**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-QSB**

| x | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|-----------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 2007**

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
|---|--------------------------------------------------------------------------------|

**YTB      INTERNATIONAL, INC.**

**Delaware**

**20-2181181**

**1901      East Edwardsville Road**

**Wood      River, Illinois 62095**

** **

**(618)      655-9477**

----

**YTB      INTERNATIONAL, INC.**

**Index      to Quarterly Report on Form 10-QSB**

**Three      and nine months ended September 30, 2007**

| PART                  I  |   | FINANCIAL                  INFORMATION                                                                                                                                |   |   |
|--------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                     |   |                                                                                                                                                                  |   |   |
| Item                  1. |   | Financial                  Statements.                                                                                                                                |   |   |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Condensed                  Consolidated Balance Sheets, September 30, 2007 (Unaudited) and                  December                  31, 2006                        |   | 3      |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Condensed                  Consolidated Statements of Operations (Unaudited) Three months                  ended                  September 30, 2007 and 2006         |   | 4      |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Condensed                  Consolidated Statements of Operations (Unaudited) Nine months ended                  September 30, 2007 and 2006                           |   | 5      |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Condensed                  Consolidated Statement of Change in Stockholders’ Equity (Deficit)                  (Unaudited) Nine months ended September 30, 2007 |   | 6      |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Condensed                  Consolidated Statements of Cash Flows (Unaudited) Nine months ended                  September 30, 2007 and 2006                           |   | 7-8    |
|                     |   |                                                                                                                                                                  |   |   |
|                     |   | Notes                  To Condensed Consolidated Financial Statements (Unaudited)                                                                                     |   | 9      |
|                     |   |                                                                                                                                                                  |   |   |
| Item                  2. |   | Management's                  Discussion and Analysis or Plan of Operation.                                                                                           |   | 23     |
|                     |   |                                                                                                                                                                  |   |   |
| Item                  3. |   | Controls                  and Procedures.                                                                                                                             |   | 33     |
|                     |   |                                                                                                                                                                  |   |   |
| PART                  II |   | OTHER                  INFORMATION                                                                                                                                    |   |   |
|                     |   |                                                                                                                                                                  |   |   |
| Item                  1. |   | Legal                  Proceedings.                                                                                                                                   |   | 34     |
| Item                  2. |   | Unregistered                  Sales of Equity Securities and Use of Proceeds.                                                                                         |   | 34     |
| Item                  3. |   | Defaults                  Upon Senior Securities.                                                                                                                     |   | 34     |
| Item                  4. |   | Submission                  of Matters to a Vote of Security Holders.                                                                                                 |   | 34     |
| Item                  5. |   | Other                  Information.                                                                                                                                   |   | 34     |
| Item                  6. |   | Exhibits.                                                                                                                                                             |   | 35     |
| Signatures               |   |                                                                                                                                                                  |   | 36     |

----

*On      July 31, 2007 (the “Reclassification Date”), we filed an Amended and Restated      Certificate of Incorporation which authorized the issuance of two classes of      common stock - Class A Common Stock and Class B Common Stock - and to increase      the Company’s total authorized capital. Stockholders of record on the      Reclassification Date received two shares of Class B Common Stock and one share      of Class A Common Stock in exchange for each share of existing common stock      held      as of the Reclassification Date. All shares and per share amounts in this      Quarterly Report on Form 10-QSB reflect this reclassification.*

**Item      1.**
**Financial      Statements.**

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Balance Sheets**

|                                                                                                                                                                                                                                                                                                                             |   | September                    30, 2007 |        | December                    31, 2006 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|--------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                             |   |  (Unaudited)                     |        |                                 |   |
| ASSETS                                                                                                                                                                                                                                                                                                                           |   |                                  |        |                                 |   |   |   |
| Current                    assets:                                                                                                                                                                                                                                                                                               |   |                                  |        |                                 |   |   |   |
| Cash                    and cash equivalents                                                                                                                                                                                                                                                                                     |   | $                                     | 4,467,221   |                                 | $      | - |   |
| Restricted                    cash                                                                                                                                                                                                                                                                                               |   |                                  | 2,060,690   |                                 |   | 1,250,000 |   |
| Available-for-sale                    securities                                                                                                                                                                                                                                                                                 |   |                                  | 1,000,124   |                                 |   | 1,014,591 |   |
| Accounts                    receivable (less allowance for doubtful accounts of $5,699 in                    2007 and                    $6,919 in 2006)                                                                                                                                                                         |   |                                  | 1,785,782   |                                 |   | 103,539 |   |
| Inventory                                                                                                                                                                                                                                                                                                                        |   |                                  | 4,516,489   |                                 |   | 1,016,690 |   |
| Notes                    receivable (less allowance for uncollectible notes of $182,723                    in 2007 and                    $0 in 2006)                                                                                                                                                                            |   |                                  | 1,932,640   |                                 |   | 1,233,624 |   |
| Prepaid                    marketing commissions                                                                                                                                                                                                                                                                                 |   |                                  | 26,088,570  |                                 |   | 12,978,516 |   |
| Other                    prepaid expenses and current assets                                                                                                                                                                                                                                                                     |   |                                  | 1,778,163   |                                 |   | 394,125 |   |
| Total                    current assets                                                                                                                                                                                                                                                                                          |   |                                  | 43,629,679  |                                 |   | 17,991,085 |   |
| Property                    and equipment, net                                                                                                                                                                                                                                                                                   |   |                                  | 13,002,660  |                                 |   | 6,191,408 |   |
| Intangible                    assets, net                                                                                                                                                                                                                                                                                        |   |                                  | 2,413,500   |                                 |   | 2,468,580 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                         |   |                                  | 2,979,322   |                                 |   | 2,224,322 |   |
| Other                    assets                                                                                                                                                                                                                                                                                                  |   |                                  | 6,867       |                                 |   | 14,994 |   |
| **TOTAL                    ASSETS**                                                                                                                                                                                                                                                                                              |   | $                                     | 62,032,028  |                                 | $      | 28,890,389 |   |
| LIABILITIES                    AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                                                |   |                                  |        |                                 |   |   |   |
| Current                    liabilities:                                                                                                                                                                                                                                                                                          |   |                                  |        |                                 |   |   |   |
| Bank                    overdraft                                                                                                                                                                                                                                                                                                |   | $                                     | -           |                                 | $      | 812,464 |   |
| Accounts                    payable and accrued expenses                                                                                                                                                                                                                                                                         |   |                                  | 11,173,987  |                                 |   | 5,099,248 |   |
| Current                    maturities of long-term debt                                                                                                                                                                                                                                                                          |   |                                  | 19,950      |                                 |   | 21,156 |   |
| Deferred                    revenue                                                                                                                                                                                                                                                                                              |   |                                  | 31,563,090  |                                 |   | 14,769,085 |   |
| Accrued                    bonuses                                                                                                                                                                                                                                                                                               |   |                                  | 117,970     |                                 |   | 7,435,132 |   |
| Short-term                    debt                                                                                                                                                                                                                                                                                               |   |                                  | 3,799,470   |                                 |   | 2,500,000 |   |
| Total                    current liabilities                                                                                                                                                                                                                                                                                     |   |                                  | 46,674,467  |                                 |   | 30,637,085 |   |
| Other                    long-term liabilities:                                                                                                                                                                                                                                                                                  |   |                                  |        |                                 |   |   |   |
| Long-term                    debt, less current maturities                                                                                                                                                                                                                                                                       |   |                                  | 227,078     |                                 |   | 241,659 |   |
| Deferred                    revenue, less current portion                                                                                                                                                                                                                                                                        |   |                                  | -           |                                 |   | 4,366 |   |
| Deferred                    tax liability                                                                                                                                                                                                                                                                                        |   |                                  | 755,000     |                                 |   | - |   |
| Other                    income tax liabilities                                                                                                                                                                                                                                                                                  |   |                                  | 192,841     |                                 |   | - |   |
| Other                    liabilities                                                                                                                                                                                                                                                                                             |   |                                  | 13,733      |                                 |   | 23,636 |   |
| Total                    other long-term liabilities                                                                                                                                                                                                                                                                             |   |                                  | 1,188,652   |                                 |   | 269,661 |   |
| **TOTAL                    LIABILITIES**                                                                                                                                                                                                                                                                                         |   |                                  | 47,863,119  |                                 |   | 30,906,746 |   |
| Commitments                    and Contingencies (Note 14)                                                                                                                                                                                                                                                                       |   |                                  |        |                                 |   |   |   |
| STOCKHOLDERS'                    EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                |   |                                  |        |                                 |   |   |   |
| Preferred                    stock, $.001 par value, 5,000,000 shares authorized, none issued                    and                    outstanding at September 30, 2007 and December 31, 2006.                                                                                                                                 |   |                                  | -           |                                 |   | - |   |
| Class                    A Common stock, $.001 par value, 300,000,000 shares authorized;                    44,889,076                    and 27,870,454 shares issued and outstanding at September 30,                    2007 and                    December 31, 2006, respectively.                                          |   |                                  | 44,889      |                                 |   | 27,870 |   |
| Class                    B Common Stock, $.001 par value, 100,000,000 shares                    authorized; 52,429,160 and 55,740,908 shares issued and outstanding                    at September 30, 2007 and December 31, 2006, respectively; convertible                    into Class A shares on a one-for-one basis |   |                                  | 52,429      |                                 |   | 55,741 |   |
| Additional                    paid-in capital                                                                                                                                                                                                                                                                                    |   |                                  | 34,844,642  |                                 |   | 20,212,265 |   |
| Retained                    earnings (deficit)                                                                                                                                                                                                                                                                                   |   |                                  | (20,773,051 | )                                    |   | (22,312,233 | ) |
| TOTAL                    STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                                                          |   |                                  | 14,168,909  |                                 |   | (2,016,357 | ) |
| **TOTAL                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                                                                                                                                                                                                                      |   | $                                     | 62,032,028  |                                 | $      | 28,890,389 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Operations**

