,000)
                
                
                (150)
                
                
                
                
                
                
                
                
                (219,750)
                
                
                219,900
                
                
                -Common
                    Stock issued for services
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                2,755,876
                
                
                2,756
                
                
                
                
                
                
                
                
                713,538
                
                
                
                
                
                716,294Common
                    Stock issued for contract settlement
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                120,000
                
                
                120
                
                
                
                
                
                
                
                
                (120)
                
                
                
                
                
                -Common
                    Stock issued for services (cancelled)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,000,000)
                
                
                (1,000)
                
                
                
                
                
                
                
                
                (3,999,000)
                
                
                4,000,000
                
                
                -Warrants
                    issued for officers/directors
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                134,396
                
                
                
                
                
                134,396Warrants
                    issued for services
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                70,088
                
                
                
                
                
                70,088Other
                    Derivative Activities
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                529,463
                
                
                
                
                
                529,463Preferred
                    Stock accretion
                
                
                
                
                
                
                
                
                
                
                
                221,004
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (221,004)
                
                
                -Net
                    Loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (4,345,135)
                
                
                (4,345,135)Balance
                    - December 31, 2005
                
                
                155
                
                $
                0
                
                
                86
                
                $
                244,021
                
                
                
                
                $
                
                
                
                45,572,570
                
                $
                45,572
                
                
                4,302,802
                
                $
                4,303
                
                $
                47,712,483
                
                $
                (52,914,089)
                
                $
                (4,907,709)Conversion
                    of Common B to Common A
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,000,000
                
                $
                1,000
                
                
                (1,000,000)
                
                $
                (1,000)
                
                
                
                
                
                
                
                
                -Conversion
                    of Debt to Common
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                31,697,010
                
                
                31,697
                
                
                
                
                
                
                
                
                439,678
                
                
                
                
                
                471,375Common
                    Stock issued for services (cancelled)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,750,000)
                
                
                (1,750)
                
                
                
                
                
                
                
                
                1,750
                
                
                
                
                
                -Common
                    Stock issued for services
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                7,459,240
                
                
                7,459
                
                
                
                
                
                
                
                
                132,662
                
                
                
                
                
                140,111Exercise
                    of warrants
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                7,325,000
                
                
                7,325
                
                
                
                
                
                
                
                
                15,425
                
                
                
                
                
                22,750Retirement
                    of preferred stock
                
                
                
                
                
                
                
                
                (86)
                
                
                (244,021)
                
                
                ,
                
                
                -
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,679,785
                
                
                (174,606)
                
                
                1,261,158Sale
                    of Preferred Stock
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                132.5
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,365,000
                
                
                
                
                
                1,365,000Net
                    Loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (2,189,746)
                
                
                (2,189,746)Balance
                    - December 31, 2006
                
                
                155
                
                $
                0
                
                
                0
                
                $
                0
                
                
                132.5
                
                $
                0
                
                
                91,303,820
                
                $
                91,303
                
                
                3,302,802
                
                $
                3,303
                
                $
                51,346,773
                
                $
                (55,278,441)
                
                $
                (3,837,061)
  **See
        notes to consolidated financial statements**








19








**THE
      AMACORE GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**Years
      ended December 31, 2006 and 2005**









**2006**
            
            **2005**Cash
                flow from operating activitiesNet
                loss
            
            $
            (1,736,248
            )
            $
            (4,345,135
            )Adjustment
                to reconcile net loss to net cash provided by (used)in operating
                activitiesAmortization
                of discount on convertible debt
            
            
            225,972
            
            
            48,083Issuances
                of shares and warrants for services and interest
            
            
            177,308
            
            
            1,449,971Depreciation
            
            
            7,497
            
            
            7,379Amortization
                of intellectual property
            
            
            -
            
            
            117,554Impairment
                of intellectual property
            
            
            -
            
            
            2,348,020Derivative
                instrument (income) expense, net
            
            
            (468,892
            )
            
            (1,772,839
            )Gain
                on extinguishment of debt
            
            
            (571,590
            )
            
            (221,004
            )Changes
                in operating assets and liabilities(Increase)
                decrease in accounts receivables
            
            
            (28,833
            )
            
            24,261(Increase)
                decrease in prepaid expenses
            
            
            4,851
            
            
            89,708(Increase)
                decrease in other current assets
            
            
            -
            
            
            46,050Increase
                (decrease) in accounts payable and accrued expenses
            
            
            (121,688
            )
            
            380,532Increase
                (decrease) in deferred compensation
            
            
            186,952
            
            
            201,081Increase
                (decrease) in deferred revenue
            
            
            (6,636
            )
            
            (140,858
            )Net
                cash provided (used) by operating activities
            
            
            (2,291,307
            )
            
            (1,767,197
            )Cash
                flow from investing activitiesPurchases
                of property and equipment
            
            
            (2,825
            )
            
            350Sale
                of property and equipment
            
            
            50,000
            
            
            -Net
                cash provided (used) by investing activities
            
            
            47,175
            
            
            350Cash
                flow from financing activitiesProceeds
                from sale of preferred stock
            
            
            1,365,000
            
            
            37,500Proceeds
                from sale of long-term debt
            
            
            -
            
            
            400,000Proceeds
                from short term borrowings loans and notes payable
            
            
            1,666,500
            
            
            1,350,700Proceeds
                from exercise of warrants
            
            
            22,750
            
            
            -Payments
                on and redemption of convertible notes
            
            
            (969,833
            )
            
            (7,000
            )Net
                cash provided by financing activities
            
            
            2,357,417
            
            
            1,781,200Increase
                (decrease) in cash
            
            
            113,285
            
            
            14,353Beginning
                cash and cash equivalents
            
            
            21,761
            
            
            7,408Ending
                cash and cash equivalents
            
            $
            135,046
            
            $
            21,761





**See
        notes to consolidated financial statements**





20










**THE
      AMACORE GROUP, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


FOR
      THE YEARS ENDED DECEMBER 31, 2006 AND
      2005











**NOTE
      1 - NATURE OF OPERATIONS**




The
      Amacore Group, Inc. (The Amacore Group) markets vision care benefit plans and
      enhancements to plans provided by others The Amacore Group's benefit plans
      and
      plan enhancements provide members and members of its plan sponsors (employers,
      associations and other organizations) the opportunity to obtain discounted
      services and products from The Amacore Group’s national network of ophthalmic
      physicians, optometrists, eyewear suppliers, etc. The Amacore Group 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**




**Principles
      of Consolidation**





The
      consolidated financial statements as of and for the years ended December 31,
      2006 and 2005 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 2006 and 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 Amacore Group 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 intellectual property. Effective January 1,
      2004 in accordance with SFAS 142. “Goodwill and Other Intangibles”, intangible
      assets with an indefinite life, namely goodwill is not amortized.
      Intangible assets with a definite life are amortized on a straight-line basis
      with estimated useful lives of 3-20 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 Amacore Group has
      selected July 1, as the annual date to test these assets for impairment. The
      unamortized balance of the intellectual property as of December 31, 2005 was
      approximately **$** 92,051.
      Based on the analysis of all relevant information at December 31, 2005, an
      impairment of approximately $2.3 million was recorded in 2005. 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.




