**FORM      10-Q**

| Delaware                                                                      |   | 20-2181181                                          |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) |   | (I.R.S.                Employer Identification No.) |

|   | Yes  x |   | No** **o |   |
|--------|------------------|--------|---------------|--------|

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

|   | Yes  o |   | No** **x |   |
|--------|------------------|--------|---------------|--------|

----

**YTB      INTERNATIONAL, INC.**

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

**Three      and six months ended June 30, 2008**

| PART                  I   |   | FINANCIAL                  INFORMATION                                                                                              |   |   |
|---------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                      |   |                                                                                                                                |   |   |
| Item                  1.  |   | Financial                  Statements.                                                                                              |   |   |
|                           |   | Condensed                Consolidated Balance Sheets, June 30, 2008 (Unaudited) and December                31,                2007 |   | 2      |
|                           |   | Condensed                Consolidated Statements of Operations (Unaudited)                                                          |   |        |
|                           |   | Three                  months ended June 30, 2008 and 2007                                                                          |   | 3      |
|                           |   | Condensed                Consolidated Statements of Operations (Unaudited)                                                          |   |        |
|                           |   | Six                  months ended June 30, 2008 and 2007                                                                            |   | 4      |
|                           |   | Condensed                Consolidated Statement of Change in Stockholders’ Equity                (Unaudited)                  |   |   |
|                           |   | Six                  months ended June 30, 2008                                                                                     |   | 5      |
|                           |   | Condensed                Consolidated Statements of Cash Flows (Unaudited)                                                          |   |   |
|                           |   | Six                  months ended June 30, 2008 and 2007                                                                            |   | 6-7    |
|                           |   | Notes                To Condensed Consolidated Financial Statements (Unaudited)                                                     |   | 8      |
| Item                  2.  |   | Management's                Discussion and Analysis of Financial Condition and Results of                Operations.                |   | 26     |
| Item                  3.  |   | Quantitative                and Qualitative Disclosures About Market Risk (not required).                                           |   | 44     |
| Item                  4T. |   | Controls                and Procedures.                                                                                             |   | 44     |
|                      |   |                                                                                                                                     |   |   |
| PART                  II  |   | OTHER                INFORMATION                                                                                                    |   |   |
|                      |   |                                                                                                                                     |   |   |
| Item                  1.  |   | Legal                Proceedings.                                                                                                   |   | 45     |
| Item                  1A. |   | Risk                Factors (not required).                                                                                         |   | 45     |
| Item                  2.  |   | Unregistered                Sales of Equity Securities and Use of Proceeds.                                                         |   | 45     |
| Item                  3.  |   | Defaults                Upon Senior Securities.                                                                                     |   | 45     |
| Item                  4.  |   | Submission                of Matters to a Vote of Security Holders.                                                                 |   | 45     |
| Item                  5.  |   | Other                Information.                                                                                                   |   | 46     |
| Item                  6.  |   | Exhibits.                                                                                                                           |   | 47     |
| Signatures                |   |                                                                                                                                     |   | 48     |

----

**PART      I - FINANCIAL INFORMATION**

*On      July 31, 2007 (the “Reclassification Date”),YTB International, Inc. (the“Company”) 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 increased 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-Q reflect this      reclassification.*

**Item      1.**

**Financial      Statements.**

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Balance Sheets**

|                                                                                                                      |   | June                  30, 2008 (Unaudited) |        | December                  31, 2007 |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|-------------|------------------------------------|--------|
| ASSETS                                                                                                                    |   |                                       |        |                               |   |
| Current                  assets:                                                                                          |   |                                       |        |                               |   |
| Cash                  and cash equivalents                                                                                |   | $                                          | 632,205     |                               | $      | 1,730,570 |   |
| Restricted                  cash                                                                                          |   |                                       | 1,965,200   |                               |   | 2,268,344 |   |
| Available-for-sale                  securities                                                                            |   |                                       | -           |                               |   | 26,834 |   |
| Accounts                  receivable (less allowance for doubtful accounts of                                             |   |                                       |        |                               |   |   |   |
| $7,196                  in 2008 and $5,699 in 2007)                                                                       |   |                                       | 3,131,042   |                               |   | 2,662,101 |   |
| Notes                  receivable (less allowance for uncollectible notes of                                              |   |                                       |        |                               |   |   |   |
| $236,339                  in 2008 and $200,907 in 2007)                                                                   |   |                                       | 1,277,483   |                               |   | 2,041,751 |   |
| Inventory,                  net                                                                                           |   |                                       | 3,821,551   |                               |   | 4,903,244 |   |
| Prepaid                  marketing commissions and advances (less allowance for                                           |   |                                       |        |                               |   |   |   |
| uncollectible                  advances of $60,000 in 2008 and $73,125 in 2007)                                           |   |                                       | 20,143,758  |                               |   | 25,080,737 |   |
| Other                  prepaid expenses and current assets                                                                |   |                                       | 2,780,151   |                               |   | 2,056,535 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Total                  current assets                                                                                     |   |                                       | 33,751,390  |                               |   | 40,770,116 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Long-term                  investments, net                                                                               |   |                                       | 950,000     |                               |   | 1,000,000 |   |
| Property                  and equipment, net                                                                              |   |                                       | 20,727,692  |                               |   | 15,432,502 |   |
| Intangible                  assets, net                                                                                   |   |                                       | 2,358,437   |                               |   | 2,395,151 |   |
| Goodwill                                                                                                                  |   |                                       | 3,128,441   |                               |   | 2,979,322 |   |
| Other                  assets, net                                                                                        |   |                                       | 100,443     |                               |   | 316,895 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| **TOTAL                  ASSETS**                                                                                         |   | $                                          | 61,016,403  |                               | $      | 62,893,986 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                     |   |                                       |        |                               |   |   |   |
| Current                  liabilities:                                                                                     |   |                                       |        |                               |   |   |   |
| Accounts                  payable and accrued expenses                                                                    |   | $                                          | 11,519,127  |                               | $      | 9,698,038 |   |
| Current                  maturities of long-term debt                                                                     |   |                                       | 22,462      |                               |   | 22,018 |   |
| Income                  taxes payable                                                                                     |   |                                       | 57,129      |                               |   | 126,155 |   |
| Deferred                  revenue                                                                                         |   |                                       | 28,455,381  |                               |   | 31,143,451 |   |
| Accrued                  bonuses                                                                                          |   |                                       | 781,987     |                               |   | 928,303 |   |
| Short-term                  debt                                                                                          |   |                                       | 1,995,990   |                               |   | 2,500,000 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Total                  current liabilities                                                                                |   |                                       | 42,832,076  |                               |   | 44,417,965 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Other                  long-term liabilities:                                                                             |   |                                       |        |                               |   |   |   |
| Long-term                  debt, less current maturities                                                                  |   |                                       | 208,298     |                               |   | 219,641 |   |
| Deferred                  tax liability                                                                                   |   |                                       | 755,000     |                               |   | 755,000 |   |
| Other                  income tax liabilities                                                                             |   |                                       | 159,156     |                               |   | 181,821 |   |
| Other                  liabilities                                                                                        |   |                                       | 11,125      |                               |   | 11,125 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Total                  other long-term liabilities                                                                        |   |                                       | 1,133,579   |                               |   | 1,167,587 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
|  **TOTAL                  LIABILITIES**                                                                              |   |                                       | 43,965,655  |                               |   | 45,585,552 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| Commitments                  and Contingencies (Note 15)                                                                  |   |                                       |        |                               |   |   |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| STOCKHOLDERS'                  EQUITY                                                                                     |   |                                       |        |                               |   |   |   |
| Preferred                  stock, $.001 par value, 5,000,000 shares authorized, none                  issued              |   |                                       |        |                               |   |   |   |
| and                  outstanding at June 30, 2008 and December 31, 2007.                                                  |   |                                       | -           |                               |   | - |   |
| Class                  A Common stock, $.001 par value, 300,000,000 shares authorized;                  65,860,543        |   |                                       |        |                               |   |   |   |
| and                  51,144,275 shares issued and outstanding at June 30, 2008 and                                        |   |                                       |        |                               |   |   |   |
| December                  31, 2007, respectively.                                                                         |   |                                       | 65,861      |                               |   | 51,144 |   |
| Class                  B Common Stock, $.001 par value, 100,000,000 shares authorized;                  37,345,310        |   |                                       |        |                               |   |   |   |
| and                  46,453,644 shares issued and outstanding at June 30, 2008 and                                        |   |                                       |        |                               |   |   |   |
| December                  31, 2007, respectively; convertible into Class A shares on a one-for-one                  basis |   |                                       | 37,345      |                               |   | 46,453 |   |
| Additional                  paid-in capital                                                                               |   |                                       | 39,923,199  |                               |   | 36,419,266 |   |
| Accumulated                  other comprehensive loss                                                                     |   |                                       | (50,000     | )                                  |   | - |   |
| Retained                  earnings (deficit)                                                                              |   |                                       | (22,925,657 | )                                  |   | (19,208,429 | ) |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| TOTAL                  STOCKHOLDERS' EQUITY                                                                               |   |                                       | 17,050,748  |                               |   | 17,308,434 |   |
|                                                                                                                      |   |                                       |        |                               |   |   |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY**                                                           |   | $                                          | 61,016,403  |                               | $      | 62,893,986 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Operations**

|                                                                                                                                                                                                                                            |   | Three                  months ended |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|
|                                                                                                                                                                                                                                            |   | June                  30, 2008      |        | June                  30, 2007 |   |
| NET                  REVENUES                                                                                                                                                                                                                   |   |                                |        |   |   |
| Online                  travel store sales and monthly fees                                                                                                                                                                                     |   | $                                   | 33,354,064  |   | $ | 23,309,601 |   |
| Travel                  commissions and services                                                                                                                                                                                                |   |                                | 8,819,817   |   |   | 5,856,731 |   |
| Training                  programs and marketing materials                                                                                                                                                                                      |   |                                | 2,266,903   |   |   | 3,352,211 |   |
| Other                                                                                                                                                                                                                                           |   |                                | 333,526     |   |   | 287,603 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| Net                  revenues                                                                                                                                                                                                                   |   |                                | 44,774,310  |   |   | 32,806,146 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| OPERATING                  EXPENSES                                                                                                                                                                                                             |   |                                |        |   |   |   |   |
| Marketing                  commissions                                                                                                                                                                                                          |   |                                | 24,476,234  |   |   | 18,946,646 |   |
| Travel                  commissions and other costs                                                                                                                                                                                             |   |                                | 7,204,179   |   |   | 3,876,327 |   |
| Depreciation                  and amortization                                                                                                                                                                                                  |   |                                | 676,167     |   |   | 263,943 |   |
| Marketing                  and selling                                                                                                                                                                                                          |   |                                | 1,531,259   |   |   | 1,458,286 |   |
| General                  and administrative                                                                                                                                                                                                     |   |                                | 11,101,197  |   |   | 6,718,843 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| Total                  operating expenses                                                                                                                                                                                                       |   |                                | 44,989,036  |   |   | 31,264,045 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| INCOME                  (LOSS) FROM OPERATIONS                                                                                                                                                                                                  |   |                                | (214,726    | ) |   | 1,542,101 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| OTHER                  INCOME (EXPENSE)                                                                                                                                                                                                         |   |                                |        |   |   |   |   |
| Interest                  and dividend income                                                                                                                                                                                                   |   |                                | 82,891      |   |   | 131,018 |   |
| Interest                  expense                                                                                                                                                                                                               |   |                                | (37,074     | ) |   | (1,315 | ) |
| Foreign                  currency translation loss                                                                                                                                                                                              |   |                                | (17,148     | ) |   | - |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| Total                  other income (expense)                                                                                                                                                                                                   |   |                                | 28,669      |   |   | 129,703 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| INCOME                  (LOSS) BEFORE INCOME TAX PROVISION                                                                                                                                                                                      |   |                                | (186,057    | ) |   | 1,671,804 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| INCOME                  TAX PROVISION                                                                                                                                                                                                           |   |                                | 13,520      |   |   | - |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| NET                  INCOME (LOSS)                                                                                                                                                                                                              |   | $                                   | (199,577    | ) | $ | 1,671,804 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| NET                  INCOME (LOSS) PER SHARE:                                                                                                                                                                                                   |   |                                |        |   |   |   |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| Weighted-average                  shares outstanding - basic for Class A and Class B                                                                                                                                                            |   |                                | 103,183,276 |   |   | 96,529,578 |   |
| Weighted-average                  shares outstanding - diluted for Class A and Class B                                                                                                                                                          |   |                                | 103,183,276 |   |   | 105,887,781 |   |
|                                                                                                                                                                                                                                            |   |                                |        |   |   |   |   |
| 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):  |   | $                                   | (0.00       | ) | $ | 0.02 |   |
| Net                  income (loss) per share - diluted for Class A and Class B (amounts                  for                  Class Aand                  Class B shares are the same under the two-class method. See Note                  3): |   | $                                   | (0.00       | ) | $ | 0.02 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Operations**

