AMERICAN MEDICAL ALERT CORP - FORM 10-Q

Attached files

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EX-10.3 - EXHIBIT 10.3 - AMERICAN MEDICAL ALERT CORP	v230635_ex10-3.htm
EX-32.1 - EXHIBIT 32.1 - AMERICAN MEDICAL ALERT CORP	v230635_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - AMERICAN MEDICAL ALERT CORP	v230635_ex31-2.htm
EX-15.1 - EXHIBIT 15.1 - AMERICAN MEDICAL ALERT CORP	v230635_ex15-1.htm
EX-32.2 - EXHIBIT 32.2 - AMERICAN MEDICAL ALERT CORP	v230635_ex32-2.htm
EX-10.1 - EXHIBIT 10.1 - AMERICAN MEDICAL ALERT CORP	v230635_ex10-1.htm
EX-10.2 - EXHIBIT 10.2 - AMERICAN MEDICAL ALERT CORP	v230635_ex10-2.htm
EXCEL - IDEA: XBRL DOCUMENT - AMERICAN MEDICAL ALERT CORP	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - AMERICAN MEDICAL ALERT CORP	v230635_ex31-1.htm

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 June 30, 2011.

¨	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 001-08635

AMERICAN MEDICAL ALERT CORP.

(Exact Name of Registrant as Specified in its Charter)

New York		11-2571221
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

36-36 33rd Street, Long Island City, New York 11106

(Address of principal executive offices)

(Zip Code)

(212) 879-5700

(Registrant’s telephone number, including area code)

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

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

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

	Large accelerated filer ¨	Accelerated filer ¨
	Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 on the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 9,615,280 shares of $.01 par value common stock as of August 10, 2011.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

INDEX

		PAGE

Part I Financial Information

	Report of Independent Registered Public Accounting Firm	1

	Condensed Consolidated Balance Sheets for June 30, 2011 and December 31, 2010	2

	Condensed Consolidated Statements of Income for the Six Months Ended June 30, 2011 and 2010	3

	Condensed Consolidated Statements of Income for the Three Months Ended June 30, 2011 and 2010	4

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010	5

	Notes to Condensed Consolidated Financial Statements	7

	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	Quantitative and Qualitative Disclosures About Market Risk	36

	Controls and Procedures	37

Part II Other Information		37

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

American Medical Alert Corp. and Subsidiaries

Long Island City, New York

We have reviewed the accompanying condensed consolidated balance sheet of American Medical Alert Corp. and Subsidiaries (the “Company”) as of June 30, 2011 and the related condensed consolidated statements of income for the six-month and three-month periods ended June 30, 2011 and 2010 and cash flows for the six-months ended June 30, 2011 and 2010. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of American Medical Alert Corp. and Subsidiaries as of December 31, 2010, and the related consolidated statements of income, shareholders’ equity and cash flows for the year then ended (not presented herein), and in our report dated March 31, 2011 we expressed an unqualified opinion on those consolidated financial statements based on our audit and the report of other auditors with respect to the Company’s investment in Lifecomm, LLC. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2010 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Margolin, Winer & Evens LLP

Margolin, Winer & Evens LLP

Garden City, New York

August 15, 2011

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2011 (Unaudited)			Dec. 31, 2010
ASSETS
CURRENT ASSETS
Cash	$	7,193,332		$	4,090,528
Accounts receivable
(net of allowance for doubtful accounts of $453,800 and $452,000)		6,986,432			7,497,367
Inventory, net of non-current portion		928,943			1,005,488
Prepaid income taxes		467,905			610,479
Prepaid expenses and other current assets		339,173			364,747
Deferred income tax asset		187,000			219,000

Total Current Assets		16,102,785			13,787,609

FIXED ASSETS
(Net of accumulated depreciation and amortization)		6,623,057			7,195,019

OTHER ASSETS
Intangible assets
(net of accumulated amortization of $7,124,593 and $6,864,657)		1,090,999			1,350,936
Goodwill		10,842,352			10,842,352
Investment in limited liability company		1,898,298			2,970,210
Other assets (including inventory of $481,135 and $407,615)		1,380,647			1,371,359
		15,212,296			16,534,857
TOTAL ASSETS	$	37,938,138		$	37,517,485

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt	$	500,000		$	660,000
Accounts payable		710,985			732,849
Accrued expense – acquisitions		98,625			105,807
Accrued expenses		1,901,732			2,013,152
Deferred revenue		259,153			231,825
Total Current Liabilities		3,470,495			3,743,633

DEFERRED INCOME TAX LIABILITY		1,196,000			1,228,000
LONG-TERM DEBT, Net of Current Portion		1,950,000			2,150,000
CUSTOMER DEPOSITS		90,899			101,499
ACCRUED RENTAL OBLIGATION		565,814			566,235
ACCRUED EXPENSE - ACQUISITION		24,100			72,300
TOTAL LIABILITIES		7,297,308			7,861,667

COMMITMENTS AND CONTINGENT LIABILITIES		0			0

SHAREHOLDERS’ EQUITY
Preferred stock, $.01 par value – authorized, 1,000,000 shares; none issued and outstanding
Common stock, $.01 par value – authorized 20,000,000 shares; issued 9,631,603 shares in 2011 and 9,618,083 shares in 2010		96,316			96,181
Additional paid-in capital		16,721,947			16,606,018
Retained earnings		13,959,144			13,090,196
		30,777,407			29,792,395
Less treasury stock, at cost (48,573 shares in 2011 and 2010)		(136,577	)		(136,577	)
Total Shareholders’ Equity		30,640,830			29,655,818
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	37,938,138		$	37,517,485

See accompanying notes to condensed financial statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Six Months Ended June 30,
	2011			2010
Revenues:
Services	$	20,574,977		$	19,264,763
Product sales		376,323			358,629
		20,951,300			19,623,392
Costs and Expenses (Income):
Costs related to services		9,589,617			8,878,500
Costs of products sold		182,744			167,830
Selling, general and administrative expenses		8,430,381			7,765,084
Interest expense		28,008			26,267
Equity in net loss from investment in limited liability company		1,071,912			116,127
Other income		(23,310	)		(59,691	)

Income before Provision for Income Taxes		1,671,948			2,729,275

Provision for Income Taxes		803,000			1,119,000

NET INCOME	$	868,948		$	1,610,275

Net income per share:
Basic	$	.09		$	.17
Diluted	$	.09		$	.16

Weighted average number of common shares outstanding:
Basic		9,576,622			9,537,894

Diluted		9,824,536			9,835,180

See accompanying notes to condensed financial statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30,
	2011			2010
Revenues:
Services	$	10,177,103		$	9,556,032
Product sales		142,464			156,113
		10,319,567			9,712,145
Costs and Expenses (Income):
Costs related to services		4,844,008			4,447,545
Costs of products sold		66,809			75,346
Selling, general and administrative expenses		4,401,965			3,857,251
Interest expense		13,348			13,836
Equity in net loss from investment in limited liability company		512,030			116,127
Other income		(10,962	)		(29,863	)

Income before Provision for Income Taxes		492,369			1,231,903

Provision for Income Taxes		333,000			509,000

NET INCOME	$	159,369		$	722,903

Net income per share:
Basic	$	.02		$	.08
Diluted	$	.02		$	.07

Weighted average number of common shares outstanding
Basic		9,580,005			9,549,355

Diluted		9,816,209			9,828,473

See accompanying notes to condensed financial statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2011			2010
Cash Flows From Operating Activities:

Net income	$	868,948		$	1,610,275

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,540,028			1,842,231
Stock compensation charge		116,064			160,419
Equity in net loss from investment in limited liability company		1,071,912			116,127
Decrease (increase) in:
Accounts receivable		510,935			173,530
Inventory		3,025			(226,445	)
Prepaid income taxes		142,574			(127,069	)
Prepaid expenses and other current assets		25,574			(206,876	)
Increase (decrease) in:
Accounts payable, accrued expenses and other		(144,304	)		122,566
Deferred revenue		27,328			(30,838	)

Net Cash Provided by Operating Activities		4,162,084			3,433,920

Cash Flows From Investing Activities:
Expenditures for fixed assets		(695,389	)		(400,624	)
Deposit on equipment		0			(21,875	)
Payment of Investment in limited liability company		0			(4,130,731	)
Decrease in other assets		51,491			5,065

Net Cash Used In Investing Activities		(643,898	)		(4,548,165	)

Cash Flows From Financing Activities:
Proceeds from long-term debt		0			2,000,000
Repayment of long-term debt		(360,000	)		(1,326,667	)
Payment of accrued expense - acquisitions		(55,382	)		(73,346	)
Proceeds upon exercise of stock options		0			43,985
Payment of loan financing costs		0			(4,370	)
Dividends paid		0			(950,364	)

Net Cash Used In Financing Activities		(415,382	)		(310,762	)

See accompanying notes to condensed financial statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Six Months Ended June 30,
	2011		2010

Net Increase (Decrease) in Cash	$	3,102,804	$	(1,425,007	)

Cash, Beginning of Period		4,090,528		5,498,448

Cash, End of Period	$	7,193,332	$	4,073,441

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

CASH PAID DURING THE PERIOD FOR INTEREST	$	30,495	$	26,014

CASH PAID DURING THE PERIOD FOR INCOME TAXES	$	675,204	$	1,274,617

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Accrued expense – acquisitions / additional goodwill
- American Mediconnect Inc.	$	0	$	38,298

Other assets, deposits on product transferred to inventory	$	0	$	89,685

See accompanying notes to condensed financial statements.

