UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 2



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934; or
|- | -------------------------------------------------------------------------------------------

For the quarterly period ended: June 30, 2008



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from:  to

DYNAMIC
RESPONSE GROUP, INC.

(Name of Small Business Issuer in its Charter)



|                                              |  |                         |  |                                    
|--------------------------------------------- |  | ----------------------- |  | -----------------------------------
|Florida                                       |  | 000-28201               |  | 52-2369185                         
|(State or Other Jurisdictionof Incorporation) |  | (CommissionFile Number) |  | (I.R.S. EmployerIdentification No.)

4770 Biscayne Boulevard, Suite 780, Miami, FL, 33137

(Address of Principal Executive Office) (Zip Code)

305-576-6889

(Registrants telephone number, including area code)

N/A

(Former name or former address,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    x  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                             
|-------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈        
|Non-accelerated filer   ̈   |  | Smaller reporting company  x

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

As of July 31, 2008, there were 90,548,066 shares of common stock issued and outstanding.









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PART I  FINANCIAL INFORMATION

EXPLANATORY NOTE

This Amendment No. 2 to the Quarterly Report on Form 10-Q
amends the Companys quarterly report for the period ended June 30, 2008, originally filed with the Securities and Exchange Commission on August 20, 2008, as amended By Amendment No. 1 on September 22, 2008. This Amendment No. 2 shall
amend the original filing, as amended by Amendment No. 1, in its entirety. Exhibits required to be filed hereunder, are incorporated herein by reference to the original filing.



2



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|Item 1. | Financial Statements
|------- | --------------------

DYNAMIC RESPONSE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                          |  | June 30,2008 |             |   | December 31,2007 |  
|                                                                                                                                                          |  | (Unaudited)  |             |   | (Audited)        |  
|ASSETS                                                                                                                                                    |  |              |             |   |                  |   |             |  
|Current Assets:                                                                                                                                           |  |              |             |   |                  |   |             |  
|Cash                                                                                                                                                      |  | $            | 677,131     |   |                  |   | 571,571     |  
|Accounts receivable, net                                                                                                                                  |  |              | 1,534,801   |   |                  |   | 1,656,618   |  
|Inventory, net                                                                                                                                            |  |              | 357,313     |   |                  |   | 566,899     |  
|Direct response advertising cost                                                                                                                          |  |              | 449,569     |   |                  |   | 186,463     |  
|Deferred tax asset                                                                                                                                        |  |              | 231,308     |   |                  |   |            |  
|Prepaid expenses and other current assets                                                                                                                 |  |              | 227,359     |   |                  |   | 103,517     |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Total current assets                                                                                                                                      |  |              | 3,477,481   |   |                  |   | 3,085,068   |  
|Office equipment-net                                                                                                                                      |  |              | 24,959      |   |                  |   | 29,835      |  
|Product prototype                                                                                                                                         |  |              | 10,500      |   |                  |   | 10,500      |  
|Intangible assets-trademark and patent                                                                                                                    |  |              | 1,490,000   |   |                  |   | 1,340,150   |  
|Restricted cash                                                                                                                                           |  |              | 10,067      |   |                  |   | 10,000      |  
|Other assets                                                                                                                                              |  |              | 24,306      |   |                  |   | 24,188      |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Total assets                                                                                                                                              |  | $            | 5,037,313   |   |                  | $ | 4,499,741   |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                     |  |              |             |   |                  |   |             |  
|Current Liabilities:                                                                                                                                      |  |              |             |   |                  |   |             |  
|Accounts payable and accrued expenses                                                                                                                     |  | $            | 6,283,104   |   |                  |   | 4,253,707   |  
|Due to related parties                                                                                                                                    |  |              | 230,994     |   |                  |   | 279,411     |  
|Current portion of obligation under capital lease                                                                                                         |  |              | 14,707      |   |                  |   |            |  
|Convertible promissory notes                                                                                                                              |  |              | 2,166,858   |   |                  |   | 2,166,858   |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Total current liabilities                                                                                                                                 |  |              | 8,695,663   |   |                  |   | 6,699,976   |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Commitments and contingencies                                                                                                                             |  |              |             |   |                  |   |             |  
|Stockholders Deficit:                                                                                                                                    |  |              |             |   |                  |   |             |  
|Common stock; $.0001 par value, 100,000,000 shares authorized, 90,548,066 and 85,273,066 issued and outstanding as of June 30, 2008 and
December 31, 2007 |  |              | 9,055       |   |                  |   | 8,527       |  
|Additional paid-in capital                                                                                                                                |  |              | 14,317,396  |   |                  |   | 14,317,923  |  
|Accumulated deficit                                                                                                                                       |  |              | (17,984,800 | ) |                  |   | (16,526,685 | )
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Total stockholders deficit                                                                                                                               |  |              | (3,658,350  | ) |                  |   | (2,200,235  | )
|                                                                                                                                                          |  |              |             |   |                  |   |             |  
|Total liabilities and stockholders deficit                                                                                                               |  | $            | 5,037,313   |   |                  | $ | 4,499,741   |  
|                                                                                                                                                          |  |              |             |   |                  |   |             |  

See the accompanying notes to financial statements



3



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DYNAMIC RESPONSE GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------ |  | ---------------------------------- | ---------- | - | -------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                 |  | For the Three Months EndedJune 30, |            |   | For the Six Months EndedJune 30, |  
|                                                 |  | 2008                               |            |   | 2007                             |   |            | 2008 |  |   | 2007       |  
|Gross revenues                                   |  | $                                  | 9,552,292  |   |                                  | $ | 3,589,252  |      |  | $ | 19,560,277 |   |  | $ | 7,942,155  |  
|Sales returns and allowances                     |  |                                    | 2,304,120  |   |                                  |   | 864,460    |      |  |   | 4,289,804  |   |  |   | 2,480,788  |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Net revenues                                     |  |                                    | 7,248,172  |   |                                  |   | 2,724,792  |      |  |   | 15,270,473 |   |  |   | 5,461,367  |  
|Cost of revenues                                 |  |                                    | 1,652,776  |   |                                  |   | 391,788    |      |  |   | 3,016,516  |   |  |   | 596,444    |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Gross profit                                     |  |                                    | 5,595,396  |   |                                  |   | 2,333,004  |      |  |   | 12,253,957 |   |  |   | 4,864,923  |  
|Operating expenses:                              |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Selling and marketing                            |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Media and advertising                            |  |                                    | 3,679,095  |   |                                  |   | 757,812    |      |  |   | 6,498,160  |   |  |   | 1,880,319  |  
|Fulfillment & freight                            |  |                                    | 970,100    |   |                                  |   | 338,024    |      |  |   | 1,975,846  |   |  |   | 650,083    |  
|Commissions                                      |  |                                    | 488,905    |   |                                  |   | 746,946    |      |  |   | 1,116,017  |   |  |   | 1,006,770  |  
|Call Center                                      |  |                                    | 429,525    |   |                                  |   | 152,752    |      |  |   | 854,661    |   |  |   | 266,172    |  
|Royalties                                        |  |                                    | 138,407    |   |                                  |   | 7,300      |      |  |   | 403,928    |   |  |   | 14,500     |  
|Other                                            |  |                                    | 117,857    |   |                                  |   | 74,436     |      |  |   | 206,670    |   |  |   | 111,757    |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Total selling and marketing                      |  |                                    | 5,823,889  |   |                                  |   | 2,077,270  |      |  |   | 11,055,282 |   |  |   | 3,929,601  |  
|Merchant charges                                 |  |                                    | 328,834    |   |                                  |   | 136,978    |      |  |   | 753,186    |   |  |   | 301,802    |  
|General and administrative                       |  |                                    | 1,209,953  |   |                                  |   | 743,823    |      |  |   | 1,971,060  |   |  |   | 1,091,370  |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Total operating expenses                         |  |                                    | 7,362,676  |   |                                  |   | 2,958,071  |      |  |   | 13,779,528 |   |  |   | 5,322,773  |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Loss from operations                             |  |                                    | (1,767,280 | ) |                                  |   | (625,067   | )    |  |   | (1,525,571 | ) |  |   | (457,850   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Other income (expense):                          |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Other income                                     |  |                                    | 3,919      |   |                                  |   | 2,977      |      |  |   | 14,198     |   |  |   | 12,932     |  
|Interest income                                  |  |                                    | 185        |   |                                  |   |           |      |  |   | 185        |   |  |   |           |  
|Interest expense                                 |  |                                    | (105,684   | ) |                                  |   | (64,557    | )    |  |   | (178,050   | ) |  |   | (169,542   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|                                                 |  |                                    | (101,765   | ) |                                  |   | (61,580    | )    |  |   | (163,852   | ) |  |   | (156,610   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Loss before income taxes                         |  | $                                  | (1,869,045 | ) |                                  | $ | (686,647   | )    |  | $ | (1,689,423 | ) |  | $ | (614,460   | )
|Benefit (provision) from income taxes            |  |                                    |           |   |                                  |   |           |      |  |   | 231,308    |   |  |   |           |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Net loss                                         |  | $                                  | (1,869,045 | ) |                                  | $ | (686,647   | )    |  | $ | (1,458,115 | ) |  | $ | (614,460   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Basic weighted average common shares outstanding |  |                                    | 88,178,011 |   |                                  |   | 76,852,082 |      |  |   | 86,735,529 |   |  |   | 73,233,466 |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Basic loss per share                             |  | $                                  | (0.02      | ) |                                  | $ | (0.01      | )    |  | $ | (0.02      | ) |  | $ | (0.01      | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  