|                                                                                                                                                                                                                      |   | Six                  months ended |        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-------------|
|                                                                                                                                                                                                                      |   | June                  30, 2008    |        | June                  30, 2007 |   |
| NET                  REVENUES                                                                                                                                                                                             |   |                              |        |   |   |
| Online                  travel store sales and monthly fees                                                                                                                                                               |   | $                                 | 67,313,452  |   | $ | 41,274,962 |   |
| Travel                  commissions and services                                                                                                                                                                          |   |                              | 14,148,444  |   |   | 8,394,425 |   |
| Training                  programs and marketing materials                                                                                                                                                                |   |                              | 5,276,408   |   |   | 6,713,363 |   |
| Other                                                                                                                                                                                                                     |   |                              | 763,573     |   |   | 601,877 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| Net                  revenues                                                                                                                                                                                             |   |                              | 87,501,877  |   |   | 56,984,627 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| OPERATING                  EXPENSES                                                                                                                                                                                       |   |                              |        |   |   |   |   |
| Marketing                  commissions                                                                                                                                                                                    |   |                              | 49,544,777  |   |   | 35,701,848 |   |
| Travel                  commissions and other costs                                                                                                                                                                       |   |                              | 11,056,595  |   |   | 5,485,015 |   |
| Depreciation                  and amortization                                                                                                                                                                            |   |                              | 1,211,829   |   |   | 477,975 |   |
| Marketing                  and selling                                                                                                                                                                                    |   |                              | 2,923,874   |   |   | 2,895,943 |   |
| General                  and administrative                                                                                                                                                                               |   |                              | 26,443,008  |   |   | 13,105,692 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| Total                  operating expenses                                                                                                                                                                                 |   |                              | 91,180,083  |   |   | 57,666,473 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| LOSS                  FROM OPERATIONS                                                                                                                                                                                     |   |                              | (3,678,206  | ) |   | (681,846 | ) |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| OTHER                  INCOME (EXPENSE)                                                                                                                                                                                   |   |                              |        |   |   |   |   |
| Interest                  and dividend income                                                                                                                                                                             |   |                              | 152,198     |   |   | 180,554 |   |
| Interest                  expense                                                                                                                                                                                         |   |                              | (54,097     | ) |   | (3,926 | ) |
| Foreign                  currency translation loss                                                                                                                                                                        |   |                              | (17,603     | ) |   | - |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| Total                  other income (expense)                                                                                                                                                                             |   |                              | 80,498      |   |   | 176,628 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| LOSS                  BEFORE INCOME TAX PROVISION                                                                                                                                                                         |   |                              | (3,597,708  | ) |   | (505,218 | ) |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| INCOME                  TAX PROVISION                                                                                                                                                                                     |   |                              | 119,520     |   |   | - |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| NET                  LOSS                                                                                                                                                                                                 |   | $                                 | (3,717,228  | ) | $ | (505,218 | ) |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| NET                  LOSS PER SHARE:                                                                                                                                                                                      |   |                              |        |   |   |   |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| Weighted-average                  shares outstanding - basic for Class A and Class B                                                                                                                                      |   |                              | 103,020,872 |   |   | 95,801,451 |   |
| Weighted-average                  shares outstanding - diluted for Class A and Class B                                                                                                                                    |   |                              | 103,020,872 |   |   | 95,801,451 |   |
|                                                                                                                                                                                                                      |   |                              |        |   |   |   |   |
| Net                  loss per share - basic for Class A and Class B (amounts for Class                  Aand                    Class B shares are the same under the two-class method. See Note                    3):   |   | $                                 | (0.04       | ) | $ | (0.01 | ) |
| Net                  loss per share - diluted for Class A and Class B (amounts for Class                  Aand                    Class B shares are the same under the two-class method. See Note                    3): |   | $                                 | (0.04       | ) | $ | (0.01 | ) |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statement of Changes in Stockholders’ Equity**

|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |     |        | Accumulated |   |      |   |   |       |
|----------------------------------------------------------|--------|-----------------------|--------|-------------------------------------|--------|--------------------------------|--------|---------------|------------|---------------|--------|----------|--------|---------------|-------------|-------------|--------|-----------|--------|--------|------------|
|                                                     |   | Preferred   |   | Common                        Stock |   |  Additional               |   | Other         |       | Retained      |   | Total    |   |
|                                                     |   | Stock       |   | Class                        A      |   | Class                        B |   |  Paid-in |       | Comprehensive |   | Earnings |   | Stockholders' |        |
|                                                     |   | Shares                |   | Amount                              |   | Shares                         |   | Amount        |       | Shares        |   | Amount   |   |  Capital |        | Loss        |   | (Deficit) |   | Equity |       |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |     |        |        |   |      |   |   |       |
| Balance                        at January 1, 2008        |   |                  | -      |                                | $      | -                              |   |          | 51,144,275 |          | $      | 51,144   |   |          | 46,453,644  |        | $      | 46,453    |   | $      | 36,419,266 |   | $ | - |   | $ | (19,208,429 | ) | $ | 17,308,434 |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Exchange                        Class B Shares           |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| for                        Class A shares                |   |                  | -      |                                |   | -                              |   |          | 12,481,828 |          |   | 12,482   |   |          | (12,481,828 | )           |   | (12,482   | )      |   | -          |   |   | - |   |   | - |   |   | - |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Common                        shares issued for          |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| restricted                        stock grant            |   |                  | -      |                                |   | -                              |   |          | 1,625,809  |          |   | 1,626    |   |          | 3,251,618   |        |   | 3,252     |   |   | (4,878     | ) |   | - |   |   | - |   |   | - |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Amortization                        of restricted stock  |   |                  | -      |                                |   | -                              |   |          | -          |          |   | -        |   |          | -           |        |   | -         |   |   | 2,578,547  |   |   | - |   |   | - |   |   | 2,578,547 |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Shares                        issued for services        |   |                  | -      |                                |   | -                              |   |          | 500,000    |          |   | 500      |   |          | -           |        |   | -         |   |   | 509,500    |   |   | - |   |   | - |   |   | 510,000 |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Common                        shares issued for          |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| option                        exercises                  |   |                  | -      |                                |   | -                              |   |          | 47,694     |          |   | 48       |   |          | -           |        |   | -         |   |   | (48        | ) |   | - |   |   | - |   |   | - |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Exercise                        of common stock warrants |   |                  | -      |                                |   | -                              |   |          | 60,937     |          |   | 61       |   |          | 121,876     |        |   | 122       |   |   | 106,458    |   |   | - |   |   | - |   |   | 106,641 |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Stock                        option compensation         |   |                  | -      |                                |   | -                              |   |          | -          |          |   | -        |   |          | -           |        |   | -         |   |   | 314,354    |   |   | - |   |   | - |   |   | 314,354 |   |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Net                        loss                          |   |                  | -      |                                |   | -                              |   |          | -          |          |   | -        |   |          | -           |        |   | -         |   |   | -          |   |   | - |   |   | (3,717,228 | ) |   | (3,717,228 | ) |
| Unrealized                        loss on securities     |   |                  | -      |                                |   | -                              |   |          | -          |          |   | -        |   |          | -           |        |   | -         |   |   | -          |   |   | (50,000 | ) |   | - |   |   | (50,000 | ) |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Total                        comprehensive loss          |   |                  | -      |                                |   | -                              |   |          | -          |          |   | -        |   |          | -           |        |   | -         |   |   | -          |   |   |   |   |   |   |   |   | (3,767,228 | ) |
|                                                     |   |                  |   |                                |   |                           |   |          |       |          |   |     |   |          |        |        |   |      |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Balance                        at June 30, 2008          |   |                  | -      |                                | $      | -                              |   |          | 65,860,543 |          | $      | 65,861   |   |          | 37,345,310  |        | $      | 37,345    |   | $      | 39,923,199 |   | $ | (50,000 | ) | $ | (22,925,657 | ) | $ | 17,050,748 |   |

*See              accompanying notes to condensed consolidated financial              statements.*