|                                                                                                                                                                                                                                                       |   | Three                    months ended |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|
|                                                                                                                                                                                                                                                       |   | September                    30, 2007 |        | September                    30, 2006 |   |
| NET                    REVENUES                                                                                                                                                                                                                            |   |                                  |        |   |   |   |   |
| Online                    travel store sales and monthly fees                                                                                                                                                                                              |   | $                                     | 28,691,270  |   | $ | 9,015,325 |   |
| Travel                    commissions and services                                                                                                                                                                                                         |   |                                  | 5,536,399   |   |   | 1,963,887 |   |
| Training                    programs and marketing materials                                                                                                                                                                                               |   |                                  | 3,651,184   |   |   | 1,475,946 |   |
| Other                                                                                                                                                                                                                                                      |   |                                  | 1,990,389   |   |   | 681,431 |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| Net                    revenues                                                                                                                                                                                                                            |   |                                  | 39,869,242  |   |   | 13,136,589 |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| OPERATING                    EXPENSES                                                                                                                                                                                                                      |   |                                  |        |   |   |   |   |
| Marketing                    commissions                                                                                                                                                                                                                   |   |                                  | 20,603,925  |   |   | 9,473,964 |   |
| Travel                    commissions                                                                                                                                                                                                                      |   |                                  | 3,913,021   |   |   | 1,348,540 |   |
| Depreciation                    and amortization                                                                                                                                                                                                           |   |                                  | 304,243     |   |   | 129,376 |   |
| Marketing                    and selling                                                                                                                                                                                                                   |   |                                  | 1,613,890   |   |   | 798,851 |   |
| General                    and administrative                                                                                                                                                                                                              |   |                                  | 11,228,055  |   |   | 5,640,940 |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| Total                    operating expenses                                                                                                                                                                                                                |   |                                  | 37,663,134  |   |   | 17,391,671 |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| INCOME                    (LOSS) FROM OPERATIONS                                                                                                                                                                                                           |   |                                  | 2,206,108   |   |   | (4,255,082 | ) |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| OTHER                    INCOME (EXPENSE)                                                                                                                                                                                                                  |   |                                  |        |   |   |   |   |
| Interest                    and dividend income                                                                                                                                                                                                            |   |                                  | 128,804     |   |   | 42,803 |   |
| Interest                    expense                                                                                                                                                                                                                        |   |                                  | (23,115     | ) |   | (151,801 | ) |
| Gain                    (loss) on sale of assets                                                                                                                                                                                                           |   |                                  | (18,556     | ) |   | - |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| Total                    other income (expense)                                                                                                                                                                                                            |   |                                  | 87,133      |   |   | (108,998 | ) |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| INCOME                    (LOSS) BEFORE INCOME TAX PROVISION                                                                                                                                                                                               |   |                                  | 2,293,241   |   |   | (4,364,080 | ) |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| INCOME                    TAX PROVISION                                                                                                                                                                                                                    |   |                                  | 143,750     |   |   | - |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| NET                    INCOME (LOSS)                                                                                                                                                                                                                       |   | $                                     | 2,149,491   |   | $ | (4,364,080 | ) |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| NET                    INCOME (LOSS) PER SHARE:                                                                                                                                                                                                            |   |                                  |        |   |   |   |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| Weighted-average                    shares outstanding - basic for Class A and Class B                                                                                                                                                                     |   |                                  | 97,209,960  |   |   | 82,162,974 |   |
| Weighted-average                    shares outstanding - diluted for Class A and Class B                                                                                                                                                                   |   |                                  | 110,801,031 |   |   | 82,162,974 |   |
|                                                                                                                                                                                                                                                       |   |                                  |        |   |   |   |   |
| Net                    income (loss) per share - basic for Class A and Class B (amounts                    for Class                    A and Class B shares are the same under the two-class method.                    See Note                    3):   |   | $                                     | 0.02        |   | $ | (0.05 | ) |
| Net                    income (loss) per share - diluted for Class A and Class B (amounts                    for                    Class A and Class B shares are the same under the two-class method.                    See                    Note 3): |   | $                                     | 0.02        |   | $ | (0.05 | ) |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Operations**

|                                                                                                                                                                                                                                             |   |  Nine                  months ended |        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|-------------|
|                                                                                                                                                                                                                                             |   | September                  30, 2007      |        | September                  30, 2006 |   |
| NET                  REVENUES                                                                                                                                                                                                                    |   |                                     |        |   |   |   |   |
| Online                  travel store sales and monthly fees                                                                                                                                                                                      |   | $                                        | 69,031,218  |   | $ | 22,481,964 |   |
| Travel                  commissions and services                                                                                                                                                                                                 |   |                                     | 13,930,824  |   |   | 5,116,529 |   |
| Training                  programs and marketing materials                                                                                                                                                                                       |   |                                     | 10,364,547  |   |   | 2,949,763 |   |
| Other                                                                                                                                                                                                                                            |   |                                     | 2,592,266   |   |   | 630,820 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| Net                  revenues                                                                                                                                                                                                                    |   |                                     | 95,918,855  |   |   | 31,179,076 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| OPERATING                  EXPENSES                                                                                                                                                                                                              |   |                                     |        |   |   |   |   |
| Marketing                  commissions                                                                                                                                                                                                           |   |                                     | 55,370,759  |   |   | 19,556,884 |   |
| Travel                  commissions                                                                                                                                                                                                              |   |                                     | 9,398,036   |   |   | 3,319,045 |   |
| Depreciation                  and amortization                                                                                                                                                                                                   |   |                                     | 782,218     |   |   | 262,846 |   |
| Marketing                  and selling                                                                                                                                                                                                           |   |                                     | 4,342,480   |   |   | 1,144,814 |   |
| General                  and administrative                                                                                                                                                                                                      |   |                                     | 24,509,665  |   |   | 12,572,068 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| Total                  operating expenses                                                                                                                                                                                                        |   |                                     | 94,403,158  |   |   | 36,855,657 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| INCOME                  (LOSS) FROM OPERATIONS                                                                                                                                                                                                   |   |                                     | 1,515,697   |   |   | (5,676,581 | ) |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| OTHER                  INCOME (EXPENSE)                                                                                                                                                                                                          |   |                                     |        |   |   |   |   |
| Interest                  and dividend income                                                                                                                                                                                                    |   |                                     | 309,358     |   |   | 118,179 |   |
| Interest                  expense                                                                                                                                                                                                                |   |                                     | (27,041     | ) |   | (452,455 | ) |
| Gain                  (loss) on sale of assets                                                                                                                                                                                                   |   |                                     | (9,991      | ) |   | 1,000 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| Total                  other income (expense)                                                                                                                                                                                                    |   |                                     | 272,326     |   |   | (333,276 | ) |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| INCOME                  (LOSS) BEFORE INCOME TAX PROVISION                                                                                                                                                                                       |   |                                     | 1,788,023   |   |   | (6,009,857 | ) |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| INCOME                  TAX PROVISION                                                                                                                                                                                                            |   |                                     | 143,750     |   |   | - |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| NET                  INCOME ( LOSS)                                                                                                                                                                                                              |   | $                                        | 1,644,273   |   | $ | (6,009,857 | ) |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| NET                  INCOME (LOSS) PER SHARE:                                                                                                                                                                                                    |   |                                     |        |   |   |   |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| Weighted-average                  shares outstanding - basic for Class A and Class B                                                                                                                                                             |   |                                     | 97,143,966  |   |   | 82,060,179 |   |
| Weighted-average                  shares outstanding - diluted for Class A and Class B                                                                                                                                                           |   |                                     | 111,144,815 |   |   | 82,060,179 |   |
|                                                                                                                                                                                                                                             |   |                                     |        |   |   |   |   |
| Net                  income (loss) per share - basic for Class A and Class B (amounts                  for Class                  A and Class B shares are the same under the two-class method. See                  Note                  3):   |   | $                                        | 0.02        |   | $ | (0.07 | ) |
| Net                  income (loss) per share - diluted for Class A and Class B (amounts                  for                  Class A and Class B shares are the same under the two-class method.                  See                  Note 3): |   | $                                        | 0.01        |   | $ | (0.07 | ) |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statement of Changes in Stockholders’ Equity      (Deficit)**