See the accompanying notes to financial statements



4



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DYNAMIC RESPONSE GROUP, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)



|                                                                           |  |                                  |            |   |      |   |          |  
|-------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---- | - | -------- | -
|                                                                           |  | For the Six Months EndedJune 30, |           
|                                                                           |  | 2008                             |            |   | 2007 |  
|Cash flows from operating activities:                                      |  |                                  |            |   |      |   |          |  
|Net loss                                                                   |  | $                                | (1,458,115 | ) |      | $ | (614,460 | )
|Adjustments to reconcile net loss to net cash used in operating activities |  |                                  |            |   |      |   |          |  
|Depreciation                                                               |  |                                  | 5,910      |   |      |   |         |  
|Allowance for doubtful accounts                                            |  |                                  | 170,537    |   |      |   |          |  
|Changes in assets and liabilities:                                         |  |                                  |            |   |      |   |          |  
|Accounts receivable                                                        |  |                                  | (48,720    | ) |      |   | (53,467  | )
|Inventory                                                                  |  |                                  | 271,513    |   |      |   | (89,378  | )
|Inventory reserve                                                          |  |                                  | (61,927    | ) |      |   |         |  
|Direct response advertising costs                                          |  |                                  | (263,106   | ) |      |   |         |  
|Prepaid expenses and other current assets                                  |  |                                  | (123,842   | ) |      |   | (11,864  | )
|Deferred tax asset                                                         |  |                                  | (231,308   | ) |      |   |         |  
|Restricted cash                                                            |  |                                  | (67        | ) |      |   |         |  
|Other assets                                                               |  |                                  | (118       | ) |      |   | (7,294   | )
|Accounts payable and accrued expenses                                      |  |                                  | 2,055,169  |   |      |   | (143,784 | )
|                                                                           |  |                                  |            |   |      |   |          |  
|Net cash provided by (used in) operating activities                        |  |                                  | 315,926    |   |      |   | (920,247 | )
|                                                                           |  |                                  |            |   |      |   |          |  
|Cash flows used in investing activities:                                   |  |                                  |            |   |      |   |          |  
|Capital expenditures                                                       |  |                                  | (1,034     | ) |      |   |         |  
|Payments toward patent agreement                                           |  |                                  | (149,850   | ) |      |   | (112,500 | )
|                                                                           |  |                                  |            |   |      |   |          |  
|Net cash used in investing activities                                      |  |                                  | (150,884   | ) |      |   | (112,500 | )
|                                                                           |  |                                  |            |   |      |   |          |  
|Cash flows from financing activities:                                      |  |                                  |            |   |      |   |          |  
|Procceds from shareholder loans                                            |  |                                  |           |   |      |   | 283,740  |  
|Repayment of related party loans                                           |  |                                  | (48,417    | ) |      |   |         |  
|Repayment of investment                                                    |  |                                  |           |   |      |   | (20,000  | )
|Repayment of promissory note                                               |  |                                  |           |   |      |   | (100,000 | )
|Proceeds from issuance of convertible promissory notes                     |  |                                  |           |   |      |   | 600,983  |  
|Principal payments for obligation under capital lease                      |  |                                  | (11,065    | ) |      |   |         |  
|                                                                           |  |                                  |            |   |      |   |          |  
|Net cash provided by (used in) financing activities                        |  |                                  | (59,482    | ) |      |   | 764,723  |  
|Net increase (decrease) in cash                                            |  |                                  | 105,560    |   |      |   | (268,024 | )
|Cash, beginning of year                                                    |  |                                  | 571,571    |   |      |   | 364,121  |  
|                                                                           |  |                                  |            |   |      |   |          |  
|Cash, end of year                                                          |  | $                                | 677,131    |   |      | $ | 96,097   |  
|                                                                           |  |                                  |            |   |      |   |          |  
|Supplemental disclosures of cash flow information:                         |  |                                  |            |   |      |   |          |  
|Cash paid for taxes                                                        |  | $                                |           |   |      | $ |         |  
|                                                                           |  |                                  |            |   |      |   |          |  
|Cash paid for interest                                                     |  | $                                | 112,425    |   |      | $ |         |  
|                                                                           |  |                                  |            |   |      |   |          |  

See the accompanying notes to financial statements



5



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008

NOTE 1 - NATURE OF BUSINESS

Dynamic Response Group,
Inc., (the Company), is a leading innovative strategic marketing company engaged in the business of Electronic & Multi Media Retailing, including print, radio, television and the internet and considers itself
an emerging leader in the use of direct response transactional television programming, known as infomercials, to market consumer products.

The
accompanying interim unaudited financial information has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position of the Company as of June 30, 2008 and the related operating results and cash flows for the interim period presented have been made. The results of operations of such
interim period are not necessarily indicative of the results of the full year. This financial information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Companys Annual Report on
Form 10-KSB for the year ended December 31, 2007.

NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying consolidated financial statements include the results of operations of all subsidiaries. The results of operations of these companies are accounted for
using the consolidated method of accounting. All material inter-company accounts and transactions have been eliminated.

NOTE 3 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Interim reporting

While the
information presented in the accompanying interim three and six months financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations
and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as
the December 31, 2007 annual financial statements of the Company. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Companys December 31,
2007s annual financial statements.

Operating results for the three and six months ended June 30, 2008 are not necessarily indicative of the
results that can be expected for the year ended December 31, 2008.



6



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results will differ from those estimates. Significant estimates during the periods include the
provision for doubtful accounts, provision for product returns, evaluation of obsolete inventory, and the useful life of long-term assets, such as property, plant and equipment.

