**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**




**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




For
      the
      quarterly period ended March 31, 2008




OR




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




For
      the
      transition period from  to




Commission
      file number 0-23016




**MEDIFAST,
      INC.**


**(Exact
      name of registrant as specified in its charter)**




**Delaware**
            
            **13-3714405****(State
                or other jurisdiction**
              **of
                organization)**
            
            **(I.R.S.
                employer**
              **Identification
                no.)**





**11445
      Cronhill Drive**


**Owings
      Mills, MD 21117**


**Telephone
      Number (410) 581-8042**




Indicate
      by checkmark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the registrant
      was required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days.




Yes  x    No o




Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):




Large
      accelerated filer o Accelerated
      filer x            Non-accelerated
      filer o




Indicate
      by checkmark whether the Registrant is a shell company (as defined in Rule
      12b-2
      of the Exchange Act).




Yes o No x




Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.




**Class**
            
            **Outstanding at May 9,2008**Common
                stock, $.001 par value per share
            
            13,814,098
                shares







Index




**Part
                  I****Financial
                  Information:**Condensed
                  Consolidated Balance Sheets –March
                  31, 2008 (unaudited) and December 31, 2007 (audited)
              3Condensed
                  Consolidated Statements of Income –Three
                  Months Ended March 31, 2008 and 2007 (unaudited)
              4Condensed
                  Consolidated Statements of Cash Flows –Three
                  Months Ended March 31, 2008 and 2007 (unaudited)
              5Notes
                  to Condensed Consolidated Financial Statements (unaudited)
              6Management
                  Discussion and Analysis of Financial ConditionAnd
                  Results of Operations
              12**Part
                  II**Exhibits
              17EX
                  31.1EX
                  31.2EX
                  32.1




2




**MEDIFAST,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**


March 31, 2008
              
              December 31, 2007(Unaudited)
              
              (Audited)**ASSETS****Current
                  assets:**Cash
                  and cash equivalents
              
              $
              1,407,000
              
              $
              2,195,000Accounts
                  receivable-net of allowance for doubtful accounts of
                  $100,000
              
              
              475,000
              
              
              493,000Inventory
              
              
              9,973,000
              
              
              9,181,000Investment
                  securities
              
              
              1,405,000
              
              
              1,439,000Deferred
                  compensation
              
              
              723,000
              
              
              814,000Prepaid
                  expenses and other current assets
              
              
              3,245,000
              
              
              2,727,000Prepaid
                  income tax
              
              
              143,000
              
              
              **-**Note
                  receivable - current
              
              
              180,000
              
              
              180,000Deferred
                  tax asset
              
              
              82,000
              
              
              100,000**Total
                  Current Assets**
              
              
              **17,633,000**
              
              
              **17,129,000**Property,
                  plant and equipment - net
              
              
              19,150,000
              
              
              17,031,000Trademarks
                  and intangibles - net
              
              
              6,897,000
              
              
              7,356,000Deferred
                  tax asset, net of current portion
              
              
              897,000
              
              
              897,000Note
                  receivable, net of current portion
              
              
              1,180,000
              
              
              1,212,000Other
                  assets
              
              
              301,000
              
              
              99,000**TOTAL
                  ASSETS**
              
              **$**
              **46,058,000**
              
              **$**
              **43,724,000****LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  liabilities:**Accounts
                  payable and accrued expenses
              
              $
              5,382,000
              
              $
              4,279,000Income
                  taxes payable
              
              
              -
              
              
              592,000Line
                  of credit
              
              
              2,176,000
              
              
              1,599,000Current
                  maturities of long-term debt
              
              
              257,000
              
              
              264,000**Total
                  Current Liabilities**
              
              
              **7,815,000**
              
              
              **6,734,000**Long-term
                  debt, net of current portion
              
              
              4,505,000
              
              
              4,570,000**Total
                  Liabilities**
              
              
              **12,320,000**
              
              
              **11,304,000****Stockholders'
                  Equity:**Common
                  stock; par value $.001 per share; 20,000,000 authorized; 13,814,098
                  and
                  13,709,098 shares issued and outstanding, respectively
              
              
              14,000
              
              
              14,000Additional
                  paid-in capital
              
              
              27,225,000
              
              
              26,953,000Accumulated
                  other comprehensive income
              
              
              154,000
              
              
              321,000Retained
                  Earnings
              
              
              11,183,000
              
              
              9,818,000**38,576,000**
              
              
              **37,106,000**Less:
                  cost of 270,534 and 270,534 shares of common stock in
                  treasury
              
              
              (1,971,000
              )
              
              (1,971,000
              )Less:
                  unearned compensation
              
              
              (2,867,000
              )
              
              (2,715,000
              )**Total
                  Stockholders' Equity**
              
              
              **33,738,000**
              
              
              **32,420,000****TOTAL
                  LIABILITIES & STOCKHOLDERS' EQUITY**
              
              **$**
              **46,058,000**
              
              **$**
              **43,724,000**




See
      accompanying notes to condensed consolidated financial statements.




3


**MEDIFAST,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**


**Three Months Ended March 31,**(Restated)**2008**
              
              **2007**(Unaudited)
              
              (Unaudited)Revenue,
                  net
              
              $
              25,169,000
              
              $
              20,089,000Cost
                  of sales
              
              
              6,100,000
              
              
              5,058,000**Gross
                  Profit**
              
              
              **19,069,000**
              
              
              **15,031,000**Selling,
                  general, and administration
              
              
              17,007,000
              
              
              13,117,000**Income
                  from operations**
              
              
              2,062,000
              
              
              1,914,000Other
                  income/(expense)Interest
                  expense
              
              
              (103,000
              )
              
              (95,000
              )Interest
                  income
              
              
              38,000
              
              
              33,000Other
                  expense
              
              
              36,000
              
              
              51,000(29,000
              )
              
              (11,000
              )**Net
                  income before provision for income taxes**
              
              
              **2,033,000**
              
              
              **1,903,000**Provision
                  for income tax (expense)
              
              
              (668,000
              )
              
              (530,000
              )**Net
                  income**
              
              **$**
              **1,365,000**
              
              **$**
              **1,373,000**Basic
                  earnings per share
              
              $
              0.10
              
              $
              0.11Diluted
                  earnings per share
              
              $
              0.10
              
              $
              0.10Weighted
                  average shares outstanding -Basic
              
              
              13,101,157
              
              
              12,899,543Diluted
              
              
              13,799,293
              
              
              13,690,788





See
      accompanying notes to condensed consolidated financial
      statements.