**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 intangibles
      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 recorded for the years 2006 and
      2005, other than the PhotoScreener noted above.

















21





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





**Concentration
      of Credit Risk**





Concentrations
      of credit risk with respect to sales to customers existed for 2006 in that
      approximately 35% of total sales were to a single plan sponsor, up from 24%
      in
      2004. In addition, sales to three customers in 2006 represented 77% of total
      sales. 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
      Amacore Group continues to mitigate this risk by expanding its customer base,
      and expects to significantly reduce the impact of the three customers in 2007
      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. The Company is also
      in
      a position 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 product
      line.





**Advertising
      Costs**





The
      Amacore Group charges advertising costs to expense as incurred. During 2006
      there was no advertising expense, and $27,485 in 2005.




**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 marketibility 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) is 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 the 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**





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
      Amacore Group also sells smaller amounts of two and three year memberships
      which
      are amortized over their respective periods. The Amacore Group 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 Amacore Group also receives a minor amount of commission
      on sale of products. The Amacore Group 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.







22





**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, 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 4)




**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
      and recognized a Gain on Extinguishment of Debt of $493,695.





**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 14.





**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 $55.0 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) as the numerator, net loss adjusted
      for preferred stock dividends and accretions and (b) as the denominator, the
      weighted average number of shares outstanding during the periods presented.
      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
      years ended December 31, 2006 and 2005, 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 liabilities or
      assets have been recorded.







23














Income
      taxes for the years ended December 31, 2006 and 2005 differs from the amounts
      computed by applying the effective income tax rate of 34% to income before
      income taxes as a result of the following:




2006
            
            2005Computed
                tax (benefit) expense at the statutory rate 34%
            
            
            (587,000
            )
            
            (2,100,000
            )Change
                in deferred tax valuation
            
            
            587,000
            
            
            2,100,000Current
                income tax expense (benefit)
            
            
            -
            
            
            -




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






2006
            
            2005Deferred
                tax assets:Net
                operating loss carry forward
            
            $
            20,487,000
            
            $
            19,900,000Less
                valuation allowance
            
            
            (20,487,000
            )
            
            (19,900,000
            )Gross
                deferred tax asset
            
            
            -
            
            
            -Gross
                deferred tax liability
            
            
            -
            
            
            -Net
                deferred tax asset
            
            $
            -
            
            $
            -




As
      of
      December 31, 2006, realization of The Amacore Group’s net deferred tax assets of
      approximately $20,487,000 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 year ended December 31,
      2006
      was $587,000.





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





As
      of
      December 31, 2006, due to stockholders/officers included the
      following:




2006
            
            
            2005Deferred
                compensation
            
            $
            970,753
            
            $
            783,801







**NOTE 5
      - ACCOUNTS RECEIVABLE, NET**




Accounts
      receivable, net consist of the following:




2006
            
            2005Accounts
                receivable
            
            $
            54,756
            
            $
            25,923Less
                allowance for uncollectible accounts
            
            
            -
            
            
            -Total
            
            $
            54,756
            
            $
            25,923





For
      the
      years ended December 31, 2006 and 2005, amounts expensed to bad debt were $5,167
      and $(23,358), respectively.








24











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





Property
      and equipment, net consist of the following:




2006
            
            
            2005Machinery
                and equipment
            
            $
            14,030
            
            $
            14,030Office
                furniture
            
            
            59,434
            
            
            59,434Computers
                and equipment
            
            
            32,429
            
            
            29,604105,893
            
            
            103,068Less
                accumulated depreciation
            
            
            (84,780
            )
            
            (77,283
            )Total
            
            $
            21,113
            
            $
            25,785





Depreciation
      expense for the years ended December 31, 2006 and 2005 was $7,496 and $7,379,
      respectively.







**NOTE 7
      - NOTES AND LOANS PAYABLE**





Notes
      and
      loans payable consist of the following as of December 31, 2006 and
      2005:




2006
            
            
            2005Promissory
                notes payable to investors and shareholders; bearing interest rangingfrom
                8% to 10% per annum; due through December 2006; currently in
                default.
            
            $
            512,500
            
            $
            528,124Convertible
                promissory notes to investors and shareholders; bearing interestranging
                from 8% to 10% per annum; due through December 2006; currently indefault
            
            
            692,000
            
            
            142,000Promissory
                notes payable to investors and shareholders; bearing interest rangingfrom
                8% to 10% per annum; due through December 2007.
            
            
            195,000
            
            
            -Convertible
                promissory notes to investors and shareholders; bearing interestranging
                from 8% to 10% per annum; due through December 2006; currently indefault
            
            
            402,500
            
            
            16,000Promissory
                note payable to shareholders; bearing 1.53% interest per annumthrough
                June 2004, increasing to 15% thereafter; currently in
                default.
            
            
            114,950
            
            
            114,950Total
                notes and loans payable
            
            $
            1,916,950
            
            $
            801,074




As
      of
      December 31, 2006, all notes and loans payable were classified as current
      maturities.





25








**NOTE
      8—CONVERTIBLE DEBENTURES**





Convertible
      debentures consist of the following as of December 31, 2006 and
      2005:








December
                31,
              2006
            
            December
                31,
              20057%
                Convertible Debentures, due between February 10, 2007 and December
                27,
                2007 (a)
            
            $
            -
            
            $
            6,1506%
                Convertible Debentures, due between March 28, 2008 and July 15, 2008
                (b)
            
            $
            -
            
            $
            6,988$
            -
            
            $
            13,138





**(a)** During
      2004, the Company entered into a debt agreement to issue up to $400,000
      convertible debentures. During the period February 10, 2004 and December 27,
      2004, $370,000 face value of the debentures was issued. The debentures were
      immediately convertible into common stock of the Company, together with 7%
      interest, which was payable in either cash or common stock, at the option of
      the
      Company. The conversion price was 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. Proceeds
      from the 7% Convertible Debentures were allocated first to the embedded
      conversions feature and the residual to the debenture. See Note 14 Financial
      Instruments .
      The
      resulting discount amounted to $370,000 which was being amortized through
      periodic charges to interest expense using the effective method. In June 2006,
      the Company redeemed all of these outstanding notes.