----

**YTB      INTERNATIONAL, INC.**

**Condensed      Consolidated Statements of Cash Flows**

|                                                                                                                  |   | Six                    months ended |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                                                  |   | June                    30, 2008    |       | June                    30, 2007 |   |
| CASH                    FLOWS FROM OPERATING ACTIVITIES:                                                              |   |                                |       |   |   |
| Net                    Loss                                                                                           |   | $                                   | (3,717,228 | ) | $ | (505,218 | ) |
| Adjustments                    to reconcile net loss to net cash provided by operating                    activities: |   |                                |       |   |   |   |   |
| Depreciation                    and amortization                                                                      |   |                                | 1,211,829  |   |   | 477,975 |   |
| Write-off                    of uncollectible notes                                                                   |   |                                | 100,000    |   |   | - |   |
| Loss                    on disposal of property and equipment                                                         |   |                                | 11,667     |   |   | 127,939 |   |
| Reserve                    against inventory                                                                          |   |                                | 523,618    |   |   | - |   |
| Provision                    for uncollectible notes and advances                                                     |   |                                | 39,098     |   |   | - |   |
| Reserve                    against deposit on acquisition of business                                                 |   |                                | 356,332    |   |   |   |   |
| Interest                    income added to notes receivable                                                          |   |                                | (67,223    | ) |   | - |   |
| Shares                    issued for restricted stock grant                                                           |   |                                | -          |   |   | 2,799,994 |   |
| Shares                    issued for services                                                                         |   |                                | 510,000    |   |   | - |   |
| Amortization                    of restricted stock                                                                   |   |                                | 2,578,547  |   |   | 2,444,821 |   |
| Stock                    option expense                                                                               |   |                                | 80,846     |   |   | 23,603 |   |
| FIN                    48 tax provision                                                                               |   |                                | (22,665    | ) |   | - |   |
| Change                    in operating assets and liabilities:                                                        |   |                                |       |   |   |   |   |
| Restricted                    cash-collateral used as reserves for                                                    |   |                                |       |   |   |   |   |
| credit                    card processing                                                                             |   |                                | (122,835   | ) |   | (3,256,190 | ) |
| Restricted                    cash-Canadian operations                                                                |   |                                | (74,021    | ) |   | - |   |
| Accounts                    receivable, net                                                                           |   |                                | (468,941   | ) |   | (2,031,207 | ) |
| Notes                    receivable                                                                                   |   |                                | 679,268    |   |   | (733,734 | ) |
| Inventory                                                                                                             |   |                                | 558,075    |   |   | (80,462 | ) |
| Prepaid                    marketing commissions                                                                      |   |                                | 4,945,104  |   |   | (9,911,292 | ) |
| Other                    prepaid expenses and current assets                                                          |   |                                | (703,616   | ) |   | (1,003,540 | ) |
| Other                    assets                                                                                       |   |                                | (94,880    | ) |   | 8,127 |   |
| Accounts                    payable and accrued expenses                                                              |   |                                | 1,041,564  |   |   | 2,230,674 |   |
| Income                    tax payable                                                                                 |   |                                | (69,026    | ) |   |   |   |
| Accrued                    bonuses                                                                                    |   |                                | 87,192     |   |   | (397,718 | ) |
| Deferred                    revenue                                                                                   |   |                                | (2,688,070 | ) |   | 13,722,908 |   |
| Other                    liabilities                                                                                  |   |                                | -          |   |   | (14,269 | ) |
| NET                    CASH PROVIDED BY OPERATING ACTIVITIES                                                          |   |                                | 4,694,635  |   |   | 3,902,411 |   |
|                                                                                                                  |   |                                |       |   |   |   |   |
| CASH                    FLOWS FROM INVESTING ACTIVITIES:                                                              |   |                                |       |   |   |   |   |
| Purchases                    of property and equipment                                                                |   |                                | (5,772,447 | ) |   | (3,078,999 | ) |
| Proceeds                    from sale of property and equipment                                                       |   |                                | 10,000     |   |   | - |   |
| Acquisition                    of business                                                                            |   |                                | (149,119   | ) |   | - |   |
| Proceeds                    from sale of available-for-sale securities                                                |   |                                | 26,834     |   |   | - |   |
| Purchases                    of available-for-sale securities                                                         |   |                                | -          |   |   | (11,297 | ) |
| NET                    CASH USED IN INVESTING ACTIVITIES                                                              |   |                                | (5,884,732 | ) |   | (3,090,296 | ) |
|                                                                                                                  |   |                                |       |   |   |   |   |
| CASH                    FLOWS FROM FINANCING ACTIVITIES:                                                              |   |                                |       |   |   |   |   |
| Repayment                    of bank overdraft                                                                        |   |                                | -          |   |   | (812,464 | ) |
| Principal                    payments on debt                                                                         |   |                                | (10,899    | ) |   | (10,472 | ) |
| Repayment                    of short-term debt                                                                       |   |                                | (504,010   | ) |   | - |   |
| Cash                    collateral for standby letter of credit                                                       |   |                                | (1,910,000 | ) |   | - |   |
| Reduction                    in cash collateral for standby letter of credit                                          |   |                                | 1,910,000  |   |   | - |   |
| Reduction                    in restricted cash-collateral for outstanding note                                       |   |                                | 500,000    |   |   | - |   |
| Proceeds                    from exercise of common stock options                                                     |   |                                | -          |   |   | 400,000 |   |
| Proceeds                    from exercise of common stock warrants                                                    |   |                                | 106,641    |   |   | 642,875 |   |
| NET                    CASH PROVIDED BY FINANCING ACTIVITIES                                                          |   |                                | 91,732     |   |   | 219,939 |   |
|                                                                                                                  |   |                                |       |   |   |   |   |
| NET                    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                               |   |                                | (1,098,365 | ) |   | 1,032,054 |   |
| CASH                    AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                     |   |                                | 1,730,570  |   |   | - |   |
| CASH                    AND CASH EQUIVALENTS, END OF PERIOD                                                           |   | $                                   | 632,205    |   | $ | 1,032,054 |   |

----

**YTB          INTERNATIONAL, INC.**

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

**(Unaudited)**

|                                                                                                         |   | Six                    months ended   |    |
|--------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                         |   | June                    30, 2008                |    |  June                    30, 2007 |   |
|                                                                                                         |   |                                       |    |    |   |
| SUPPLEMENTAL                    CASH FLOW INFORMATION:                                                       |   |                                       |    |    |   |
| Interest                    paid                                                                             |   | $                                               | 55,227  |   | $ | 101,780 |   |
| Taxes                    paid                                                                                |   | $                                               | 148,711 |   | $ | - |   |
| SUPPLEMENTAL                    NON-CASH INVESTING AND FINANCING ACTIVITIES:                                 |   |                                            |    |   |   |   |   |
| Increase                    in accounts payable and property and equipment                                   |   | $                                               | 779,525 |   | $ | 69,628 |   |
| 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 |   |
| Stock                    option compensation                                                                 |   | $                                               | 233,508 |   | $ | - |   |
| Transfer                    of Class B common stock shares to Class A common stock                    shares |   | $                                               | 12,482  |   | $ | - |   |
| Shares                    issued for restricted stock grant                                                  |   | $                                               | 4,878   |   | $ | - |   |
| Notes                    receivable issued for sale of auto                                                  |   | $                                               | 60,000  |   | $ | - |   |
| Reclass                    of notes receivable to other current assets                                       |   | $                                               | 20,000  |   | $ | - |   |
| Reclass                    of notes receivable to other assets                                               |   | $                                               | 45,000  |   | $ | - |   |
| Unrealized                    loss on securities                                                             |   | $                                               | 50,000  |   | $ | - |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

----

----

***Newly      Adopted Accounting Standards***

| ·   | Defines                fair value as the price that would be received to sell an asset or                paid to                transfer a liability in an orderly transaction between market participants                and the measurement date; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establishes                a three-level hierarchy (“valuation hierarchy”) for fair value                measurements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Requires                consideration of the Company’s creditworthiness when valuing liabilities;                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | Expands                disclosures about instruments measured at fair                value. |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | Level                1 - inputs to the valuation methodology are quoted prices (unadjusted)                for                identical assets or liabilities in active                markets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level                2 - inputs to the valuation methodology include quoted prices for                similar                assets and liabilities in active market, inputs that are observable                for                the asset or liability, either directly or indirectly, for substantially                the full term of the financial                statement. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level                3 - inputs to the valuation methodology are unobservable and significant                to the fair value measurement. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   | Three                  Months Ended |        | Six                  Months Ended |   |
|-----------------------------------------------------------|--------|-------------------------------------|-------------|-----------------------------------|--------|
|                                                      |   | June                  30,           |        | June                  30,         |   |
|                                                      |   | 2008                                |        | 2007                              |   | 2008 |   | 2007 |   |
|                                                      |   |                                |        |                              |   |   |   |   |   |
| Numerator:                                                |   |                                |        |                              |   |   |   |   |   |
| Net                  income (loss)                        |   | $                                   | (199,577    | )                                 | $      | 1,671,804 |   | $ | (3,717,228 | ) | $ | (505,218 | ) |
|                                                      |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| Denominator:                                              |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| Weighted                  average common shares and       |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| denominator                  for basic calculation:  |   |                                | 103,183,276 |                              |   | 96,529,578 |   |   | 103,020,872 |   |   | 95,801,451 |   |
|                                                      |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| Weighted                  average effects of dilutive     |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| equity                  based compensation awards:   |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| Stock                  options                            |   |                                | -           |                              |   | 270,807 |   |   | - |   |   | - |   |
| Stock                  warrants                           |   |                                | -           |                              |   | 4,626,219 |   |   | - |   |   | - |   |
| Restricted                  stock awards                  |   |                                | -           |                              |   | 4,461,177 |   |   | - |   |   | - |   |
|                                                      |   |                                |        |                              |   |   |   |   |   |   |   |   |   |
| Denominator                  for diluted calculation      |   |                                | 103,183,276 |                              |   | 105,887,781 |   |   | 103,020,872 |   |   | 95,801,451 |   |

| Net                  income (loss) per share - basic for Class A and Class B   |   | $      | (0.00  | )      | $      | 0.02   |   | $      | (0.04  | )      | $      | (0.01  | )      |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss) per share - diluted for Class A and Class B |   | $      | (0.00  | )      | $      | 0.02   |   | $      | (0.04  | )      | $      | (0.01  | )      |

----

|                                                         |   | June                  30, 2008 |      | December                  31, 2007 |   |
|--------------------------------------------------------------|--------|--------------------------------|-----------|------------------------------------|--------|
| "Success                  From Home" and "Success" magazines |   | $                              | 1,936,941 |                               | $      | 2,772,016 |   |
| "Fun                  & Travel" magazines                |   |                           | 749,148   |                               |   | 1,173,130 |   |
| Audio                  / Video Marketing                     |   |                           | 534,048   |                               |   | 576,292 |   |
| Printed                  marketing materials                 |   |                           | 601,414   |                               |   | 381,806 |   |
|                                                         |   |                           |      |                               |   |   |   |
| Inventory,                  net                              |   | $                              | 3,821,551 |                               | $      | 4,903,244 |   |

----

|                                         |   | As                  of June 30, 2008 |      |
|----------------------------------------------|--------|--------------------------------------|-----------|
|                                         |   |                                 |      |   |   |   |   |   |   |
|                                         |   | Amortized                  Cost      |      | Gross                  Unrealized Gains |   | Gross                  Unrealized Losses |   | Estimated                  Fair Value |   |
| Long-term                  investments:      |   |                                 |      |   |   |   |   |   |   |
| Auction                  rate securities     |   | $                                    | 1,000,000 |   | $ | - |   | $ | (50,000 | ) | $ | 950,000 |   |
|                                         |   |                                 |      |   |   |   |   |   |   |   |   |   |   |
| Total                  long-term investments |   | $                                    | 1,000,000 |   | $ | - |   | $ | (50,000 | ) | $ | 950,000 |   |

|                                         |   | As                  of December 31, 2007 |      |
|----------------------------------------------|--------|------------------------------------------|-----------|
|                                         |   |                                     |      |   |   |   |   |   |   |
|                                         |   | Amortized                  Cost          |      | Gross                  Unrealized Gains |   | Gross                  Unrealized Losses |   | Estimated                  Fair Value |   |
| Long-term                  investments:      |   |                                     |      |   |   |   |   |   |   |
| Auction                  rate securities     |   | $                                        | 1,000,000 |   | $ | - |   | $ | - |   | $ | 1,000,000 |   |
|                                         |   |                                     |      |   |   |   |   |   |   |   |   |   |   |
| Total                  long-term investments |   | $                                        | 1,000,000 |   | $ | - |   | $ | - |   | $ | 1,000,000 |   |