Revenue recognition

The Company recognizes product revenue, net of estimated sales discounts and returns and
allowances, in accordance with Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition in Financial Statements which established that revenue can be recognized when persuasive evidence of an arrangement exists, the product has
been shipped, all significant contractual obligations have been satisfied, the fee is fixed or determinable and collection is reasonably assured. In addition, the Company recognizes product revenue in accordance with Statement of Financial
Accounting Standard (SFAS) No. 48 Revenue Recognition When Right of Return Exists. This statement requires that in order to recognize revenue at the point of sale when the buyer has a return privilege, the amount of future returns
must be reasonably estimable by the seller company.

Fair value of financial instruments

The carrying amounts of financial instruments, including cash, accounts receivable, lines of credit and accounts payable and accrued expenses approximate fair value at
June 30, 2008 because of the relatively short maturity of the instruments. The carrying value of long-term debt and convertible promissory notes approximate fair value at June 30, 2008 based upon terms available for companies under similar
arrangements.

Cash and cash equivalents

The Company
considers all highly liquid debt securities purchased with original or remaining maturities of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value.

Restricted cash

In accordance with Accounting Review Board (ARB)
No. 43, Chapter 3A Current Assets and Current Liabilities, cash which is restricted as to withdrawal is considered to be a noncurrent asset. Restricted cash consists of a reserve for credit card processing of approximately $10,067,
which the Company holds in a separate escrow account as required by its third party inventory fulfillment center. This amount is included in other assets.



7



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Accounts receivable

Accounts receivable are reported at net realizable value. The Company has established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information.
Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At June 30, 2008, the provision for doubtful accounts and allowance for product returns was $170,537.

Inventories

Inventories consist of finished goods and are stated at
the lower of cost or market, with cost being determined by the first-in, first-out (FIFO) method. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and market conditions. The Company writes down inventory during the period in which such products are considered no longer effective.

Property and equipment

Property and equipment are stated at cost
less accumulated depreciation and amortization. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which range from three to ten years. Normal maintenance and repairs of property and equipment are
expensed as incurred while renewals, betterments and major repairs that materially extend the useful life of property and equipment are capitalized. Upon retirement or disposition of property and equipment, the asset and related accumulated
depreciation or amortization is removed from the accounts and any resulting gain or loss is charged to operations.

Intangible assets

The Company accounts for intangible assets in accordance with SFAS 142. Generally, intangible assets with indefinite lives, and goodwill, are no longer amortized; they
are carried at lower of cost or market and subject to annual impairment evaluation, or interim impairment evaluation if an interim triggering event occurs, using a new fair market value method. Intangible assets with finite lives are amortized over
those lives, with no stipulated maximum, and an impairment test is performed only when a triggering event occurs. Such assets are amortized on a straight-line basis over the estimated useful life of the asset.

Intangible assets consist of license payments made in accordance with an agreement to purchase the formula and patent used in the Companys primary product. The
Company considers the patent to have an indefinite life.

Income taxes

The Company uses the liability method for income taxes as required by SFAS No. 109 Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation
allowances are established when it is more likely than not that the deferred tax assets will not be realized.



8



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Shipping and handling costs

Shipping and handling costs are included as selling, general and administrative expense, in accordance with guidance established by the Emerging Issues Task Force (EITF) No. 00-10, Accounting for Shipping and
Handling Costs. EITF 00-10 permits companies to adopt a policy of including shipping and handling costs in cost of sales or other income statement line items.

Advertising

Advertising costs are expensed as incurred, except for direct response advertising. Direct response
advertising consists primarily of costs associated with eliciting sales to customers, principally the direct response television advertising, and the e-commerce catalog mailings. In accordance with the American Institute of Certified Public
Accountants Statement of Position (SOP) 93-7, Reporting on Advertising Costs, these capitalized direct response advertising costs are amortized over the period during which the future benefits are expected to be received, generally
six to twelve months.

The Company incurred advertising expenses of $6,498,160 and $1,880,319 during 2008 and 2007, respectively. The Company capitalized
direct response advertising costs of $150,377 during the three months ended June 30, 2008. The balance of deferred advertising costs as of June 30, 2008 is $449,569.

Income (loss) per share

The Company presents basic income (loss) per share and diluted earnings per share in
accordance with the provisions of SFAS No. 128 Earnings per Share.

Under SFAS 128, basic net loss per share is computed by dividing the
net loss for the year by the weighted average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss for the year by the weighted average number of common shares and common share
equivalents outstanding during the year.

Provision for Returns

In the normal course of business, the Company does not provide stock-balancing or price protection rights to its distributors; however, on a non-recurring basis, the Company has accepted product returns. Management establishes provisions
for estimated returns concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors, including, among other things, recent and historical return rates for both specific distributors and
projected economic conditions.



9



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Concentration of credit risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable. The Company maintains accounts with financial institutions, which at times exceeds the insured
Federal Deposit Insurance Corporation limit of $100,000. The Company minimizes its credit risks associated with cash by periodically evaluating the credit quality of its primary financial institutions.

The Companys accounts receivables are due from the individuals to which it markets its products. The Company does not require collateral to secure its accounts
receivables. No customers accounted for more than 10% of its net accounts receivables.

Reclassifications

The Company included a subtotal for sales and marketing expenses and merchant charges in its Consolidated Statements of Operations for the three and six months ended
June 30, 2008 and 2007 and, accordingly, reclassified certain items of expense consistent with this presentation.

NOTE 4 - CONVERTIBLE PROMISSORY
NOTES

The Company has extended the initial maturity dates of convertible promissory notes issued in 2005 and 2006. These convertible promissory notes
allow for conversion to common stock prior to maturity date or repayment of principal plus interest on the date of maturity, which was one year from the date of issuance. After extension, the notes will now mature between late 2009 and early 2010.
The convertible promissory notes totaled $2,166,858 at the end of June 30, 2008.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities

In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) Issue No. 03-6-1, Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities. The FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation
in computing earnings per share under the two-class method. The FSP affects entities that accrue dividends on share-based payment awards during the awards service period when the dividends do not need to be returned if the employees forfeit
the award. This FSP is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of FSP EITF 03-6-1 on its consolidated financial position and results of operations.



10



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an entitys Own Stock

In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an
Entitys Own Stock (EITF 07-5). EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the
instruments contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for
fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of EITF 07-5 on its consolidated financial position and results of operations.

Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)

In May 2008, the FASB issued FSP Accounting Principles Board (APB) Opinion No. 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers to account separately for the liability and equity
components of certain convertible debt instruments in a manner that reflects the issuers nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP requires bifurcation of a component of the debt,
classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. The FSP requires retrospective application to the terms of
instruments as they existed for all periods presented. The FSP is effective for us as of January 1, 2009 and early adoption is not permitted. The Company is currently evaluating the potential impact of FSP APB 14-1 upon its consolidated
financial statements.

The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (FAS No.162). SFAS No. 162 identifies the sources of accounting principles and the framework
for selecting the principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The implementation of this standard will not have a material impact on the Companys consolidated financial position and results of operations.



11



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Determination of the Useful Life of Intangible Assets

In April 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position on Financial Accounting Standard (FSP FAS)
No. 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under
SFAS No. 142 Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of the expected cash flows
used to measure the fair value of the asset under SFAS No. 141 (revised 2007) Business Combinations and other U.S. generally accepted accounting principles. The Company is currently evaluating the potential impact of FSP FAS
No. 142-3 on its consolidated financial statements.