**(b)** During
      March 2005, an agreement was signed whereby Divine Capital would raise up to
      $1.0 million of three-year, 6% convertible debentures. In March 2005, the
      Company received an initial investment of $305,000 from that financing
      arrangement and an additional $95,000 during the second and third quarters
      of
      2005. The debentures were convertible into shares of the Company’s Class 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. Proceeds from the 6% convertible
      debentures were allocated first to the embedded conversion feature and the
      residual to the debenture. See Note 14 Financial
      Instruments. The
      resulting discount amounted to $400,000 which is being amortized through
      periodic charges to interest expense using the effective method. In June 2006,
      the Company redeemed all of these outstanding notes.





**(c)** The
      effective interest rate used to amortize the debt discount on the 7% Convertible
      Debentures and the 6% Convertible Debentures amounted to 171.03% and 170.99%,
      respectively. Amortization of the discounts, which was included in interest
      expense, amounted to $96,261 **** and
      $61,275 during the years ended December 31, 2006 and 2005,
      respectively.





**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.





26








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
      $453,498 and $221,004 during the years ended December 31, 2006 and 2005,
      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.





The
      Company will have 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





**NOTE
      10 - COMMON STOCK**




In
      August
      2005, The Amacore Group received approval from its shareholders, to increase
      its
      authorized shares from one hundred twenty million shares to six hundred forty
      million shares. The authorized shares for Class A common stock was increased
      from eighty million shares to five hundred million shares; its Class B shares
      from twenty million shares to one-hundred twenty million shares and its
      preferred shares remained at twenty million shares.




The
      Company’s authorized shares of common stock consist of two classes; 860,000,000
      authorized Class A, and 120,000,000 authorized Class B. 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.






Reacquisition
      of common stock




The
      Company originally issued 1.15 million shares of Class A common stock to May
      Davis, in 2004, in connection with their agreement to raise funds for the
      Company.  The agreement provided for a return of the shares of certain
      levels of financing were not achieved by a stipulated date.  May Davis did
      not fulfill on its obligation to meet the financing amount by the stipulated
      date so the Company exercised its rights to reacquire the shares in 2005. 
The reacquisition was treated as a contraction of its capital structure and
      a
      constructive retirement of the shares.  It is not the intention of the
      Company to reissue the shares and the common stock, paid in capital accounts
      are
      adjusted in accordance with the original issue amounts with a corresponding
      charge to retained deficit.








27








**NOTE
      11 - WARRANTS**




During
      the years ended December 31, 2006 and 2005, The Amacore Group issued warrants
      to
      purchase 13,949,000 and 2,825,000 shares of Class A common stock,
      respectively.  At December 31, 2006 there were 10,727,000 warrants to
      purchase Class A common stock outstanding, exercisable at varying prices through
      2011.  The following table summarizes this warrant activity:







2006
            
            2005Warrants
            
            Weighted
              Average
              Exercise
              Price
            
            Warrants
            
            Weighted
              Average
              Exercise
              PriceWarrants
                outstanding, beginning of year
            
            
            4,472,428
            
            $
            .74
            
            
            2,447,090
            
            $
            2.38Additional
                warrants
            
            
            13,949,000
            
            
            .04
            
            
            2,825,000
            
            
            .16Warrants
                cancelled/expired
            
            
            369,428
            
            
            2.5
                7
            
            
            799,662
            
            
            2.35Warrants
                exercised
            
            
            (7,325,000
            )
            
            .01
            
            
            -
            
            
            -Warrants
                outstanding, ending of year
            
            
            10,727,000
            
            $
            .27
            
            
            4,472,428
            
            $
            .74






The
      following table summarizes the status of warrants outstanding at December 31,
      2006; all warrants are immediately exercisable:





Exercisable
                and Outstanding WarrantsExercise
                Price
            
            Number
            
            Weighted
                average
              remaining
              contractual
                life in
              years$0.005
            
            
            4,200,000
            
            
            4.50$0.01
            
            
            805,600
            
            
            .56$0.025
            
            
            1,000,000
            
            
            .67$0.05
            
            
            53,400
            
            
            .40$0.10
            
            
            460,000
            
            
            4.27$0.15
            
            
            200,000
            
            
            1.25$0.16
            
            
            2,425000
            
            
            3.35$0.21
            
            
            200,000
            
            
            2.58$0.30
            
            
            50,000
            
            
            4.29$1.25
            
            
            906,000
            
            
            3.66$2.40
            
            
            400,000
            
            
            2.67$5.00
            
            
            25,000
            
            
            .09






**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 included
      in the fully diluted shares calculation.








28








The
      following is the computation of basic and diluted net earnings (loss) per common
      share for the years ended December 31, 2006 and 2005:




2006
            
            
            2005Numerator:Net
                income (loss)
            
            $
            (1,736,248
            )
            $
            (4,345,135
            )Less
                preferred stock dividend and accretions
            
            
            (453,498
            )
            
            (221,004
            )Net loss
                applicable to common stockholders
            
            $
            (2,189,746
            )
            $
            (4,566,139
            )Denominator:Weighted
                average basic share outstanding
            
            
            68,306,991
            
            
            34,317,405Stock
                optionsWarrantsConvertible
                noteWeighted
                average fully diluted shares outstanding
            
            
            68,306,991
            
            
            34,317,405Net
                earnings per common share - basic and diluted
            
            $
            (0.03
            )
            $
            (0.13
            )




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










**NOTE
      13 - STOCK OPTION PLAN**





The
      1997
      Stock Option Plan (Plan) is administered by the Board of Directors or a
      committee thereof and provides for options to purchase 750,000 shares of Class
      A
      common stock to be granted under the Plan to employees (including officers),
      directors, independent contractors and consultants to The Amacore Group. 
The Plan authorizes the issuance of incentive stock options (ISOs), as defined
      in the Internal Revenue Code of 1986, as amended, non-qualified stock options
      (NQSOs) and stock appreciation rights (SARs).  Consultants and directors
      who are not also employees of The Amacore Group are eligible for grants of
      only
      NQSOs and SARs. The exercise price of each ISO may not be less than 100% of
      the
      fair market value of the common stock at the time of grant, except that in
      the
      case of a grant to an employee who owns 10% or more of the outstanding stock
      of
      The Amacore Group or a subsidiary of The Amacore Group, the exercise price
      may
      not be less than 110% of the fair market value on the date of grant. The
      exercise price of each NQSO or SAR may not be less than 85% of the fair market
      value of the common stock at the time of grant. Generally, options shall be
      exercisable at 20%, per year, and shall be outstanding for ten
      years.