**Nine      months ended September 30, 2007**

|                                                                               |   |        |   |                              |   |                   |   |     |       |  Total   |   |
|------------------------------------------------------------------------------------|--------|-------------|--------|-----------------------------------|--------|------------------------|--------|----------|------------|---------------|--------|
|                                                                               |   | Preferred   |   |  Common                Stock |   | Additional             |   | Retained |       | Stockholders' |   |
|                                                                               |   |  Stock |   | Class                A            |   | Class                B |   | Paid-in  |       | Earnings      |   | Equity |   |
|                                                                               |   | Shares      |   | Amount                            |   | Shares                 |   | Amount   |       | Shares        |   | Amount |   | Capital |   | (Deficit) |   |  (Deficit) |   |
| Balance                at January 1, 2007                                          |   |        | -      |                              | $      | -                      |   |     | 27,870,454 |          | $      | 27,870 |   |   | 55,740,908 |   | $ | 55,741 |   | $ | 20,212,265 |   | $ | (22,312,233 | ) | $ | (2,016,357 | ) |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Exchange              Class B Shares for Class A Shares                            |   |        |   |                              |   |                   |   |     | 12,449,664 |          |   | 12,450 |   |   | (12,449,664 | ) |   | (12,450 | ) |   |   |   |   |   |   |   |   |   |
|                                                                               |   |        |   |                              |   |                   |   |     |       |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adoption                of FIN 48 cumulative effect                adjustment |   |        | -      |                              |   | -                      |   |     | -          |          |   | - |   |   | - |   |   | - |   |   | - |   |   | (105,091 | ) |   | (105,091 | ) |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Common                shares issued for restricted stock grant                |   |        | -      |                              |   | -                      |   |     | 3,112,901  |          |   | 3,113 |   |   | 6,225,802 |   |   | 6,226 |   |   | 9,640,654 |   |   | - |   |   | 9,649,993 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Amortization                  of restricted                  stock (unvested)      |   |        | -      |                              |   | -                      |   |     | -          |          |   | - |   |   | - |   |   | - |   |   | 3,667,231 |   |   | - |   |   | 3,667,231 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Shares                issued for services                                          |   |        | -      |                              |   | -                      |   |     | 10,000     |          |   | 10 |   |   | 20,000 |   |   | 20 |   |   | 45,470 |   |   | - |   |   | 45,500 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Common                shares issued for options                exercised      |   |        | -      |                              |   | -                      |   |     | 410,000    |          |   | 410 |   |   | 820,000 |   |   | 820 |   |   | 410,770 |   |   | - |   |   | 412,000 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Exercise                of common stock warrants                                   |   |        | -      |                              |   | -                      |   |     | 1,036,057  |          |   | 1,036 |   |   | 2,072,114 |   |   | 2,072 |   |   | 765,881 |   |   | - |   |   | 768,969 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Stock                option compensation                                           |   |        | -      |                              |   | -                      |   |     | -          |          |   | - |   |   | - |   |   | - |   |   | 102,391 |   |   | - |   |   | 102,391 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Net                income                                                          |   |        | -      |                              |   | -                      |   |     | -          |          |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,644,273 |   |   | 1,644,273 |   |
|                                                                               |   |        |        |                              |   |                        |   |     |            |          |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Balance                at September 30, 2007                                       |   |        | -      |                              | $      | -                      |   |     | 44,889,076 |          | $      | 44,889 |   |   | 52,429,160 |   | $ | 52,429 |   | $ | 34,844,642 |   | $ | (20,773,051 | ) | $ | 14,168,909 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Cash Flows**

|                                                                                                                                                  |   | Nine                  months ended  |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|
|                                                                                                                                                  |   | September                  30, 2007 |        | September                  30, 2006 |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                                                                |   |                                |        |   |   |   |   |
| Net                  Income (Loss)                                                                                                                    |   | $                                   | 1,644,273   |   | $ | (6,009,857 | ) |
| Adjustments                  to reconcile net income (loss) to net cash provided by (used in)                  operating                  activities: |   |                                |        |   |   |   |   |
| Depreciation                  and amortization                                                                                                        |   |                                | 782,218     |   |   | 262,846 |   |
| Loss                  on disposal of property and equipment                                                                                           |   |                                | 9,991       |   |   | - |   |
| Provision                    for uncollectible notes                                                                                                  |   |                                | 182,723     |   |   | - |   |
| Shares                  issued for restricted stock grant                                                                                             |   |                                | 2,799,994   |   |   | - |   |
| Shares                  issued for services                                                                                                           |   |                                | 45,500      |   |   | 208,960 |   |
| Amortization                  of restricted stock (unvested)                                                                                          |   |                                | 3,667,231   |   |   | - |   |
| Stock                  option expense                                                                                                                 |   |                                | 102,391     |   |   | 157,064 |   |
| FIN                  48 tax provision                                                                                                                 |   |                                | 87,750      |   |   | - |   |
| Change                  in operating assets and liabilities:                                                                                          |   |                                |        |   |   |   |   |
| Accounts                  receivable, net                                                                                                             |   |                                | (1,682,243  | ) |   | (57,224 | ) |
| Notes                  receivable                                                                                                                     |   |                                | (881,739    | ) |   | (440,000 | ) |
| Inventory                                                                                                                                             |   |                                | (3,499,799  | ) |   | (328,060 | ) |
| Prepaid                  marketing commissions                                                                                                        |   |                                | (13,110,054 | ) |   | (6,437,692 | ) |
| Other                  prepaid expenses and current assets                                                                                            |   |                                | (1,384,038  | ) |   | (187,011 | ) |
| Other                  assets                                                                                                                         |   |                                | 8,127       |   |   | 1,190 |   |
| Accounts                  payable and accrued expenses                                                                                                |   |                                | 5,900,537   |   |   | 2,567,255 |   |
| Accrued                  bonuses                                                                                                                      |   |                                | (365,673    | ) |   | 2,933,954 |   |
| Deferred                  revenue                                                                                                                     |   |                                | 16,794,005  |   |   | 6,823,520 |   |
| Convertible                  debt derivative                                                                                                          |   |                                | -           |   |   | 481,910 |   |
| Other                  liabilities                                                                                                                    |   |                                | (14,269     | ) |   | - |   |
| NET                  CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                  |   |                                | 11,086,925  |   |   | (23,145 | ) |
|                                                                                                                                                  |   |                                |        |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                                                |   |                                |        |   |   |   |   |
| Purchases                  of property and equipment                                                                                                  |   |                                | (6,263,738  | ) |   | (720,007 | ) |
| Proceeds                  from sale of property and equipment                                                                                         |   |                                | 87,539      |   |   | - |   |
| Proceeds                  from sale of available-for-sale securities                                                                                  |   |                                | 1,165,231   |   |   | 2,062,153 |   |
| Purchases                  of available-for-sale securities                                                                                           |   |                                | (1,150,764  | )  |   | (307,028 | ) |
| NET                  CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                                                                                  |   |                                | (6,161,732  | ) |   | 1,035,118 |   |
|                                                                                                                                                  |   |                                |        |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                                                |   |                                |        |   |   |   |   |
| Bank                  overdraft                                                                                                                       |   |                                | -           |   |   | 120,184 |   |
| Repayment                  of bank overdraft                                                                                                          |   |                                | (812,464    | ) |   | - |   |
| Principal                  payments on debt                                                                                                           |   |                                | (15,787     | ) |   | (15,637 | ) |
| Repayment                  of notes payable                                                                                                           |   |                                | -           |   |   | (96,878 | ) |
| Restricted                  cash-collateral used as reserves for credit card                  processing                                              |   |                                | (810,690    | ) |   | (1,250,000 | ) |
| Proceeds                  from exercise of common stock options                                                                                       |   |                                | 412,000     |   |   | - |   |
| Proceeds                  from exercise of common stock warrants                                                                                      |   |                                | 768,969     |   |   | - |   |
| NET                  CASH USED IN FINANCING ACTIVITIES                                                                                                |   |                                | (457,972    | ) |   | (1,242,331 | ) |
|                                                                                                                                                  |   |                                |        |   |   |   |   |
| NET                  INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                  |   |                                | 4,467,221   |   |   | (230,358 | ) |
| CASH                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                                                       |   |                                | -           |   |   | 230,358 |   |
| CASH                  AND CASH EQUIVALENTS, END OF PERIOD                                                                                             |   | $                                   | 4,467,221   |   | $ | - |   |
|                                                                                                                                                  |   |                                |        |   |   |   |   |
| SUPPLEMENTAL                  CASH FLOW INFORMATION:                                                                                                  |   |                                |        |   |   |   |   |
| Interest                  paid                                                                                                                        |   | $                                   | 153,120     |   | $ | 43,869 |   |