Disclosure about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, an amendment of SFAS
No. 133, (SFAS 161). This statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS No. 161 on January 1, 2009.
The Company is currently evaluating the potential impact of SFAS No. 161 on the Companys consolidated financial statements.

Delay in
Effective Date

In February 2008, the FASB issued FSP FAS No. 157-2, Effective Date of FASB Statement No. 157. This FSP delays the
effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The impact of adoption was not material to the Companys consolidated financial condition or results of operations.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R) Business Combinations (SFAS
141(R)). This Statement replaces the original SFAS No. 141. This Statement retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (which SFAS No. 141 called the purchase method) be used
for all business combinations and for an acquirer to be identified for each business combination. The objective of SFAS No. 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects. To accomplish that, SFAS No. 141(R) establishes principles and requirements for how the acquirer:



| | a. | Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase.
| | -- | ------------------------------------------------------------------------------------------------------------



| | c. | Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



12



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



This Statement applies prospectively to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS No. 141(R) will have on
its consolidated results of operations and financial condition.

Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No. 51

In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements  an amendment
of ARB No. 51 (SFAS No. 160). This Statement amends the original Accounting Review Board (ARB) No. 51 Consolidated Financial Statements to establish accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements.
This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its
adoption of SFAS No. 160 will have on its consolidated results of operations and financial condition.

Fair Value Option for Financial Assets and
Financial Liabilities

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
 Including an amendment of SFAS No. 115 (SFAS No. 159), which becomes effective for the Company on February 1, 2008, permits companies to choose to measure many financial instruments and certain other items at fair value
and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument. The Company does not anticipate that the election, of this fair-value option will have a material effect on its
consolidated financial condition, results of operations, cash flows or disclosures.

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides guidance for using fair value to
measure assets and liabilities. SFAS No. 157 addresses the requests from investors for expanded disclosure about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and
the effect of fair value measurements on earnings. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS
No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and will be adopted by the Company in the first quarter of fiscal year 2008. The Company is unable at this time to determine the effect
that its adoption of SFAS No. 157 will have on its consolidated results of operations and financial condition.



13



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



NOTE 6 - INVENTORIES

Inventories at June 30, 2008 and December 31, 2007 consist of the following:



|               |  |      |         |   |      |   |         |  
|-------------- |  | ---- | ------- | - | ---- | - | ------- | -
|               |  | 2008 |         |   | 2007 |  
|Finished goods |  | $    | 426,022 |   |      | $ | 637,535 |  
|Reserves       |  |      | (88,709 | ) |      |   | (70,636 | )
|               |  |      |         |   |      |   |         |  
|Inventory, net |  | $    | 357,313 |   |      | $ | 566,899 |  
|               |  |      |         |   |      |   |         |  

NOTE 7 - INCOME TAXES

The benefit from income taxes from continued operations for the six months ended June 30, 2008 and 2007 consists of the following:



|                                                 |  |      |          |   |      |   |          |  
|------------------------------------------------ |  | ---- | -------- | - | ---- | - | -------- | -
|                                                 |  | 2008 |          |   | 2007 |  
|Current:                                         |  |      |          |   |      |   |          |  
|Federal                                          |  | $    |         |   |      | $ |         |  
|State                                            |  |      |         |   |      |   |         |  
|Deferred:                                        |  |      |          |   |      |   |          |  
|Federal                                          |  |      | (251,542 | ) |      |   | (225,000 | )
|State                                            |  |      |         |   |      |   |         |  
|Benefit from the decrease in valuation allowance |  |      | 20,434   |   |      |   | 225,000  |  
|                                                 |  |      |          |   |      |   |          |  
|Benefit for income taxes, net                    |  | $    | (231,308 | ) |      | $ |         |  
|                                                 |  |      |          |   |      |   |          |  

The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual
income tax expense is as follows:



|                                  |  |       |   
|--------------------------------- |  | ----- | --
|Statutory federal income tax rate |  | 35.0  | % 
|Decrease in valuation allowance   |  | (81.0 | )%
|State income taxes                |  | 5.5   | % 
|Other                             |  |      | % 
|Valuation allowance               |  | (40.5 | )%
|                                  |  |       |   
|Effective tax rate                |  | (0.0  | )%
|                                  |  |       |   



14



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DYNAMIC RESPONSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008



Deferred income taxes result from temporary differences in the recognition of income and expenses for financial
reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax assets and liabilities result principally from the following:



|                                |  |      |           
|------------------------------- |  | ---- | ----------
|                                |  | 2008
|Net operating loss-carryforward |  | $    | 16,577,771
|expiring between 2019-2028      |  |      |          
|Depreciation and amortization   |  |      |          
|Other                           |  |      |          
|                                |  |      |           
|Deferred income tax asset       |  | $    | 16,577,771
|                                |  |      |           

The net deferred tax assets and liabilities are comprised of the following:



|                              |  |      |            |  
|----------------------------- |  | ---- | ---------- | -
|                              |  | 2008 |           
|Deferred tax assets:          |  | $    |           |  
|Current                       |  |      |           |  
|Non-current                   |  |      | 6,631,308  |  
|Less: valuation allowance     |  |      | (6,400,000 | )
|                              |  |      |            |  
|Net deferred income tax asset |  | $    | 231,308    |  
|                              |  |      |            |  



15



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Throughout this Report on Form 10-Q/A (the Report), the terms DRG, Dynamic Response, the Company,
we, our, and us refer to Dynamic Response Group, Inc., a Florida corporation.

Cautionary Note Regarding
Forward-Looking Statements

This Report contains forward-looking statements that relate to, among other things, our business strategy;
the market opportunity for our products, including expected demand for our products; our estimates regarding our capital requirements; and other plans, objectives, and intentions. Any statements contained in this Report that are not statements of
historical fact may be deemed to be forward-looking statements, including any statements relating to future actions and outcomes including but not limited to prospective products, future performance or results of current or anticipated products,
sales and marketing efforts, costs and expense trends, future interest rates, outcome of contingencies and their future impact on financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and
other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as expects, anticipates, targets, goals,
projects, intends, plans, believes, seeks, estimates, may, will, should, contemplates, predicts,
potential, or continue or variations and/or the negative of these similar terms. Forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, our future performance,
our beliefs and our Managements assumptions. All forward-looking statements made in this Report, including any future written or oral statements made by us or on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section.

These forward-looking statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that we cannot predict. Any assumptions, upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Report. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking
statements. Please refer to Part II, Item 7 under Liquidity and Capital Resources and under Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2007 for additional discussion. We
assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.