As
      of
      December 31, 2006 and 2005, no options have been granted under the
      Plan.








**NOTE
      14—FINANCIAL INSTRUMENTS**





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





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





The
      fair
      value of the 7% Convertible Debentures amount to approximately $0 and $180,256,
      respectively, as of December 31, 2006 and 2005 (See Note 8—Convertible
      Debentures). Fair values for the convertible debentures were calculated at
      net
      present value using the Company’s weighted average borrowing rate of 12.4% for
      debt instruments without conversion features applied to total future cash flows
      of the instruments.





29








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). These derivative financial instruments are indexed to an
      aggregate of 0 and 18,483,214 shares at December 31, 2005 and were carried
      at
      fair value. In June 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.





The
      following tabular presentation sets forth information about the derivative
      financial instruments.


As
      of and
      for the year ended December 31, 2006:





Embedded
                Conversion Features:
            
            7%
                Convertible
              Debentures
            
            6%
                Convertible
              Debentures
            
            Series
                C
              Preferred
            
            Sub-TotalFair
                value
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Fair
                value adjustments:Contract
                inception
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -End
                of period
            
            
            420,401
            
            
            (155,815)
            
            
            (1,019,259
            )
            
            (754,673)Total
                period (income) loss
            
            $
            420,401
            
            $
            (155,815)
            
            $
            (1,019,259
            )
            $
            (754,673)






Warrants:
            
            Warrants
              (Note
                9)
            
            Other
              Warrants
                (a)
            
            TotalFair
                value
            
            $
            -
            
            $
            -
            
            $
            -Fair
                value adjustments:Contract
                inception
            
            $
            -
            
            $
            -
            
            $
            -End
                of period
            
            
            (16,000
            )
            
            (9,850
            )
            
            (468,893
            )Total
                period (income) loss
            
            $
            (16,000
            )
            $
            (9,850
            )
            $
            (468,893
            )





As
      of and
      for the year ended December 31, 2005:








Embedded
                Conversion Features:
            
            7%
                Convertible
              Debentures
            
            6%
                Convertible
              Debentures
            
            Series
                C
              Preferred
            
            Sub-TotalFair
                value
            
            $
            289,540
            
            $
            520,325
            
            $
            1,019,259
            
            $
            1,829,124Fair
                value adjustments:Contract
                inception
            
            $
            -
            
            $
            360,933
            
            $
            -
            
            $
            360,933End
                of period
            
            
            (57,155
            )
            
            275,407
            
            
            (8,273
            )
            
            209,912Total
                period (income) loss
            
            $
            (57,155
            )
            $
            636,340
            
            $
            (8,273
            )
            $
            570,912






Warrants:
            
            Warrants
              (Note
                9)
            
            Other
              Warrants
                (a)
            
            TotalFair
                value
            
            $
            20,000
            
            $
            133,478
            
            $
            1,982,602Fair
                value adjustments:Contract
                inception
            
            $
            -
            
            $
            -
            
            $
            360,933End
                of period
            
            
            (284,000
            )
            
            (1,750,783
            )
            
            (1,824,804
            )Total
                period (income) loss
            
            $
            (284,000
            )
            $
            (1,750,783
            )
            $
            (1,463,871
            )








30








**(a)** Effective with the issuance of the 7% Convertible Debentures, the Company no
      longer controlled the ability to physical or net share settle any other
      derivative financial instruments, representing principally warrants to acquire
      common stock, previously executed. As a result, the fair values of then
      outstanding warrants amounting to $3,545,000 were reclassified from stockholders
      equity (deficit) to derivative liabilities. These instruments are adjusted
      to
      fair value until the Company’s ability to settle on a physical or net share
      settlement is regained.





**(b)** Fair
      value for option-based financial instruments is determined using the
      Black-Scholes Valuation Model. Significant assumptions as of December 31, 2005
      for the embedded conversion feature on the 7% Convertible Debentures, the
      embedded conversion feature on the 6% Convertible Debentures, the embedded
      conversion feature on the Series C Preferred Stock and the Warrants,
      respectively, included: strike price-$0.03, $0.03, $0.03 and $2.40;
      volatility-249% for all instruments; term-remaining term of conversion feature
      for all instruments; and, risk free rate-3.82% for all instruments.





**NOTE
      15 - COMMITMENTS AND CONTINGENCY**





The
      Amacore Group is committed under a lease for office space through May 31,
      2008.  For the years ended December 31, 2006 and 2005, rent expense
      was approximately $80,156 and $127,602, respectively.





The
      following is a schedule of future minimum lease payments (net of sales tax)
      required under a one-year lease for the 2,985 square foot facilities located
      at
      1211 N. Westshore Blvd, Suite 512, Tampa, FL 33607:







Year
                ending December 31,2007
            
            $
            51,6162008
            
            $
            21,766








**NOTE
      16 - LITIGATION AND CONTINGENCIES**





At
      December 31, 2006, 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 the
      ultimate outcome of these matters will be significant to its results of
      operations or cash flows.






**NOTE
      17 - 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 year ended December 31, 2006, The Amacore Group had negative
      working capital of approximately $3,824,702, a net loss of $2,189,746 and has
      incurred substantial losses in previous years resulting in an accumulated
      deficit of approximately $55,278,388.  Although these factors raise
      substantial doubt about the ability of The Amacore Group to continue as a going
      concern The Amacore Group has taken several actions to ensure that The Amacore
      Group will continue as a going concern through December 31, 2007.  The
      Company has obtained additional financing in the first quarter of 2007 totaling
      $4.8 million..