----

|                                            |   | June                  30, 2008 |       | December                  31, 2007 |   |
|-------------------------------------------------|--------|--------------------------------|------------|------------------------------------|--------|
| Equipment                                       |   | $                              | 3,282,225  |                               | $      | 2,736,467 |   |
| Furniture                  and fixtures         |   |                           | 897,016    |                               |   | 847,233 |   |
| Aircraft                                        |   |                           | 1,300,000  |                               |   | - |   |
| Software                                        |   |                           | 4,502,193  |                               |   | 2,016,844 |   |
| Vehicles                                        |   |                           | 64,295     |                               |   | 164,294 |   |
| Building                  and improvements      |   |                           | 5,478,370  |                               |   | 5,408,154 |   |
| Land                                            |   |                           | 4,721,218  |                               |   | 4,721,218 |   |
| Construction                  in progress       |   |                           | 4,288,724  |                               |   | 2,209,710 |   |
| Leasehold                  improvements         |   |                           | 142,295    |                               |   | 120,445 |   |
|                                            |   |                           | 24,676,336 |                               |   | 18,224,365 |   |
| Less:                  Accumulated depreciation |   |                           | (3,948,644 | )                                  |   | (2,791,863 | ) |
|                                            |   |                           |       |                               |   |   |   |
| Property                  and equipment, net    |   | $                              | 20,727,692 |                               | $      | 15,432,502 |   |

----

**Proposed      Business Acquisition**

**Acquisition      of Travel Agency for Canadian Operations**

***2004      Stock Option and Restricted Stock Plan.***

**Stock      Options**

----

**Additional      Awards Under the 2004 Stock Option and Restricted Stock      Plan**

*Additional      Stock Option Awards*

*Restricted      Stock Awards*

----

***2007      Sales Director Bonus Plan***

**Initial      Grant of Stock Options**

**Additional      Grant of Stock Options Under the 2007 Sales Director Bonus      Plan**

----

|                                                             |   | Shares |      | Weighted-Average                  Exercise Price |   | Weighted-Average                  Fair Value |   |
|------------------------------------------------------------------|--------|--------|-----------|--------------------------------------------------|--------|----------------------------------------------|--------|
|                                                             |   |   |      |                                             |   |                                         |   |
| Options                  outstanding, beginning of period        |   |   | 785,841   |                                             | $      | 0.46                                         |   | $ | 0.34 |   |
| For                  the period from January 1 to June 30, 2008: |   |   |      |                                             |   |                                         |   |   |   |   |
| Granted                                                          |   |   | 1,666,666 |                                             |   | 1.00                                         |   |   | 0.75 |   |
| Forfeited                                                        |   |   | -         |                                             |   | -                                            |   |   | - |   |
| Expired                                                          |   |   | -         |                                             |   | -                                            |   |   | - |   |
| Exercised                                                        |   |   | 63,492    |                                             |   | 0.53                                         |   |   | 0.57 |   |
|                                                             |   |   |      |                                             |   |                                         |   |   |   |   |
| Options                  outstanding, end of period              |   |   | 2,389,015 |                                             | $      | 0.84                                         |   | $ | 0.62 |   |
|                                                             |   |   |      |                                             |   |                                         |   |   |   |   |
| Options                  exercisable, end of period              |   |   | 652,066   |                                             | $      | 0.82                                         |   | $ | 0.53 |   |

|                                      |   | Options                  Outstanding |      | Options                  Exercisable |   |
|-------------------------------------------|--------|--------------------------------------|-----------|--------------------------------------|--------|
|                                      |   |                            |      | Weighted-                            |   |   |   |   |   |   |   |
|                                      |   |                            |      | Average                              |   | Weighted- |   |   |   | Weighted- |   |
|                                      |   | Number                               |      | Remaining                            |   | Average |   | Number |   | Average |   |
| Range                  of Exercise Prices |   | Outstanding                          |      | Life                  (years)        |   | Exercise                  Price |   | Outstanding |   | Exercise                  Price |   |
| $0.40                  - $1.00            |   |                                 | 1,389,015 |                                 |   | 2.56 |   | $ | 0.49 |   |   | 398,730 |   | $ | 0.45 |   |
| $1.01                  - $1.67            |   |                                 | 1,000,000 |                                 |   | 6.89 |   |   | 1.32 |   |   | 253,336 |   |   | 1.40 |   |
|                                      |   |                                 | 2,389,015 |                                 |   | 4.37 |   | $ | 0.84 |   |   | 652,066 |   | $ | 0.82 |   |

----

***One-Time      Restricted Stock Award***

----

|                                             |   |       |       | Weighted-                   |   |
|--------------------------------------------------|--------|------------|------------|-----------------------------|--------|
|                                             |   |       |       | average                     |   |
|                                             |   | Restricted |       | grant-date                  |   |
|                                             |   | shares     |       | fair                  value |   |
| Non-vested                  at beginning of 2008 |   |       | 19,611,324 |                        | $      | 1.03 |   |
| Granted                                          |   |       | 812,206    |                        |   | 1.64 |   |
| Vested                                           |   |       | 4,902,831  |                        |   | 1.03 |   |
| Forfeited                                        |   |       | -          |                        |   | - |   |
| Non-vested                  at June 30, 2008     |   |       | 15,520,699 |                        | $      | 1.06 |   |

----

----

*“*

* *

----

| Three                  Months Ended                 |   |      |       |   |   |       |   |        |       |   |   |
|-----------------------------------------------------|--------|-----------|------------|--------|--------|------------|--------|-------------|------------|--------|--------|
| June                  30, 2008                      |   | Marketing |       | Travel |   | Parent     |   | Elimination |       | Total  |   |
|                                                |   |      |       |   |   |       |   |        |       |   |   |
| External                  and inter-segment revenue |   | $         | 35,788,074 |   | $      | 9,007,491  |   | $           | (21,255    | )      | $      | - |   | $ | 44,774,310 |   |
| Net                  income (loss)                  |   |      | (449,438   | )      |   | 2,758,901  |   |        | (2,509,040 | )      |   | - |   |   | (199,577 | ) |
| Assets                                              |   |      | 88,326,533 |   |   | 30,683,304 |   |        | 62,138,841 |   |   | (120,132,275 | ) |   | 61,016,403 |   |
| Depreciation                  and amortization      |   |      | 344,283    |   |   | 60,457     |   |        | 271,427    |   |   | - |   |   | 676,167 |   |
| Capital                  expenditures               |   |      | 465,099    |   |   | 119,999    |   |        | 1,858,910  |   |   | - |   |   | 2,444,008 |   |

| Three                  Months Ended                 |   |      |       |   |   |      |   |        |       |   |   |
|-----------------------------------------------------|--------|-----------|------------|--------|--------|-----------|--------|-------------|------------|--------|--------|
| June                  30, 2007                      |   | Marketing |       | Travel |   | Parent    |   | Elimination |       | Total  |   |
|                                                |   |      |       |   |   |      |   |        |       |   |   |
| External                  and inter-segment revenue |   | $         | 26,683,569 |   | $      | 5,840,820 |   | $           | -          |   | $      | 281,757 |   | $ | 32,806,146 |   |
| Net                  income (loss)                  |   |      | 967,111    |   |   | 1,712,544 |   |        | (1,007,851 | )      |   | - |   |   | 1,671,804 |   |
| Assets                                              |   |      | 38,926,714 |   |   | 8,599,360 |   |        | 9,720,937  |   |   | (7,007,260 | ) |   | 50,239,751 |   |
| Depreciation                  and amortization      |   |      | 193,741    |   |   | 1,063     |   |        | 69,139     |   |   | - |   |   | 263,943 |   |
| Capital                  expenditures               |   |      | 679,803    |   |   | 101,750   |   |        | 373,372    |   |   | - |   |   | 1,154,925 |   |

| Six                  Months Ended                   |   |      |       |   |   |       |   |        |       |   |   |
|-----------------------------------------------------|--------|-----------|------------|--------|--------|------------|--------|-------------|------------|--------|--------|
| June                  30, 2008                      |   | Marketing |       | Travel |   | Parent     |   | Elimination |       | Total  |   |
|                                                |   |      |       |   |   |       |   |        |       |   |   |
| External                  and inter-segment revenue |   | $         | 72,864,392 |   | $      | 14,637,485 |   | $           | -          |   | $      | - |   | $ | 87,501,877 |   |
| Net                  income (loss)                  |   |      | (524,558   | )      |   | 2,361,734  |   |        | (5,554,404 | )      |   | - |   |   | (3,717,228 | ) |
| Assets                                              |   |      | 88,326,533 |   |   | 30,683,304 |   |        | 62,138,841 |   |   | (120,132,275 | ) |   | 61,016,403 |   |
| Depreciation                  and amortization      |   |      | 660,060    |   |   | 109,261    |   |        | 442,508    |   |   | - |   |   | 1,211,829 |   |
| Capital                  expenditures               |   |      | 1,021,859  |   |   | 458,424    |   |        | 5,071,689  |   |   | - |   |   | 6,551,972 |   |

| Six                  Months Ended                   |   |      |       |   |   |      |   |        |       |   |   |
|-----------------------------------------------------|--------|-----------|------------|--------|--------|-----------|--------|-------------|------------|--------|--------|
| June                  30, 2007                      |   | Marketing |       | Travel |   | Parent    |   | Elimination |       | Total  |   |
|                                                |   |      |       |   |   |      |   |        |       |   |   |
| External                  and inter-segment revenue |   | $         | 47,976,997 |   | $      | 9,007,630 |   | $           | -          |   | $      | - |   | $ | 56,984,627 |   |
| Net                  income (loss)                  |   |      | (1,254,028 | )      |   | 2,676,333 |   |        | (1,927,523 | )      |   | - |   |   | (505,218 | ) |
| Assets                                              |   |      | 38,926,714 |   |   | 8,599,360 |   |        | 9,720,937  |   |   | (7,007,260 | ) |   | 50,239,751 |   |
| Depreciation                  and amortization      |   |      | 347,489    |   |   | 1,063     |   |        | 129,423    |   |   | - |   |   | 477,975 |   |
| Capital                  expenditures               |   |      | 1,603,361  |   |   | 101,750   |   |        | 1,443,516  |   |   | - |   |   | 3,148,627 |   |

----

| NET                  REVENUES: |   | Three                  months ended |       | Six                  months ended |   |
|--------------------------------|--------|-------------------------------------|------------|-----------------------------------|--------|
|                           |   | June                  30, 2008      |       | June                  30, 2007    |   | June                  30, 2008 |   | June                  30, 2007 |   |
|                           |   |                                |       |                              |   |   |   |   |   |
| United                  States |   | $                                   | 43,504,859 |                              |   | 32,806,146 |   | $ | 84,944,481 |   | $ | 56,984,627 |   |
| Canada                         |   |                                | 1,269,451  |                              |   | - |   |   | 2,557,396 |   |   | - |   |
|                           |   | $                                   | 44,774,310 |                              | $      | 32,806,146 |   | $ | 87,501,877 |   | $ | 56,984,627 |   |