4


**MEDIFAST,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**


Three
                  Months Ended March 31,(Restated)2008
              
              2007(Unaudited)
              
              (Unaudited)Cash
                  flows from operating activities:Net
                  income
              
              $
              1,365,000
              
              $
              1,373,000Adjustments
                    to reconcile net income to net cashprovided by operating
                    activities from continuing
                    operations:Depreciation
                  and amortization
              
              
              1,079,000
              
              
              786,000Realized
                  loss on investment securities
              
              
              36,000
              
              
              32,000Common
                  stock issued for services
              
              
              35,000
              
              
              21,000Stock
                  options vested during period
              
              
              -
              
              
              77,000Stock
                  options cancelled during period
              
              
              (77,000
              )
              
              -Excess
                  tax benefits from share-based payment arrangements
              
              
              -
              
              
              30,000Vesting
                  of unearned compensation
              
              
              148,000
              
              
              164,000Net
                  change in other comprehensive (loss) income
              
              
              (167,000
              )
              
              14,000Deferred
                  income taxes
              
              
              18,000
              
              
              (88,000
              )Changes
                  in assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              18,000
              
              
              (76,000
              )(Increase)
                  in inventory
              
              
              (792,000
              )
              
              (452,000
              )(Increase)
                  in prepaid expenses & other current assets
              
              
              (518,000
              )
              
              (885,000
              )(Increase)
                  decrease in deferred compensation
              
              
              91,000
              
              
              (125,000
              )(Increase)
                  in prepaid taxes
              
              
              (143,000
              )
              
              -(Increase)
                  in other assets
              
              
              (202,000
              )
              
              (6,000
              )Increase
                  in accounts payable and accrued expenses
              
              
              1,103,000
              
              
              701,000Increase
                  (decrease) in income taxes payable
              
              
              (592,000
              )
              
              154,000Net
                  cash provided by operating activities
              
              
              1,402,000
              
              
              1,720,000Cash
                  Flow from Investing Activities:(Purchase)
                  sale of investment securities, net
              
              
              (4,000
              )
              
              97,000(Purchase)
                  of property and equipment
              
              
              (2,735,000
              )
              
              (1,044,000
              )(Purchase)
                  of intangible assets
              
              
              (2,000
              )
              
              (240,000
              )Net
                  cash (used in) investing activities
              
              
              (2,741,000
              )
              
              (1,187,000
              )Cash
                  Flow from Financing Activities:Issuance
                  of common stock, options and warrants
              
              
              12,000
              
              
              24,000(Repayment)
                  of long-term debt, net
              
              
              (71,000
              )
              
              (137,000
              )Increase
                  in line of credit
              
              
              577,000
              
              
              650,000Decrease
                  in note receivable
              
              
              33,000
              
              
              41,000Excess
                  tax benefits from share-based payment arrangements
              
              
              -
              
              
              (30,000
              )(Purchase)
                  of treasury stock
              
              
              -
              
              
              (309,000
              )Net
                  cash provided by financing activities
              
              
              551,000
              
              
              239,000**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              (788,000
              )
              
              772,000Cash
                  and cash equivalents - beginning of the period
              
              
              2,195,000
              
              
              1,085,000Cash
                  and cash equivalents - end of period
              
              $
              1,407,000
              
              $
              1,857,000Supplemental
                  disclosure of cash flow information:Interest
                  paid
              
              $
              103,000
              
              $
              95,000Income
                  taxes
              
              $
              1,489,000
              
              $
              464,000Supplemental
                  disclosure of non cash activity:Common
                  stock issued to Directors over 3-year vesting period
              
              $
              195,000
              
              $
              -Options
                  vested during period
              
              $
              -
              
              $
              77,000Options
                  cancelled during period
              
              $
              (77,000
              )
              $
              -Common
                  stock issued for services
              
              $
              35,000
              
              $
              21,000




See
        accompanying notes to condensed consolidated financial
        statements.


5





**Notes
      to Condensed Consolidated Financial Statements**


**General**





1. Basis
          of
          Presentation





The
      condensed unaudited interim consolidated financial statements included herein
      have been prepared, without audit, pursuant to the rules and regulations of
      the
      Securities and Exchange Commission. The condensed consolidated financial
      statements and notes are presented as permitted on Form 10-Q and do not
      contain information included in the Company’s annual statements and notes.
      Certain information and footnote disclosures normally included in financial
      statements prepared in accordance with accounting principles generally accepted
      in the United States of America have been condensed or omitted pursuant to
      such
      rules and regulations, although the Company believes that the disclosures are
      adequate to make the information presented not misleading. It is suggested
      that
      these condensed consolidated financial statements be read in conjunction with
      the December 31, 2007 audited consolidated financial statements and the
      accompanying notes thereto. While management believes the procedures followed
      in
      preparing these condensed consolidated financial statements are reasonable,
      the
      accuracy of the amounts are in some respects dependent upon the facts that
      will
      exist, and procedures that will be accomplished by the Company later in the
      year.





These
      condensed unaudited consolidated financial statements reflect all adjustments,
      including normal recurring adjustments, which, in the opinion of management,
      are
      necessary to present fairly the operations and cash flows for the period
      presented.




2. Presentation
          of Financial Statements




The
      Company’s condensed consolidated financial statements include the accounts of
      Medifast, Inc. and its wholly-owned subsidiaries. All significant intercompany
      accounts and transactions have been eliminated.