**NOTE 18
      - RELATED PARTY TRANSACTIONS**




During
      the years ended December 31, 2006 and 2005, The Amacore Group had an employment
      agreement with its President and Chief Executive Officer, Clark Marcus. 
The agreement, which originally had an expiration date of September 20, 1999,
      was extended by resolution of the Board of Directors, on February 15, 1996,
      for
      a period of five years, originating upon the date the executive commences to
      receive his full compensation, as provided under the terms of the employment
      agreement.  Therefore the original agreement is still in
      effect.




As
      of
      December 31, 2006 and 2005, a total of $461,702 and $412,797, respectively,
      of
      deferred compensation was due to this executive.







31








During
      the years ended December 31, 2006 and 2005, The Amacore Group had an employment
      agreement with James Koenig, Acting Chief Financial Officer.  The agreement
      originally had an expiration date of February 1, 2001.  The Board of
      Directors extended this agreement on the same terms as described for its
      President and Chief Executive Officer.





As
      of
      December 31, 2006 and 2005, The Amacore Group had accrued deferred compensation
      of $505,450 and $371,004, respectively, for services performed during the years
      ended 2006, 2005, 2004 and 2003 by Mr. Koenig.




The
      terms
      of the employment agreements include annual salary increases and bonuses, to
      be
      determined by the Board of Directors.  In addition, to fringe benefits
      afforded to other senior executives, The Amacore Group is obligated to pay
      premiums for life, travel and accident insurance, with a double indemnity
      provision, in the amount of five times the President and Chief Executive
      Officer’s base compensation, with the beneficiary to be designated by the
      executive.






**NOTE 19
      - SUBSEQUENT EVENTS**





In
      January 2007, the Company entered into long-term employment contracts with
      Mr.
      Jay Shafer, our President, and with Mr. Guy Norberg, our Senior Vice President
      of Sales and Marketing. Both were previously employed by Protective Marketing
      Enterprises, Inc., (PME) a subsidiary of Protective Life Corporation. Upon
      their
      employment, the Company opened an office in the Orlando, Florida area and hired
      a support staff, including Mr. William Heneghan, former director of operations
      for PME.





During
      the first quarter of 2007, The Amacore Group concentrated its efforts on
      developing a wide range of both discount and insured products, which products
      Amacore Group intended to market through a significant number of distribution
      channels with whom Messrs. Shafer and Norberg had worked in the past. The
      Amacore Group successfully contracted with a number of other discount networks
      so that it has now positioned itself to provide not only vision programs but
      discount dental programs; hearing programs, chiropractic programs; counseling
      programs; a nurse line program; an emergency informational system (Contact
      911)
      and pharmacy programs. All of the networks with whom The Amacore Group has
      now
      contracted had previously successful business relationships with Messrs. Shafer
      and Norberg.





The
      Amacore Group has also entered into marketing and customer service agreements
      with TruPoint Marketing and the American Advantage Association pursuant to
      which
      agreements Amacore Group is positioned to enroll existing and prospective
      members into limited medical indemnity and accident group insurance programs
      underwritten by numerous insurance companies through licensed insurance brokers.
      The Amacore Group has combined these various programs into its products
      identified as Smart Health Plus and Smart Health Premier, which include either
      some or all of the above identified healthcare components. The Amacore Group
      has
      positioned itself to sell those components either in packaged or stand-alone
      form, thus giving Amacore Group the ability to service a wide customer range
      base with both stand-alone products and what is commonly known in the healthcare
      industry as Limited Medical Indemnity programs. All of these programs are
      designed to be sold on a guaranteed issue basis at rates affordable to the
      consumer.





The
      Amacore Group has also contracted with a number of distribution channels
      experienced not only in the sale of the types of products designed by Amacore
      Group, but with the networks forming the components of Amacore Group’s new
      product line. During the first quarter of 2007, The Amacore Group entered into
      distribution agreements with, among others, Selective Health Plan, LLC and
      LA
      Marketing Plans, both companies being well experienced in the consumer direct
      response sales industry. The Amacore Group also contracted with Chase Paymentech
      Solutions LLC, believed by Amacore Group to be the world’s largest merchant
      acquirer accepting payments at the point of sale, hospitality, internet, retail,
      catalogue and recurring billing.





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 was 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.





In
      January 2007 the Company issued 75 shares of its Series D, Mandatory
      Convertible, 6% preferred stock to Vicis Capital Master Fund for $750,000.
      The
      Series D preferred shares, which have a maturity date of July 15, 2011, are
      convertible into common stock of the Company at a conversion price of $0.01
      per
      share at any time after January 31, 2009.





In
      February 2007, the Company entered into a six-year consulting contract with
      James Koenig, former Chief Financial Officer of the Company. Mr. Koenig will
      receive a weekly retainer plus compensation for hours worked for the Company.
      As
      part of the contract, Mr. Koenig agreed to forgive the Company of his deferred
      compensation that had accumulated over the period of 2003 through 2006 totaling
      approximately $505,000.





On
      March
      28, 2007 the Company issued another 150 shares of its Series D, Mandatory
      Convertible, 6% preferred stock to Vicis Capital Master Fund for $1.5 million
      dollars. The terms are the same as the January issuance discussed
      above.





On
      March
      30, 2007, the Company received a loan from Vicis Capital Master Fund in the
      amount of $3.3 million. The loan, which accrues interest at the rate of 4%
      compounded monthly, can be redeemed, in part or in whole and including accrued
      interest, until May 1, 2007, when it is converted into Series D preferred stock.
      However, the Company may redeem any amount of the preferred shares, up to ninety
      percent issued on May 1, through December 1, 2007.








32








**Item
      8. Changes in and Disagreements With Accountants on Accounting and Financial
      Disclosure.**





We
      had no
      changes in or disagreements with accountants on accounting and accounting
      disclosure in 2006 or 2005.





**Item
      8A. CONTROLS AND PROCEDURES.**





EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES





Our
      management evaluated, with the participation of our Chief Executive
      Officer/Interim Chief Financial Officer, the effectiveness of our disclosure
      controls and procedures as of the end of the period covered by this Annual
      Report on Form 10-KSB. Based on this evaluation, our Chief Executive
      Officer/Interim Chief Financial Officer has concluded that our disclosure
      controls and procedures are effective to ensure that information we are required
      to disclose in reports that we file or submit under the Securities Exchange
      Act
      of 1934 (i) is recorded, processed, summarized and reported within the time
      periods specified in Securities and Exchange Commission rules and forms, and
      (ii) is accumulated and communicated to our management, including our Chief
      Executive Officer/Interim Chief Financial Officer, as appropriate to allow
      timely decisions regarding required disclosure. Our disclosure controls and
      procedures are designed to provide reasonable assurance that such information
      is
      accumulated and communicated to our management. Our disclosure controls and
      procedures include components of our internal control over financial reporting.
      Management's assessment of the effectiveness of our internal control over
      financial reporting is expressed at the level of reasonable assurance that
      the
      control system, no matter how well designed and operated, can provide only
      reasonable, but not absolute, assurance that the control system's objectives
      will be met.