----

----

**Item      2.**

**Management’s      Discussion and Analysis**

**      of Financial Condition and Results of Operations**

*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-Q 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                       |   |
|------------------------------------------------------------|--------|-------------------------------------|------------|-------------------------------------|--------|--------------------------------|--------|
|                                                       |   | June                  30, 2008      |       | %                  of Net Revenues  |   | June                  30, 2007 |   | %                  of Net Revenues |   | Increase                  (Decrease) |   | Inc.(Decr.)                  % |   |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |
| NET                  REVENUES                              |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |
| Online                  travel stores and monthly fees     |   | $                                   | 33,354,064 |                                |   | 74.5                           | %      | $ | 23,309,601 |   |   | 71.1 | % | $ | 10,044,463 |   |   | 43.1 | % |
| Travel                  commissions and services           |   |                                | 8,819,817  |                                |   | 19.7                           | %      |   | 5,856,731 |   |   | 17.9 | % |   | 2,963,086 |   |   | 50.6 | % |
| Training                  programs and marketing materials |   |                                | 2,266,903  |                                |   | 5.1                            | %      |   | 3,352,211 |   |   | 10.2 | % |   | (1,085,308 | ) |   | (32.4 | %) |
| Other                                                      |   |                                | 333,526    |                                |   | 0.7                            | %      |   | 287,603 |   |   | 0.8 | % |   | 45,923 |   |   | 16.0 | % |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  net revenues                        |   |                                | 44,774,310 |                                |   | 100.0                          | %      |   | 32,806,146 |   |   | 100.0 | % |   | 11,968,164 |   |   | 36.5 | % |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING                  EXPENSES                        |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                  commissions                     |   |                                | 24,476,234 |                                |   | 54.7                           | %      |   | 18,946,646 |   |   | 57.8 | % |   | 5,529,588 |   |   | 29.2 | % |
| Travel                  commissions and other costs        |   |                                | 7,204,179  |                                |   | 16.1                           | %      |   | 3,876,327 |   |   | 11.8 | % |   | 3,327,852 |   |   | 85.9 | % |
| Depreciation                  and amortization             |   |                                | 676,167    |                                |   | 1.5                            | %      |   | 263,943 |   |   | 0.8 | % |   | 412,224 |   |   | 156.2 | % |
| Marketing                  and selling                     |   |                                | 1,531,259  |                                |   | 3.4                            | %      |   | 1,458,286 |   |   | 4.4 | % |   | 72,973 |   |   | 5.0 | % |
| General                  and administrative                |   |                                | 11,101,197 |                                |   | 24.8                           | %      |   | 6,718,843 |   |   | 20.5 | % |   | 4,382,354 |   |   | 65.2 | % |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  operating expenses                  |   |                                | 44,989,036 |                                |   | 100.5                          | %      |   | 31,264,045 |   |   | 95.3 | % |   | 13,724,991 |   |   | 43.9 | % |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  (LOSS) FROM OPERATIONS             |   |                                | (214,726   | )                                   |   | (0.5                           | %)     |   | 1,542,101 |   |   | 4.7 | % |   | (1,756,827 | ) |   | (113.9 | %) |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME/(EXPENSE)                    |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  and dividend income              |   |                                | 82,891     |                                |   | 0.2                            | %      |   | 131,018 |   |   | 0.4 | % |   | (48,127 | ) |   | (36.7 | %) |
| Interest                  expense                          |   |                                | (37,074    | )                                   |   | (0.1                           | %)     |   | (1,315 | ) |   | 0.0 | % |   | (35,759 | ) |   | 2719.3 | % |
| Foreign                  currency translation loss         |   |                                | (17,148    | )                                   |   | 0.0                            | %      |   | - |   |   | 0.0 | % |   | (17,148 | ) |   | n/a |   |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other income/(expense)              |   |                                | 28,669     |                                |   | 0.1                            | %      |   | 129,703 |   |   | 0.4 | % |   | (101,034 | ) |   | (77.9 | %) |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  (LOSS) BEFORE INCOME TAX PROVISION |   |                                | (186,057   | )                                   |   | (0.4                           | %)     |   | 1,671,804 |   |   | 5.1 | % |   | (1,857,861 | ) |   | (111.1 | %) |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  TAX PROVISION                      |   |                                | 13,520     |                                |   | 0.0                            | %      |   | - |   |   | 0.0 | % |   | 13,520 |   |   | n/a |   |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   |                                |       |                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  INCOME (LOSS)                         |   | $                                   | (199,577   | )                                   |   | (0.4                           | %)     | $ | 1,671,804 |   |   | 5.1 | % | $ | (1,871,381 | ) |   | (111.9 | %) |

----

|                                                       |   | Six                  months ended |       | Six                  months ended  |   | Variance                       |   |
|------------------------------------------------------------|--------|-----------------------------------|------------|------------------------------------|--------|--------------------------------|--------|
|                                                       |   | June                  30, 2008    |       | %                  of Net Revenues |   | June                  30, 2007 |   | %                  of Net Revenues |   | Increase                  (Decrease) |   | Inc.(Decr.)                  % |   |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |
| NET                  REVENUES                              |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |
| Online                  travel stores and monthly fees     |   | $                                 | 67,313,452 |                               |   | 76.9                           | %      | $ | 41,274,962 |   |   | 72.4 | % | $ | 26,038,490 |   |   | 63.1 | % |
| Travel                  commissions and services           |   |                              | 14,148,444 |                               |   | 16.2                           | %      |   | 8,394,425 |   |   | 14.7 | % |   | 5,754,019 |   |   | 68.5 | % |
| Training                  programs and marketing materials |   |                              | 5,276,408  |                               |   | 6.0                            | %      |   | 6,713,363 |   |   | 11.8 | % |   | (1,436,955 | ) |   | (21.4 | %) |
| Other                                                      |   |                              | 763,573    |                               |   | 0.9                            | %      |   | 601,877 |   |   | 1.1 | % |   | 161,696 |   |   | 26.9 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  net revenues                        |   |                              | 87,501,877 |                               |   | 100.0                          | %      |   | 56,984,627 |   |   | 100.0 | % |   | 30,517,250 |   |   | 53.6 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING                  EXPENSES                        |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Marketing                  commissions                     |   |                              | 49,544,777 |                               |   | 56.6                           | %      |   | 35,701,848 |   |   | 62.7 | % |   | 13,842,929 |   |   | 38.8 | % |
| Travel                  commissions and other costs        |   |                              | 11,056,595 |                               |   | 12.6                           | %      |   | 5,485,015 |   |   | 9.6 | % |   | 5,571,580 |   |   | 101.6 | % |
| Depreciation                  and amortization             |   |                              | 1,211,829  |                               |   | 1.4                            | %      |   | 477,975 |   |   | 0.8 | % |   | 733,854 |   |   | 153.5 | % |
| Marketing                  and selling                     |   |                              | 2,923,874  |                               |   | 3.3                            | %      |   | 2,895,943 |   |   | 5.1 | % |   | 27,931 |   |   | 1.0 | % |
| General                  and administrative                |   |                              | 26,443,008 |                               |   | 30.2                           | %      |   | 13,105,692 |   |   | 23.0 | % |   | 13,337,316 |   |   | 101.8 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  operating expenses                  |   |                              | 91,180,083 |                               |   | 104.2                          | %      |   | 57,666,473 |   |   | 101.2 | % |   | 33,513,610 |   |   | 58.1 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS                  FROM OPERATIONS                      |   |                              | (3,678,206 | )                                  |   | (4.2                           | %)     |   | (681,846 | ) |   | (1.2 | %) |   | (2,996,360 | ) |   | 439.4 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME/(EXPENSE)                    |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  and dividend income              |   |                              | 152,198    |                               |   | 0.2                            | %      |   | 180,554 |   |   | 0.3 | % |   | (28,356 | ) |   | (15.7 | %) |
| Interest                  expense                          |   |                              | (54,097    | )                                  |   | (0.1                           | %)     |   | (3,926 | ) |   | 0.0 | % |   | (50,171 | ) |   | 1277.9 | % |
| Foreign                  currency translation loss         |   |                              | (17,603    | )                                  |   | 0.0                            | %      |   | - |   |   | 0.0 | % |   | (17,603 | ) |   | n/a |   |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other income/(expense)              |   |                              | 80,498     |                               |   | 0.1                            | %      |   | 176,628 |   |   | 0.3 | % |   | (96,130 | ) |   | (54.4 | %) |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS                  BEFORE INCOME TAX PROVISION          |   |                              | (3,597,708 | )                                  |   | (4.1                           | %)     |   | (505,218 | ) |   | (0.9 | %) |   | (3,092,490 | ) |   | 612.1 | % |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  TAX PROVISION                      |   |                              | 119,520    |                               |   | 0.1                            | %      |   | - |   |   | - |   |   | 119,520 |   |   | n/a |   |
|                                                       |   |                              |       |                               |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  LOSS                                  |   | $                                 | (3,717,228 | )                                  |   | (4.2                           | %)     | $ | (505,218 | ) |   | (0.9 | %) | $ | (3,212,010 | ) |   | 635.8 | % |

----

|                                          |   |                                               |    |                          |   |              |   |                                            |   |                                                 |   |
|-----------------------------------------------|--------|----------------------------------------------------|---------|-------------------------------|--------|-------------------|--------|-------------------------------------------------|--------|------------------------------------------------------|--------|
| **Year                  2008**                |   | **Beginning                  Balance Active RTAs** |    | **New                  RTAs** |   | **Deactivations** |   | **Ending                  Balance Active RTAs** |   | **Average                  Renewals for the Period** |   |
| 3                  months ended June 30, 2008 |   |                                               | 138,814 |                          |   | 23,396            |   |                                            | 30,638 |                                                 |   | 131,572 |   |   | 134,823 |   |
|                                          |   |                                               |    |                          |   |              |   |                                            |   |                                                 |   |   |   |   |   |   |
| 6                  months ended June 30, 2008 |   |                                               | 131,802 |                          |   | 54,289            |   |                                            | 54,519 |                                                 |   | 131,572 |   |   | 135,534 |   |

|                                          |   |                                               |   |                          |   |              |   |                                            |   |                                                 |   |
|-----------------------------------------------|--------|----------------------------------------------------|--------|-------------------------------|--------|-------------------|--------|-------------------------------------------------|--------|------------------------------------------------------|--------|
| **Year                  2007**                |   | **Beginning                  Balance Active RTAs** |   | **New                  RTAs** |   | **Deactivations** |   | **Ending                  Balance Active RTAs** |   | **Average                  Renewals for the Period** |   |
| 3                  months ended June 30, 2007 |   |                                               | 82,932 |                          |   | 34,309            |   |                                            | 16,897 |                                                 |   | 100,344 |   |   | 95,123 |   |
|                                          |   |                                               |   |                          |   |              |   |                                            |   |                                                 |   |   |   |   |   |   |
| 6                  months ended June 30, 2007 |   |                                               | 59,333 |                          |   | 67,724            |   |                                            | 26,713 |                                                 |   | 100,344 |   |   | 84,743 |   |