3.  Recent
      Accounting Pronouncements




In
      September 2006, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which
      clarifies the definition of fair value whenever another standard requires or
      permits assets or liabilities to be measured at fair value. Specifically, the
      standard clarifies that fair value should be based on the assumptions market
      participants would use when pricing the asset or liability, and establishes
      a
      fair value hierarchy that prioritizes the information used to develop those
      assumptions. SFAS No. 157 does not expand the use of fair value to any new
      circumstances, and must be applied on a prospective basis except in certain
      cases. The standard also requires expanded financial statement disclosures
      about
      fair value measurements, including disclosure of the methods used and the effect
      on earnings.




In
      February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective
      Date of FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP
      No. 157-2 defers the effective date of SFAS No. 157 to fiscal years
      beginning after December 15, 2008, and interim periods within those fiscal
      years, for all nonfinancial assets and liabilities, except those that are
      recognized or disclosed at fair value in the financial statements on a recurring
      basis (at least annually). Examples of items within the scope of FSP
      No. 157-2 are nonfinancial assets and nonfinancial liabilities initially
      measured at fair value in a business combination (but not measured at fair
      value
      in subsequent periods), and long-lived assets, such as property, plant and
      equipment and intangible assets measured at fair value for an impairment
      assessment under SFAS No. 144.




The
      partial adoption of SFAS No. 157 on January 1, 2008 with respect to
      financial assets and financial liabilities recognized or disclosed at fair
      value
      in the financial statements on a recurring basis did not have a material impact
      on the Company's consolidated financial statements. See Note 12 for the
      fair value measurement disclosures for these assets and liabilities. The Company
      is in the process of analyzing the potential impact of SFAS No. 157
      relating to its planned January 1, 2009 adoption of the remainder of the
      standard.




On
      January 1, 2008 (the first day of fiscal 2008), the Company adopted SFAS
      No. 159, "The Fair Value Option for Financial Assets and Financial
      Liabilities, Including an amendment of FASB Statement No. 115" ("SFAS
      No. 159"). SFAS No. 159 permits entities to choose to measure many
      financial instruments and certain other items at fair value, which are not
      otherwise currently required to be measured at fair value. Under SFAS
      No. 159, the decision to measure items at fair value is made at specified
      election dates on an instrument-by-instrument basis and is irrevocable. Entities
      electing the fair value option are required to recognize changes in fair value
      in earnings and to expense upfront costs and fees associated with the item
      for
      which the fair value option is elected. The new standard did not impact the
      Company's Condensed Consolidated Financial Statements as the Company did not
      elect the fair value option for any instruments existing as of the adoption
      date. However, the Company will evaluate the fair value measurement election
      with respect to financial instruments the Company enters into in the future.




6




In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
      Combinations" ("SFAS No. 141(R)"). SFAS No. 141(R) changes how an
      entity accounts for the acquisition of a business. While it retains the
      requirement to account for all business combinations using the acquisition
      method, the new rule will apply to a wider range of transactions or events
      and
      requires, in general, acquisition-date fair value measurement of identifiable
      assets acquired, liabilities assumed and non-controlling ownership interests
      held in the acquire, among other items. The Company is beginning to review
      the
      provisions of SFAS No. 141(R), which applies prospectively to business
      combinations with an acquisition date on or after the beginning of its 2009
      fiscal year.




In
      December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
      Consolidated Financial Statements: an amendment of ARB No. 51" ("SFAS
      No. 160"). SFAS No. 160 replaces the term minority interests with the
      newly-defined term of non-controlling interests and establishes this line item
      as an element of stockholders' equity, separate from the parent's equity. SFAS
      No. 160 also includes expanded disclosure requirements regarding the
      interests of the parent and its non-controlling interest. The Company is
      continuing to review the provisions of SFAS No. 160, which is effective the
      first quarter of fiscal 2009, and currently does not expect this new accounting
      standard to have a significant impact on the Consolidated Financial Statements.




In
      March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
      Instruments and Hedging Activities: an amendment of FASB Statement No. 133"
      ("SFAS No. 161"). SFAS No. 161 changes the disclosure requirements for
      derivative instruments and hedging activities. The Company is reviewing the
      provisions of SFAS No. 161, which is effective the first quarter of fiscal
      2009, and currently does not anticipate that this new accounting standard will
      have a significant impact on the Consolidated Financial Statements .




4. Revenue
          Recognition





Revenue
      is recognized net of discounts, rebates, promotional adjustments, price
      adjustments, returns and other potential adjustments upon shipment and passing
      of risk to the customer and when estimates of are reasonably determinable,
      collection is reasonably assured and the Company has no further performance
      obligations.





5. Inventories





Inventories
      consist principally of finished packaged foods, packaging and raw materials
      held
      in either the Company’s manufacturing facility or distribution warehouse.
      Inventories are valued at cost determined using the first-in, first-out (FIFO)
      method.





6.  Goodwill
      and Other Intangible Assets ****





In
      June
      2001, the Financial Accounting Standards Board (“FASB”) issued Statement No. 142
“Goodwill and Other Intangible Assets”. This statement addresses financial
      accounting and reporting for acquired goodwill and other intangible assets
      and
      supersedes APB Opinion No. 17, “Intangible Assets”. It addresses how intangible
      assets that are acquired individually or with a group of other assets (but
      not
      those acquired in a business combination) should be accounted for in financial
      statements upon their acquisition. This Statement also addresses how goodwill
      and other intangible assets should be accounted for after they have been
      initially recognized in the financial statements.





In
      addition, the Company has acquired other intangible assets, which include:
      customer lists, non-compete agreements, trademarks, patents, and copyrights.
      The
      non-compete agreements are fully amortized as of December 31, 2007. The customer
      lists are being amortized over a period ranging between 5 and 7 years based
      on
      management’s best estimate of the expected benefits to be consumed or otherwise
      used up. The costs of patents and copyrights are amortized over 5 and 7 years
      based on their estimated useful life, while trademarks representing brands
      with
      an infinite life, and are carried at cost and tested annually for impairment
      as
      outlined below. Goodwill and other intangible assets are tested annually for
      impairment in the fourth quarter, and are tested for impairment more frequently
      if events and circumstances indicate that the asset might be impaired. An
      impairment loss is recognized to the extent that the carrying amount exceeds
      the
      asset’s fair value. The Company assesses the recoverability of its goodwill and
      other intangible assets by comparing the projected undiscounted net cash flows
      associated with the related asset, over their remaining lives, in comparison
      to
      their respective carrying amounts. Impairment, if any, is based on the excess
      of
      the carrying amount over the fair value of those assets.