AMERICAN MEDICAL ALERT CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

General:

These financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2010 included in the Annual Report on Form 10-K for the year ended December 31, 2010 of American Medical Alert Corp.

2.	Results of Operations:

The accompanying condensed consolidated financial statements include the accounts of American Medical Alert Corp. and its wholly-owned subsidiaries; together the “Company.” All material inter-company balances and transactions have been eliminated.

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 2011 and the results of operations for the six and three months ended June 30, 2011 and 2010 and cash flows for the six months ended June 30, 2011 and 2010.

The accounting policies used in preparing these financial statements are the same as those described in the December 31, 2010 financial statements.

The results of operations for the six and three months ended June 30, 2011 are not necessarily indicative of the results to be expected for any other interim period or for the full year.

3.	Recent Accounting Pronouncements:

In December 2010, the FASB issued Update 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations”. The amendments in Update 2010-29 specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Update 2010-29 also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributed to the business combination included in the pro forma financial data. The Company is required to adopt all the provisions of Update 2010-29 for any business combinations for which the acquisition date is on or after January 1, 2011. The impact of the provisions of this guidance on the Company’s consolidated financial statements depends upon the nature, terms and size of the acquisitions it will consummate in the future.

In December 2010, the FASB issued Update 2010-28, “Intangibles - Goodwill and Other (Topic 350)”. Update 2010-28 modifies the first step of the goodwill impairment test to include reporting units with zero or negative carrying amounts. For these reporting units, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any; when it is more likely than not that a goodwill impairment exists. Update 2010-28 is effective for fiscal years and interim periods beginning after December 15, 2010. The adoption of this guidance did not have a material impact on the consolidated financial statements of the Company.

4.	Accounting for Stock-Based Compensation:

Stock based compensation is recorded in accordance with ASC Topic 718, Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payments to employees, including grants of stock and employee stock options, based on estimated fair values.

The Company granted options to purchase 10,000 shares of common stock during the six months ended June 30, 2011. No options were granted during the six months ended June 30, 2010.

The following tables summarize stock option activity for the six months ended June 30, 2011 and 2010.

2011

						Weighted
						Average
				Weighted		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic
	Options			Option Price		Term (years)		Value
Balance at January 1		718,343		$	3.85
Granted		10,000			5.85
Exercised		-			-
Expired/Forfeited		(25,650	)		6.86

Balance at June 30		702,693		$	3.77		1.49	$	1,339,659

Vested and exercisable		678,419		$	3.69		1.42	$	1,339,659

2010

						Weighted
						Average
				Weighted		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic
	Options			Option Price		Term (years)		Value
Balance at January 1		894,785		$	4.29
Granted		-			-
Exercised		(10,325	)		4.26
Expired/Forfeited		-			-

Balance at June 30		884,460		$	4.29		2.00	$	1,565,633

Vested and exercisable		851,760		$	4.23		1.92	$	1,561,911

No options were exercised during the six months ended June 30, 2011. The aggregate intrinsic value of options exercised during the six months ended June 30, 2010 was $24,560. There were 24,274 and 32,700 nonvested stock options outstanding as of June 30, 2011 and 2010, respectively.

The following table summarizes stock-based compensation expense related to all share-based payments recognized in the condensed consolidated statements of income.

	Three Months			Three Months
	Ended June 30,			Ended June 30,
	2011			2010
Stock options	$	7,310		$	-
Stock grants – other		16,384			10,882
Service based awards		23,599			32,037
Performance based awards		-			37,294
Tax benefit		(28,341	)		(33,098	)
Stock-based compensation expense, net of tax	$	18,952		$	47,115

	Six Months			Six Months
	Ended June 30,			Ended June 30,
	2011			2010
Stock options	$	36,101		$	-
Stock grants – other		32,765			21,759
Service based awards		47,198			64,072
Performance based awards		-			74,588
Tax benefit		(55,743	)		(65,772	)
Stock-based compensation expense, net of tax	$	60,321		$	94,647

Stock Grants - Other

The non-employee members of the Board of Directors have an option to elect at the beginning of each calendar year to receive either shares of common stock or cash at the end of each quarter as compensation for services provided as members of the Board of Directors and other committees. Share grants issued vest immediately, but are subject to a one-year restriction on transfer. In addition, stock grants may be issued to employees at the Board of Directors’ discretion.

Service Based Awards

In January 2006, May 2007, January 2009 and December 2010 the Company granted 50,000, 22,000, 12,000 (net of 9,500 shares waived by an executive) and 46,500 restricted shares, respectively, to certain executives in respect of services rendered but at no monetary cost. These shares vest over periods ranging from 2 to 5 years, on December 31 of each year. The Company records the compensation expense on a straight-line basis over the vesting period. Fair value for restricted stock awards is based on the Company's closing common stock price on the date of grant. There were 84,000 shares and 63,000 shares vested as of June 30, 2011 and 2010, respectively. The aggregate grant date fair value of restricted stock grants was $830,845. The vesting period of the January 2006 and May 2007 grants expired on December 31, 2010. As of June 30, 2011 and 2010, the Company had approximately $236,000 and $68,000, respectively, of total unrecognized compensation costs related to nonvested restricted stock units expected to be recognized over a weighted average period of 2.5 years.

Performance Based Awards

In January 2006 and May 2007, respectively, the Company granted share awards for up to 90,000 shares (up to 18,000 shares per year through December 31, 2010) and 46,000 shares (up to 11,500 shares per year through December 31, 2010) to certain executives. Vesting of such shares was contingent upon the Company achieving certain specified consolidated gross revenue and Earnings before Interest and Taxes (“EBIT”) objectives in each of the fiscal years ending December 31, 2006 through December 31, 2010. The fair value of the performance shares (aggregate value of $909,400) was based on the closing trade value of the Company’s stock on the date of grant and assumed that performance goals would be achieved. The fair value of the shares was expensed over the performance period for those shares that were expected to ultimately vest. If such objectives were not met, no compensation cost was recognized and any recognized compensation cost was reversed. All performance based awards were either earned or forfeited as of December 31, 2010. During 2011, there were no performance shares vesting and there were no unrecognized compensation costs related to performance share awards. As of June 30, 2010, 57,250 shares were vested and there was approximately $75,000 of total unrecognized compensation costs related to nonvested share awards.

5.	Earnings Per Share:

Earnings per share data for the six and three months ended June 30, 2011 and 2010 is presented in conformity with ASC Topic 250, Earnings Per Share.

The following table is a reconciliation of the numerators and denominators in computing earnings per share:

	Income		Shares		Per-Share
	(Numerator)		(Denominator)		Amounts
Six Months Ended June 30, 2011

Basic EPS - Income available to common stockholders	$	868,948		9,576,622	$	.09
Effect of dilutive securities - Options and warrants		-		247,914
Diluted EPS - Income available to common stockholders and assumed conversions	$	868,948		9,824,536	$	.09

Three Months Ended June 30, 2011

Basic EPS -Income available to common stockholders	$	159,369		9,580,005	$	.02
Effect of dilutive securities - Options and warrants		-		236,204
Diluted EPS - Income available to common stockholders and assumed conversions	$	159,369		9,816,209	$	.02

Six Months Ended June 30, 2010

Basic EPS - Income available to common stockholders	$	1,610,275		9,537,894	$	.17
Effect of dilutive securities - Options and warrants		-		297,286
Diluted EPS - Income available to common stockholders and assumed conversions	$	1,610,275		9,835,180	$	.16

Three Months Ended June 30, 2010

Basic EPS -Income available to common stockholders	$	722,903		9,549,355	$	.08
Effect of dilutive securities - Options and warrants		-		279,118
Diluted EPS - Income available to common stockholders and assumed conversions	$	722,903		9,828,473	$	.07

Goodwill

Changes in the carrying amount of goodwill, all of which relates to the Company’s TBCS segment, for the six months ended June 30, 2011 and 2010 are as follows:

Six Months Ended June 30, 2011

Balance as of January 1, 2011	$	10,842,352
Additional Goodwill		-

Balance as of June 30, 2011	$	10,842,352

Six Months Ended June 30, 2010

Balance as of January 1, 2010	$	10,255,983
Additional Goodwill		38,298

Balance as of June 30, 2010	$	10,294,281

The addition to goodwill during the six months ended June 30, 2010 related to the additional purchase price of American Mediconnect, Inc. based on the cash receipts from the clinical trials portion of the business.