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Cash Flows (continued)**

**(Unaudited)**

|                                                                                                            |   | Nine                  months ended  |      |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                                                            |   | September                  30, 2007 |      | September                  30, 2006 |   |
| SUPPLEMENTAL                  NON-CASH INVESTING AND FINANCING ACTIVITIES:                                      |   |                                |      |   |   |   |   |
|                                                                                                                 |   |                                |      |   |   |   |   |
| Increase                  in accounts payable and property and equipment                                        |   | $                                   | 174,202   |   | $ | - |   |
| Property                  and equipment settlement of the bonus liability                                       |   |                                | 101,490   |   |   | - |   |
| Increase                  in debt obligation and property and equipment                                         |   | $                                   | -         |   | $ | 2,500,000 |   |
| Increase                  in short-term debt and property and equipment                                         |   | $                                   | 1,299,470 |   | $ | - |   |
| Shares                  issued under a restricted stock grant in settlement of bonus                  liability |   | $                                   | 6,849,999 |   | $ | - |   |
| Shares                  issued in cashless warrant exercise                                                     |   | $                                   | 602       |   | $ | - |   |
| Increase                  in goodwill related to increase in deferred tax liability                             |   | $                                   | 755,000   |   | $ | - |   |
| FIN                  48 cumulative effect adjustment                                                            |   | $                                   | 105,091   |   | $ | - |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

----

|                                                                                                         |   | Three                    Months Ended |        | Nine                    Months Ended |   |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|--------------------------------------|--------|
|                                                                                                         |   | September                    30,      |        | September                    30,     |   |
|                                                                                                         |   | 2007                                  |        | 2006                                 |   | 2007 |   | 2006 |   |
| Numerator:                                                                                                   |   |                                  |        |                                 |   |   |   |   |   |
| Net                    income (loss)                                                                         |   | $                                     | 2,149,491   |                                 | $      | (4,364,080 | ) | $ | 1,644,273 |   | $ | (6,009,857 | ) |
|                                                                                                         |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                                 |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Weighted                    average common shares and denominator for basic                    calculation:  |   |                                  | 97,209,960  |                                 |   | 82,162,974 |   |   | 97,143,966 |   |   | 82,060,179 |   |
|                                                                                                         |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Weighted                    average effects of dilutive equity based compensation                    awards: |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Stock                    options                                                                             |   |                                  | 450,718     |                                 |   | - |   |   | 462,601 |   |   | - |   |
| Stock                    warrants                                                                            |   |                                  | 3,666,913   |                                 |   | - |   |   | 3,797,896 |   |   | - |   |
| Restricted                    stock awards                                                                   |   |                                  | 9,473,440   |                                 |   | - |   |   | 9,740,352 |   |   | - |   |
|                                                                                                         |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Denominator                    for diluted calculation                                                       |   |                                  | 110,801,031 |                                 |   | 82,162,974 |   |   | 111,144,815 |   |   | 82,060,179 |   |
|                                                                                                         |   |                                  |        |                                 |   |   |   |   |   |   |   |   |   |
| Net                    income (loss) per share - basic for Class A and Class B                               |   | $                                     | 0.02        |                                 | $      | (0.05 | ) | $ | 0.02 |   | $ | (0.07 | ) |
| Net                    income (loss) per share - diluted for Class A and Class B                             |   | $                                     | 0.02        |                                 | $      | (0.05 | ) | $ | 0.01 |   | $ | (0.07 | ) |

----

|                                           |   | September                  30, 2007 |      | December                  31, 2006 |   |
|------------------------------------------------|--------|-------------------------------------|-----------|------------------------------------|--------|
| "Success                  From Home" magazines |   | $                                   | 2,142,577 |                               | $      | 906,600 |   |
| "Fun                  & Travel" magazines  |   |                                | 1,270,249 |                               |   | - |   |
| Printed                  marketing materials   |   |                                | 1,103,663 |                               |   | 110,090 |   |
|                                           |   |                                |      |                               |   |   |   |
| Inventory                                      |   | $                                   | 4,516,489 |                               | $      | 1,016,690 |   |

| NOTE                  6 - PROPERTY AND EQUIPMENT                                    |
|-------------------------------------------------------------------------------------|
|                                                                                |
| Property                  and equipment consists of the                  following: |

|                                                 |   |   | September                  30, 2007 |   |   | December                  31, 2006 |   |
|-------------------------------------------------|--------|--------|-------------------------------------|--------|--------|------------------------------------|--------|
| Equipment                                       |   | $      | 2,283,665                           |   | $      | 1,105,005                          |   |
| Furniture                  and fixtures         |   |   | 808,788                             |   |   | 436,369                            |   |
| Capitalized                  software           |   |   | 1,719,533                           |   |   | 1,555,003                          |   |
| Vehicles                                        |   |   | 164,294                             |   |   | 168,908                            |   |
| Building                  and improvements      |   |   | 5,382,118                           |   |   | 3,085,519                          |   |
| Land                                            |   |   | 3,178,878                           |   |   | 1,538,693                          |   |
| Construction                  in progress       |   |   | 1,785,821                           |   |   | -                                  |   |
| Leasehold                  improvements         |   |   | 120,445                             |   |   | 116,522                            |   |
|                                            |   |   | 15,443,542                          |   |   | 8,006,019                          |   |
| Less:                  Accumulated depreciation |   |   | (2,440,882                          | )      |   | (1,814,611                         | )      |
|                                            |   |   |                                |   |   |                               |   |
| Property                  and equipment, net    |   | $      | 13,002,660                          |   | $      | 6,191,408                          |   |

----

**Stock      Options**

----

----

|                                                                  |   | Shares |       | Weighted-                  Average Exercise Price |   | Weighted-                  Average Fair Value |   |
|-----------------------------------------------------------------------|--------|--------|------------|---------------------------------------------------|--------|-----------------------------------------------|--------|
| Options                  outstanding, beginning of period             |   |   | 1,875,000  |                                              | $      | 0.36                                          |   | $ | 0.21 |   |
| For                  the period from January 1 to September 30, 2007: |   |   |       |                                              |   |                                          |   |   |   |   |
| Granted                                                               |   |   | 211,266    |                                              |   | 0.71                                          |   | $ | 0.89 |   |
| Forfeited                                                             |   |   | -          |                                              |   | -                                             |   | $ | - |   |
| Expired                                                               |   |   | -          |                                              |   | -                                             |   | $ | - |   |
| Exercised                                                             |   |   | (1,230,000 | )                                                 |   | 0.40                                          |   | $ | 0.12 |   |
|                                                                  |   |   |       |                                              |   |                                          |   |   |   |   |
| Options                  outstanding, end of period                   |   |   | 856,266    |                                              | $      | 0.48                                          |   | $ | 0.37 |   |
|                                                                  |   |   |       |                                              |   |                                          |   |   |   |   |
| Options                  exercisable, end of period                   |   |   | 175,425    |                                              | $      | 0.52                                          |   | $ | 0.36 |   |

|                                      |   |  Options                  Outstanding |    | Options                  Exercisable                      |   |
|-------------------------------------------|--------|--------------------------------------------|---------|-----------------------------------------------------------|--------|
| Range                  of Exercise Prices |   | Number                  Outstanding        |    | Weighted-                  Average Remaining Life (years) |   | Weighted-                  Average Exercise Price |   | Number                  Outstanding |   | Weighted-                  Average Exercise Price |   |
| $.40                  - $.71              |   |                                       | 856,266 |                                                      |   | 3.74 |   | $ | 0.48 |   |   | 175,425 |   | $ | 0.52 |   |
|                                      |   |                                       |    |                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                     |   |                                       | 856,266 |                                                      |   | 3.74 |   | $ | 0.48 |   |   | 175,425 |   | $ | 0.52 |   |