----

**Three      months ended June 30, 2008 compared to three months ended June 30,      2007**

**Net      Revenues **

| ·   | Online                travel store sales increased $1,047,606 or 8.3% in the second quarter                of                2008 to $13,634,791 from the $12,587,185 reported in the comparable                prior                year quarter. The increase is due to increases in both the average                number                of store sales for which we are able to recognize revenue, along                with an                increase in the average amount of revenue recognizable for each store                sale. The average number of store sales for which we were able to                recognize revenue increased to 10,684 in 2008 from 7,970 in 2007.                In                addition, the average amount of recognized revenue from each store                sale                increased to $449.95 in 2008 from $438.41 in 2007. We believe this                significant growth year over year in average 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. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Monthly                renewal fees increased $8,966,857 or 83.9% in the second quarter                of 2008                to $19,719,273 from the $10,722,416 reported in the comparable prior                year                quarter. The increase is in direct relation to the number of active                paying                RTAs. The weighted average of paying RTAs per month increased from                95,123                in 2007 to 134,823 for the same period in 2008. We believe this                significant growth year over year in average RTAs is also 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                commissions and services for the second quarter of 2008 increased                $2,963,086 or 50.6%                to                $8,819,817                from the $5,856,731 reported in the comparable prior year quarter.                The                increase in travel commissions is attributable to the growth in gross                travel retail bookings driven by the number of customers utilizing                us as                their travel provider in 2008. Also contributing to the growth in                travel                commissions is the fact that we held more travel educational                events/tradeshows in the second quarter of 2008 compared to 2007,                which in                turn increases product awareness, making our RTAs more effective                in                selling travel. As the increase in travel bookings occur, a preferred                travel bonus, or override, is given by certain vendors in addition                to                commission. A portion of the anticipated bonus for the second quarter                of                2008 has been recorded as travel commission revenue with an offsetting                receivable. Also contributing to the increase in travel services                for the                three months ended June 30, 2008, is the fact that we chartered two                ships                with revenues totaling $1,048,192. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue decreased $1,085,308 or                32.4% in                the second quarter of 2008 to $2,266,903 from $3,352,211 in the comparable                prior year quarter. The decrease was due to a reduction in sales                of                magazine and sales aids, partially due to a reduction in the number                of                participants in the magazine Autoship Program, linked to the $6,000                Guarantee Program. We expect this trend to continue as long as the                number                of paying, active RTAs declines. In addition, in the second quarter                of                2008 compared to the second quarter of 2007, we experienced a decrease                in                the number of paying attendees at training events. We expect this                trend to                continue as long as the number of new online store sales continues                to                decline. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the second quarter of 2008 as compared to 2007                by                $45,923 or 16.0% to $333,526 from $287,603 in the comparable prior                year                quarter. Contributing to the increase was the implementation of a                new RTA                insurance program for which we collect a nominal fee. In addition,                we                experienced an increase in the number of payment processing fees                collected. We also experienced a significant increase in revenues                earned                from flower sales through the Flora 2000 online                website. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses **

| ·   | Marketing                commissions increased by $5,529,588 or 29.2% in the second quarter                of 2008                to $24,476,234 from $18,946,646 in the second quarter of 2007. This                increase is due to the increase year over year in active travel websites.                The increase is also due to the growth in the number of Sales Directors                in                our Company along with an increase in the amount paid out to the                entire                Sales Director’s Pool. The Sales Director’s Pool consists of Reps who have                achieved certain performance levels within our Company which entitles                them                to additional commissions on the number of new sales, monthly renewals                and                the number of training events held. Also, the introduction of Levels                6 and                7 Director’s Pool in first quarter 2008, which consists of a small group                of the our top Sales Directors, increased the amount of the overall                pool                to be paid out monthly. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Travel                commissions and other costs for the second quarter of 2008 increased                by                $3,327,852 or 85.9% to $7,204,179 from $3,876,327 reported in the                second                quarter of 2007. The increase is primarily due to the expense we                incurred                in relation to the two cruise charters that took place during the                quarter                which totaled $2,397,121 for the three months ended. Additionally,                the                increase is attributable to the increase in the number of customers                utilizing us as their travel provider in 2008 due to the growth in                the                number of active travel websites. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $676,167 in the second quarter of 2008 compared                to                $263,943 in the corresponding quarter of 2007, reflecting an increase                of                156.2% or $412,224. The increase in depreciation and amortization                is                primarily attributable to the new additions related to our current                headquarters building and assets related to the growth of our                infrastructure as well as the new additions of computer software                related                to our expansion into Canada. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased by $72,973 or 5.0% to $1,531,259 from                $1,458,286 reported in the second quarter of 2007. The slight increase                in                cost was associated with increased costs related to our Red Carpet                Day                Events partially offset by the decrease in expense on magazines sold                to                Reps and RTAs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $4,382,354 to $11,101,197 in                the                second quarter of 2008 from $6,718,843 in the second quarter of 2007,                reflecting an increase of 65.2%. As a percentage of total net revenues,                these expenses were 24.8% in 2008 and 20.5% in 2007. The increase                in                general and administrative expense in 2008 is primarily attributable                to                the costs associated with the ongoing implementation of new business                strategies company-wide and to a lesser extent the growth of our                infrastructure. The increases year over year relate primarily                to: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Salaries                and benefits increased by $2.1 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 as                well as                salary increases of existing staff.  |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Credit                card fees and bank charges increased by $464,315 as a result of an                increased number of transactions processed by the                Company. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Legal                fees increased $535,881 as a result of work done relating to the                Canadian                expansion, and an increase in expenses surrounding general compliance,                both domestic and international. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sarbanes-Oxley                compliance fees of $125,940. |
|--------------------|------------------------------------------------------------|

| §   | Building                overhead increased approximately $900,000 due to the increase in                employees                and number of locations at which we have                employees. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sales                and use tax expense of $692,594. |
|--------------------|-------------------------------------------------------|

| §   | Contract                labor increased $1.3 million primarily related to increased consulting                fees resulting from various IT projects of $414,429 and $266,632                in                maintenance and support costs associated with SAP, our new ERP platform                which was implemented during the first quarter of 2008. The remaining                increase relates to various marketing                initiatives. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**BUSINESS      SEGMENTS**

| **Marketing**                                  |   |   |       |   |   |       |   |
|------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                           |   |   |       |   |   |       |   |
| Three                  months ended June 30,   |   | 2008   |       | 2007   |   | Change     |   |
|                                           |   |   |       |   |   |       |   |
| Net                  revenues                  |   | $      | 35,788,074 |   | $      | 26,683,569 |   |   | 34.1 | % |
|                                           |   |   |       |   |   |       |   |   |   |   |
| Operating                  expenses            |   | $      | 36,249,518 |   | $      | 25,818,266 |   |  | 40.4 | % |
|                                           |   |   |       |   |   |       |   |   |   |   |
| Income                  (loss) from operations |   | $      | (461,444   | )      | $      | 865,303    |   |  | (153.3 | %) |

**Net      Revenues**

| ·   | Online                travel store sales increased $1,047,606 or 8.3% in the second quarter                of                2008 to $13,634,791 from the $12,587,185 reported in the comparable                prior                year quarter. The increase is due to increases in both the average                number                of store sales for which we are able to recognize revenue, along                with an                increase in the average amount of revenue recognizable for each store                sale. The average number of store sales for which we were able to                recognize revenue increased to 10,684 in 2008 from 7,970 in 2007.                In                addition, the average amount of recognized revenue from each store                sale                increased to $449.95 in 2008 from $438.41 in 2007. We believe that                this                significant growth year over year in average 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Monthly                renewal fees increased $8,996,857 or 83.9% in the second quarter                of 2008                to $19,719,273 from the $10,722,416 reported in the comparable prior                year                quarter. The increase is in direct relation to the number of active                paying                RTAs. The weighted average of paying RTAs per month increased from                95,123                in 2007 to 134,823 for the same period in 2008. We believe that this                significant growth year over year in average RTAs is also 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. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue decreased $1,085,308 or                32.4% in                the second quarter of 2008 to $2,266,903 from $3,352,211 in the comparable                prior year quarter. The decrease was due to a reduction in sales                of                magazine and sales aids, partially due to a reduction in the number                of                participants in the magazine Autoship Program, linked to the $6,000                Guarantee Program. We expect this trend to continue as long as the                number                of paying, active RTAs declines. In addition, in the second quarter                of                2008 compared to the second quarter of 2007, we experienced a decrease                in                the number of paying attendees at training events. We expect this                trend to                continue as long as the number of new online store sales continues                to                decline. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the second quarter of 2008 as compared to the                second                quarter of 2007 by $145,350 or 668.0% to $167,107 from $21,757. This                increase is primarily related to processing fees collected from the                RTA                insurance program implemented in 2008. In addition, we experienced                an                increase in the number of payment processing fees collected. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses**

| ·   | Marketing                commissions increased by $5,529,588 or 29.2% in the second quarter                of 2008                to $24,476,234 from $18,946,646 in the second quarter of 2007. This                increase is due to the increase year over year in active travel websites.                The increase is also due to the growth in the number of Sales Directors                in                our Company along with an increase in the amount paid out to the                entire                Sales Director’s Pool. The Sales Director’s Pool consists of Reps who have                achieved certain performance levels within our Company which entitles                them                to additional commissions on the number of new sales, monthly renewals                and                the number of training events held. Also, the introduction of Level                6 and                7 Sales Director Pool in first quarter 2008, which consists of a                small                group of the Company’s top Sales Directors, increased the amount of the                overall pool to be paid out                monthly. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $344,283 in the second quarter of 2008, compared                to                $193,741 in the corresponding quarter of 2007. The increase in                depreciation and amortization is primarily attributable to the new                additions related to our current headquarters building and assets                related                to the growth of our                infrastructure. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased by $87,796 or 6.4% to $1,455,597 from                $1,367,801 reported in the second quarter of 2007. The slight increase                in                cost was associated with increased costs related to our Red Carpet                Day                Events partially offset by the decrease in expense on magazines sold                to                Reps and RTAs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $4,663,326 to $9,973,404 in                the                second quarter of 2008 from $5,310,078 in the second quarter of 2007.                As a                percentage of total marketing net revenues, these expenses were 27.9%                in                2008 and 19.9% in 2007. The increase in general and administrative                expense                in 2008 is primarily attributable to the costs associated with the                ongoing                implementation of new business strategies and to a lesser extent                the                growth of our infrastructure. The increases year over year relate                primarily to: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Salaries                and benefits increased by $2.1 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 as                well as                salary increases of existing                staff.  |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Credit                card fees and bank charges increased by $331,211 in direct proportion                to                the number of sales and renewals. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Building                overhead increased approximately $600,000 due to the increase in                employees, and number of locations at which we have                employees. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sales                and use tax expense of $692,594. |
|--------------------|-------------------------------------------------------|

----

| **Travel**                                   |   |   |      |   |   |      |   |
|----------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                         |   |   |      |   |   |      |   |
| Three                  months ended June 30, |   | 2008   |      | 2007   |   | Change    |   |
|                                         |   |   |      |   |   |      |   |
| Net                  revenues                |   | $      | 9,007,491 |   | $      | 5,840,820 |   |   | 54.2 | % |
|                                         |   |   |      |   |   |      |   |   |   |   |
| Operating                  expenses          |   | $      | 6,250,018 |   | $      | 4,140,395 |   |   | 51.0 | % |
|                                         |   |   |      |   |   |      |   |   |   |   |
| Income                  from operations      |   | $      | 2,757,473 |   | $      | 1,700,425 |   |   | 62.2 | % |