CHANGES
      IN INTERNAL CONTROLS





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





**ITEM
      8B - OTHER INFORMATION**





Not
      Applicable.





**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters and Control Persons; Compliance
      with
      Section 16(a) of the Exchange Act.**





The
      following is a list of our directors and executive officers:




Name
            Age
            PositionClark
                A. Marcus
            65
            Chairman,
                Chief Executive
              Officer
                and DirectorJames
                L. Koenig
            60
            Acting
                CFO, Corporate Secretary and DirectorArnold
                Finestone
            76
            DirectorWilliam
                H. Koch, M.D.
            68
            DirectorSharon
                Kay Ray
            49
            DirectorArthur
                Yeap
            51
            DirectorJay
                Shafer
            47
            President
                and DirectorJerry
                Katzman, M.D.
            54
            Director








33








Clark
      A.
      Marcus, one of our founders, has served as Chairman of the Board and Chief
      Executive Officer since September 1993. He also has served as President since
      February 1996. Mr. Marcus has been a practicing attorney since 1968 and was
      senior partner in the New York law firms of Victor & Marcus and Marcus &
Marcus.





James
      L.
      Koenig has been Secretary and a Director since February 1996. He was Senior
      Vice
      President and Chief Financial Officer from February 1996 until August 16, 2004
      and is currently serving as the Acting Chief Financial Officer. Prior to joining
      Amacore Group in December 1994, as an independent sales agent, he worked in
      various accounting/management capacities primarily in the utilities industry.
      From 1984 to November 1994, Mr. Koenig was employed by Tampa Electric Company
      in
      various executive capacities ranging from Assistant Controller to Director
      of
      Audit Services and Director of Regulatory Affairs.





Arnold
      Finestone has been a member of our Board of Directors since April 2001. 
Mr. Finestone is a business management consultant.  From 1970 to 1988, he
      was an executive with Dart & Kraft, Inc., serving as President of its Dartco
      subsidiary, which was engaged in marketing and manufacturing high performance
      engineering plastics for consumer and industrial uses and Executive Vice
      President of the Chemical-Plastics Group from 1970 to 1982.  From 1957 to
      1970, he was Vice President, Director of Planning, Development and Marketing
      of
      Foster-Grant, Inc.





William
      H. Koch, M.D. has been a member of our Board of Directors since February 1996.
      He has been a psychiatrist and child development specialist since 1974. He
      is
      the Founder and Director of Parent and Child Services, Inc., New York City;
      The
      Parent and Child Consultation Services, New York City; and the "School for
      Parents." He is a former member of the faculty of the College of Physicians
      and
      Surgeons, New York City, and Special Consultant to Child Protective Services,
      New York City. Dr. Koch also is an author, lecturer and consultant.





Sharon
      Kay Ray, one of our founders, has been a member of our Board of Directors since
      inception. Since March 1989, she has served as regional marketing representative
      for Novo Nordis Pharmaceuticals, a multi-national pharmaceutical company, and
      as
      a special marketing consultant for a number of public and non-public
      corporations.





Arthur
      Yeap has been a member of our Board of Directors since April 2001.  Since
      1983 Mr. Yeap has been Chief Executive officer of Novo Group, consultants and
      manufacturers of customer audio and video products for professional use. 
He also has been a principal investigator on the staff of the University of
      California at Berkley, engaged in research for advanced military and consumer
      uses for the Internet.  From 1996 to 1999, he was Director of Marketing,
      Consumer Products for ITV Corp.  From 1995 to 1996 Mr. Yeap was Chief
      Engineer for WYSIWYG networks.





Jay
      Shafer became President of The Amacore Group, Inc. in January 2007 and was
      elected to the Board of Directors in March 2007. Prior to joining the Company,
      Mr. Shafer was employed by Protective Marketing Enterprises, Inc. (PME) from
      1997 to 2006. He served as PME’s Vice President Business Development from 1997
      to 2002 and as its


Chief
      Executive Officer from 2002 to 2006. He was Vice President- Financial Services
      Division of John Harland Company from 1988 to 1997.





Jerry
      Katzman was elected to the Board of Directors in April 2007. Dr. Katzman is
      an
      ophthalmologist and the principal founder of Eye Care International, Inc. He
      served as its President from 1993 through 1995, before returning to private
      practice. Dr. Katzman has continually worked with the Company in various
      consulting capacities since 1995.





**Meetings
      and Committees of the Board of Directors**





Our
      Board
      of Directors conducts its business through meetings of the Board and through
      activities of its committees.





***Audit
      Committee***





The
      Board
      of Directors has established an Audit Committee. Arnold Finestone and Arthur
      Yeap are the current members of the Audit Committee. Mr. Finestone is the Audit
      Committee financial expert. The Audit Committee recommends engagement of our
      independent auditors, is primarily responsible for approving the services
      performed by the independent auditors and for reviewing and evaluating our
      accounting principles and our system of internal accounting controls and has
      general responsibility in connection with related matters.





***Other
      Committees***





The
      Board
      does not have a compensation committee or a nominating committee, the functions
      of which are performed by the Board.





34








All
      our
      directors hold office until the next annual meeting of stockholders or until
      their successors are duly elected and qualified, and all executive officers
      hold
      office at the discretion of the Board of Directors.





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Securities Exchange Act requires our officers, directors and
      persons who own more than ten percent of our class A common stock to file
      certain reports of ownership and changes in ownership with the SEC within
      specified time periods. Officers, directors and ten-percent stockholders are
      required by regulation to furnish us with copies of all Section 16(a) forms
      they
      file. We are not aware of any failures to file reports or report transactions
      in
      a timely manner during the fiscal year ended December 31, 2006.