7


**As of March 31, 2008**
              
              **As of December 31, 2007****Gross Carrying**
              
              **Accumulated**
              
              **Gross Carrying**
              
              **Accumulated****Amount**
              
              **Amortization**
              
              **Amount**
              
              **Amortization**Customer
                  lists
              
              $
              8,332,000
              
              $
              3,467,000
              
              $
              8,332,000
              
              $
              3,065,000Trademarks,
                  patents, and copyrightsfinite
                  life
              
              
              1,628,000
              
              
              505,000
              
              
              1,626,000
              
              
              446,000infinite
                  life
              
              
              909,000
              
              
              -
              
              
              909,000
              
              
              -Total
              
              $
              10,869,000
              
              $
              3,972,000
              
              $
              10,867,000
              
              $
              3,511,000**Amortization
                  expense for the three months ended March 31, 2008 and 2007 was
                  as
                  follows:**(Restated)2008
              
              2007Customer
                  lists
              
              
              
              
              
              
              
              $
              402,000
              
              $
              239,000Trademarks
                  and patents
              
              
              
              
              
              
              
              
              59,000
              
              
              58,000Total
                  Trademarks and Intangibles
              
              
              
              
              
              
              
              $
              461,000
              
              $
              297,000Amortization
                  expense is included in selling, general and administrative
                  expenses.





7.  Fixed
      Assets





Fixed
      assets are stated at cost. Depreciation is provided using the straight-line
      method over the estimated useful lives of the related assets, which are
      generally three to seven years. Leasehold improvements and equipment under
      capital leases are amortized on a straight-line basis over the lesser of the
      estimated useful life of the asset or the related lease terms. Expenditures
      for
      repairs and maintenance are charged to expense as incurred, while major renewals
      and improvements are capitalized.





8.  Note
      Receivable





Medifast
      realized a $1,503,000 note receivable as a result of the sale of Consumer Choice
      Systems on January 17, 2006 to a former board member. The note has a 10-year
      term with imputed interest of 4% collateralized by 50,000 shares of Medifast
      stock and all the assets of Consumer Choice Systems. The amount of principal
      to
      be collected over each of the next 5 years is $183,000 per year with the
      remaining amount collectible thereafter of $495,000.





9.  Income
      Per Common Share





Basic
      income per share is calculated by dividing net income by the weighted average
      number of outstanding common shares during the year. Basic income per share
      excludes any dilutive effects of options, warrants and other stock-based
      compensation.


8





10.  Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting periods. Actual results could differ from those
      estimates.





11.  Deferred
      Compensation Plans





We
      maintain a non-qualified deferred compensation plan for Senior Executive
      management. Currently, Bradley MacDonald is the only participant in the plan.
      Under the deferred compensation plan that became effective in 2003, executive
      officers of the Company may defer a portion of their salary and bonus
      (performance-based compensation) annually. A participant may elect to receive
      distributions of the accrued deferred compensation in a lump sum or in
      installments upon retirement





Each
      participating officer may request that the deferred amounts be allocated among
      several available investment options established and offered by the Company.
      These investment options provide market rates of return and are not subsidized
      by the Company. The benefit payable under the plan at any time to a participant
      following termination of employment is equal to the applicable deferred amounts,
      plus or minus any earnings or losses attributable to the investment of such
      deferred amounts. The Company has established a trust for the benefit of
      participants in the deferred compensation plan. Pursuant to the terms of the
      trust, as soon as possible after any deferred amounts have been withheld from
      a
      plan participant, the Company will contribute such deferred amounts to the
      trust
      to be held for the benefit of the participant in accordance with the terms
      of
      the plan and the trust.





Retirement
      payouts under the plan upon an executive officer’s retirement from the Company
      are payable either in a lump-sum payment or in annual installments over a period
      of up to ten years. Upon death, disability or termination of employment, all
      amounts shall be paid in a lump-sum payment as soon as administratively
      feasible.





12.  Fair
      Value Measurements




On
      January 1, 2008, the Company adopted SFAS No. 157 “Fair Value
      Measurements” (“SFAS 157”). SFAS 157 defines fair value, provides a consistent
      framework for measuring fair value under Generally Accepted Accounting
      Principles and expands fair value financial statement disclosure requirements.
      SFAS 157’s valuation techniques are based on observable and unobservable inputs.
      Observable inputs reflect readily obtainable data from independent sources,
      while unobservable inputs reflect our market assumptions. SFAS 157 classifies
      these inputs into the following hierarchy:




Level
      1
      Inputs– Quoted prices for identical instruments in active markets.




Level
      2
      Inputs– Quoted prices for similar instruments in active markets; quoted prices
      for identical or similar instruments in markets that are not active; and
      model-derived valuations whose inputs are observable or whose significant value
      drivers are observable.




Level
      3
      Inputs– Instruments with primarily unobservable value drivers.




The
      following table represents the fair value hierarchy for those financial assets
      and liabilities measured at fair value on a recurring basis as of March 31,
      2008.




Fair
      Value Measurements on a Recurring Basis as of March 31, 2008




Assets
            
            Level
                I
            
            Level II
            
            Level III
            
            TotalInvestment
                securities
            
            $
            1,405,000
            
            
            -
            
            
            -
            
            $
            1,405,000Cash
                equivalents
            
            
            1,407,000
            
            
            -
            
            
            -
            
            
            1,407,000Total
                Assets
            
            $
            2,812,000
            
            $
            -
            
            $
            -
            
            $
            2,812,000Liabilities
            
            
            -
            
            
            -
            
            
            -
            
            
            -Total
                Liabilities
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -


9


13. Share
          Based Payments





Stock-Based
      Compensation





Effective
      December 31, 2005, the Company adopted the provisions of Financial Accounting
      Standards Board Statement of Financial Accounting Standard (“SFAS”) No. 123(R),
“Share-Based Payments,” which establishes the accounting for employee
      stock-based awards. Under the provisions of SFAS No.123(R), stock-based
      compensation is measured at the grant date, based on the calculated fair value
      of the award, and is recognized as an expense over the requisite employee
      service period (generally the vesting period of the grant). The Company adopted
      SFAS No. 123(R) using the modified prospective method and, as a result, periods
      prior to December 31, 2005 have not been restated. The Company recognized
      stock-based compensation for awards issued under the Company’s stock option
      plans in other income/expenses included in the Condensed Consolidated Statement
      of Operations. Additionally, no modifications were made to outstanding stock
      options prior to the adoption of SFAS No. 123(R), and no cumulative adjustments
      were recorded in the Company’s financial statements.