16



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Overview

We are a marketing company, developer and distributor of branded lifestyle products and solutions to retail consumers. Our products are designed to appeal to consumers who value personal development, wellness, spirituality and entertainment
and currently include:



| |  |  | ProCede - a hair thickening treatment system for men with thinning hair.
| | - |  | ------------------------------------------------------------------------



| |  |  | Riddex Plus - an electronic pest control product that incorporates patented Digital Pulse Technology to create an irritating environment for rodents, roaches
and other pests inside walls, chasing them from homes and preventing future pests from entering.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Legends of Soul - a DVD and CD series of current concerts of ten classic soul artists.
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | The Official NASCAR Members Club - a bundled package consisting of the NASCAR membership and select merchandise.
| | - |  | ----------------------------------------------------------------------------------------------------------------

In addition to the products we currently offer, we have several products in varying stages of testing and development as follows:

Turbo Cooker-steams, bakes, roasts and fries with easy clean-up. The Turbo Cooker has internal steam racks that cook different entrees on
multiple layers allowing for preparation of a full course meal all in one unit. This product is in the testing and sourcing phases and we anticipate introducing this product nationally in the third or early fourth quarter of this year. this product.



| |  |  | Spin Fryer  a patented technology that allows for the cooking of fried foods with 50% less oil on the food after cooking. This product is in the
development and design stage, has not been market tested and is not slated for testing until early 2009.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Polar Delight  a patented technology that allows for the creation of low calorie, gourmet style deserts using a secret formula of ingredients that is
prepackaged for the consumer. This product has not been market tested and is not slated for testing until later this year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Vibio  an exercise platform wholly owned and developed by us. It is currently in the testing phase and we anticipate rolling out and sourcing this
product in late 2008 in time for the first of the year exercise demand when consumers renew their interest in health and weight loss.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | AbFlexer - a patented product that targets the muscles of the abdomen. We are currently under contract with the product owner and have begun testing to make
a determination as to market viability for the first of the year health and weight loss shopping.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



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We market and sell our products and programs through print catalogs, radio, direct mail but focus our
selling efforts primarily on direct response television (DRTV) programming and the Internet. DRTV is television advertising that asks consumers to respond directly to us, either by calling an 800 number or by visiting one of our product
web sites. DRTV programming is available to us through licensed distributors to more than 370 million households in seventy countries worldwide, including Argentina, Australia, Austria, Belarus, the Benelux countries, Brazil, China, Denmark,
Ecuador, most Eastern European countries, Finland, France, Germany, Greece, Ireland, Italy, Japan, Mexico, most Middle Eastern countries, New Zealand, Norway, Peru, Portugal, Russia, Spain, most South American countries, Sweden, Switzerland, Taiwan,
Turkey, Ukraine and the United Kingdom. Internationally, the infomercials are aired on one or more of three technologies by licensed distributors: (i) satellite transmission; (ii) cable operators who retransmit satellite broadcasts, and
(iii) terrestrial broadcast television. Domestically, we purchase most of our cable television time directly from cable networks and their respective media representatives. In addition to airtime purchased on cable networks, we purchase
broadcast television time from network affiliates and independent stations. Broadcast television time segments are purchased primarily in 30-minute spots.

We use the Internet to sell our products and to provide information for each product to consumers. We offer each of our products through their own websites and promote our websites through visual media, catalogs,
print publications, product packaging and Internet links.

We outsource order fulfillment, inventory management and customer service
through an agreement with Planet E Shop that allows us to distribute our products, just-in-time, from a single fulfillment center located in Dallas, Texas and oversees our customer support for Internet sales and returns and exchanges. Products
ordered through one of our in-bound call center partners are generally shipped no later than the next business day.

We also have an
exclusive agreement with Global DR, an international sourcing and distribution-company with distribution in over seventy countries worldwide. Global grants us exclusive rights on a right of first refusal basis to license Globals
internationally successful products and infomercials for marketing in the United States market. Conversely, the agreement grants Global the exclusive right to distribute our products in its distribution stream worldwide.

Recent Developments

During the second quarter of
2008, Dynamic developed a direct-to-consumer business plan for Medico Express, a licensed durable medical equipment provider that will operate as a subsidiary of Dynamic. Management intends Medico Express to be a provider of direct-to-consumer
Medicare reimbursed medical products focused exclusively on chronic diseases afflicting the Hispanic community in the United States, Puerto Rico and the Virgin Islands. In addition to developing the business plan, in June 2008, Medico Express
submitted a licensing application to Medicare and is currently waiting on approval.



18



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In anticipation of launching Medico Express, management also anticipates expanding its current products
and services both of which management believes will require the addition of a local customer call center. To accommodate this expansion, we relocated our principal office to a larger space in our current building which increased our square footage
by approximately 1,500 square feet. Our new address is 4770 Biscayne Boulevard, Suite 780, Miami, FL, 33137. Our telephone, facsimile and email information did not change.

Results of Operations - Comparative Three-Month Periods Ended June 30, 2008 and 2007

Our
financial statements are consolidated to include the accounts of the Company and our wholly owned subsidiaries, TMK Holdings, Inc, a Florida corporation, Consumer Dynamix Corp, a Florida corporation, ProCede Corp, a Florida corporation and TV Short
Force, Inc., a Florida corporation and our majority owned subsidiary, Medico Express, Inc. (f/k/a USA 24/7, Inc.), a Florida corporation. The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our unaudited financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report and our audited financial statements and accompanying notes and the information set forth under Item 7
Managements Discussion and Analysis or Plan of Operations included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2007.

We are revising our discussion of the comparative three month periods ended June 30 to address reallocation of certain operating expenses and the impact of such reallocation to our costs of revenue and overall
comparative operating results for the periods covered by this Form 10-Q/A. As a consequence, the results of operations for the three month period is more consistent with the results of operations for the six month period.

We recognized a net loss of $(1,869,045) for the three months ended June 30, 2008, a 172% increase as compared to $(686,647) for the same period in
2007 which did not change as a result of our reallocation of certain operating expenses. Compared to the year ended December 31, 2007, we recognized an overall decrease of 2% in net loss. The losses in the current period are due to an increase
in media expenses which are cyclical in nature and generally more expensive in during the second quarter.

Gross revenue increased
$5,963,040 or 166% to $9,552,292 for the three months ended June 30, 2008 as compared to $3,589,222 for the three months ended June 30, 2007. The increase was due primarily to the Companys new product offerings in 2008, including
Riddex Plus and Legends of Soul, which generated a combined net revenue of $6,825,071 for the three months ended June 30, 2008. These products were not offered during the three months ended June 30, 2007. Existing products, such as The
Official NASCAR Members Club and ProCede, generated $2,238,805 for the three months ended June 30, 2008 compared with $2,565,764 generated for the same product mix for the three months ended June 30, 2007, along with an additional
$1,023,458 in other products offered in 2007. Gross revenues were offset by returns and allowances of $2,304,120 and $864,460 for the three months ended June 30, 2008 and 2007, respectively. Although the returns and allowances increased by
$1,439,660 or 167% for the three months ended June 30, 2008, as compared to 2007, the percentage of returns and allowances to gross revenues remained consistent at 24%.



19



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Cost of revenues was 17% our gross revenue during the second quarter of 2008 as compared to 11% for the second quarter 2007 The increase in 2008 versus 2007
was due higher inventory costs associated with Riddex Plus that were not incurred in 2007. The costs of revenue for Riddex Plus approximate 22% of its gross revenue.

As a result of our reevaluation and reallocation of certain operating costs, cost of revenues increased $1,260,998 or 322% (instead of $633,877 or 162% as previously reported) to $1,652,776 for the three months ended
June 30, 2008 as compared to $391,788 for the three months ended June 30, 2007. The increase was primarily due to increased sales of Riddex Plus. As a result of an increase in our sales, gross profit increased $3,262,392 or 140% to
$5,595,396 for the three months ended June 30, 2008 as compared to $2,333,004 for the three months ended June 30, 2007. Total operating expenses increased $4,404,605 or 149% (instead of $5,031,716 or 170% previously reported) to $7,362,676
for the three months ended June 30, 2008 as compared to $2,958,071 for the three months ended June 30, 2007. This change was primarily a result of the following:

Selling and marketing expensesincreased $3,746,619 or 180% to $5,823,889 (instead of $5,971,005 reported on the 10-Q) as compared to $2,077,270
for the three months ended June 30, 2007. The decrease is the result of managements reevaluation of certain expense classifications and reallocation herein of specific expenses associated with royalty payments, fulfillment and freight
expenses, and merchant charges that were originally classified under Other selling and marketing expenses. Selling and marketing expenses consist generally of media and advertising, fees paid to fulfillment vendors for processing
customer orders and related customer services, costs for freight, sales commissions to our marketers and product owners, call center costs and other costs incurred to sell our products. The increase in the second quarter of 2008 as compared to the
second quarter of 2007 was due primarily to a 385% increase in media and advertising costs as a result of industry wide higher prices in the second quarter; and a 1796% increase in royalties payable to product owners, that had been previously
allocated as an Other selling and marketing expense. The increase in royalties paid during the second quarter ended June 20, 2008 was the result of an increase in the number of products offered by the Company in 2008 as compared to
2007.