----

**Restricted      Stock**

----

|                                              |   | Restricted                  shares |       | Weighted-                  average grant-date fair value |   |
|---------------------------------------------------|--------|------------------------------------|------------|----------------------------------------------------------|--------|
| Non-vested                  at beginning of 2007  |   |                               | -          |                                                     |   | - |   |
| Granted                                           |   |                               | 28,950,027 |                                                     | $      | 1.03 |   |
| Vested                                            |   |                               | 9,338,703  |                                                     | $      | 1.03 |   |
| Forfeited                                         |   |                               | -          |                                                     |   |   |   |
| Non-vested                  at September 30, 2007 |   |                               | 19,611,324 |                                                     | $      | 1.03 |   |

----

----

*The      Fair Value Option for Financial Assets and Financial Liabilities Including      an      amendment of FASB Statement No. 115 *
*,*

----

| Three                  Months Ended September 30, 2007 |   | Marketing |       | Travel |   | Parent    |   | Elimination |       | Total  |   |
|--------------------------------------------------------|--------|-----------|------------|--------|--------|-----------|--------|-------------|------------|--------|--------|
| External                  and inter-segment revenue    |   | $         | 34,162,402 |   | $      | 5,706,840 |   | $           | -          |   |   |   |   | $ | 39,869,242 |   |
| Segment                  profit (loss)                 |   |      | 2,310,087  |   |   | 1,445,211 |   |        | (1,605,807 | )      |   | - |   |   | 2,149,491 |   |
| Assets                                                 |   |      | 49,430,975 |   |   | 9,707,809 |   |        | 10,090,879 |   |   | (7,197,635 | ) |   | 62,032,028 |   |
| Depreciation                  and amortization         |   |      | 230,115    |   |   | 3,188     |   |        | 70,940     |   |   | - |   |   | 304,243 |   |
| Capital                  expenditures                  |   |      | 1,123,615  |   |   | 63,500    |   |        | 3,401,668  |   |   | - |   |   | 4,588,783 |   |

| Three                  Months Ended September 30, 2006 |   | Marketing |       | Travel |   | Parent    |   | Elimination |       | Total  |   |
|--------------------------------------------------------|--------|-----------|------------|--------|--------|-----------|--------|-------------|------------|--------|--------|
| External                  and inter-segment revenue    |   | $         | 11,039,579 |   | $      | 2,137,260 |   | $           | -          |   | $      | (40,250 | ) | $ | 13,136,589 |   |
| Segment                  profit (loss)                 |   |      | (3,602,445 | )      |   | 482,746   |   |        | (1,244,381 | )      |   | - |   |   | (4,364,080 | ) |
| Assets                                                 |   |      | 14,859,898 |   |   | 3,964,070 |   |        | 10,200,099 |   |   | (5,635,909 | ) |   | 23,388,158 |   |
| Depreciation                  and amortization         |   |      | 106,016    |   |   | -         |   |        | 23,360     |   |   | - |   |   | 129,376 |   |
| Capital                  expenditures                  |   |      | 119,886    |   |   | -         |   |        | 2,808,275  |   |   | - |   |   | 2,928,161 |   |

| Nine                  Months Ended September 30, 2007 |   | Marketing |       | Travel |   | Parent     |   | Elimination |       | Total  |   |
|-------------------------------------------------------|--------|-----------|------------|--------|--------|------------|--------|-------------|------------|--------|--------|
| External                  and inter-segment revenue   |   | $         | 81,203,985 |   | $      | 14,714,470 |   | $           | 400        |   | $      | - |   | $ | 95,918,855 |   |
| Segment                  profit (loss)                |   |      | 1,056,058  |   |   | 4,121,544  |   |        | (3,533,329 | )      |   | - |   |   | 1,644,273 |   |
| Assets                                                |   |      | 49,430,975 |   |   | 9,707,809  |   |        | 10,090,879 |   |   | (7,197,635 | ) |   | 62,032,028 |   |
| Depreciation                  and amortization        |   |      | 577,605    |   |   | 4,250      |   |        | 200,363    |   |   | - |   |   | 782,218 |   |
| Capital                  expenditures                 |   |      | 2,726,976  |   |   | 165,250    |   |        | 4,845,184  |   |   | - |   |   | 7,737,410 |   |

| Year                  Ended September 30, 2006      |   | Marketing |       | Travel |   | Parent    |   | Elimination |       | Total  |   |
|-----------------------------------------------------|--------|-----------|------------|--------|--------|-----------|--------|-------------|------------|--------|--------|
| External                  and inter-segment revenue |   | $         | 25,719,127 |   | $      | 5,725,207 |   | $           | -          |   | $      | (265,258 | ) | $ | 31,179,076 |   |
| Segment                  profit (loss)              |   |      | (3,776,516 | )      |   | 1,371,293 |   |        | (3,604,634 | )      |   | - |   |   | (6,009,857 | ) |
| Assets                                              |   |      | 14,859,898 |   |   | 3,964,070 |   |        | 10,200,099 |   |   | (5,635,909 | ) |   | 23,388,158 |   |
| Depreciation                  and amortization      |   |      | 192,766    |   |   | -         |   |        | 70,080     |   |   | - |   |   | 262,846 |   |
| Capital                  expenditures               |   |      | 378,811    |   |   | -         |   |        | 2,808,275  |   |   | - |   |   | 3,187,086 |   |

----

*Income      Taxes -*
*”,*

----

----

----

**Item      2.**

**Management’s      Discussion and Analysis or Plan of Operation**

*The      Private Securities Litigation Reform Act of 1995 and Section 21E of the      Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe      harbor for forward-looking statements made by or on behalf of the Company.      The      Company and its representatives may from time to time make written or oral      statements that are “forward-looking”, including statements contained in this      report and other filings with the Securities and Exchange Commission (“SEC”) and      in our reports to stockholders. In some cases forward-looking statements can      be      identified by words such as “believe,” “expect,” “anticipate,” “plan,”“potential,” “continue” or similar expressions. Such forward-looking statements      include risks and uncertainties and there are important factors that could      cause      actual results to differ materially from those expressed or implied by such      forward-looking statements. These factors, risks and uncertainties can be found      in the “Risk Factors” section of the Company’s Registration      Statement on Form SB-2 filed with the SEC on May 21,      2007.*

*Although      we believe the expectations reflected in our forward-looking statements are      based upon reasonable assumptions, it is not possible to foresee or identify      all      facts that could have a material effect on the future financial performance      of      the Company. The forward-looking statements in this report are made on the      basis      of management’s assumptions and analyses, as of the time the statements are      made, in light of their experience and perception of historical conditions,      expected future developments and other factors believed to be appropriate under      the circumstances.*

*In      addition, certain market data and other statistical information used throughout      this report are based on independent industry publications. Although we believe      these sources to be reliable, we have not independently verified the information      and cannot guarantee the accuracy and completeness of such      sources.*

*Except      as otherwise required by the federal securities laws, we disclaim any obligation      or undertaking to publicly release any updates or revisions to any      forward-looking statement contained in this quarterly report on Form 10-QSB      and      the information incorporated by reference in this report to reflect any change      in our expectations with regard thereto or any change in events, conditions      or      circumstances on which any statement is based.*