Unearned
      compensation represents shares issued to executives that will be vested over
      a
      5-6 year period. These shares will be amortized over the vesting period in
      accordance with FASB 123(R). The expense related to the vesting of unearned
      compensation was $148,000 and $164,000 at March 31, 2008 and March 31, 2007,
      respectively. Expense related to vesting of options under FASB 123R was $0
      and
      $20,000 at March 31, 2008 and March 31, 2007, respectively.





The
      following summarizes the stock option activity for the Three Months ended March
      31, 2008:





Shares
            
            Weighted
              Average
              Exercise Price
            
            Weighted
              Average
              Contractual
              Term (Years)Outstanding, December 31, 2007
            
            
            291,300
            
            
            4.19Options
                grantedOptions
                reinstatedOptions
                exercised
            
            
            (25,000
            )
            
            0.50Options
                forfeited or expired
            
            
            (100,000
            )
            
            6.25Outstanding
                March 31, 2008
            
            
            166,300
            
            
            3.50
            
            
            1.90Options
                exercisable, March 31, 2008
            
            
            166,300
            
            
            3.50
            
            
            1.90Options
                available for grant at March 31, 2008
            
            
            1,056,200





14. Restatements





The
      March
      31, 2007 financial statements have been restated to increase amortization
      expense on customer lists by $84,000. Pre-tax income decreased by $84,000 for
      the quarter-ended March 31, 2007 from $1,987,000 to $1,903,000. Net income
      for
      the quarter-ended March 31, 2007 decreased by $49,000 from $1,422,000 to
      $1,373,000 and retained earnings decreased from $7,403,000 to
      $7,354,000.





15.  Reclassifications





Certain
      amounts for the quarter ended March 31, 2007 have been reclassified to conform
      to the presentation of the March 31, 2008 amounts. The reclassifications have
      no
      effect on net income for the quarters ended March 31, 2008 and
      2007.


10





16.  Business
      Segments





Operating
      segments are components of an enterprise about which separate financial
      information is available that is regularly reviewed by the chief operating
      decision maker about how to allocate resources and in assessing performance.
      The
      Company has two reportable operating segments: Medifast and All Other. The
      Medifast reporting segment consists of the following distribution channels:
      Medifast Direct, Take Shape for Life, and Doctors. The All Other reporting
      segments consist of Hi-Energy and Medifast Weight Control Centers and the
      Company’s parent company operations.





The
      accounting policies of the segments are the same as those of the Company. The
      presentation and allocation of assets, liabilities and results of operations
      may
      not reflect the actual economic costs of the segments as stand-alone businesses.
      If a different basis of allocation were utilized, the relative contributions
      of
      the segments might differ, but management believes that the relative trends
      in
      segments would likely not be impacted.




The
      following table’s present segment information for the three months ended March
      31, 2008 and 2007:




**Three
                  Month Ended March 31, 2008****Medifast**
              
              **All
                  Other**
              
              **Eliminations**
              
              **Consolidated**Revenues,
                  net
              
              
              23,480,000
              
              
              1,689,000
              
              
              
              
              
              25,169,000Cost
                  of Sales
              
              
              5,727,000
              
              
              373,000
              
              
              
              
              
              6,100,000Other
                  Selling, General and Adminstrative Expenses
              
              
              14,415,000
              
              
              1,607,000
              
              
              
              
              
              16,022,000Depreciation
                  and Amortization
              
              
              842,000
              
              
              237,000
              
              
              
              
              
              1,079,000Interest
                  (net)
              
              
              (10,000
              )
              
              (55,000
              )
              
              
              
              
              (65,000
              )Provision
                  for income taxes
              
              
              668,000
              
              
              
              
              
              
              
              
              668,000Net
                  income (loss)
              
              
              1,838,000
              
              
              ($473,000
              )
              
              
              
              
              1,365,000Segment
                  Assets
              
              
              27,083,000
              
              
              18,973,000
              
              
              
              
              
              46,056,000
  **Three
                  Month Ended March 31, 2007 (Restated)****Medifast**
              
              **All
                  Other**
              
              **Eliminations**
              
              **Consolidated**Revenues,
                  net
              
              
              19,037,000
              
              
              1,052,000
              
              
              
              
              
              20,089,000Cost
                  of Sales
              
              
              4,827,000
              
              
              231,000
              
              
              
              
              
              5,058,000Other
                  Selling, General and Adminstrative Expenses
              
              
              11,082,000
              
              
              1,198,000
              
              
              
              
              
              12,280,000Depreciation
                  and Amortization
              
              
              657,000
              
              
              129,000
              
              
              
              
              
              786,000Interest
                  (net)
              
              
              (8,000
              )
              
              70,000
              
              
              
              
              
              62,000Provision
                  for income taxes
              
              
              530,000
              
              
              
              
              
              
              
              
              530,000Net
                  income (loss)
              
              
              1,949,000
              
              
              ($576,000
              )
              
              
              
              
              1,373,000Segment
                  Assets
              
              
              23,831,000
              
              
              15,581,000
              
              
              
              
              
              39,412,000


11





**Management
      Discussion and Analysis of**


**Financial
      Condition and Results of Operations**





*Except
      for the historical information contained herein, this Report on Form 10-Q
      contains certain forward-looking statements that involve substantial risks
      and
      uncertainties. When used in this Report, the words “anticipate,” “believe,”
“estimate,” “expect” and similar expressions, as they relate to Medifast, Inc.
      or its management, are intended to identify such forward-looking statements.
      The
      Company’s actual results, performance or achievements could differ materially
      from the results expressed in, or implied by, these forward-looking statements.
      Accordingly, there is no assurance that the results in the forward-looking
      statements will be achieved.*





**Critical
      Accounting Policies and Estimates**





Our
      consolidated financial statements are prepared in accordance with U.S. generally
      accepted accounting principles. Our significant accounting policies are
      described in Note 2 of the consolidated financial statements.