In addition to reallocating royalties as a separate line item expense, we have also created a separate line item expense for credit
card merchant fees, so that Other selling and marketing expenses consists of product development, testing and infomercials, and development of an in-house ecommerce center as discussed below. Other selling and marketing
expenses increased $43,421 or 58% (instead of $326,144 or 423% as previously reported on the 10-Q. The increase in Other selling and marketing expenses during the second quarter of 2008, were incurred as a result of re-shooting
infomercials for our Riddex Plus product that will be tested in the market for consumer reaction and are currently being tested in the US Hispanic market place and for testing of several potential products, including Mother Mary, New Credit,
Celluless, Set N Slice, Fridge Buddy, Sidney Phonics, InstaCurls, SRO Laundry and The U-turn Bra. Based on our analysis of test results, we determined that we would not pursue marketing and sales of these items. We also experienced a 187% increase
in fulfillment and freight due to higher fuel/transportation costs to ship products. We also began



20



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reviewing and updating our ecommerce division to assess how we can reduce our reliance on third party vendors and began development of a new database that
will allow us to provide state of the art marketing and direct selling to our customers. In connection with our review, we incurred additional expenses for upgrades and improvements to our websites resulting in 181% increase in costs to maintain our
call center which is tied to our fulfillment agreement.

Merchant Charges increased $191,856 or 140% to $328,834 as
compared to $136,978 for the three months ended June 30, 2007. The increase in credit card merchant fees is directly related to our increase in revenue.

General and administrative expenses increased $466,130 or 63% (instead of $1,137,981 or 129% as previously reported) from $743,823
compared to the second quarter of 2007 primarily as a result of an across the board cost of living increase and payment of bonuses to employees; the hiring of two additional senior staff personnel; and increased legal and investor relations
expenses.

Results of Operations - Comparative Six-Month Periods Ended June 30, 2008 and 2007

We are revising our discussion of the comparative six month periods ended June 30 to address reallocation of expenses for royalties and the creation
of a new line item expense for merchant charges, both of which were previously included in Other selling and marketing expenses, and the subsequent effect on general and administrative expenses.

The foregoing trend of increasing revenues due to sales of Riddex Plus reported during the three months ended June 30, carried over into our results
of operations for the six months ended June 30.

We recognized a net loss of $(1,458,115) for the six months ended June 30, 2008,
a 137% increase as compared to $(614,460) for the same period in 2007.

Gross revenue increased $11,618,122 or 146% to $19,560,277 for the
six months ended June 30, 2008 as compared to $7,942,788 for the six months ended June 30, 2007. As discussed in our results of operations for the three months ended June 30, the increase was due primarily to the Companys new
product offerings in 2008, including Riddex Plus and Legends of Soul. Gross revenues were offset by returns and allowances of $4,289,804 for the six months ended June 30, 2008, as compared to $2,480,788 for the same six month period in 2007, an
increase of $1,809,016 or 73%; however, the percentage of returns and allowances to gross revenues decreased to 22% for the six months ended June 30, 2008 as compared to 31% for the same period in 2007.

As a result of new product offerings in 2008, cost of revenues increased $2,420,072 or 406% to $3,016,516 for the six months ended June 30, 2008 as
compared to $596,444 for the six months ended June 30, 2007. Cost of revenues was 15% of our gross revenue during the six months ended June 30, 2008 as compared to 8% for the six months ended 2007. As a result of an increase in our sales,
gross profit increased $7,389,034 or 152% to $12,253,957 for the six months ended June 30, 2008 as compared to $4,864,923 for the six months ended June 30, 2007.



21



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Total operating expenses increased $8,456,755 or 159% to $13,779,528 for the six months ended
June 30, 2008 as compared to $5,322,773 for the six months ended June 30, 2007. Our total operating expenses for the six months ended June 30 did not change as a result of our reevaluation and reallocation of certain operating costs
for the three months ended June 30; however, to remain consistent with our results of operations for the three month period we reallocated certain selling and marketing expenses as follows:

Selling and marketing expensesincreased $7,125,681 or 159% (instead of $7,870,386 or 200% previously reported) to $11,055,282 as
compared to $3,929,601 for the six months ended June 30, 2007. The decrease is the result of managements reevaluation of certain expense classifications and reallocation herein of specific expenses associated with royalty payments and
merchant charges that were originally classified under Other selling and marketing expenses. The increase in selling and marketing expenses for the six months ended 2008 as compared to 2007, was due primarily to a 2686% increase in
royalties payable to product owners that had been previously allocated as an Other selling and marketing expense. The increase in royalties paid during the six months ended 2008 was the result of an increase in the number of products
offered by the Company in 2008 as compared to 2007.

In addition to reallocating royalties as a separate line item expense,
we have also created a separate line item expense for credit card merchant fees, so that Other selling and marketing expenses now consists of product development, testing and infomercials, and development of an in-house ecommerce center
as discussed below. Other selling and marketing expenses increased $94,913 or 85% (instead of $1,229,046 or 973% as previously reported on the 10-Q). The increase in Other selling and marketing expenses during the six months
ended June 30, 2008 were due to product development, testing and infomercials, and development of an in-house ecommerce center, as discussed in the preceding three month ended June 30 analysis. We also experienced a 246% increase in media
and advertising due to higher second quarter pricing of media; a 204% increase in fulfillment and freight due to higher fuel/transportation costs; and a 221% increase in costs to maintain our call center which is tied to our fulfillment agreement.

Merchant Charges increased $451,384 or 150% to $753,186 as compared to $301,802 for the six months ended June 30, 2007. The
increase in credit card merchant fees is directly related to our increase in revenue.

General and administrative
expenses increased $879,690 or 81% (instead of $586,369 or 42% as previously reported) to $1,971,060 for the six months ended June 30, 2008 compared to $1,091,370 for the same period in 2007. The increase was the result of an across
the board cost of living increase and payment of bonuses to employees; the hiring of two additional senior staff personnel; and increased legal and investor relations expenses in 2008.



22



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Liquidity and Capital Resources

Cash Flows for the Six Months Ended June 30, 2008

Our cash and cash equivalents increased
$392,413 or 13% to $3,477,481 as of June 30, 2008 from $3,085,068 as of December 31, 2007.