**Code
      of Ethics**





We
      have
      adopted a Code of Ethics. A copy of our Code of Ethics was filed with our Form
      10-KSB for the period ending December 31, 2003. We will provide a copy of our
      Code of Ethics to any shareholder without charge upon a written
      request.





**Procedure
      for Nominating Directors**





We
      have
      not made any material changes to the procedures by which security holders may
      recommend nominees to our board of directors.





The
      Board
      does not have a written policy or charter regarding how director candidates
      are
      evaluated or nominated for the board. Additionally, the Board has not created
      particular qualifications or minimum standards that candidates for the board
      must meet. Instead, the Board considers how a candidate could contribute to
      the
      company's business and meet the needs of the company and the board.




The
      Board
      will consider candidates for director recommended by our shareholders.
      Candidates recommended by shareholders are evaluated with the same methodology
      as candidates recommended by management or members of the board. To refer a
      candidate for director, please send a resume or detailed description of the
      candidate's background and experience with a letter describing the candidate's
      interest in the company to 1211 N. Westshore Blvd, #512, Tampa, FL 33607,
      Attention: Chairman. All candidate referrals are reviewed by at least one
      current board member.


























35








**Item
      10. Executive Compensation**




The
      following table shows the compensation paid or accrued during the fiscal years
      ended December 31, 2006 and 2005 to (1) our Principal Executive Officer (2)
      our
      one most highly compensated executive officer, other than our Principal
      Executive Officer.







**Summary
      Compensation Table**





Name
                and Principal Position
              (a)
            Year
              Ended
              December
              31,
              (b)
            Base
                Salary
              $
              (c)
            Option
                Awards5
              $
              (f)
            Non-qualified
                Deferred compensation Earnings
              $
              (h)
            All
                Other Compensation
              $
              (i)
            Dollar
                Value of total compensation for the covered fiscal year $
              (j)Clark
                A. Marcus, Principal Executive Officer and President
            2006
            615,6281
            51,000
            
            6,000
            672,6282005
            490,3012
            89,597
            
            6,000
            585,898Jim
                Koenig, Acting Chief Financial Officer
            2006
            352,4583
            6,800
            
            6,000
            365,2582005
            246,4364
            44,799
            
            6,000
            297,235




(1) Clark
      Marcus
      received payments of $387,529 in 2006. The balance of $228,099 was accrued
      as
      deferred compensation.





(2) Clark
      Marcus
      received payments of $318,374 in 2005. The balance of $171,927 was accrued
      as
      deferred compensation





(3) Jim
      Koenig
      received payments of $218,012 in 2006. The balance of $134,446 was accrued
      as
      deferred compensation.





(4) Jim
      Koenig
      received payments of $153,353 in 2005. The balance of $93,083 was accrued as
      deferred compensation.





(5) A
      discussion
      of the assumptions used to value these awards can be found in Notes to Financial
      Statements, Note 14, Financial Instruments.







**NARRATIVE
      TO SUMMARY COMPENSATION TABLE**




EMPLOYMENT
      AGREEMENTS OF EACH NAMED EXECUTIVE OFFICER





Clark
      Marcus serves as our Chief Executive Officer pursuant to an employment agreement
      which expires in September 2008. The agreement provides for a salary of $150,000
      per annum, increased by an amount equal to the greater of fifteen percent of
      the
      prior year's salary or the increase in the consumer price index for the Tampa,
      Florida area, plus a bonus beginning at three percent of our pre-tax profits
      in
      any year that our revenues exceed $1 million and increasing up to seven percent
      of our pre-tax profits in any year that revenues exceed $4 million. The actual
      amount paid to Mr. Marcus, excluding an auto allowance of $6,000, and deferred
      salary of $228,099, for the year ending December 31, 2006 was $387,529. We
      may
      terminate his employment for gross misconduct in the performance of his duties.
      If Mr. Marcus' employment is terminated within 12 months following a change
      in
      control, Mr. Marcus will receive his salary, bonus and additional compensation
      for a period equal to the greater of the remainder of the term of the employment
      agreement or 3 years. We have amended Mr. Marcus’ agreement for extensions for
      periods that he has not received his full annual salary, currently resulting
      in
      extension through the year 2008.





36








James
      L.
      Koenig served as our Senior Vice President and Chief Financial Officer until
      August 16, 2004, when retired, pursuant to an employment agreement which would
      have expired in February 2008. Following the termination of Mr. Scott Carson
      in
      April 2005, Mr. Koenig agreed to temporarily resume the responsibilities of
      Acting Chief Financial Officer and he continues as Secretary. The agreement,
      which was reinstated, provided for a salary of $125,000 per annum, increased
      by
      an amount equal to the greater of ten percent of the prior year's salary or
      the
      increase in the consumer price index for the Tampa, Florida area, plus a bonus
      of three percent of our pre-tax profits in any year that our revenues exceed
      $1
      million. We are obligated to pay his deferred compensation totaling $505,450
      when we have the ability to do so.





Each
      of
      Messrs. Marcus and Koenig have entered into agreements with us which provide
      that, for a period of three years following the termination of his employment,
      he will not:





·
            engage,
                directly or indirectly, in a business within the United States that
                markets products or services the same as, similar to, or competitive
                with,
                our products or services, whether fully developed or in the development
                stage.





·
            solicit
                or accept business from any entity within the United States which
                is or
                was a customer of ours during his tenure with us, if such business
                involves one of our products.





·
            solicit
                the employment of, hire or cause any other entity to hire, any of
                our
                employees.








**OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END**


We
      had
      not outstanding equity awards as of December 31, 2006.







**DIRECTOR
      COMPENSATION**





We
      did
      not pay compensation to our directors in the year ended December 31,
      2006.





**Item
      11. Security Ownership of Certain Beneficial Owners and
      Management**





The
      following table sets forth certain information as of April 3, 2007 regarding
      the
      beneficial ownership of our common stock held by each of our executive officers
      and directors, individually and as a group and by each person who beneficially
      owns in excess of five percent of our common stock. In general, beneficial
      ownership includes those shares that a person has the power to vote, sell,
      or
      otherwise dispose. Beneficial ownership also includes that number of shares
      which an individual has the right to acquire within 60 days (such as stock
      options) of the date this table was prepared. Two or more persons may be
      considered the beneficial owner of the same shares. The inclusion in this
      section of any shares deemed beneficially owned does not constitute an admission
      by that person of beneficial ownership of those shares.


The
      persons and entities named in the table have sole voting and investment power
      with respect to all shares shown as beneficially owned by them, except as noted
      below.