The
      preparation of these financial statements requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities,
      the
      disclosure of contingent assets and liabilities at the date of the financial
      statements, and the reported amounts of revenue and expenses during the
      reporting period. Management develops, and changes periodically, these estimates
      and assumptions based on historical experience and on various other factors
      that
      are believed to be reasonable under the circumstances. Actual results may differ
      from these estimates under different assumptions or conditions. Management
      considers the following accounting estimates to be the most critical in
      preparing our consolidated financial statements. These critical accounting
      estimates have been discussed with our audit committee.





Revenue
      Recognition. Revenue is recognized net of discounts, rebates, promotional
      adjustments, price adjustments, returns and other potential adjustments upon
      shipment and passing of risk to the customer and when estimates of are
      reasonably determinable, collection is reasonably assured and the Company has
      no
      further performance obligations.




*Impairment
      of Fixed Assets and Intangible Assets.* We
      continually assess the impairment of long-lived assets whenever events or
      changes in circumstances indicate that the carrying value of the assets may
      not
      be recoverable. Judgments regarding the existence of impairment indicators
      are
      based on legal factors, market conditions and our operating performance. Future
      events could cause us to conclude that impairment indicators exist and the
      carrying values of fixed and intangible assets may be impaired. Any resulting
      impairment loss would be limited to the value of net fixed and intangible
      assets.




*Income
      Taxes* .
      In the
      preparation of consolidated financial statements, the Company estimates income
      taxes based on diverse legislative and regulatory structures that exist in
      jurisdictions where the company conducts business. Deferred income tax assets
      and liabilities represent tax benefits or obligations that arise from temporary
      differences due to differing treatment of certain items for accounting and
      income tax purposes. The Company evaluates deferred tax assets each period
      to
      ensure that estimated future taxable income will be sufficient in character
      amount and timing to result in their recovery. A valuation allowance is
      established when management determines that it is more likely than not that
      a
      deferred tax asset will not be realized to reduce the assets to their realizable
      value. Considerable judgments are required in establishing deferred tax
      valuation allowances and in assessing probable exposures related to tax matters.
      The Company’s tax returns are subject to audit and local taxing authorities that
      could challenge the company’s tax positions. The Company believes it records
      and/or discloses such potential tax liabilities as appropriate and has
      reasonably estimated its income tax liabilities and recoverable tax
      assets.




*Allowance
      for doubtful accounts* .
      In
      determining the adequacy of the allowance for doubtful accounts, we consider
      a
      number of factors including the aging of the receivable portfolio, customer
      payment trends, and financial condition of the customer, industry conditions
      and
      overall credibility of the customer. Actual amounts could differ significantly
      from our estimates.




12





**General**




**Three
      Months Ended March 31, 2008 and March 31, 2007**





Revenue:
      Revenue increased to $25.2 million for the first three months of 2008 compared
      to $20.1 million for the first three months of 2007, an increase of $5.1 million
      or 25%. The direct marketing sales channel accounted for 51% of total revenue,
      Take Shape for Life 39%, doctors 3%, and brick and mortar clinics 7%. As
      compared to the first three months of 2007, the direct marketing sales channel,
      which is fueled primarily by consumer advertising, increased revenues by
      approximately 6% year-over year. Take Shape for Life sales, which are fueled
      by
      person-to-person recruiting and support increased by 63% compared to the first
      quarter of 2007. The Company’s doctor’s sales decreased by 25% and The Medifast
      Weight Control Centers increased sales by 75% as compared to the first quarter
      of 2007.





The
      Take
      Shape for Life division grew 63% year-over-year. This growth can largely be
      attributed to the tools and training that led to an increase in the ability
      of
      the division to both promote growth in recruiting of health coaches, as well
      as
      better supporting this growth as it occurs. This continued investment proved
      to
      be a large part of the current growth trends in Take Shape for Life sales,
      as
      well as the number of active health coaches. The number of active health coaches
      grew to 2,200 at the end of the first quarter of 2008 as compared to 1,350
      for
      the same time period in 2007, an increase of 63%. The Company believes that
      the
      growth in health coach activity is a positive trend that should continue, and
      will lead to significant revenue growth in the near future.





The
      Medifast Weight Control Centers, which represent approximately 7% of the
      Company’s overall revenues, are currently operating in 14 locations in Dallas,
      Houston, and Orlando. In the first three months of 2008, the Company experienced
      revenue growth of 62% versus the same time period last year. The average monthly
      revenue per clinic also witnessed significant growth of 35%, averaging $39,000
      per clinic in the first quarter of 2008 as compared to $29,000 in the first
      quarter of 2007. In the expanding Dallas, TX market, the average monthly revenue
      per clinic is approximately $50,000. In the estimated $40 billion weight loss
      and health living industry, the brick and mortar clinic model has always made
      up
      a significant portion of overall sales. The recent growth in the Medifast Weight
      Control Centers has proven that the model is in high demand from a select
      portion of the weight loss consumers. Throughout 2007, the Company invested
      in
      the infrastructure of its clinic model. The major aspects of the investment
      in
      this division included an expanded executive team, the creation of a point
      of
      sale system, a robust customer data tracking system, and finalizing the
      franchise opportunity documentation. During the first quarter of 2008, the
      Company opened four additional corporately owned clinics in the Houston, TX
      market. The Company plans on opening four additional corporately owned clinics
      in the Houston market by the end of the second quarter of 2008 as well as two
      additional clinics in the already established Dallas, TX market.