**Overview**

----

**About      Our Industry**

----

**Results      of Operations**

|                                                         |   | Three                  months ended |       | Three                  months ended |   | Variance                        |    |
|--------------------------------------------------------------|--------|-------------------------------------|------------|-------------------------------------|--------|---------------------------------|---------|
|                                                         |   | Sept.                  30, 2007     |       | %                  of Net Revenues  |   | Sept.                  30, 2006 |    | %                  of Net Revenues |   | Increase                  (Decrease) |   | Inc.(Decr.)                  % |   |
| NET                  REVENUES                                |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |
| Online                  travel stores and monthly fees       |   | $                                   | 28,691,270 |                                |   | 72.0                            | %       | $ | 9,015,325 |   |   | 68.6 | % | $ | 19,675,945 |   |   | 218.2 | % |
| Travel                  commissions and services             |   |                                | 5,536,399  |                                |   | 13.9                            | %       |   | 1,963,887 |   |   | 15.0 | % |   | 3,572,512 |   |   | 181.9 | % |
| Training                  programs and marketing materials   |   |                                | 3,651,184  |                                |   | 9.1                             | %       |   | 1,475,946 |   |   | 11.2 | % |   | 2,175,238 |   |   | 147.4 | % |
| Other                                                        |   |                                | 1,990,389  |                                |   | 5.0                             | %       |   | 681,431 |   |   | 5.2 | % |   | 1,308,958 |   |   | 192.1 | % |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  net revenues                          |   |                                | 39,869,242 |                                |   | 100.0                           | %       |   | 13,136,589 |   |   | 100.0 | % |   | 26,732,653 |   |   | 203.5 | % |
| OPERATING                  EXPENSES                          |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                  commissions                       |   |                                | 20,603,925 |                                |   | 51.7                            | %       |   | 9,473,964 |   |   | 72.1 | % |   | 11,129,961 |   |   | 117.5 | % |
| Travel                  commissions                          |   |                                | 3,913,021  |                                |   | 9.8                             | %       |   | 1,348,540 |   |   | 10.3 | % |   | 2,564,481 |   |   | 190.2 | % |
| Depreciation                  and amortization               |   |                                | 304,243    |                                |   | 0.8                             | %       |   | 129,376 |   |   | 1.0 | % |   | 174,867 |   |   | 135.2 | % |
| Marketing                  and selling                       |   |                                | 1,613,890  |                                |   | 4.0                             | %       |   | 798,851 |   |   | 6.1 | % |   | 815,039 |   |   | 102.0 | % |
| General                  and administrative                  |   |                                | 11,228,055 |                                |   | 28.2                            | %       |   | 5,640,940 |   |   | 42.9 | % |   | 5,587,115 |   |   | 99.0 | % |
| Total                  operating expenses                    |   |                                | 37,663,134 |                                |   | 94.5                            | %       |   | 17,391,671 |   |   | 132.4 | % |   | 20,271,463 |   |   | 116.6 | % |
| INCOME                  (LOSS) FROM OPERATIONS               |   |                                | 2,206,108  |                                |   | 5.5                             | %       |   | (4,255,082 | ) |   | (32.4 | %) |   | 6,461,190 |   |   | (151.8 | %) |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME/(EXPENSE)                      |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  and dividend income                |   |                                | 128,804    |                                |   | 0.3                             | %       |   | 42,803 |   |   | 0.3 | % |   | 86,001 |   |   | 200.9 | % |
| Interest                  expense                            |   |                                | (23,115    | )                                   |   | (0.1                            | %)      |   | (151,801 | ) |   | (1.2 | %) |   | 128,686 |   |   | (84.8 | %) |
| Gain                  (loss) on sale of assets               |   |                                | (18,556    | )                                   |   | 0.0                             | %       |   | - |   |   | 0.0 | % |   | (18,556 | ) |   | 0.0 | % |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other income/(expense)                |   |                                | 87,133     |                                |   | 0.2                             | %       |   | (108,998 | ) |   | (0.9 | %) |   | 196,131 |   |   | (179.9 | %) |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                    (LOSS) BEFORE INCOME TAX PROVISION |   |                                | 2,293,241  |                                |   | 5.7                             | %       |   | (4,364,080 | ) |   | (33.3 | %) |   | 6,657,321 |   |   | 152.5 | % |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  TAX PROVISION                        |   |                                | 143,750    |                                |   | 0.4                             | %  |   | - |   |   | - |   |   | 143,750 |   |   | - |   |
|                                                         |   |                                |       |                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  INCOME (LOSS)                           |   | $                                   | 2,149,491  |                                |   | 5.3                             | %       | $ | (4,364,080 | ) |   | (33.3 | %) | $ | 6,513,571 |   |   | 149.3 | % |

----

|                                                         |   | Nine                  months ended |       | Nine                  months ended |   | Variance                        |   |
|--------------------------------------------------------------|--------|------------------------------------|------------|------------------------------------|--------|---------------------------------|--------|
|                                                         |   | Sept.                  30, 2007    |       | %                  of Net Revenues |   | Sept.                  30, 2006 |   | %                  of Net Revenues |   | Increase                  (Decrease) |   | Inc.(Decr.)                  % |   |
| NET                  REVENUES                                |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |
| Online                  travel stores and monthly fees       |   | $                                  | 69,031,218 |                               |   | 72.0                            | %      | $ | 22,481,964 |   |   | 72.1 | % | $ | 46,549,254 |   |   | 207.1 | % |
| Travel                  commissions and services             |   |                               | 13,930,824 |                               |   | 14.5                            | %      |   | 5,116,529 |   |   | 16.4 | % |   | 8,814,295 |   |   | 172.3 | % |
| Training                  programs and marketing materials   |   |                               | 10,364,547 |                               |   | 10.8                            | %      |   | 2,949,763 |   |   | 9.5 | % |   | 7,414,784 |   |   | 251.4 | % |
| Other                                                        |   |                               | 2,592,266  |                               |   | 2.7                             | %      |   | 630,820 |   |   | 2.0 | % |   | 1,961,446 |   |   | 310.9 | % |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  net revenues                          |   |                               | 95,918,855 |                               |   | 100.0                           | %      |   | 31,179,076 |   |   | 100.0 | % |   | 64,739,779 |   |   | 207.6 | % |
| OPERATING                  EXPENSES                          |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                  commissions                       |   |                               | 55,370,759 |                               |   | 57.7                            | %      |   | 19,556,884 |   |   | 62.7 | % |   | 35,813,875 |   |   | 183.1 | % |
| Travel                  commissions                          |   |                               | 9,398,036  |                               |   | 9.8                             | %      |   | 3,319,045 |   |   | 10.6 | % |   | 6,078,991 |   |   | 183.2 | % |
| Depreciation                  and amortization               |   |                               | 782,218    |                               |   | 0.8                             | %      |   | 262,846 |   |   | 0.8 | % |   | 519,372 |   |   | 197.6 | % |
| Marketing                  and selling                       |   |                               | 4,342,480  |                               |   | 4.5                             | %      |   | 1,144,814 |   |   | 3.7 | % |   | 3,197,666 |   |   | 279.3 | % |
| General                  and administrative                  |   |                               | 24,509,665 |                               |   | 25.6                            | %      |   | 12,572,068 |   |   | 40.3 | % |   | 11,937,597 |   |   | 95.0 | % |
| Total                  operating expenses                    |   |                               | 94,403,158 |                               |   | 98.4                            | %      |   | 36,855,657 |   |   | 118.1 | % |   | 57,547,501 |   |   | 156.1 | % |
| INCOME                  (LOSS) FROM OPERATIONS               |   |                               | 1,515,697  |                               |   | 1.6                             | %      |   | (5,676,581 | ) |   | (18.1 | %) |   | 7,192,278 |   |   | (126.7 | %) |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME/(EXPENSE)                      |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  and dividend income                |   |                               | 309,358    |                               |   | 0.3                             | %      |   | 118,179 |   |   | 0.4 | % |   | 191,179 |   |   | 161.8 | % |
| Interest                  expense                            |   |                               | (27,041    | )                                  |   | 0.0                             | %      |   | (452,455 | ) |   | (1.5 | %) |   | 425,414 |   |   | (94.0 | %) |
| Gain                  (loss) on sale of assets               |   |                               | (9,991     | )                                  |   | 0.0                             | %      |   | 1,000 |   |   | 0.0 | % |   | (10,991 | ) |   | (1099.1 | %) |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other income/(expense)                |   |                               | 272,326    |                               |   | 0.3                             | %      |   | (333,276 | ) |   | (1.1 | %) |   | 605,602 |   |   | (181.7 | %) |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                    (LOSS) BEFORE INCOME TAX PROVISION |   |                               | 1,788,023  |                               |   | 1.9                             | %      |   | (6,009,857 | ) |   | (19.2 | %) |   | 7,797,880 |   |   | (129.8 | %) |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  TAX PROVISION                        |   |                               | 143,750    |                               |   | 0.1                             | %      |   | - |   |   | - |   |   | 143,750 |   |   | - |   |
|                                                         |   |                               |       |                               |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  INCOME (LOSS)                           |   | $                                  | 1,644,273  |                               |   | 1.8                             | %      | $ | (6,009,857 | ) |   | (19.2 | %) | $ | 7,654,130 |   |   | (127.4 | %) |

| RTAs                    as of         |   | RTAs                    as of         |
|---------------------------------------|--------|---------------------------------------|
| September                    30, 2007 |   | September                    30, 2006 |
| 120,948                               |   | 45,233                                |

| **Three                    months ended September 30, 2007 and                    2006** |
|------------------------------------------------------------------------------------------|

| Site                    sales for the |   | Site                    sales for the |
|---------------------------------------|--------|---------------------------------------|
| 3                    months ended     |   | 3                    months ended     |
| September                    30, 2007 |   | September                    30, 2006 |
| 38,032                                |   | 17,811                                |

| **Nine                    months ended September 30, 2007 and                    2006** |
|-----------------------------------------------------------------------------------------|

| Site                    sales for the |   | Site                    sales for the |
|---------------------------------------|--------|---------------------------------------|
| 9                    months ended     |   | 9                    months ended     |
| September                    30, 2007 |   | September                    30, 2006 |
| 105,756                               |   | 39,613                                |