**Net        Revenues**

| ·   | Travel                commissions and services for the second quarter of 2008 increased                $3,244,843 or 58.2%                to                $8,819,817                from the $5,574,974 reported in the comparable prior year quarter.                The                increase in travel commissions is attributable to the growth in gross                travel retail bookings driven by the number of customers utilizing                us as                their travel provider in 2008. Also contributing to the growth in                travel                commissions is the fact that we held more travel educational                events/tradeshows in the second quarter of 2008 compared to 2007,                which in                turn increases product awareness, making our RTAs more effective                in                selling travel. As the increase in travel bookings occur, a preferred                travel bonus, or override, is given by certain vendors in addition                to                commission. A portion of the anticipated bonus for the second quarter                of                2008 has been recorded as travel commission revenue with an offsetting                receivable. Contributing to the increase in travel services for the                three                months ended June 30, 2008, is the fact that we chartered two cruise                ships with revenues totaling                $1,048,192. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income decreased in the second quarter of 2008 as compared to the                prior                year quarter by $78,173 or 29.4% to $187,674 from                $265,846. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses**
** **

| ·   | Travel                commissions and other costs for the second quarter of 2008 increased                by                $3,609,609 or 100.4% to $7,204,179 from $3,594,570 reported in the                second                quarter of 2007. The increase is primarily due to the expense we                incurred                in relation to the cruise charters that took place during the quarter                which totaled $2,397,121 for the three months ended. Additionally,                the                increase is attributable to the increase in the number of customers                utilizing us as their travel provider in 2008 due to the growth in                the                number of active travel websites. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $60,457 in the second quarter of 2008, compared                to                $1,063 in the corresponding quarter of 2007. The increase in depreciation                and amortization is primarily attributable to the new addition of                computer                software related to our expansion into Canada, and the addition of                infrastructure to support our growth in                travel. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses decreased $1,552,108 to a credit                of $1,097,831 in the second quarter of 2008 from $454,277 in the                second quarter of 2007 primarily as a result of the reversal of the                $1.7                million cruise cabin inventory reserve reclassified and realized                in travel                commissions and other costs in the second quarter of 2008. As a percentage                of total travel net revenues, these expenses excluding the reserve                reversal were 6.7% in the second quarter of 2008 and 7.8% in                2007. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Parent**                                   |   |   |       |   |   |       |   |
|----------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                         |   |   |       |   |   |       |   |
| Three                  months ended June 30, |   | 2008   |       | 2007   |   | Change     |   |
|                                         |   |   |       |   |   |       |   |
| Net                  revenues                |   | $      | (21,255    | )      | $      | -          |   |   | n/a |   |
|                                         |   |   |       |   |   |       |   |   |   |   |
| Operating                  expenses          |   | $      | 2,489,500  |   | $      | 1,023,627  |   |   | 143.2 | % |
|                                         |   |   |       |   |   |       |   |   |   |   |
| Loss                  from operations        |   | $      | (2,510,755 | )      | $      | (1,023,627 | )      |   | 145.3 | % |

**Operating      Expenses**

| ·   | Depreciation                and amortization was $271,427 in the second quarter of 2008, compared                to                $69,139 in the corresponding quarter of 2007. The increase in depreciation                and amortization is primarily attributable to the new additions related                to                our current headquarters building and assets related to the growth                of our                infrastructure. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $1,271,136 to $2,225,624 in                the                second quarter of 2008 from $954,488 in the second quarter of 2007.                The                increase in general and administrative expense in 2008 is primarily                attributable to Sarbanes-Oxley compliance fees of $125,940, various                IT                projects and maintenance of $414,429 and $266,632 in SAP software                support                fees. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Six      months ended June 30, 2008 compared to six months ended June 30,      2007**

**Net      Revenues **

| ·   | Online                travel store sales increased $5,358,225 or 24.0% in the second quarter                of                2008 to $27,646,705 from the $22,288,480 reported in the comparable                prior                year quarter. The increase is due to increases in both the average                number                of store sales for which we are able to recognize revenue, along                with an                increase in the average amount of revenue recognizable for each store                sale. The average number of store sales for which we were able to                recognize revenue increased to 10,973 in the first half of 2008 from                7,020                in comparable period of 2007. In addition, the average amount of                recognized revenue from each store sale increased to $449.95 in 2008                from                $433.41 in 2007. We believe that the significant growth year over                year in                average 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Monthly                renewal fees increased $20,680,265 or 108.9% in the first half of                2008 to                $39,666,747 from the $18,986,482 reported in the comparable prior                year                period. The increase is in direct relation to the number of active                paying                RTAs. The weighted average of paying RTAs per month increased from                84,743                in the first six months of 2007 to 135,534 for the same period in                2008. We                believe that the significant growth year over year in average 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                commissions and services for the first six months of 2008 increased                $5,754,019 or 68.5%                to                $14,148,444                from the $8,394,425 reported in the comparable prior year period.                The                increase in travel commissions is attributable to the growth in gross                travel bookings driven by the increase in the number of customers                utilizing us as their travel provider in 2008. Also contributing                to the                growth in travel agency commissions is the fact that we held more                travel                training events/tradeshows during the first six months of 2008 compared                to                2007, which in turn increases product awareness, making our RTAs                more                effective in selling travel. As the increase in travel bookings occur,                a                preferred travel bonus, or override, is given by certain vendors                in                addition to commission. A portion of the anticipated bonus for the                second                quarter of 2008 has been recorded as travel commission revenue with                an                offsetting receivable. Contributing to the increase in travel services                for                the six months ended June 30, 2008, is the fact that we chartered                two                cruise ships with revenues totaling                $1,048,192. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue decreased $1,436,955 or                21.4% in                the first six months of 2008 to $5,276,408 from $6,713,363 in the                comparable prior year quarter. This decrease is partially due to                our                revamping the Association training program, thus leading to a significant                decrease in revenue attributable to those training events. In addition,                we                experienced a decrease in sales of magazines and sales aids, due                to a                reduction in the number of participants in the magazine Autoship                Program,                linked to the $6,000 Guarantee Program. We expect these trends to                continue                as long as the numbers of paying, active RTAs and the number of new                online                store sales continue to decline. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the first six months of 2008 as compared to the                first                six months of 2007 by $161,696 or 26.9% to $763,573 from $601,877                in the                comparable prior year period. Contributing to the increase was the                implementation of a new RTA insurance program for which we collect                a                nominal fee. In addition, we experienced an increase in the number                of                payment processing fees collected. We also experienced a significant                increase in revenues earned from flower sales through the Flora 2000                online website. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses **

| ·   | Marketing                commissions increased by $13,842,929 or 38.8% in the first six months                of                2008 to $49,544,777 from $35,701,848 in the first six months of 2007.                This                increase is due to the increase year over year in active travel websites.                The increase is also due to an increase in the number of Sales Directors                in our 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 our Company which entitles them                to                additional commissions on the number of new sales, monthly renewals                and                the number of training events held. Also, the introduction of Levels                6 and                7 Director’s Pool in first quarter 2008, which consists of a small group                of our top Sales Directors, increased the amount of the overall pool                to be                paid out monthly. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Travel                commissions and other costs for the first six months of 2008 increased                by                $5,571,580 or 101.6% to $11,056,595 from $5,485,015 reported in the                first                six months of 2007. The increase is primarily due to the expense                we                incurred in relation to the two charters that sailed during the second                quarter of 2008 which totaled $2,397,121 for the six months ended.                Additionally, the increase is attributable to the increase in the                number                of customers utilizing us as their travel provider in 2007 due to                the                growth in the number of active travel                websites. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $1,211,829 in the first six months of 2008,                compared                to $477,975 in the corresponding period of 2007, reflecting an increase                of                153.5% or $733,854. The increase in depreciation and amortization                is                primarily attributable to the new additions related to our current                headquarters building and assets related to the growth of our                infrastructure as well as the additions of computer software related                to                our expansions into Canada. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased by $27,931 or 1.0% to $2,923,874 from                $2,895,943 reported in the first six months of 2007. The slight increase                in cost was associated with increased costs related to our Red Carpet                Day                Events partially offset by the decrease in expense on magazines sold                to                Reps and RTAs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $13,337,316 to $26,443,008                in the                first six months of 2008 from $13,105,692 in the first six months                of 2007,                reflecting an increase of 101.8%. As a percentage of total net revenues,                these expenses were 30.2% in the first half of 2008 and 23.0% in                the                comparable prior year period. The increase in general and administrative                expense in 2008 is primarily attributable to the costs associated                with the                ongoing implementation of new business strategies company-wide and                to a                lesser extent the growth of our infrastructure. The increases year                over                year relate primarily to: |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Salaries                and benefits increased by $4.7 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 as                well as                salary increases of existing staff.   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Credit                card fees and bank charges increased by $565,434 in direct proportion                to                the number of sales and                renewals.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Legal                fees increased $1.1 million as a result of work done relating to                the                Canadian expansion, and an increase in expenses surrounding general                compliance, both domestic and                international. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sarbanes-Oxley                compliance fees of $394,068. |
|--------------------|------------------------------------------------------------|

| §   | Building                overhead increased approximately $2.0 million due to the increase                in                employees, and number of locations at which we have                employees. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sales                and use tax expense of $760,042. |
|--------------------|-------------------------------------------------------|

| §   | Contract                labor increased $1.0 million primarily related to increased consulting                fees resulting from various IT projects and maintenance of $714,019                and                $325,556 in support costs associated with SAP, our new ERP platform                which                was implemented during the first quarter of                2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Bad                debt expense increased by $439,196 to $489,976 in the first half                of 2008                from $50,780 reported for the first six months of 2007 due to our                recording a $356,332 reserve related to a potential acquisition along                with                reserves against advances that had been made our Sales                Directors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Marketing                event costs for top Sales Directors in our Company of                $831,979. |
|--------------------|---------------------------------------------------------------------------------------------------------|

| §   | Equity                compensation of $510,000 for certain marketing                services. |
|--------------------|-----------------------------------------------------------------------------------------------|

**BUSINESS      SEGMENTS**

| **Marketing**                              |   |   |       |   |   |       |   |
|--------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                       |   |   |       |   |   |       |   |
| Six                  months ended June 30, |   | 2008   |       | 2007   |   | Change     |   |
|                                       |   |   |       |   |   |       |   |
| Net                  revenues              |   | $      | 72,864,392 |   | $      | 47,976,997 |   |   | 51.9 | % |
|                                       |   |   |       |   |   |       |   |   |   |   |
| Operating                  expenses        |   | $      | 73,427,875 |   | $      | 49,359,252 |   |   | 48.8 | % |
|                                       |   |   |       |   |   |       |   |   |   |   |
| Loss                  from operations      |   | $      | (563,483   | )      | $      | (1,382,255 | )      |   | (59.2 | %) |