7.	Acquisition:

On September 29, 2010, the Company acquired substantially all of the assets of Alpha Message Center, Inc. (“Alpha”), a New Jersey based company that provides telephone after-hours answering and pager services. The purchase price of this acquisition consisted of an initial cash payment of $577,977 and an accrual of $200,000, which represented the estimated fair value (derived using significant unobservable inputs categorized within Level 3 of the fair value hierarchy) of the contingent consideration expected to be paid through September 2012. The contingent consideration is based on the acquisition agreement that calls for the Company to pay the former owner of Alpha fourteen percent (14%) of the cash expected to be collected by the Company, excluding sales taxes, from certain revenue generated by Alpha through September 2012. The Company estimated the future contingent consideration expected to be paid based upon Alpha’s historic revenue data. As of June 30, 2011, $77,275 has been paid to the former owner based on cash receipts. The Company also incurred finder and professional fees of approximately $57,000, which were included in selling, general and administrative expenses for the year ended December 31, 2010. The results of operations of Alpha are included in the Telephone Based Communications Services (“TBCS”) segment as of the date of acquisition.

The following table summarizes the estimated fair values of the assets acquired at the date of acquisition.

Accounts receivable	$	4,906
Fixed assets		25,000
Non-compete agreement		15,000
Customer list		185,000
Goodwill		548,071
Cost to acquire Alpha	$	777,977

The purchase price of the acquisition exceeded the fair value of the identifiable net assets acquired inasmuch as the acquisition was consummated to enable the Company to strengthen its position in the area where it was already operating. Furthermore, the acquisition was for the business' future cash flows and net earnings as opposed to solely for the identifiable tangible and intangible assets.

The results of operations for Alpha are included in the condensed consolidated statements of income for the six and three months ended June 30, 2011. On a pro forma basis, had the Alpha acquisition taken place as of the beginning of 2010, the Company’s results of operations for the six and three months ended June 30, 2010 would not have been materially affected.

8.	Investment in Limited Liability Company

On May 12, 2010, the Company entered into a limited liability company agreement with Hughes Telematics, Inc. and Qualcomm Incorporated to design, develop, finance and operate a mobile PERS system. The Company invested $4,000,000 and incurred $150,336 in professional fees to acquire a minority interest (approximately 10%) in the new company, Lifecomm, LLC (“Lifecomm”). As part of this transaction, the Company borrowed $2,000,000 from its bank to partially finance this transaction. In addition, pursuant to the limited liability company agreement, the Company has agreed to fund its share ($200,000) of a stand-by equity commitment for Lifecomm’s benefit, if required. As of June 30, 2011, the Company’s exposure to loss is limited to the recorded equity investment balance of $1,898,298 and its share ($200,000) of a stand-by equity commitment, if required.

Hughes Telematics, Inc., parent of Lifecomm and the party who has a controlling financial interest in Lifecomm, has determined that Lifecomm is a variable interest entity and that HTI is the primary beneficiary.

In accordance with the limited liability company agreement, profits are generally allocated to members in the amount of and in proportion to their ownership of the outstanding membership units. Losses are generally allocated to members in the amount of and in proportion to their unreturned capital contributions, which for the purposes of determining the allocation of losses is defined as the aggregate of (i) cash contributions, (ii) the fair value of other contributed assets and (iii) the value of in-kind services contributed by the members through the date of determination, less (iv) the fair value of any assets distributed to the members; provided, however, that any losses generated through May 12, 2012 will be generally allocated to the members first in the amount of and in proportion to the unreturned capital contributions attributable to only the cash contributions and the value of in-kind services contributed by the members through the date of determination and then in the amount of and in proportion to the unreturned capital contributions attributable to the fair value of other contributed assets.

During the six and three months ended June 30, 2011, the Company recorded a pre-tax net loss of $1,071,912 and $512,030, respectively ($2,252,038 during the period from inception, May 12, 2010 to June 30, 2011) for its share of losses from the equity investment in Lifecomm. The equity loss primarily relates to research and development costs as well as other selling, general and administrative expenses incurred for the development of the next generation mobile PERS. As the development continues to progress, the Company expects that its share of equity loss will continue throughout 2011 until the next generation mobile PERS is completed and commercialized, which is anticipated to be in early 2012.

In connection with the formation of Lifecomm, the Company entered into a Value Added Reseller Agreement (“VAR Agreement”) with Lifecomm. Under the VAR Agreement, the Company will be a reseller of the Mobile PERS Solution in the United States, as well as a preferred provider of the emergency assistance call center (“EACC”) component of the Mobile PERS Solution provided by Lifecomm to customers. The Company will be the sole provider of the EACC to the customers to whom it resells the Mobile PERS Solution. The term of the VAR Agreement is perpetual, subject to termination as set forth therein. The VAR Agreement contains standard indemnification provisions for agreements of this nature.

9.	Long-term Debt:

The Company had a credit facility arrangement for $4,500,000 which included a revolving credit line which permitted borrowings of $1,500,000 (based on eligible receivables as defined) and a $3,000,000 term loan payable. The term loan was payable in equal monthly principal installments of $50,000 over five years commencing January 2006. This term loan was paid in full during the second quarter of 2010 without any prepayment charge.

During 2006, the credit facility was amended whereby the Company obtained an additional $2,500,000 and $1,600,000 of term loans, the proceeds of which were utilized to finance certain acquisitions. These term loans are payable over five years in equal monthly principal installments of $41,666.67 and $26,666.67, respectively. Additionally, certain of the covenants were amended. The $2,500,000 term loan was paid in full during the second quarter of 2010 without any prepayment charge.

In December 2006, the credit facility was amended to reduce the interest rates charged by the bank such that borrowings under the term loan will bear interest at either (a) LIBOR plus 2.00% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater, and the revolving credit line will bear interest at either (a) LIBOR plus 1.75% or (b) the prime rate or the federal funds effective rate plus .5%, whichever is greater. The LIBOR interest rate charge shall be adjusted in .25% intervals based on the Company’s ratio of Consolidated Funded Debt to Consolidated EBITDA. In the third quarter of 2007, the interest rate was reduced by .25% based on this ratio. The Company has the option to choose between the two interest rate options under the amended term loan and revolving credit line. Borrowings under the credit facility are collateralized by substantially all of the assets of the Company.

On April 30, 2007, the Company amended its credit facility whereby the term of the revolving credit line was extended through June 2010 and the amount of credit available under the revolving credit line was increased to $2,500,000. In June 2010, the term of the revolving credit line was extended through June 2013.

On May 12, 2010, the Company’s credit facility was amended whereby the Company obtained an additional $2,000,000 in the form of a term loan, the proceeds of which were utilized to partially finance its investment in Lifecomm relating to the development of a mobile PERS system. This term loan is payable over five years in equal monthly principal installments of $33,333.33, commencing June 1, 2010. The interest rate is the same as the previous term loans secured by the Company, as described above.

As of June 30, 2011 and March 31, 2011, the Company was in compliance with its financial covenants in its loan agreement. As of June 30, 2010 and March 31, 2010, the Company was in compliance with its financial covenants in its loan agreement.

10.	Provision for Income Taxes:

The Company records its tax provision (or benefit) on an interim basis using an estimated annual effective tax rate. For the six and three months ended June 30, 2011 the Company increased the estimated effective tax rate to reflect the impact of certain non-deductible expenses.

11.	Dividends:

On December 16, 2009, the Company declared a dividend in the amount of $0.10 per share, or $950,364, which was accrued as of December 31, 2009. The dividend was payable to the shareholders of record as of December 28, 2009. The dividend was paid on January 15, 2010.

12.	Segment Reporting:

The Company has two reportable segments, (i) Health and Safety Monitoring Systems (“HSMS”) and (ii) Telephone Based Communication Services (“TBCS”).