On
      February 18, 2008, the Company announced that it has sold its first franchise
      of
      Medifast Weight Control Centers. The Company sold the rights to open four
      clinics in the Greater Baltimore Metropolitan Area. The franchisee also has
      the
      rights to open four additional Medifast Weight Control Centers in the Baltimore
      area over the next two years, bringing the total to eight locations.





Overall,
      selling, general and administrative expenses increased by $3.9 million as
      compared to the first three months of 2007. Advertising expense for the first
      three months of 2008 was approximately $5.2 million compared to approximately
      $4.3 million for the same period last year, an increase of $900,000. Salaries
      and benefits increased by approximately $300,000 in the first 3 months of 2008.
      The increase includes the hiring of additional expertise in critical areas
      such
      as Take Shape for Life and the Medifast Weight Control Centers in the second
      half of 2007 which have greatly impacted the revenue growth in the first quarter
      of 2008. Additional personnel were hired in the call center during the first
      quarter of 2008 as the Company brought the outsourced Take Shape for Life call
      center in-house early in the second quarter of 2008. Going forward, savings
      will
      be realized on call center expense however in the first quarter in-house call
      center reps had to be hired and trained in preparation for the transition.
      The
      opening of four new corporately owned clinics in the Houston, TX market also
      required the hiring of additional center managers and support staff. Take Shape
      for Life commission expense, which is completely variable based upon revenue,
      increased by approximately $1,900,000 as the Company showed sales growth of
      63%
      as compared to the first three months of 2007. Communication expense, which
      includes the Take Shape for Life outsourced call center increased by $50,000
      based on additional sales order volume. The reduction in outsourced call center
      expenses will continue in stages throughout 2008 as the call center is brought
      in-house. Other expenses increased by $550,000 which included items such as
      depreciation, amortization, credit card processing fees, charitable
      contributions, and property taxes. Operating expenses increased by $200,000
      which primarily resulted from additional printing expense for our direct to
      consumer postcard mailings as well as maintenance, repairs, and supplies for
      our
      manufacturing and distribution facilities.





Costs
      and
      Expenses: Cost of revenue increased $1 million to $6.1 million in the first
      three months of 2008 from $5.1 million for the first three months of 2007.
      As a
      percentage of sales, gross margin increased to 75.8% from 74.8% for the first
      3
      months of 2008. The margin improved due to efficiencies gained from new
      machinery purchases in prior year as well as new shipping rules that resulted
      in
      additional shipping revenue from customers netting against shipping
      expense.





Income
      taxes **:** **** **** For
      the
      first three months of 2008 the Company recorded $668,000 in income tax expense,
      which represents an annual effective rate of 32.9%. For the first three months
      of 2007, we recorded income tax expense of $530,000 which reflected an estimated
      annual effective tax rate of 27.9%. The Company anticipates a tax rate of
      approximately 32-34% in 2008.


13





Net
      income: Net income was $1.4 million for the first three months of 2008 as
      compared to $1.4 million for the first three months of 2007. Net income remained
      the same despite sales growth of 25% in the first quarter of 2008 due to the
      increases in selling, general and administrative expenses described above.





**SEGMENT
      RESULTS OF OPERATIONS**





**Net
                Sales by Segment as of March 31,****2008**
            
            **2007****Segments**
            
            Sales
            
            %
                of Total
            
            Sales
            
            %
                of TotalMedifast
            
            
            23,480,000
            
            
            93
            %
            
            19,037,000
            
            
            95
            %All
                Other
            
            
            1,689,000
            
            
            7
            %
            
            1,052,000
            
            
            5
            %Total
                Sales
            
            
            25,169,000
            
            
            100
            %
            
            20,089,000
            
            
            100
            %





**Three
      Months Ended March 31, 2008 and March 31, 2007**





Medifast
      Segment: The Medifast reporting segment consists of the sales of Medifast
      Direct, Take Shape for Life, and Doctors. As this represents the majority of
      our
      business this is referenced to the “Condensed Consolidated Results of
      Operations” management discussion for the three months ended March 31, 2008 and
      2007 above.





All
      Other
      Segment: The All Other reporting segment consists of the sales of Hi-Energy
      and
      Medifast Weight Control Centers. Sales increased by $637,000 year-over year
      as a
      result of an increase in Hi-Energy and Medifast Weight Control Centers sales
      to
      $1,689,000. The increase in the Hi-Energy and Medifast Weight Control Centers
      sales was due to opening new centers in the Houston market in the first quarter,
      spending increases for advertising, increased advertising effectiveness,
      improved closing rates on walk-in sales, as well as the hiring of more
      experienced clinic operators to manage the clinics. During the first quarter
      of
      2008, four additional corporate clinics were opened in the Houston, TX market.
      The Company had 14 clinics operating at the end of the first quarter of 2008
      compared to 11 clinics in operation at the end of the first quarter of
      2007.





**Net
                Profit by Segment as of March 31,****2008**
            
            **2007****Segments**
            
            Profit
            
            %
                of Total
            
            Profit
            
            %
                of TotalMedifast
            
            
            1,838,000
            
            
            135
            %
            
            1,949,000
            
            
            142
            %All
                Other
            
            
            (473,000
            )
            
            -35
            %
            
            (576,000
            )
            
            -42
            %Total
                Net Profit
            
            
            1,365,000
            
            
            100
            %
            
            1,373,000
            
            
            100
            %





**Three
      Months Ended March 31, 2008 and March 31, 2007**





Medifast
      Segment: The Medifast reporting segment consists of the profits of Medifast
      Direct, Take Shape for Life, and Doctors. As this represents the majority of
      our
      business this is referenced to the “Condensed Consolidated Results of
      Operations” management discussion for the three months ended March 31, 2008 and
      2007 above. See footnote 16, “Business Segments” for a detailed breakout of
      expenses





All
      Other
      Segment: The All Other reporting segment consists of the profit or loss of
      Hi-Energy and Medifast Weight Control Centers, and corporate expenses related
      to
      the parent company operations. Year-over-year, the loss in the All Other segment
      improved by $103,000. The Hi-Energy and Medifast Weight Control Centers showed
      an increase in net profitability year-over-year of $30,000. The increase for
      the
      Medifast Weight control centers was due to management fine tuning clinic
      operations in order to improve profitability. This was offset by the opening
      of
      four new clinics in the Houston, TX market during the quarter which led to
      additional salaries, rent, and advertising expense during the start-up phase
      with minimal sales volume. Corporate expenses increased by $133,000
      year-over-year. Corporate expenses include items such as auditors’ fees,
      attorney’s fees, Board of Director expenses, investor relations, corporate
      consulting, corporate outings, as well as depreciation and property taxes on
      corporately owned buildings. See footnote 16, “Business Segments” for a detailed
      breakout of expenses.