The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing activities for the six months ended June 30, 2008, the six months ended June 30, 2007 and for the cumulative period from domestication in Florida in May 2006:



|                                                     |  |                             |          |   |                             |   |          |                                                             |  |   |            |  
|---------------------------------------------------- |  | --------------------------- | -------- | - | --------------------------- | - | -------- | ----------------------------------------------------------- |  | - | ---------- | -
|                                                     |  | Six MonthsEndedJune 30,2008 |          |   | Six MonthsEndedJune 30,2007 |   |          | CumulativePeriod frominception(October 1982)to
June 30,2008 | 
|Net Cash From/(Used in) Operating Activities         |  | $                           | 315,926  |   |                             | $ | (920,247 | )                                                           |  | $ | (3,658,623 | )
|Net Cash Provided by (Used in) Investing Activities  |  | $                           | (150,884 | ) |                             | $ | (112,500 | )                                                           |  | $ | (1,490,000 | )
|Net Cash Provided by (Used in) Financing Activities  |  | $                           | (59,482  | ) |                             | $ | 764,723  |                                                             |  | $ | 5,825,754  |  
|Net Increase/(Decrease) in Cash and Cash Equivalents |  | $                           | 105,560  |   |                             | $ | (268,024 | )                                                           |  | $ | 677,131    |  

Cash Flows from Operating Activities

Operating activities used net cash for the six months ended June 30, 2008 of $315,926. Net cash used reflects cash used to support net changes in
working capital items, which included a $175,284 increase in accounts receivable as a result of increased sales, a $360,891 increase in inventories for our Riddex Plus product, and a $2,198,953 increase in accounts payable and accrued expenses
primarily as a result of industry norm higher media and advertising costs incurred during the second quarter of 2008. These net changes in working capital items were offset by a $263,106 increase in direct response advertising costs, a $111,978
increase in prepaid expenses as a result of payments sent to our Riddex Plus suppliers for inventory; and a $231,308 estimated deferred tax asset incurred as a result of a negotiated amnesty program to catch up back sales taxes. The deferred tax
asset is an estimate of our net operating loss that we expect to recover and offset against future taxable income in 2009.

Cash Flows
used in Investing Activities

Our investing activities used $(150,884) in net cash during the six months ended June 30, 2008. Net
cash used is composed entirely of capital expenditures and payments made on our patent agreement for the formula that is used in manufacturing our ProCede product.



23



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Cash Flows from Financing Activities

Our financing activities used net cash of $(59,482) for the six months ended June 30, 2008 due to the repayment of accrued salaries and consulting
expenses and equipment financed under capital leases.

Financial Position

Our total assets increased $537,572 or 12% to $5,037,313 as of June 30, 2008 from $4,499,741 as of December 31, 2007. The $392,413 increase in
total current assets was primarily associated with a $263,106 increase in direct response advertising cost and a $123,842 increase in prepaid expenses which was partially offset by a $209,586 decrease in inventory and a decrease in accounts
receivable and a $121,817 decrease in accounts receivable, all related to supporting our increasing sales. Our restricted cash consists of a reserve for credit card processing of approximately $10,067, which we hold in a separate escrow account as
required by our fulfillment service provider.

Obligations Outstanding

As of June 30, 2008 we owe $14,707 for equipment financed under capital leases and $230,994 to officers, employees and consultants to the Company for
accrued wages and consulting expenses. The balance due to our officers, employees and consultants accrues interest at 12%.

In connection
with unsecured convertible promissory notes that we issued to investors during 2005 and 2006, we owe $2,166,858 as of June 30, 2008. The convertible promissory notes bear interest at the rate of 15% per annum and may be converted into
shares of common stock at $1.00 per share any time prior to maturity. After extension, the notes will mature at the end of 2009 and early 2010 (instead of 2008 and 2009 as previously reported).

Material Commitments, Expenditures and Contingencies

We believe our available cash, cash expected to be generated from operations, and borrowing capabilities should be sufficient to fund our operations on both a short-term and long-term basis. However, our projected
cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.

In the
normal course of our business, we investigate, evaluate and discuss acquisition, joint venture, strategic relationship and other business combination opportunities for new products. For any future investment, acquisition or joint venture
opportunities, we may consider using then-available liquidity, issuing equity securities or incurring additional indebtedness.

Off Balance Sheet
Arrangements

None.



24



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Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation
of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note 4 of the Notes to our consolidated financial statements describes the
significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies. A critical accounting policy is defined as one that
is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically,
critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the
estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates
and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These
estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they
became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our consolidated financial statements are fairly stated in
accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

Revenue Recognition:Our revenue, to date, has been derived from the sales of our products and services. Revenue is recognized in accordance with
the provisions of Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition in Financial Statements, which states that revenue is realized or realizable and earned when all of the following criteria are met:



| |  |  | persuasive evidence of an arrangement exists,
| | - |  | ---------------------------------------------



| |  |  | delivery has occurred or services have been rendered,
| | - |  | -----------------------------------------------------



| |  |  | the sellers price to the buyer is fixed or determinable, and
| | - |  | -------------------------------------------------------------



| |  |  | collectability is reasonably assured.
| | - |  | -------------------------------------

These conditions are typically met upon shipment of products to our customers. In addition, the Company recognizes product revenue in accordance with Statement of Financial Accounting Standard (SFAS) No. 48 Revenue Recognition
When Right of Return Exists. This statement requires that in order to recognize revenue at the point of sale when the buyer has a return privilege, the amount of future returns must be reasonably estimable by the seller company.



25



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Fair Value of Financial Instruments:We are required to disclose the fair value of financial
instruments, which includes cash, accounts receivable, lines of credit and accounts payable and accrued expenses. We consider all highly liquid debt securities with original or remaining maturities of three months of less to be cash equivalents.
Based on the relatively short maturity of these current liabilities, we believe that the carrying amounts at June 30, 2008 of our cash and cash equivalents reflect the approximate fair value. The carrying value of long-term debt and convertible
promissory notes approximate fair value at June 30, 2008 based upon terms available for companies under similar arrangements.

Accounts Receivable:Accounts receivable are reported at net realizable value. The Company has established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends,
and other information. We write off delinquent accounts when we determine the amounts are uncollectible. At June 30, 2008, our provision for doubtful accounts and allowance for returns was $170,537 as compared to $100,000 at
December 31, 2007 and $223,000 at March 31, 2008.

Inventories:Inventories consist of finished goods held for sale and
are stated at the lower of cost (first-in, first-out method) or market. We identify the inventory items to be written down for obsolescence based on the items current sales status and condition. We write down discontinued or slow moving
inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories and write down inventory during the period in which such products are considered no longer effective. For the three
months ended June 30, 2008 and 2007, the Company has written down $0 and $0, respectively.

Intangible Assets:Intangible
assets consist of license payments made in accordance with an agreement to purchase the formula and patent used in our ProCede product. We consider the patent to have an indefinite life.

Advertising:Except for direct response advertising, we expense advertising costs as they are incurred. Direct
response advertising consists primarily of costs associated with eliciting sales to customers, principally the direct response television advertising, and the e-commerce catalog mailings. Capitalized direct response advertising costs are amortized
over the period during which the future benefits are expected to be received, generally six to 12 months. We incurred advertising expenses of $6,498,160 and $1,880,319 during the six months ended June 30, 2008 and 2007, respectively. We
capitalized direct response advertising costs of approximately $150,377 during the three months ended June 30, 2008. The balance of deferred advertising costs as of June 30, 2008 is $449,569.

Provisions for Returns:We generally do not provide stock-balancing or price protection rights to our distributors; however, on a non-recurring
basis, we have accepted product returns. Management establishes provisions for estimated returns concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors, including, among other
things, recent and historical return rates for both specific distributors and projected economic conditions.



26



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New Accounting Pronouncements

Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized in the notes to our financial statements and below:

Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities:In June 2008, the FASB issued FSP
EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. The FSP addresses whether instruments granted in share-based payment transactions are participating
securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The FSP affects entities that accrue dividends on share-based payment awards during the
awards service period when the dividends do not need to be returned if the employees forfeit the award. This FSP is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of FSP EITF
03-6-1 on its consolidated financial position and results of operations.