The table below provides a reconciliation of segment information to total consolidated information for the six and three months ended June 30, 2011 and 2010:

2011

	HSMS		TBCS		Consolidated
Six Months Ended June 30, 2011
Revenue	$	10,429,165	$	10,522,135	$	20,951,300
Income before provision for income taxes*		550,221		1,121,727		1,671,948
Total assets		17,300,149		20,637,989		37,938,138

	HSMS		TBCS		Consolidated
Three Months Ended June 30, 2011
Revenue	$	5,180,396	$	5,139,171	$	10,319,567
Income before provision for income taxes*		70,087		422,282		492,369

2010

	HSMS		TBCS		Consolidated
Six Months Ended June 30, 2010
Revenue	$	10,233,896	$	9,389,496	$	19,623,392
Income before provision for income taxes*		1,906,142		823,133		2,729,275
Total assets		18,840,211		18,461,741		37,301,952

	HSMS		TBCS		Consolidated
Three Months Ended June 30, 2010
Revenue	$	5,083,836	$	4,628,309	$	9,712,145
Income before provision for income taxes*		846,764		385,139		1,231,903

* Income before provision for income taxes within the HSMS segment includes the Company’s share of equity in net loss from its investment in limited liability company as follow:

	June 30, 2011		June 30, 2010
Six Months Ended	$	1,071,912	$	116,127
Three Months Ended	$	512,030	$	116,127

13.	Commitments and Contingencies:

The Company is aware of various threatened or pending litigation claims against the Company relating to its products and services and other claims arising in the ordinary course of its business. At June 30, 2011 and 2010, no material liabilities have been recorded in the accompanying financial statements. The Company has given its insurance carrier notice of such claims and it believes there is sufficient insurance coverage to cover any such claims. In any event, the Company believes the disposition of these matters will not have a material adverse effect on the results of operations and financial condition of the Company.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion and analysis should be read in conjunction with the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2010.

Statements contained in this Quarterly Report on Form 10-Q include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including, in particular and without limitation, statements contained herein under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company’s actual results, performance and achievements, whether expressed or implied by such forward-looking statements, not to occur or be realized. These include uncertainties relating to our investment in the Lifecomm joint venture, successful implementation of our acquisition strategy, risk of loss of key government customers, government regulation, new product initiatives and product liability risks Such forward-looking statements generally are based upon the Company’s best estimates of future results, performance or achievement, based upon current conditions and the most recent results of operations. Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “project,” “anticipate,” “continue” or similar terms, variations of those terms or the negative of those terms.

You should carefully consider such risks, uncertainties and other information, disclosures and discussions which contain cautionary statements identifying important factors that could cause actual results to differ materially from those provided in the forward-looking statements. Readers should carefully review the risk factors and any other cautionary statements contained in the Company’s Annual Report on Form 10-K, this Quarterly Report on Form 10-Q and other public filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview:

The Company’s primary business consists of two operating segments. The first segment, Health Safety and Monitoring Services (“HSMS”), is comprised of the development and marketing of Remote Patient Monitoring (“RPM”) technologies that include personal emergency response systems (“PERS”), medication reminder and dispensing systems, telehealth/disease management technologies and safety monitoring systems to pharmacies. The second segment, Telephony Based Communication Services (“TBCS”), provides centralized call center solutions primarily to the healthcare community, including traditional after hours services, daytime services applications, and pharmaceutical support and clinical trial recruitment call center services. The Company markets its offerings directly to healthcare providers, pharmaceutical companies, managed care organizations and through a network of distributors. The Company also offers certain products and services directly to consumers.

About HSMS:

Personal Emergency Response Systems (PERS)

PERS is the Company’s core product and service offering. The system consists of a console unit and a wireless transmitter generally worn as a pendant or on the wrist by the client. In the event of an emergency, the client is able to summon immediate assistance via a two-way voice system that connects the client’s home telephone with the Company’s emergency response center. The ability to access and obtain assistance, particularly after a fall or during a medical emergency, has been proven to reduce overall healthcare costs and increase the ability of an individual to remain independent at home. AMAC’s PERS is marketed directly to consumers, providers and by third party resellers under multiple brands, including VoiceCare®, Walgreens Ready Response™, Response Call®, ApriaAlert™ and most recently VNSNYAssist™ .

MedSmart

MedSmart is a powerful solution that organizes, reminds and dispenses pills in accordance with prescribed treatment regimens. Easy to set up and use, MedSmart improves adherence to medication regimens and reduces the risk of missed doses and overdosing errors to improve clinical outcomes and quality of life. With MedSmart’s innovative event reporting and notification capability, family caregivers and healthcare professionals can proactively support independent living. MedSmart’s docking base serves as the gateway for remote programming and event reporting. When connected to a household phone, MedSmart transmits device and dispensing history to a secure server supported with a web application for review by authorized individuals, such as relatives or medical professionals. Through AMAC’s personalized notification system, alerts can be sent to track adherence, address dosing errors and predict refill requirements. The ability to communicate these events creates a new capability to easily track adherence, proactively modify behavior and improve compliance.

MedTime

MedTime is an electronic medication reminder and dispensing unit marketed under an exclusive licensing, manufacturing and distribution agreement which began in 1999. This agreement originates from PharmaCell AB, a Swedish company, with licensing rights extending throughout the United States, Canada and Mexico. The initial term of the agreement was five years requiring the Company to achieve certain purchase minimums in order to maintain exclusivity. Thereafter, the agreement converted to an evergreen with annual purchase minimums of 1,500 units. The Company has met all minimums with PharmaCell to date and continues to maintain exclusivity.

Telehealth systems

Rounding out AMAC’s RPM portfolio is AMAC’s telehealth delivery capability. As a distributor of the Health Buddy® System, many of the Company’s customers have successfully demonstrated the value proposition of incorporating disease management technologies into a patient’s plan of care. This AMAC operated telehealth platform is directed toward providers who require a low-cost solution, easy installation, reliable transmission of vital sign data in real-time and ease of use on the patient side. The Company believes the telehealth market will continue to provide opportunities for AMAC’s expansion as a full source provider of remote patient monitoring technologies and first line support services.

About TBCS:

AMAC’s TBCS segment offers value added, customizable call center solutions that enhance the patient/provider communication experience. As part of our business development strategy, management continues to employ the most advanced telephony technology and information systems to develop services to respond to shifting market factors that affect healthcare client needs. In addition to technology, a critical component for successful expansion is the Company’s professionally trained call agent staff. The Company allocates resources to enhance contact agent training and staff development, new communication technology, and continuous quality control to support TBCS’ expansion efforts. The overall infrastructure has allowed AMAC to expand its footprint of services beyond traditional telephone answering services to provide more innovative, clinically oriented call center offerings.

After Hours Answering Services

AMAC’s after hours services are classified as essential call center services with a fully customizable approach to communications support. Basic services in this offering include traditional after hour answer and customized message delivery options, contact lists and on-call schedule management, all of which can be updated at the client’s convenience using the OnCall web portal. Through this portal, clients can also access the account’s call history, specifications and messages.

Concierge Services/Daytime Solutions

AMAC’s Concierge Services focus on the delivery of enhanced communications and help to streamline workflow within provider organizations. These solutions primarily serve hospitals and health plans in the Northeast seeking to address staffing constraints in a variety of areas while extending first-class patient experience. Services range from providing skilled contact agents to support insurance eligibility verification programs; enhancing patient self care activities through post discharge follow-up programs, and providing specialized emergency department programs with strict reach guidelines to facilitate better treatment and care. Through more efficient and effective call processing, these solutions improve patient satisfaction, reduce cost, and increase revenue by maximizing the ratio of patients to available resources.

Pharmaceutical Support and Clinical Trial Recruitment Services

Our clinical trial solutions service is an integral component of our overall growth strategy to drive revenue enhancement and expand our visibility. AMAC’s PhoneScreen is a leader in the field of patient recruitment, retention and contact center services. Using centralized telephone screening of potential clinical trial study subjects, PhoneScreen provides valuable data to inform advertising and patient recruitment strategies. As the trend towards more individualized healthcare communication becomes the norm, AMAC is leading this transformation with innovative contact solutions. We anticipate that our pharmaceutical support programs will be increasingly utilized to deliver enhanced patient-centric healthcare communication experiences on behalf of certain brands. Based upon new demand, we are recruiting nurses, health educators and other healthcare professionals that will allow us to provide additional turn-key solutions for our clients.

The Company has completed eleven acquisitions to date to facilitate growth within the TBCS division. For the remainder of 2011, the Company will focus on growing this segment through internally driven sales and marketing efforts as well as continue to search for additional acquisition opportunities.