----

**Net      Revenues**

| ·   | Online                travel store sales increased $5,358,225 or 24.0% in the second quarter                of                2008 to $27,646,705 from the $22,288,480 reported in the comparable                prior                year quarter. The increase is due to increases in both the average                number                of store sales for which we are able to recognize revenue, along                with an                increase in the average amount of revenue recognizable for each store                sale. The average number of store sales for which we were able to                recognize revenue increased to 10,973 in the first half of 2008 from                7,020                in comparable period of 2007. In addition, the average amount of                recognized revenue from each store sale increased to $449.95 in 2008                from                $433.41 in 2007. We believe that the significant growth year over                year in                average 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Monthly                renewal fees increased $20,680,265 or 108.9% in the first half of                2008 to                $39,666,747 from the $18,986,482 reported in the comparable prior                year                period. The increase is in direct relation to the number of active                paying                RTAs. The weighted average of paying RTAs per month increased from                84,743                in the first six months of 2007 to 135,534 for the same period in                2008. We                believe that the significant growth year over year in average 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. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Training                programs and marketing materials revenue decreased $1,436,955 or                21.4% in                the first six months of 2008 to $5,276,408 from $6,713,363 in the                comparable prior year quarter. This decrease is partially due to                our                revamping our Association training program, thus leading to a significant                decrease in revenue attributable to those training events. In addition,                we                experienced a decrease in sales of magazines and sales aids, due                to a                reduction in the number of participants in the magazine Autoship                Program,                linked to the $6,000 Guarantee Program. We expect these trends to                continue                as long as the numbers of paying, active RTAs and the number of new                online                store sales continue to decline. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased in the first six months of 2008 compared to 2007                by                $285,860. This increase is primarily related to the increase in payment                processing fees, along with revenues earned from a new RTA insurance                program for which we collect a nominal                fee. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      Expenses**

| ·   | Marketing                commissions increased by $13,842,929 or 38.8% in the first six months                of                2008 to $49,544,777 from $35,701,848 in the first six months of 2007.                This                increase is due to the increase year over year in active travel websites.                The increase is also due to an increase in the number of Sales Directors                in our 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 our Company which entitles them                to                additional commissions on the number of new sales, monthly renewals                and                the number of training events held. Also, the introduction of Levels                6 and                7 Director’s Pool in first quarter 2008, which consists of a small group                of the our top Sales Directors, increased the amount of the overall                pool                to be paid out monthly. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $660,060 in the first six months of 2008, compared                to                $347,489 in the corresponding quarter of 2007, reflecting an increase                of                90.0%. The increase in depreciation and amortization is primarily                attributable to the new additions related to our current headquarters                building and assets related to the growth of our                infrastructure. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marketing                and selling expenses increased $21,878 or 0.8% to $2,775,128 from                $2,753,250 reported in the first half of 2007. The slight increase                in cost                was associated with increased costs related to our Red Carpet Day                Events                partially offset by the decrease in expense on magazines sold to                Reps and                RTAs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $9,891,245 to $20,447,910 in                the                first six months of 2008 from $10,556,665 in the first half of 2007,                reflecting an increase of 93.7%. As a percentage of total marketing                net                revenues, these expenses were 28.1% in 2008 and 22.0% in 2007 and                to a                lesser extent to the growth of our infrastructure. The increase in                general                and administrative expense in 2008 is primarily attributable to the                costs                associated with the ongoing implementation of new business strategies                and                to a lesser extent the growth of our infrastructure. The increases                year                over year relate primarily to: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Salaries                and benefits increased by $4.7 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 as                well as                salary increases of existing staff.   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Credit                card fees and bank charges increased by $405,805 in direct proportion                to                the number of sales and                renewals.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Legal                fees increased $777,153 as a result of work done relating to the                Canadian expansion, and an increase in expenses surrounding general                compliance, both domestic and                international. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| §   | Building                overhead increased approximately $1.4 million due to the increase                in                employees, and number of locations at which we have                employees. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §   | Sales                and use tax expenses of $760,042. |
|--------------------|--------------------------------------------------------|
| §   | Bad                debt expense increased by $439,196 to $489,976 in the first half                of 2008                from $50,780 reported for the first six months of 2007 due to our                recording a $356,332 reserve related to a potential acquisition along                with                reserves against advances that had been made our Sales                Directors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §   | Marketing                event costs for top Sales Directors in our Company of                $831,979. |
|--------------------|---------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|

| **Travel**                                 |   |   |       |   |   |      |   |
|--------------------------------------------|--------|--------|------------|--------|--------|-----------|--------|
|                                       |   |   |       |   |   |      |   |
| Six                  months ended June 30, |   | 2008   |       | 2007   |   | Change    |   |
|                                       |   |   |       |   |   |      |   |
| Net                  revenues              |   | $      | 14,637,485 |   | $      | 9,007,630 |   |   | 62.5 | % |
|                                       |   |   |       |   |   |      |   |   |   |   |
| Operating                  expenses        |   | $      | 12,290,041 |   | $      | 6,355,339 |   |   | 93.4 | % |
|                                       |   |   |       |   |   |      |   |   |   |   |
| Income                  from operations    |   | $      | 2,347,444  |   | $      | 2,652,291 |   |   | (11.5 | %) |

**Net      Revenues**

| ·   | Travel                commissions and services for the first six months of 2008 increased                $5,754,019 or 68.5%                to                $14,148,444                from the $8,394,425 reported in the comparable prior year period.                The                increase in travel commissions is attributable to the growth in gross                travel bookings driven by the increase in the number of customers                utilizing us as their travel provider in 2008. Also contributing                to the                growth in travel agency commissions is the fact that we held more                travel                training events/tradeshows during the first six months of 2008 compared                to                2007, which in turn increases product awareness, making our RTAs                more                effective in selling travel. As the increase in travel bookings occur,                a                preferred travel bonus, or override, is given by certain vendors                in                addition to commission. A portion of the anticipated bonus for the                second                quarter of 2008 has been recorded as travel commission revenue with                an                offsetting receivable. Contributing to the increase in travel services                for                the six months ended June 30, 2008, is the fact that we chartered                two                ships with revenues totaling                $1,048,192. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income decreased in the first six months of 2008 as compared to 2007                by                $124,164 or 20.2% to $489,041 from                $613,205. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating      **
**Expenses      **

| ·   | Travel                commissions and other costs for the first six months of 2008 increased                by                $5,571,580 or 101.6% to $11,056,595 from $5,485,015 reported in the                first                six months of 2007. The increase is primarily due to the expense                we                incurred in relation to the two cruise charters that sailed during                the                second quarter of 2008 which totaled $2,397,121 for the six months                ended.                Additionally, the increase is attributable to the increase in the                number                of customers utilizing us as their travel provider in 2007 due to                the                growth in the number of active travel                websites. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                and amortization was $109,260 in the first six months of 2008, compared                to                $1,063 in the corresponding quarter of 2007. The increase in depreciation                and amortization is primarily attributable to the new addition of                computer                software related to our expansion into Canada, and the overall growth                in                our infrastructure to support our                growth. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased $286,450 to $1,013,018 in the                first                six months of 2008 from $726,568 in the first six months of 2007.                As a                percentage of total travel net revenues, these expenses were 6.9%                in 2008                and 8.1% in 2007. The increase in general and administrative expense                in                2008 is primarily attributable to costs related to the expansion                into                Canada, including related software and training                costs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Parent**                                 |   |   |       |   |   |       |   |
|--------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                       |   |   |       |   |   |       |   |
| Six                  months ended June 30, |   | 2008   |       | 2007   |   | Change     |   |
|                                       |   |   |       |   |   |       |   |
| Net                  revenues              |   | $      | -          |   |   | -          |   |   | n/a |   |
|                                       |   |   |       |   |   |       |   |   |   |   |
| Operating                  expenses        |   | $      | 5,462,167  |   | $      | 1,951,882  |   |   | 179.8 | % |
|                                       |   |   |       |   |   |       |   |   |   |   |
| Loss                  from operations      |   | $      | (5,462,167 | )      | $      | (1,951,882 | )      |   | 179.8 | % |

**Operating      Expenses**

| ·   | Depreciation                and amortization was $442,509 in the first six months of 2008, compared                to                $129,423 in the corresponding first six months of 2007, reflecting                an                increase of 241.9%. The increase in depreciation and amortization                is                primarily attibutable to the renovations to our current headquarters,                which have increased their depreciable                value. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| ·   | General                and administrative expenses increased $3,159,621 to $4,982,080 in                the                first six months of 2008 from $1,822,459 in the first half of 2007.                As a                percentage of total net revenues, the expenses were 5.7% in 2008                and 3.2%                in 2007. The increase in general and administrative expense in 2008                is                attributable to:. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | Sarbanes-Oxley                  compliance fees of $394,068. |
|--------|--------|--------------------------------------------------------------|

|   | Ÿ | Contract                  labor increased $1.0 million primarily related to increased consulting                  fees resulting from various IT projects and maintenance of $714,019                  and                  $325,556 in support costs associated with SAP, our new ERP platform                  which                  was implemented during the first quarter of                  2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | Equity                  compensation of $510,000 for certain marketing                  services. |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | Ÿ | Legal                  fees of $286,906. |
|--------|--------|------------------------------------------|

----

**Variability      of Results**

**Liquidity      and Capital Resources**

|                                             |   |  Six                  months ended |       |
|--------------------------------------------------|--------|-----------------------------------------|------------|
|                                             |   | June                  30, 2008          |       | June                  30, 2007 |   |
|                                             |   |                               |       |   |   |
| Net                  cash provided by (used in): |   |                               |       |   |   |
| Operating                  activities            |   | $                                       | 4,694,635  |   | $ | 3,902,411 |   |
| Investing                  activities            |   |                                    | (5,884,732 | ) |   | (3,090,296 | ) |
| Financing                  activities            |   |                                    | 91,732     |   |   | 219,939 |   |
|                                             |   |                                    |       |   |   |   |   |
| Net                  increase (decrease) in cash |   | $                                       | (1,098,365 | ) | $ | 1,032,054 |   |

----

----

**Off-Balance      Sheet Arrangements**

**New      Accounting Pronouncements**

*“*

* *

----

**Application      of Critical Accounting Policies**

**Forward-Looking      Statements**

**Item      3.**

**Quantitative      and Qualitative Disclosures About Market Risk**

**Item      4T.Controls and Procedures**

**Evaluation      of Disclosure Controls and Procedures **

----

**Changes      in Internal Control Over Financial Reporting**

**PART      II - OTHER INFORMATION**

**Item      1.**

**Legal      Proceedings.**

**Item      1A. Risk Factors.**

**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.**

----

|                                    |   |   |   |   |   |                                  |   |
|-----------------------------------------|--------|--------|--------|--------|--------|---------------------------------------|--------|
|                                    |   |   |   | For    |   | Withhold                    authority |   |
|                                    |   |   |   |   |   |                                  |   |
| Andrew                    Wilder        |   |   |   |   |   | 33,522,661                            |   |   | 99,137 |   |
| Clay                    Winfield        |   |   |   |   |   | 33,496,109                            |   |   | 125,689 |   |
| Harold                    L. Kestenbaum |   |   |   |   |   | 33,493,903                            |   |   | 131,895 |   |

|   |   |   | For        |   |   | Against |   |   | Abstain |   |
|--------|--------|--------|------------|--------|--------|---------|--------|--------|---------|--------|
|   |   |   |       |   |   |    |   |   |    |   |
|   |   |   | 33,363,101 |   |   | 143,110 |   |   | 115,587 |   |

**Item      5.**

**Other      Information.**

** **

----

**Item      6.**

**Exhibits      [to be reviewed and updated]**

| 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. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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.                                                                                                                                                                                                                                                                                                                                                               |

----

**SIGNATURES**

|   |                                                                                     | **YTB                International, Inc** |
|--------|------------------------------------------------------------------------------------------|-------------------------------------------|
|   |                                                                                     |
|   |                                                                                          | /s/                J. Scott Tomer         |
|   | J.                Scott Tomer                                                            |
|   | Director                and Chief Executive OfficerDated:                August 14, 2008 |

|   |                                                                          |                             |
|--------|-------------------------------------------------------------------------------|----------------------------------|
|   |                                                                               | /s/                John D. Clagg |
|   | John                D. Clagg                                                  |
|   | Chief                Financial OfficerDated:                  August 14, 2008 |

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