14





**Seasonality**





The
      Company's weight management products and programs have historically been subject
      to seasonality. Traditionally the holiday season in November/December of each
      year is considered poor for diet control products and services. January and
      February generally show increases in sales, as these months are considered
      the
      commencement of the “diet season.” In 2008, seasonality has not been a
      significant factor. This is largely due to the increase in the consumer’s
      awareness of the overall health and nutritional benefits accompanied with the
      use of the Company’s product line. As consumers continue to increase their
      association of nutritional weight loss programs with overall health, seasonality
      will continue to decrease.





**Inflation**





Inflation
      generally affects us by increasing the costs of labor, overhead and equipment.
      The impact of inflation on our financial position and results of operations
      was
      minimal during the first quarter of both 2008 and 2007. However, we continue
      to
      be negatively impacted by increasing raw material costs.





**Item
      5. Other Information**


Litigation **:**





Leonard
      Z. Sotomeyer on December 30, 2003 filed an action in the Supreme Court of the
      State of New York, County of New York, against his former business partner,
      David Scheffler, and T-1 Holdings, LLC, and included Medifast, Inc., formerly
      Heathrite, Inc., as a Defendant, Case 604076-03, seeking monetary damages for
      failure of his former business partner to compensate him under several
      consulting agreements with Medifast, Inc. made with H-T Capital, Inc. and
      derivatively on behalf of T-1 Holdings, LLC. The Court dismissed on Defendants’
motions Sotomeyer’s complaint in its entirety by Order of September 30, 2004.
      Following an appeal, the Appellate Division, First Department, reinstated the
      first and second causes of action while affirming the dismissal of Plaintiff’s
      remaining derivative claims by its decision April 13, 2006. The matter is now,
      again, before the New York Supreme Court for the specific purpose of litigating
      plaintiff’s first and second causes of action only. Medifast has denied any
      wrongdoing and discovery is ongoing. Medifast believes it continues to have
      a
      meritorious defense to the two remaining counts and that any decision rendered
      would not materially impact the ongoing operations of Medifast,
      Inc.




Earnings
      per Share: The
      Company follows the provisions of Statement of Financial Accounting Standards
      No. 128, “Earnings per Share.” The calculation of basic and diluted earnings per
      share (“EPS”) is reflected on the accompanying Consolidated Statement of
      Operations.





Code
      of Ethics :
      In
      August of 2006, the Company updated its Code of Ethics by which directors,
      officers and employees commit and undertake to personal and corporate growth,
      dedicate themselves to excellence, integrity and responsiveness to the
      marketplace, and work together to enhance the value of the Company for the
      shareholders, vendors, and customers.





Trading
      Policy: In March
      2003, the Company implemented a Trading Policy whereby if a director, officer
      or
      employee has material non-public information relating to the Company, neither
      that person nor any related person may buy or sell securities of the Company
      or
      engage in any other action to take advantage of, or pass on to others, that
      information. Additionally, on October 16, 2006 the Board of Directors approved
      an updated trading policy in which insiders may purchase or sell MED securities
      if such purchase or sale is made 7 days after or 14 days before an earnings
      announcement to include the 10-K
      or
      10-Q in
      order
      to insure that investors have available the same information necessary to make
      investment decisions as insiders.





Evaluation
      of Disclosure Controls and Procedures:




The
      Securities and Exchange Commission defines the term “disclosure controls and
      procedures” to mean a company’s controls and other procedures that are designed
      to ensure that information required to be disclosed in the reports that it
      files
      or submits under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission’s rules and forms. Based on the evaluation of the
      effectiveness of our disclosure controls and procedures by our management,
      with
      the participation of our Chief Executive Officer and our Chief Financial
      Officer, as of the end of the period covered by this report, our Chief Executive
      Officer and our Chief Financial Officer have concluded that our disclosure
      controls and procedures at the end of the period covered by this report were
      effective to ensure that information required to be disclosed in the reports
      that we file or submit under the Securities Exchange Act of 1934 is
      (i) recorded, processed, summarized and reported, within the time periods
      specified in the Commission’s rules and forms, and (ii) accumulated and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate to allow timely decisions regarding
      disclosure.


15





Changes
      in Internal Control over Financial Reporting:




No
      change
      in our internal control over financial reporting (as defined in Rules 13a-15(f)
      and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended
      March 31, 2008 that has materially affected, or is reasonably likely to
      materially affect, our internal control over financial reporting.




Forward
      Looking Statements: Some of
      the information presented in this quarterly report constitutes forward-looking
      statements within the meaning of the private Securities Litigation Reform Act
      of
      1995. Statements that are not historical facts, including statements about
      management’s expectations for fiscal year 2003 and beyond, are forward-looking
      statements and involve various risks and uncertainties. Although the Company
      believes that its expectations are based on reasonable assumptions within the
      bounds of its knowledge, there can be no assurance that actual results will
      not
      differ materially from the Company’s expectations. The Company cautions
      investors not to place undue reliance on forward-looking statements which speak
      only to management’s experience on this data.




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report to be signed on its behalf by the undersigned, thereunto
      duly authorized.





**Medifast,
      Inc.**




BY:
            /S/
                MICHAEL S. MCDEVITT
            May
                12, 2008Michael
                S. McDevittChief
                Executive Officer and Chief Financial Officer(principal
                executive officer and principal financial officer)




16





Index
      to
      Exhibits




Exhibit
                Number
            Description
              of Exhibit31.1
            
            Certification
                of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            
            Certification
                of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002




17