Operating Segments

For the six months ended June 30, 2011, HSMS accounted for 50% of the Company’s revenue and TBCS accounted for 50% of the Company’s revenue. The Company believes that the overall mix of cash flow generating businesses from HSMS and TBCS, combined with its emphasis on developing products and services to support demand from customers and the emerging, home-based monitoring market, provides the correct blend of stability and growth opportunity. The Company believes this strategy will enable it to maintain and increase its role as a national healthcare communications provider. Based on the Company’s growth strategy and the complementary nature of if its operating divisions, management believes the Company’s outlook is very positive.

Components of Statements of Income by Operating Segment

The following table shows the components of the Statement of Income for the six and three months ended June 30, 2011 and 2010.

In thousands (000’s)	Three Months Ended June 30,												Six Months Ended June 30,

	2011			%			2010			%			2011			%			2010			%
Revenues
HSMS		5,180			50	%		5,084			52	%		10,429			50	%		10,234			52	%
TBCS		5,139			50	%		4,628			48	%		10,522			50	%		9,389			48	%

Total Revenues		10,319			100	%		9,712			100	%		20,951			100	%		19,623			100	%

Cost of Services and Goods Sold
HSMS		2,080			40	%		2,058			40	%		4,036			39	%		4,067			40	%
TBCS		2,831			55	%		2,465			53	%		5,736			55	%		4,979			53	%

Total Cost of Services and Goods Sold		4,911			48	%		4,523			47	%		9,772			47	%		9,046			46	%

Gross Profit
HSMS		3,100			60	%		3,026			60	%		6,393			61	%		6,167			60	%
TBCS		2,308			45	%		2,163			47	%		4,786			45	%		4,410			47	%

Total Gross Profit		5,408			52	%		5,189			53	%		11,179			53	%		10,577			54	%

Selling, General & Administrative		4,402			43	%		3,857			40	%		8,430			40	%		7,765			40	%
Interest Expense		13			-	%		14			-	%		28			-	%		26			-	%
Equity in net loss from investment in limited liability company		512			5	%		116			1	%		1,072			5	%		116			1	%
Other Income		(11	)		-	%		(30	)		-	%		(23	)		-	%		(59	)		-	%

Income before Income Taxes		492			5	%		1,232			13	%		1,672			8	%		2,729			14	%

Provision for Income Taxes		333						509						803						1,119

Net Income		159						723						869						1,610

Results of Operations:

The Company has two distinct operating business segments, which are HSMS and TBCS.

Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2010

Revenues:

HSMS

Revenues, which consist primarily of monthly rental revenues, increased approximately $96,000, or 2%, for the three months ended June 30, 2011 as compared to the same period in 2010. The increase was primarily attributable to the following factor:

The Company recognized an increase in its PERS service revenue of approximately $88,000 primarily from its long-term care programs and execution of a new agreement with a hospital organization. By aligning itself with long-term care organizations in the interests of improving the business and operational efficiencies of such organizations, the Company experienced growth in the number of subscribers utilizing its PERS units under these programs.

The Company recently entered into an agreement with a major multi-national conglomerate to provide the Company’s PERS product under a private label arrangement. The Company is currently in the process of preparing for this endeavor which is anticipated to start generating revenue during fourth quarter of 2011.

TBCS

The increase in revenues of approximately $511,000, or 11%, for the three months ended June 30, 2011 as compared to the same period in 2010 was primarily due to:

The Company recognized an increase in its non-traditional daytime service revenue of approximately $125,000 primarily due to hospital organizations expanding services with the Company. The Company recently executed a contract with another hospital organization whereby services are expected to commence in the second half of 2011. With this latest agreement and the continued expansion from existing hospitals, the Company anticipates that revenue growth from this offering will continue through the remainder of 2011.

The Company recognized an increase in revenue within its pharmaceutical support services of approximately $319,000 primarily as a result of a significant agreement being executed with a large pharmaceutical company in 2010. Under this agreement, the Company has been awarded with new projects which have continued to provide revenue into the second quarter of 2011. Revenue growth in this offering is anticipated to continue throughout the year of 2011 as additional new projects under this agreement are scheduled to begin in the second half of 2011.

·	The Company increased its revenue by approximately $202,000 as a result of the acquisition of a telephone answering service company in September 2010. In 2011, the Company continues to consider acquisition opportunities that will benefit the Company.

These increases were partially offset by a decrease in revenue within the Company’s traditional after hours services of approximately $135,000 primarily due to customer attrition. While the Company has been working on strategies to minimize this attrition, it is anticipated that some attrition will continue in this area as a result of current economic conditions and physicians now looking to bring these services in-house.

Costs Related to Services and Goods Sold:

HSMS

Costs related to services and goods sold increased by approximately $22,000 for the three months ended June 30, 2011 as compared to the same period in 2010, an increase of 1%, primarily due to the following:

·	Payroll from service operations and telephone expense increased by approximately $37,000 primarily due to a corresponding increase in revenue.

·	Service fees with respect to the Company’s use of a third party’s telehealth software increased by approximately $37,000 due to an increase in the monthly fee effective in late 2010.

These increases were partially offset by a decrease in depreciation expense of approximately $49,000 primarily due to the Company purchasing its PERS devices at reduced prices through an alternative supplier in the past three years.

TBCS

Costs related to services increased by approximately $366,000 for the three months ended June 30, 2011 as compared to the same period in 2010, an increase of 15%, primarily due to the following:

The Company recognized an increase in payroll and related expenses associated with pharmaceutical support services and non-traditional daytime services of approximately $293,000 primarily due to a corresponding increase in revenue in these areas. As the Company continues to grow in this area, it will continue to closely monitor the personnel requirements to perform these services efficiently.

§	As a result of acquiring a telephone answering service company in September 2010, costs related services increased by approximately $97,000 from the operation of this newly acquired subsidiary. These expenses primarily consisted of operators’ payroll and rent expense.

These increases were partially offset by a decrease in the payroll associated with the traditional after hours services of approximately $106,000 primarily due to a corresponding decrease in revenue in these areas.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses increased by approximately $545,000 for the three months ended June 30, 2011 as compared to the same period in 2010, an increase of 14%. The increase was primarily attributable to the following:

Administrative payroll expense increased by approximately $99,000 primarily due to the Company hiring additional management and support level personnel to assist in expanding its business. While the Company continues to grow, it will closely monitor the personnel requirements necessary to facilitate, manage and oversee this expansion effectively.

§	Professional fees increased by approximately $331,000 in relation to certain business activities. These fees are also expected to be a factor in the third quarter of 2011.

§	Travel and entertainment as well as consulting expense increased by approximately $107,000 primarily due to increased marketing and sales activities as well as expansion of business.

§	Research and development expense increased by approximately $64,000 primarily due to research relating to the development of a home-based cellular PERS device. The Company anticipates it will continue to incur additional research and development costs as it continues to enhance to its PERS device.

As a result of acquiring a telephone answering service company in September 2010, selling, general and administrative expenses increased by approximately $101,000 from the operation of this newly acquired subsidiary. These expenses primarily consisted of administrative payroll and consulting expense.

These increases were partially offset by a decrease in amortization expense of approximately $117,000 due to certain intangible assets being fully amortized and a decrease in advertising expense of approximately $148,000.

Equity in Net Loss from Investment in Limited Liability Company:

Equity in net loss from investment in limited liability company for the three months ended June 30, 2011 and 2010 of approximately $512,000 and $116,000, respectively, was related to the Company’s investment in Lifecomm in May 2010. This equity loss represents the Company’s share of Lifecomm’s loss, which consists of research and development cost as well as other selling, general and administrative expenses incurred for the development of the next generation mobile PERS. This equity loss, which is not related to the Company’s current business operations, is expected to continue throughout 2011 until the next generation mobile PERS is completed and commercialized, which is anticipated to be in early 2012.

Income Before Provision for Income Taxes:

The Company’s income before provision for income taxes for the three months ended June 30, 2011 was approximately $492,000 as compared to $1,232,000 for the same period in 2010. The decrease of $740,000 for the three months ended June 30, 2011 primarily resulted from an increase in the Company's costs related to services and product sales, an increase in selling, general and administrative costs and an increase in equity in net loss which were partially offset by an increase in the Company’s revenue.

Provision for Income Taxes:

The Company’s provision for income taxes for the three months ended June 30, 2011 was approximately $333,000 as compared to $509,000 for the same period in 2010. The estimated effective tax rate for the three months ended June 30, 2011 was approximately 68% as compared to 41% for the same period in 2010. The increase in the Company’s estimated effective rate was due to the impact of certain non-deductible professional fees.

Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010

Revenues:

HSMS

Revenues, which consist primarily of monthly rental revenues, increased approximately $195,000, or 2%, for the six months ended June 30, 2011 as compared to the same period in 2010. The increase was primarily attributable to the following factor:

The Company recognized an increase in its PERS service revenue of approximately $180,000 primarily from its long-term care programs and execution of new agreements with hospital organizations. By aligning itself with long-term care organizations in the interests of improving the business and operational efficiencies of such organizations, the Company experienced growth in the number of subscribers utilizing its PERS units under these programs.

TBCS

The increase in revenues of approximately $1,133,000, or 12%, for the six months ended June 30, 2011 as compared to the same period in 2010 was primarily due to:

The Company recognized an increase in its non-traditional daytime service revenue of approximately $428,000 primarily due to hospital organizations expanding services with the Company. The Company recently executed a contract with another hospital organization whereby services are expected to commence in the second half of 2011. With this latest agreement and the continued expansion from existing hospitals, the Company anticipates that revenue growth from this offering will continue through the remainder of 2011.

The Company recognized an increase in revenue within its pharmaceutical support services of approximately $592,000 primarily as a result of a significant agreement being executed with a large pharmaceutical company in 2010. Under this agreement, the Company has been awarded new projects which have continued to provide revenue into the second quarter of 2011. Revenue growth in this offering is anticipated to continue throughout the year of 2011 as additional new projects under this agreement are scheduled to begin in the second half of 2011.

·	The Company increased its revenue by approximately $424,000 as a result of the acquisition of a telephone answering service company in September 2010. In 2011, the Company continues to consider acquisition opportunities that will benefit the Company.

These increases were partially offset by a decrease in revenue within the Company’s traditional after hours services of approximately $311,000 primarily due to customer attrition. While the Company has been working on strategies to minimize this attrition, it is anticipated that some attrition will continue in this area as a result of current economic conditions and physicians now looking to bring these services in-house.

Costs Related to Services and Goods Sold:

HSMS

Costs related to services and goods sold decreased by approximately $31,000 for the six months ended June 30, 2011 as compared to the same period in 2010, a decrease of 1%, primarily due to the following:

Depreciation expense decreased by approximately $99,000 primarily due to the Company purchasing its PERS devices at reduced prices through an alternative supplier in the past three years. This decrease was partially offset by an increase in service fees with respect to the Company’s use of a third party’s telehealth software of approximately $62,000 due to an increase in the monthly fee effective in late 2010.

TBCS:

Costs related to services increased by approximately $757,000 for the six months ended June 30, 2011 as compared to the same period in 2010, an increase of 15%, primarily due to the following:

The Company recognized an increase in payroll and related expenses associated with pharmaceutical support service and non-traditional daytime services of approximately $656,000 primarily due to a corresponding increase in revenue in these areas. As the Company continues to grow in this area, it will continue to closely monitor the personnel requirements to perform these services efficiently.

§	The Company incurred costs of approximately $65,000 in the development and modification of certain project specific reports for pharmaceutical support service customers, whereby the projects commenced in late 2010 and during 2011.

§	As a result of acquiring a telephone answering service company in September 2010, costs related services increased by approximately $196,000 from the operation of this newly acquired subsidiary. These expenses primarily consisted of operators’ payroll and rent expense.

These increases were partially offset by a decrease in the payroll associated with the traditional after hours services of approximately $247,000 primarily due to a corresponding decrease in revenue in these areas.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses increased by approximately $665,000 for the six months ended June 30, 2011 as compared to the same period in 2010, an increase of 9%. The increase was primarily attributable to the following:

Administrative payroll expense increased by approximately $224,000 primarily due to the Company hiring additional management and support level personnel to assist in expanding its business. While the Company continues to grow, it will closely monitor the personnel requirements necessary to facilitate, manage and oversee this expansion effectively.

§	Professional fees increased by approximately $351,000 in relation to certain business activities. These fees are also expected to be a factor in the third quarter of 2011.

§	Travel and entertainment as well as consulting expense increased by approximately $132,000 primarily due to increased marketing and sales activities as well as expansion of business.

§	Research and development expense increased by approximately $71,000 primarily due to research relating to the development of a home-based cellular PERS device. The Company anticipates it will continue to incur additional research and development costs as it continues to enhance to its PERS device.

As a result of acquiring a telephone answering service company in September 2010, selling, general and administrative expenses increased by approximately $181,000 from the operation of this newly acquired subsidiary. These expenses primarily consisted of administrative payroll and consulting expense.

These increases were partially offset by a decrease in amortization expense of approximately $204,000 due to certain intangible assets being fully amortized and a decrease in advertising expense of approximately $119,000.

Equity in Net Loss from Investment in Limited Liability Company:

Equity in net loss from investment in limited liability company for the six months ended June 30, 2011 and 2010 of approximately $1,072,000 and $116,000, respectively, was related to the Company’s investment in Lifecomm in May 2010. This equity loss represents the Company’s share of Lifecomm’s loss, which consists of research and development cost as well as other selling, general and administrative expenses incurred for the development of the next generation mobile PERS. This equity loss, which is not related to the Company’s current business operations, is expected to continue throughout 2011 until the next generation mobile PERS is completed and commercialized, which is anticipated to be in early 2012.

Income Before Provision for Income Taxes:

The Company’s income before provision for income taxes for the six months ended June 30, 2011 was approximately $1,672,000 as compared to $2,729,000 for the same period in 2010. The decrease of $1,057,000 for the six months ended June 30, 2011 primarily resulted from an increase in the Company's costs related to services and product sales, an increase in selling, general and administrative costs and an increase in equity in net loss which were partially offset by an increase in the Company’s revenue.

Provision for Income Taxes:

The Company’s provision for income taxes for the six months ended June 30, 2011 was approximately $803,000 as compared to $1,119,000 for the same period in 2010. The estimated effective tax rate for the six months ended June 30, 2011 was approximately 48% as compared to 41% for the same period in 2010. The increase in the Company’s estimated effective rate was due to the impact of certain non-deductible professional fees.

Liquidity and Capital Resources

The Company had a credit facility arrangement for $4,500,000 which included a revolving credit line which permitted borrowings of $1,500,000 (based on eligible receivables as defined in the credit agreement) and a $3,000,000 term loan payable. The term loan was payable in equal monthly principal installments of $50,000, over five years, commencing January 2006. This term loan was paid in full during the second quarter of 2010 without any prepayment charge.

During 2006, the credit facility was amended whereby the Company obtained a $2,500,000 and a $1,600,000 term loan, the proceeds of which were utilized to finance the acquisitions of MD OnCall and American Mediconnect, Inc. These term loans are payable over five years in equal monthly principal installments of $41,666.67 and $26,666.67, respectively. Additionally, certain of the covenants were amended. The $2,500,000 term loan was paid in full during the second quarter of 2010 without any prepayment charge.

In December 2006, the credit facility was amended to reduce the interest rates charged by the bank such that borrowings under the term loan will bear interest at either (a) LIBOR plus 2.00% or (b) the prime rate or the federal funds effective rate plus 0.5%, whichever is greater, and the revolving credit line bears interest at either (a) LIBOR plus 1.75% or (b) the prime rate or the federal funds effective rate plus 0.5%, whichever is greater. The LIBOR interest rate charge shall be adjusted in 0.25% intervals based on the Company’s ratio of Consolidated Funded Debt to Consolidated EBITDA. In the third quarter of 2007, the interest rate was reduced by 0.25% based on this ratio. The Company has the option to choose between the two interest rate options under the amended term loan and revolving credit line. Borrowings under the credit facility are collateralized by substantially all of the assets of the Company.

On April 30, 2007, the Company amended its credit facility whereby the amount of credit available under the revolving credit line was increased to $2,500,000. In June 2010, the term of the revolving credit line was extended through June 2013.

On May 12, 2010, the Company’s credit facility was amended whereby the Company obtained an additional $2,000,000 in the form of a term loan, the proceeds of which were utilized to partially finance its investment in Lifecomm relating to the development of the mobile PERS system. This term loan is payable over five years in equal monthly principal installments of $33,333.33, commencing June 1, 2010. The interest rate is the same as the previous term loans secured by the Company.

As of June 30, 2011 and 2010, the Company was in compliance with its financial covenants in its credit agreement.

The following table is a summary of contractual obligations as of June 30, 2011:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Revolving Credit Line	$	750,000			$	750,000
Debt (a)	$	1,700,000	$	500,000	$	1,200,000
Operating Leases (b)	$	8,194,240	$	1,526,163	$	3,867,471	$	2,130,935	$	669,671
Purchase Commitments (c)	$	1,767,720	$	1,767,720
Interest Expense (d)	$	120,745	$	55,924	$	64,821
Acquisition Related Commitment (e)	$	122,725	$	98,625	$	24,100
Total Contractual Obligations	$	12,655,430	$	3,948,432	$	5,906,392	$	2,130,935	$	669,671

(a) – Debt includes the Company’s aggregate outstanding term loans which mature in 2011 and 2015.