Amount
                and Nature
              Of
                Beneficial
              Ownership
                (1)
            
            Percentage
                of Common Stock
              Beneficially
                Owned (2)Name
            Class
                A
              Common
              Stock
            
            Class
                B
              Common
              Stock
            
            As
                a %
              of
                All
              Common
                Stock
            
            As
                a %
              of
                All
              Class
                A
            
            As
                a %
              of
                All
              Class
                BClark
                Marcus (3)
            1,506,250
            
            14,209,280
            
            11.4%
            
            1.4%
            
            52.3%Sharon
                Kay Ray (3)
            400,000
            
            224,640
            
            *
            
            *****
            
            *James
                L. Koenig (3)
            -
            
            2,073,882
            
            1.5%
            
            **-**
            
            7.6%William
                Koch (3)
            412,548
            
            205,000
            
            *
            
            *****
            
            *Arnold
                Finestone (3)
            396,390
            
            200,000
            
            *
            
            *****
            
            *Arthur
                Yeap (3)
            406,581
            
            200,000
            
            *
            
            *****
            
            *Jerry
                Katzman, M.D.
            326.720
            
            10,050,000
            
            7.5%
            
            *****
            
            37.0%Jay
                Shafer
            2,750,000
            
            **-**
            
            2.2%
            
            2.5%
            
            -All
                officers and directors
              as
                a group (8 persons)
            6,198,489
            
            27,162,802
            
            24.2%
            
            5.6%
            
            100.0%





_______________________________


*                      
      Less than 1%





37








(1)     
      Unless otherwise indicated, each person has sole investment and voting power
      with respect to the shares indicated, subject to community property laws, where
      applicable. For purposes of this table, a person or group of persons is deemed
      to beneficially own any shares that such person has the right to acquire within
      60 days after April 3, 2006.





(2)     
      Calculated as a percentage of the total number of shares of common stock issued
      and outstanding without respect to voting power. Each share of class B common
      stock is entitled to five votes per share, as compared to one vote per share
      of
      class A common stock. For purposes of computing the percentage of outstanding
      shares held by each person or group of persons named above on April 3, 2006,
      any
      shares, which such person or group of persons has the right to acquire within
      60
      days after such date is deemed to be outstanding for the purpose of computing
      the percentage ownership of such person. As of April 3, 2006, we had 110,934,820
      (including 13,081,000 warrants) shares of class A common stock outstanding
      and
      27,162,802 shares of class B common stock outstanding (including 4,200,000
      warrants), or a total of 138,097,622 shares of common stock outstanding
      (including 17,281,000 warrants).





(3)     
      Address is c/o The Amacore Group, Inc., 1211 North Westshore Boulevard, Suite
      512, Tampa, Florida 33607.








**Item
      12. Certain Relationships and Related Transactions, and Director
      Independence.**





**Certain
      Relationships and Related Transactions**





In
      March
      2003, Mr. Marcus and Mr. Koenig forgave us of their deferred compensation for
      fiscal years 2000, 2001 and 2002 of $426,484 and $511,654, respectively, leaving
      deferred compensation of approximately $100,000 owing to Mr. Marcus and zero
      to
      Mr. Koenig. We owe Mr. Marcus and Mr. Koenig deferred compensation for the
      years
      2003, 2004 and 2005 of $412,797 and $371,004, respectively. The deferred
      compensation does not bear interest. Also in March 2003, we forgave Mr. Marcus
      and Mr. Koenig of indebtedness of loans of $274,984 and $8,000
      respectively.





Other
      than as described above, none of the following parties has, since our date
      of
      incorporation, had any material interest, direct or indirect, in any transaction
      with us or in any presently proposed transaction that has or will materially
      affect us:





·
            Any
                of our directors or officers;


·
            Any
                person proposed as a nominee for election as a
                director;


·
            Any
                person who beneficially owns, directly or indirectly, shares carrying
                more
                than 10% of the voting rights attached to our outstanding shares
                of common
                stock;


·
            Any
                of our promoters;


·
            Any
                relative or spouse of any of the foregoing persons who has the same
                house
                as such person





**Director
      Independence**





During
      the year ended December 31, 2006, Clark A. Marcus, James L. Koenig, William
      Koch, M.D., Sharon Kay Ray, Arnold Finestone and Arthur Yeap served as our
      directors. We are currently traded on the Over-the-Counter Bulletin Board or
      OTCBB. The OTCBB does not require that a majority of the Board be
      independent.





38





**Item
      13. Exhibits**




EXHIBIT
              NUMBER
            
            DESCRIPTION21.1
            
            List
                of Subsidiaries (filed herewith).31.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002.








**Item
      14. Principal Accountant Fees and Services.**








Fiscal
                year ending
              December
                31, 2006
            
            Fiscal
                year ending
              December
                31, 2005Audit
                Fees
            $
            96,440
            $
            52,391Audit
                Related Fees
            
            0
            
            0Tax
                Fees
            
            0
            
            0All
                Other Fees
            $
            0
            $
            77,138







**THE
      BOARD OF DIRECTORS PRE-APPROVAL POLICY AND PROCEDURES**





We
      may
      not engage our independent auditors to render any audit or non-audit service
      unless our Audit Committee approves the service in advance.





The
      Audit
      Committee has considered whether the provision of the services described above
      under the caption "All Other Fees" is compatible with maintaining the auditor's
      independence.








39








**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**:**April
                  17, 2007
              /s/*Clark
                  A. Marcus*Clark
                  A. MarcusChief
                  Executive Officer


In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the Registrant on the 17 th day of
      April, 2007 in the capacities indicated.





/s/ *Clark
      A. Marcus*


Clark
      A.
      Marcus


Chief
      Executive Officer, President and


Director





*/s/
      James L. Koenig*


James
      L.
      Koenig


Acting
      Chief Financial Officer,


Principal
      Accounting Officer and Director





*/s/ 
      William Koch, M.D*


William
      Koch, M.D.


Director





*/s/ 
      Sharon Kay Ray*


Sharon
      Kay Ray


Director





*/s/
      Arnold Finestone*


Arnold
      Finestone


Director





*/s/
      Arthur Yeap*


Arthur
      Yeap


Director





*/s/
      Jay Shafer*


Jay
      Shafer


Director





*/s/
      Jerry Katzman, M.D.*


Jerry
      Katzman, M.D.


Director








40