----

**Three      months ended September 30, 2007 compared to three months ended September 30,      2006**

**Net      Revenues**

| ·   | Online                travel store sales and monthly fees increased $19,675,945 or 218.2%                in the                third quarter of 2007 to $28,691,270 from the $9,015,325 reported                in the                comparable prior year quarter. The increase is due to the significant                growth of YTB Marketing attributable to the increase in active RTAs.                The                Company believes its significant growth in RTAs is attributable to                the                emerging market shift to the Internet for travel services which presents                the opportunity for advancement of products and services by referral                relationships and the growth in the desire for home-based                businesses. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Travel                agency commissions for the third quarter of 2007 increased $3,572,512                or                181.9%                to                $5,536,399                from the $1,963,887 reported in the comparable prior year quarter.                The                increase is attributable to the increase in the number of customers                utilizing the Company as their travel provider in 2007 due to the                significant growth in the number of RTAs. Also contributing to the                growth                in travel agency commissions is the fact that the Company held more                travel                training events/tradeshows in the third quarter of 2007 compared                to 2006,                which in turn increase product awareness, making the Company’s RTAs more                effective in selling travel. The Company anticipates the number of                training events and tradeshows held will continue to increase as                the                number of RTAs continues to grow. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue increased $2,175,238 or                147.4% in                the third quarter of 2007 to $3,651,184 from $1,475,946 in the comparable                prior year quarter. This increase is due to the significant growth                of                sales revenues primarily from training programs, sales aides and                miscellaneous promotional and marketing materials purchased by an                increasing number of Reps. Revenue from the sale of the “Success from                Home” magazine, new in 2006, accounts for $1.2 million of the increase                in                the third quarter of 2007. Additional increases in the third quarter                of                2007 related to training programs revenue and sales aides in the                amount of                approximately $1.0 million compared to the third quarter of 2006.                Training                program revenue has increased significantly as the Company is holding                more                meetings and the average attendance at the meetings is growing as                well. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the third quarter of 2007 as compared to 2006                by                $1,308,958 or 192.1% to $1,990,389 from $681,431. This increase is                primarily related to the annual convention revenue which increased                $1,302,795 or 237.4% to $1,851,503 from $548,708 reported in the                comparable prior year quarter. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Operating      Expenses **

| ·   | Marketing                commissions increased by $11,129,961 or 117.5% in the third quarter                of                2007 to $20,603,925 from $9,473,964 in the third quarter of 2006.                This                increase is due to the significant increase in active RTAs recruited                by                our Reps. The increase is also due to an increase in the number of                sales                directors in the Company along with an increase in the amount paid                out to                the entire Director’s Pool. The Director’s Pool consists of Reps who have                achieved certain performance levels within the Company which entitles                them                to additional commissions on the number of new sales, monthly renewals                and                the number of training events held. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Travel                commissions for the third quarter of 2007 increased by $2,564,481                or                190.2% to $3,913,021 from $1,348,540 reported in the third quarter                of                2006. The increase is attributable to the increase in the number                of                customers utilizing the Company as their travel provider in 2007                due to                the significant growth in the number of                RTAs. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $304,243 in the third quarter of 2007, compared                to                $129,376 in the corresponding quarter of 2006. The increase in                depreciation and amortization is primarily attributable to the new                additions related to the Company’s new headquarters building and assets                related to the growth of the Company’s                infrastructure. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased by $815,039 or 102% to $1,613,890                from                $798,851 reported in the third quarter of 2006. The increase is primarily                due to the increase in the promotional magazine program expense;                this                expense is offset by the revenue collected on the sale of magazines                to                RTAs. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $5,587,115 to $11,228,055 in                the                third quarter of 2007 from $5,640,940 in the third quarter of 2006.                As a                percentage of total net revenues, these expenses were 28.2% in 2007                and                42.9% in 2006. The increase in general and administrative expense                in 2007                is attributable to the significant growth in the number of active                RTAs                resulting in increased costs associated with the growth in the Company’s                infrastructure to support the increased volume as well as the costs                associated with the ongoing implementation of new business strategies                company-wide. The increases year over year relate primarily to                : |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Salaries                and benefits increased by $1.4 million primarily as a result of additional                staffing requirements at the home office directly related to the                increased                sales of on line travel stores and continuing renewals of RTAs.  |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                annual convention expense increased $1,282,259 due to the 200% increase                in                attendance.  |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Postage                and shipping increased by $311,614 as a result of the continued strong                sales and renewal base of RTAs and the related costs to ship marketing                materials to our RTAs.    |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Credit                card fees and bank charges increased by $607,955 in direct proportion                to                the number of sales and                renewals.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Nine      months ended September 30, 2007 compared to nine months ended September 30,      2006**

**Net      Revenues**

| ·   | Online                travel store sales and monthly fees increased $46,549,254 or 207.1%                in the                first nine months of 2007 to $69,031,218 from the $22,481,964 reported                in                the comparable prior year period. The increase is due to the significant                growth of YTB Marketing attributable to the increase in active RTAs.                The                Company believes its significant growth in RTAs is attributable to                the                emerging market shift to the Internet for travel services which presents                the opportunity for advancement of products and services by referral                relationships and the growth in the demand for home-based                businesses. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Travel                agency commissions for the first nine months of 2007 increased $8,814,295                or 172.3%                to                $13,930,824                from the $5,116,529 reported in the comparable prior year period.                The                increase is attributable to an increase in the number of customers                utilizing the Company as their travel provider in 2007 due to the                significant growth in the number of RTAs. Also contributing to the                growth                in travel agency commissions is the fact that the Company is holding                more                travel training events/tradeshows in the first nine months of 2007                compared to 2006 that increase product awareness, making the Company’s                RTAs more effective in selling travel. The Company anticipates the                number                of training events and tradeshows held will continue to increase                as the                number of RTAs continues to grow. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue increased $7,414,784 or                251.4% in                the first nine months of 2007 to $10,364,547 from $2,949,763 in the                comparable prior year period. This increase is due to the significant                growth of sales revenues primarily from training programs, sales                aides and                miscellaneous promotional and marketing materials purchased by an                increasing number of Reps. Revenue from the sale of the “Success from                Home” magazine, new in 2006, accounts for approximately $4.3 million of                the increase in the first nine months of 2007. Additional increases                in the                first nine months of 2007 related to (i) training programs revenue                and                (ii) sales aides and miscellaneous marketing materials revenue, in                the                amounts of approximately $2.8 million and $272,886, respectively,                compared                to the first nine months of 2006. Training program revenue has increased                significantly as the Company is holding more meetings and the average                attendance at the meetings is growing as                well. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the first nine months of 2007 as compared to                2006 by                $1,961,446 or 310.9% to $2,592,266 from $630,820. This increase is                primarily related to the annual convention which incurred offsetting                expenses. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses **

| ·   | Marketing                commissions increased by $35,813,875 or 183.1% in the first nine                months of                2007 to $55,370,759 from $19,556,884 in the first nine months of                2006.                This increase is primarily due to the significant increase in active                RTAs                recruited by our Reps. The first nine months ended September 30,                2007 also                includes $6,654,645 in bonus expense for the Company’s Reps earned in                conjunction with the Company’s sales director bonus programs while the                first nine months of 2006 includes $3,480,500 of bonus expense. The                increase is also due to an increase in the number of sales directors                in                the Company with guaranteed earnings, along with an increase in the                amount                paid out to the entire Directors’ Pool. The Directors’ Pool consists of                Reps who have achieved certain performance levels within the Company                which                entitles them to additional commissions on the number of new sales,                monthly renewals and the number of training events held. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Travel                commissions for the first nine months of 2007 increased by $6,078,991                or                183.2% to $9,398,036 from $3,319,045 reported in the first nine months                of                2006. The increase is attributable to an increase in the number of                customers utilizing the Company as their travel provider in 2007                due to                the significant growth in the number of                RTAs. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $782,218 in the first nine months of 2007, compared                to $262,846 in the corresponding period of 2006. The increase in                depreciation and amortization is primarily attributable to the new                additions related to the Company’s new headquarters building and assets                related to the growth of the Company’s                infrastructure. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased by $3,197,666 or 279.3% from $1,144,814                in                the first nine months of 2006 to $4,342,480 in the first nine months                of                2007. The increase is attributable to an increase in promotional                efforts                in connection with our Super Bowl insert and our leadership bulletins                which led to an increase in RTAs. The increase is also due to the                increase                in magazine expense; this expense is offset by the revenue collected                on                the sale of magazines to RTAs. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | General                and administrative expenses increased $11,937,597 to $24,509,665                in the                first nine months of 2007 from $12,572,068 in the first nine months                of                2006. As a percentage of total net revenues, these expenses were                25.6% in                2007 and 40.3% in 2006. The increase in general and administrative                expense                in 2007 is attributable to the significant growth in the number of                active                RTAs resulting in increased costs associated with the growth in the                Company’s infrastructure to support the increased volume as well as costs                associated with the ongoing implementation of new business strategies                company-wide. The increases year over year relate primarily                to: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Salaries                and benefits increased by $3.7 million primarily as a result of additional                staffing requirements at the home office directly related to the                increased                sales of online travel stores and continuing renewals of RTAs.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Postage                and shipping increased by $1.2 million as a result of the continued                strong                sales and renewal base of RTAs and the related costs to ship marketing                materials to our RTAs.    |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Credit                card fees and bank charges increased by $1.5 million in direct proportion                to the number of sales and                renewals.  |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                annual convention expense increased $1,282,259 due to the 200% increase                in                attendance. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

**Variability      of Results**

----

**Liquidity      and Capital Resources**

|                                             |   | Nine                  months ended  |       |
|--------------------------------------------------|--------|-------------------------------------|------------|
|                                             |   | September                  30, 2007 |       | September                  30, 2006 |   |
| Net                  cash provided by (used in): |   |                                |       |   |   |
| Operating                  activities            |   | $                                   | 11,086,925 |   | $ | (23,145 | ) |
| Investing                  activities            |   |                                | (6,161,732 | ) |   | 1,035,118 |   |
| Financing                  activities            |   |                                | (457,972   | ) |   | (1,242,331 | ) |
|                                             |   |                                |       |   |   |   |   |
| Net                  increase (decrease) in cash |   | $                                   | 4,467,221  |   | $ | (230,358 | ) |

----

**Off-Balance      Sheet Arrangements**

**New      Accounting Pronouncements**

*The      Fair Value Option for Financial Assets and Financial Liabilities Including      an      amendment of FASB Statement No. 115 *
*,*

**Application      of Critical Accounting Policies**

**Forward-Looking      Statements**

----

**Item      3.**

**Controls      and Procedures**

**Evaluation      of Disclosure Controls and Procedures **

**Changes      in Internal Control Over Financial Reporting**

| ·   | Formed                a formal Disclosure Committee, comprised of senior and mid-level                management, to review, comment on, and discuss required                disclosures. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| ·   | Experienced                staff in the financial area have been recruited and                retained. |
|--------------------|---------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| ·   | A                formal Disclosure Control policy has been drafted and subsequently                adopted                by the Board of Directors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| ·   | A                formal, more stringent, closing process has been developed with timelines                and checklists to be completed, for                review. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PART      II - OTHER INFORMATION**

**Item      1.**

**Legal      Proceedings.**

**Item      2.**

**Unregistered      Sales of Equity Securities and Use of Proceeds.**

**Item      3.**

**Defaults      Upon Senior Securities.**

**Item      4.**

**Submission      of Matters to a Vote of Security Holders.**

**Item      5.**

**Other      Information.**

----

**Item      6.**

**Exhibits**

| 3.1    |   | Form                of Amended and Restated Certificate of Incorporation of the Company,                effective as of July 31 2007, incorporated by reference to YTB                International, Inc.'s Definitive Proxy Statement, on Schedule 14A,                Appendix A, filed April 24, 2007.                                                                                                                                                                                                                                                                                                                           |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2    |   | Amended                and Restated By-Laws of the Company, incorporated by reference to                YTB                International, Inc.'s Current Report on Form 8-K, Exhibit 3.1, filed                September 28, 2007.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.1    |   | Stockholders’                Agreement dated December 8, 2004 by and among Great River Enterprises,                LP#1, J. Scott Tomer, J. Kim Sorensen, Michael Y. Brent, Derek J.                Brent                and REZconnect Technologies Inc., incorporated by reference to YTB                International, Inc.’s Current Report on Form 8-K, as amended, Exhibit 4.1,                filed June 20, 2005.                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.2    |   | Agreement                and Irrevocable Proxy, dated November 22, 2006, by and among J. Lloyd                Tomer, J. Scott Tomer, J. Kim Sorensen, jointly and severally, and                Michael                Y. Brent, Derek Brent and Darren Brent, jointly and severally, with                respect to certain matters specified therein, incorporated by reference                to                Exhibit 99.1 to the Schedule 13D/A filed by Great River Enterprises,                LP                #1, J. Lloyd Tomer, J. Scott Tomer and J. Kim Sorensen on November                24,                2006. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1   |   | Contract                to Purchase Real Estate (Building One), dated July 27, 2007, by and                between Meridian Land Company, Inc. and YTB International, Inc.,                incorporated by reference to YTB International, Inc.’s Quarterly Report on                Form 10-QSB, as amended, Exhibit 10.1, filed August                14,2007.                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2   |   | Commercial                Lease Agreement, dated as of August 10, 2007, by and between Meridian                Land                Company, Inc. and YTB International, Inc. with respect to certain                premises                located at #112 Magnolia Drive (Lot #9 Magnolia Commons), Glen Carbon,                Illinois 62034, incorporated by reference to YTB International, Inc.’s                Current Report on Form 8-K, Exhibit 10.1, filed August 22,                2007.                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3   |   | Contract                to Purchase Real Estate, dated as of July 13, 2007, by and between                Robert                Karlas and YTB International, Inc. with respect to two parcels of                land                located at or about 2201 Old Alton Edwardsville Road, East Alton,                Illinois.                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.1   |   | Chief                Executive Officer Certification pursuant to Rule 13a-14(a) or 15d-14(a)                of                the Securities Exchange Act of 1934, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.2   |   | Chief                Financial Officer Certification pursuant to Rule 13a-14(a) or 15d-14(a)                of                the Securities Exchange Act of 1934, as adopted pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 32.1*  |   | Chief                Executive Officer Certification pursuant to Rule 13a-14(b) of the                Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 32.2*  |   | Chief                Financial Officer Certification pursuant to Rule 13a-14(b) of the                Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                               |

| * | These                certifications are attached as Exhibits 32.1and 32.2 accompanying                this                Quarterly Report on Form 10-QSB pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by YTB                International, Inc. for the purposes of Section 18 of the Exchange                Act.                Signed originals of these written statements required by Section                906 have                been provided to YTB International, Inc. and will be retained by                YTB                International, Inc. and furnished to the Securities and Exchange                Commission or its staff upon                request. |
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**SIGNATURES**

|   |   |   | **YTB                  International, Inc**                                                     |
|--------|--------|--------|-------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                            |
|   |   |   |                                                                                            |
|        |   |   | /s/                J. Scott                Tomer                                                |
|        |   |   | J.                  Scott Tomer                                                                 |
|        |   |   | Chief                  Executive Officer and Director Dated: November 14,                  2007 |

|   |   |   |                                                                                           |
|--------|--------|--------|------------------------------------------------------------------------------------------------|
|        |   |   | /s/                    John D.                    Clagg                                        |
|        |   |   | John                      D. Clagg                                                             |
|        |   |   | Chief                        Financial Officer Dated: November 14,                        2007 |

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