(b) – Operating leases include rental of facilities at various locations within the United States. These leases include the rental of the Company’s call centers, warehouse and office facilities with various expiration dates. The Company currently leases office space from the Chairman and principal shareholder pursuant to a lease. This lease expires in December 2012. The Company also leases office space from certain telephone answering service managers with expirations through March 2015.

(c) – Purchase commitments relate to orders for the Company’s traditional PERS system and its MedSmart medication medical system.

(d) – Interest expense relates to interest on the Company’s revolving credit line and debt at the Company’s current rate of interest.

(e) – Acquisition related commitment represents estimated payments due based on collections of trade receivables relating to the acquisition of Alpha Message Center, Inc in September 2010.

The primary sources of liquidity are cash flows from operating activities. Net cash provided by operating activities was approximately $4.2 million for the six months ended June 30, 2011, as compared to approximately $3.4 million for the same period in 2010. During 2011, the cash provided by operating activities was primarily from net earnings of approximately $0.9 million, depreciation and amortization of approximately $1.5 million, equity in net loss from investment in limited liability company of approximately $1.1 million, and an increase in accounts receivable of approximately $0.5 million. The components of depreciation and amortization primarily relate to the purchases of the Company’s traditional PERS equipment and the customer lists associated with the acquisition of telephone answering service businesses. The net loss from investment in limited liability company represents the Company’s equity share of Lifecomm’s loss which consists of research and development cost as well as other selling, general and administrative expense incurred for the development of the next generation mobile PERS. The decrease in accounts receivable was primarily as a result of certain significant projects which were billed in the last quarter of 2010 being collected in 2011. During 2010, the cash provided by operating activities was primarily from net earnings of approximately $1.6 million and depreciation and amortization of approximately $1.8 million.

Net cash used in investing activities for the six months ended June 30, 2011 was approximately $0.6 million compared to $4.5 million for the same period in 2010. The primary component of net cash used in investing activities in 2011 was capital expenditures of approximately $0.7 million. The primary components of net cash used in investing activities in 2010 were the investment in a limited liability company of approximately $4.1 million for the development of the next generation mobile PERS system and capital expenditures of approximately $0.4 million. Capital expenditures for both 2011 and 2010 primarily related to the continued production and purchase of the traditional PERS systems.

Cash flows used in financing activities for the six months ended June 30, 2011 were approximately $0.4 million compared to $0.3 million for the same period in 2010. The primary component of cash flow used in financing activities in 2011 was the payment of long-term debt of approximately $0.4 million. The primary components of cash flow used in financing activities in 2010 were the payment of long-term debt of approximately $1.3 million and the payment of a special dividend, which was declared on December 16, 2009, of approximately $1.0 million. These financing cash outflows in 2010 were partially offset by the proceeds from long-term debt of $2.0 million which was obtained for the purpose of partially funding the investment in a limited liability company.

During the next twelve months, the Company anticipates it will make capital expenditures of approximately $1.75 – $2.25 million for the production and purchase of the traditional PERS systems, telehealth systems, Mobile PERS, enhancements to its computer operating systems and build-out of its additional call center space. Part of this amount is subject to fluctuations primarily based on customer demand. The Company anticipates incurring approximately $0.1 - $0.2 million of costs primarily relating to research and development of its home-based cellular PERS and telehealth products. The Company also plans to incur approximately $1.0 - $1.5 million of advertising expense for promotional campaigns related to its PERS system. The Company is also considering acquisition initiatives which may require additional cash outlay.

As of June 30, 2011, the Company had approximately $7.2 million in cash and the Company’s working capital was approximately $12.5 million. The Company believes that with its present cash balance and with operations of the business generating positive cash flow, it will be able to meet its cash flow needs for working capital and capital expenditures for at least the next twelve months. The Company also has a revolving credit line, which expires in June 2013 that permits borrowings up to $2.5 million, of which $750,000 was outstanding at June 30, 2011.

Off-Balance Sheet Arrangements:

As of June 30, 2011, the Company has not entered into any off-balance sheet arrangements that are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Other Factors:

Lease Commitments

On January 14, 2002, the Company entered into an operating lease agreement for space in Long Island City, New York in order to consolidate its HCI TBCS and PERS ERC/ Customer Service facilities. The centralization of the ERC, Customer Service and HLINK® OnCall operations has provided certain operating efficiencies and allowed for continued growth of the HLINK and PERS divisions. The fifteen (15) year lease term commenced in April 2003. The lease calls for minimum annual rentals of $307,900, subject to a 3% annual increase plus reimbursement for certain real estate taxes.

During 2005, the Company entered into two operating lease agreements for additional space at its Long Island City, New York location in order to consolidate its warehouse and distribution center and accounting department into this location. The leases, which commenced in January 2006 and expire in March 2018, call for minimum annual rentals of $220,000 and $122,000, respectively, and are subject to increases in accordance with the term of the agreements. The Company is also responsible for the reimbursement of certain real estate taxes.

In September 2009, the Company sublet a portion of its Long Island City, New York space under one of its operating leases which was entered into in 2005. The space is being sublet to an independent third party and calls for minimum annual rentals of $125,000, subject to annual increases in accordance with the terms of the agreement. The sublease expires in March 2018.

During 2010, the Company entered into an operating lease agreement for additional space at its Long Island City, New York location in order to provide space for the operation of its non traditional day-time services. The lease, which commenced in January 2011 and expires in December 2015, calls for minimum annual rent of $65,000, subject to increases in accordance with the term of the agreement. The Company is also responsible for the reimbursement of certain real estate taxes.

In June 2011, the Company entered into an operating lease agreement for additional space at its Long Island City, New York location in order to provide space primarily for the expansion of its non traditional day-time services and its pharmaceutical support services. The lease will commence when the landlord’s build out is completed which is estimated to be in October 2011, and will expire after five years. The lease calls for minimum annual rent of $215,375 and is subject to increases in accordance with the term of the agreement. The Company is also responsible for the reimbursement of real estate taxes.

Investment in limited liability company

On May 12, 2010, the Company entered into a limited liability company agreement with Hughes Telematics, Inc. and Qualcomm Incorporated to design, develop, finance and operate a mobile PERS system. The Company invested $4,000,000 and incurred $150,336 in professional fees to acquire a minority interest (approximately 10%) in the new company, Lifecomm LLC (“Lifecomm”). As part of this transaction, the Company borrowed $2,000,000 from its bank to partially finance this transaction. In addition, pursuant to the limited liability company agreement, the Company has agreed to fund its share ($200,000) of a stand-by equity commitment for Lifecomm’s benefit, if required. As of June 30, 2011, the Company’s exposure to loss is limited to the recorded equity investment balance of $1,898,298 and its share ($200,000) of a stand-by equity commitment, if required.

Hughes Telematics, Inc. (“HTI”), parent of Lifecomm and the party who has a controlling financial interest in Lifecomm, has determined that Lifecomm is a variable interest entity and that HTI is the primary beneficiary. If HTI is unable to provide the financial and operating support that it is obligated to under the agreement, Lifecomm and the successful development of the next generation mobile PERS would likely be negatively impacted.

Lifecomm is a development stage company that has yet to generate any revenue, and has generated a pre-tax net loss of $4,312,480 and $2,356,758 during the six and three months ended June 30, 2011 ($7,934,372 during the period from inception, May 12, 2010 to June 30, 2011). Lifecomm will continue to generate losses until the next generation mobile PERS is completed and commercialized, which is anticipated to be in early 2012. There is no assurance that Lifecomm will complete, in a cost effective or timely manner, the development of the operating systems to specifications that will allow it to successfully generate revenue.

Acquisition

On September 29, 2010, the Company acquired substantially all of the assets of Alpha Message Center, Inc. (“Alpha”), a New Jersey based company that provides telephone after-hours answering and pager services. The purchase price of this acquisition consisted of an initial cash payment of $577,977 and an accrual of $200,000, which represented the estimated fair value of the contingent consideration expected to be paid through September 2012. The contingent consideration is based on the acquisition agreement that calls for the Company to pay the former owner of Alpha fourteen percent (14%) of the cash expected to be collected by the Company, excluding sales taxes, from certain revenue generated by Alpha through September 2012. The Company estimated the future contingent consideration expected to be paid based upon Alpha’s historic revenue data. The results of operations of Alpha are included in the Telephone Based Communications Services segment as of the date of acquisition.