Determining Whether an Instrument (or an Embedded Feature) Is
Indexed to an entitys Own Stock:In June 2008, the FASB ratified EITF 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entitys Own Stock. EITF 07-5 provides that an entity should
use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instruments contingent exercise and settlement provisions. It also clarifies on the
impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing
the impact of EITF 07-5 on its consolidated financial position and results of operations.

Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement):In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement). The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers to account separately for the
liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP requires bifurcation of a component of the
debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. The FSP requires retrospective application to the
terms of instruments as they existed for all periods presented. The FSP is effective for us as of January 1, 2009 and early adoption is not permitted. The Company is currently evaluating the potential impact of FSP APB 14-1 upon its
consolidated financial statements.

The Hierarchy of Generally Accepted Accounting Principles:In May 2008, the FASB issued SFAS
162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS 162 is
effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The
implementation of this standard will not have a material impact on the Company's consolidated financial position and results of operations.



27



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Determination of the Useful Life of Intangible Assets:In April 2008, the FASB issued FSP FAS
142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under SFAS 142
Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of the expected cash flows used to measure the fair value
of the asset under SFAS 141 (revised 2007) Business Combinations and other U.S. generally accepted accounting principles. The Company is currently evaluating the potential impact of FSP FAS 142-3 on its consolidated financial statements.
The adoption of FSP FAS 142-3 is not expected to have a material effect on its financial position, results of operations or cash flows.

Disclosure about Derivative Instruments and Hedging Activities:In March 2008, the FASB issued SFAS 161, Disclosure about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. This
statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS 161 on January 1, 2009. The Company is currently evaluating the
potential impact of SFAS 161 on the Companys consolidated financial statements.

Delay in Effective Date:In February 2008,
the FASB issued FSP FAS No. 157-2, Effective Date of FASB Statement No. 157. This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or
disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The impact of adoption was not material to the Companys consolidated
financial condition or results of operations.

Business Combinations:In December 2007, the FASB SFAS 141(R) Business
Combinations. This Statement replaces the original FASB 141. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business combination. The objective of this SFAS 141(R) is to improve the relevance, and comparability of the information that a reporting entity provides in its financial reports
about a business combination and its effects. To accomplish that, SFAS 141(R) establishes principles and requirements for how the acquirer:



| | a. | Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase.
| | -- | ------------------------------------------------------------------------------------------------------------



| | c. | Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



28



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This Statement applies prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS 141(R) will have on
its consolidated results of operations and financial condition.

Noncontrolling Interests in Consolidated Financial Statementsan
amendment of ARB No. 51:In December 2007, the FASB issued SFAS 160 Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51. This Statement amends the original ARB 51
Consolidated Financial Statements to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after
December 15, 2008 and may not be applied before that date. The Company is unable at this time to determine the effect that its adoption of SFAS 160 will have on its consolidated results of operations and financial condition.

Fair Value Option for Financial Assets and Financial Liabilities:In February 2007, the FASB issued SFAS 159, The Fair Value Option for
Financial Assets and Financial Liabilities  Including an amendment of SFAS No. 115, which becomes effective for the Company on February 1, 2008, permits companies to choose to measure many financial instruments and certain
other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument. The Company does not anticipate that the election, of this fair-value option will have
a material effect on its consolidated financial condition, results of operations, cash flows or disclosures.

Fair Value Measurements:In September 2006, the FASB issued SFAS 157, Fair Value Measurements. SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 addresses the requests from investors for expanded disclosure about the
extent to which Companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or
liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. In February 2008, the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157. This FSP delays the effective date
of FAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years. SFAS 157 will be adopted by the Company in the first quarter of fiscal year 2009. The Company is unable at this time to determine the effect that its adoption of SFAS 157 will have on its consolidated results of operations
and financial condition.



29



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|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

We are a smaller reporting company as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.



|Item 4T. | Controls and Procedures.
|-------- | ------------------------

Disclosure Controls
and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and
with the participation of the Companys Principal Executive Officer/Principal Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. The Companys disclosure controls
and procedures are designed to provide a reasonable level of assurance of achieving the Companys disclosure control objectives. The Companys Principal Executive Officer/Principal Accounting Officer has concluded that the Companys
disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the end of period covered by this report.

Changes in Internal Controls

There were no changes in the Companys internal control over financial reporting during
the period covered by this report, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

We are occasionally subject to
legal proceedings and claims that arise in the ordinary course of our business. It is impossible for us to predict with any certainty the outcome of pending disputes, and unless otherwise stated below, we cannot predict whether any liability arising
from pending claims and litigation will be material in relation to our consolidated financial position or results of operations. We are currently not a party to any material litigation and are not aware of any threatened litigation that would have a
material adverse effect on our business.



|Item 1A. | Risk Factors.
|-------- | -------------

There have been no material changes
during the six months ended June 30, 2008 in our risk factors as set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------

In April 2008, we issued an aggregate of 3,000,000 shares of restricted stock to officers and directors and 350,000 shares of restricted stock to a consultant as follows:



| | 1) | We issued 750,000 shares of restricted common stock to each of Melissa K. Rice and Joseph I. Emas as compensation for their services as directors during the fiscal year 2007 and
2008.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | We issued 350,000 shares of restricted common stock to Scott Swank as a bonus for consulting services rendered to the Company.
| | -- | ------------------------------------------------------------------------------------------------------------------------------

During the three months ended June 30, 2008, we authorized but have not issued shares of restricted stock to our Chief Executive Officer as follows:



| | 1) | On May 27, 2008, our Board of Directors authorized the issuance of 1,100,000 shares of restricted common stock to Melissa Rice, our Chief Executive Officer, as bonus earned
during the fiscal year ended December 31, 2007 subject to the terms set forth in her employment agreement. In addition, the Board authorized the issuance of additional shares of restricted common stock to Ms. Rice in lieu of a cash bonus
of $56,250 earned by Ms. Rice during the year ended December 31, 2007. The additional shares were valued at $0.032 per share, or 80% of $0.04, the closing price of the Companys common stock on the OTCBB on May 23, 2008.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All of the foregoing shares were acquired under one of the exemptions from registration provided for in Sections 4(2) and
4(6) of the Securities Act including Regulation D promulgated thereunder.



30



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|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

None.



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

None.



|Item 5. | Other Information.
|------- | ------------------

On May 27, 2008, our Board
of Directors authorized a 14% performance and cost of living increase to our Chief Executives salary and a bonus in accordance with the terms of her employment agreement. Ms. Rice has deferred the salary increase and agreed to take her
bonus as restricted shares of the Companys common stock.

There have been no material changes to the procedures by which security
holders may recommend nominees to the Companys Board of Directors.



|Item 6. | Exhibits.
|------- | ---------



|     |  |                                                                                                                                       
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------
|No.  |  | Description                                                                                                                           
|     | 
|31.1 |  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32.1 |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                               



31



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 2 to Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly
authorized.



|                     |  |  |  |                                                            
|-------------------- |  |  |  | -----------------------------------------------------------
|Date: March 11, 2009 |  |  |  | DYNAMIC RESPONSE GROUP, INC.                               
|                     |  | 
|                     |  |  |  | /s/ Melissa K. Rice                                        
|                     |  |  |  | Principal Executive Officer and Principal Financial
Officer



32



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Exhibit Index



|     |  |                                                                                                                                       
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------
|No.  |  | Description                                                                                                                           
|     | 
|31.1 |  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32.1 |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                               



33