Recent Accounting Pronouncements:

In December 2010, the FASB issued Update 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations.” The amendments in Update 2010-29 specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Update 2010-29 also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributed to the business combination included in the pro forma financial data. The Company is required to adopt all the provisions of Update 2010-29 for any business combinations for which the acquisition date is on or after January 1, 2011. The impact of the provisions of this guidance on our consolidated financial statements depends upon the nature, terms and size of the acquisitions we consummate in the future.

In December 2010, the FASB issued Update 2010-28, “Intangibles --Goodwill and Other (Topic 350).” Update 2010-28 modifies the first step of the goodwill impairment test to include reporting units with zero or negative carrying amounts. For these reporting units, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any; when it is more likely than not that a goodwill impairment exists. Update 2010-28 is effective for fiscal years and interim periods beginning after December 15, 2010. The adoption of this guidance did not have a material impact on the consolidated financial statements of the Company.

Critical Accounting Policies:

In preparing the financial statements, the Company makes estimates, assumptions and judgments that can have a significant impact on our revenue, operating income and net income, as well as on the reported amounts of certain assets and liabilities on the balance sheet. The Company believes that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on its financial statements due to the materiality of the accounts involved, and therefore, considers these to be its critical accounting policies. Estimates in each of these areas are based on historical experience and a variety of assumptions that the Company believes are appropriate. Actual results may differ from these estimates.

Reserves for Uncollectible Accounts Receivable

The Company makes ongoing assumptions relating to the collectability of its accounts receivable. The accounts receivable amount on the balance sheet includes a reserve for accounts that might not be paid. In determining the amount of the reserve, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and it assesses current economic trends that might impact the level of credit losses in the future. The Company recorded reserves for uncollectible accounts receivable of $453,800 as of June 30, 2011, which is equal to 6% of the total accounts receivable. While the Company believes that the current reserves are adequate to cover potential credit losses, it cannot predict future changes in the financial stability of its customers and the Company cannot guarantee that its reserves will continue to be adequate. For each 1% that actual credit losses exceed the reserves established, there would be an increase in general and administrative expenses and a reduction in reported net income of approximately $74,000. Conversely, for each 1% that actual credit losses are less than the reserve, this would decrease the Company’s general and administrative expenses and increase the reported net income by approximately $74,000.

Fixed Assets

Fixed assets are stated at cost. Depreciation for financial reporting purposes is being provided by the straight-line method over the estimated useful lives of the related assets. The valuation and classification of these assets and the assignment of useful depreciable lives involves significant judgments and the use of estimates. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Historically, impairment losses have not been required. Any change in the assumption of estimated useful lives could either result in a decrease or increase to the Company’s financial results. A decrease in estimated useful life would reduce the Company’s net income and an increase in estimated useful life would increase the Company’s net income. If the estimated useful lives of the PERS medical device were decreased by one year, the cost of goods related to services would increase and net income would decrease by approximately $154,000 per annum. Conversely, if the estimated useful lives of the PERS medical device were increased by one year, the cost of goods related to services would decrease and net income would increase by approximately $112,000 per annum.

Valuation of Goodwill

Goodwill and indefinite life intangible assets are subject to annual impairment tests. To date, the Company has not been required to recognize an impairment of goodwill. The Company tests goodwill for impairment annually or more frequently when events or circumstances occur indicating goodwill might be impaired. This process involves estimating fair value using discounted cash flow analyses. Considerable management judgment is necessary to estimate discounted future cash flows. Assumptions used for these estimated cash flows were based on a combination of historical results and current internal forecasts. The Company cannot predict certain events that could adversely affect the reported value of goodwill, which totaled $10,842,352 at June 30, 2011 and December 31, 2010. If the Company were to experience a significant adverse impact on goodwill, it would negatively impact the Company’s net income.

Investment in limited liability company

The Company owns a minority interest of approximately 10% and is not the primary beneficiary in an unconsolidated limited liability company. The Company's investment in the unconsolidated limited liability company is recorded using the equity method of accounting, whereby the original investment is recorded at cost and subsequently adjusted for contributions, distributions, and net income (loss) attributable to such limited liability company. All income and loss are allocated to the limited liability company members in accordance with the terms of the limited liability company agreement. An impairment charge is recognized for an investment accounted for under the equity method when an other than temporary decline in its carrying value has occurred. As of June 30, 2011, the equity investment balance was $1,898,298 and the Company has not recorded any impairment charges on its equity investment in the limited liability company.

Accounting for Stock-Based Awards

Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. The Company recorded a pre-tax stock-based compensation expense which is included in selling, general and administrative expense in its consolidated financial statements of approximately $116,000 and $160,000 for the six months ended June 30, 2011 and 2010, respectively.

The determination of fair value of share-based payment awards to employees and directors on the date of grant using the Black-Scholes model is affected by the Company's stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk Disclosure

The Company does not hold market risk-sensitive instruments entered into for trading purposes, nor does it hold market risk sensitive instruments entered into for other than trading purposes. All sales, operating items and balance sheet data are denominated in U.S. dollars; therefore, the Company has no significant foreign currency exchange rate risk.

In the ordinary course of its business, the Company enters into commitments to purchase raw materials and finished goods over a period of time, generally six months to one year, at contracted prices. At June 30, 2011, these future commitments were not at prices in excess of current market, or in quantities in excess of normal requirements. The Company does not utilize derivative contracts either to hedge existing risks or for speculative purposes.

Interest Rate Risk

We are exposed to market risk from changes in interest rates primarily through our financing activities. Interest on the outstanding balances on our term loans and revolving credit line under our credit facility accrues at a rate of LIBOR plus 1.75% and LIBOR plus 1.50%, respectively. Our ability to carry out our business plan to finance future working capital requirements may be impacted if the cost of carrying debt fluctuates to the point where it becomes a burden on our resources.

Item 4. Controls and Procedures.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer and President and its Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and President and the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed by it under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and President and Chief Financial Officer of the Company, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is aware of various threatened or pending litigation claims against the Company relating to its products and services and other claims arising in the ordinary course of its business. The Company has given its insurance carrier notice of such claims and it believes there is sufficient insurance coverage to cover any such claims. Currently, no material liabilities have been recorded and in any event, the Company believes the disposition of these matters will not have a material adverse effect on the results of operations and financial condition of the Company.

Item 1A. Risk Factors

Management believes that there have been no material changes in the Company’s risk factors as reported in the Annual Report on Form 10-K for the year ended December 31, 2010, which was filed on March 31, 2011 with the Securities and Exchange Commission and amended on April 6, 2011

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

On June 23, 2011, we issued time vested restricted stock units representing the right to receive 46,500 shares of our common stock to two executive officers, as required under such executives’ existing employment agreements. On June 30, 2011, we granted 2931 shares of restricted stock to two non-employee directors. Exemption from the registration provisions of the Securities Act of 1933, as amended (the "Act") for the foregoing grants is claimed under Section 4(2) of the Act, and Rule 506 promulgated thereunder. The exemption was established by the representation of each recipient as to his status as an accredited investor by virtue of his position with the Company, and the acknowledgment by each recipient that the shares are “restricted securities” and that resale of the securities may not be made unless registered under the Act, or another exemption is available. In addition, the securities will bear a legend indicating such restrictions on transferability. The foregoing issuances were compensatory in nature and were made without cost to the receipients.

Item 6. Exhibits

No.	Description

10.1	Lease Modification II, dated June 24, 2011, to the Lease, dated as of January 4, 2002, between CityView Plaza, LLC and American Medical Alert Corp.

10.2	Restricted Stock Unit Award Agreement, dated June 23, 2011, between American Medical Alert Corp. and Jack Rhian.

10.3	Restricted Stock Unit Award Agreement, dated June 23, 2011, between American Medical Alert Corp. and Frederic Siegel.

15.1	Letter from Margolin, Winer & Evens LLP, the independent accountant of the Company, acknowledging awareness of the use in a registration statement of a report on the unaudited interim financial information in this quarterly report.

31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002

31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002

32.1	Certification of CEO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002

32.2	Certification of CFO Pursuant to Section 906 of the Sarbanes Oxley Act of 2002

SIGNATURES

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

	AMERICAN MEDICAL ALERT CORP.

Dated: August 15, 2011	By:	/s/ Jack Rhian
		Name: Jack Rhian
		Title: Chief Executive Officer and President


	By:	/s/ Richard Rallo
		Name: Richard Rallo
		Title: Chief Financial Officer

Attached files

AMERICAN MEDICAL ALERT CORP Reports

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