STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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

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

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

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

Overview

We are a leading provider of Internet-based travel related services and operate through our three subsidiaries: YourTravelBiz.com, Inc., YTB Travel Network, Inc. and REZconnect Technologies, Inc. YourTravelBiz.com, Inc. ("YTB Marketing") establishes and sells online travel agencies and compensates its Independent Marketing Representatives ("Reps") who sell such travel agencies via a multilevel marketing commission structure. YTB Travel Network, Inc. ("YTB Travel") contracts with the online travel agencies, provides online booking systems, collects travel commissions and pays travel commissions. REZconnect Technologies, Inc. ("REZconnect") is a travel vendor relationship management company and host agency for traditional brick and mortar travel agencies. REZconnect is reported as part of the YTB Travel segment for segment reporting purposes.

YTB Marketing conducts business through marketing, training and support of its Rep sales force who are responsible for marketing and selling online travel websites to Referring Travel Agents (or Referring Travel Affiliates in Canada, "RTAs"), most of whom work from their homes.

YTB Travel is the travel management subsidiary that processes travel sales from online business models and processes and handles bookings (reservations) from RTA websites, negotiates deals with preferred vendors and receives incentives based on the volume of business that it produces. The fulfillment is offered through interactive, real time booking engines and access to preferred deals with leading travel industry suppliers.

The emerging market shift to the Internet for travel services presents the opportunity for advancement of products and services by referral relationships. Typical online travel merchants sell a commodity (travel), which does not engender strong customer loyalty. By contrast, each RTA develops personal relationships with his or her customers, who book travel through the RTA's online travel store, thereby creating a significant advantage for our company over the major online travel companies. Typically, the cost to book a trip through an RTA is nearly identical to booking a trip through a major online travel company. The RTAs' online stores provide access to more than 60 booking engines, including World Choice Travel (a subsidiary of Travelocity), Hotels.com, Apple Vacations, Collette Vacations, and more.

Future travel revenue growth should accelerate as we add RTAs and as our existing RTAs become more productive. RTA sites are available for use 24 hours, 7 days a week. On June 30, 2008, we issued a press release announcing that we have been named one of the country's leading travel agencies in Travel Weekly's 2008 Power List. In this year's Travel Weekly Power List, we are ranked 26th among all travel agencies, advancing nine places over our ranking in the previous year with an 84% increase in sales.

Our revenues are comprised primarily of online travel store sales and monthly RTA web hosting fees, commissions paid by travel providers and direct sales of travel. In addition, certain travel suppliers pay performance-based compensation known as "override commissions" or "overrides." Commission revenues and gross retail sales, net of allowances for cancellations, are recognized generally based on the expected date of travel. Overrides are recognized on an accrual basis, based on prior years experience adjusted for current year volumes. Management believes these estimates to be reasonable. Revenue from online travel store sales is deferred and recognized ratably as revenue over a twelve-month period.

The commission rates paid by travel suppliers, in addition to overrides, are determined by individual travel suppliers and are subject to change. Historically, typical standard base commission rates paid by travel suppliers have been approximately 10% for hotel reservations, 5% to 10% for car rentals, 10% to 16% for cruises and vacation packages and a nominal service fee for airline tickets. During the past several years, leisure vendors (including tour operators, cruise lines and hotel and car packagers) have not reduced their commission levels but in fact have offered YTB Travel incentive commissions above the standard compensation for its volume business. YTB Travel expects that its weighted average commission of online transaction revenues will increase due to the fact that its leisure bookings are much greater as a percentage of total sales than airline ticketing, the latter offering lower commissions. Each website travel storeowner (RTA) pays a monthly fee of $49.95 to us, and can earn transactional compensation from travel purchased from his or her website. There can be no assurance that travel suppliers will not reduce commission rates paid to YTB Travel or eliminate such commissions entirely, which could, individually or in the aggregate, have a material adverse effect on our business, operating results and financial condition.

About Our Industry

Booking via the Internet has resulted in many opportunities for individuals and provides greater access to the consumer. Our Company has become a target for some traditional "Brick and Mortar" agencies as their market share diminishes.

We believe that the shift to the Internet for booking travel and our unique programs for our RTAs place our Company in a valuable and unique position to provide an income stream for our RTAs and allows the ultimate consumer a choice of booking his or her travel through the ever-growing Internet travel industry.

We are not attempting to conform to the pre-Internet travel industry of the 1970s and '80s. Rather, we are building a new company with new ideas, building an army of entrepreneurs. We will continue to attract RTAs to sell our products. We will provide our sales force with a powerful e-commerce consumer website that sells travel as well as other highly consumed products. Our customers will shop and purchase on the Internet from someone they know and with whom they have a relationship.

We offer business opportunities for entrepreneurs who desire to capitalize on the growing trend of online travel bookings. In our eighth year of business and with well over a billion dollars in travel sales in our history, we will continue to teach and practice the highest standards of business principles and practices in this exciting and growing travel industry.

Results of Operations

The following tables set forth, for the three and six months ended June 30, 2008
and 2007, as indicated, the percentage relationship of certain items from the
Company's consolidated statement of operations to total net revenues. A summary
of consolidated results follows.


                               Three months ended               Three months ended                    Variance
                                             % of Net                         % of Net       Increase
                           June 30, 2008     Revenues       June 30, 2007     Revenues      (Decrease)      Inc.(Decr.) %

NET REVENUES
Online travel stores
and monthly fees          $    33,354,064          74.5 %  $    23,309,601          71.1 % $  10,044,463              43.1 %
Travel commissions and
services                        8,819,817          19.7 %        5,856,731          17.9 %     2,963,086              50.6 %
Training programs and
marketing materials             2,266,903           5.1 %        3,352,211          10.2 %    (1,085,308 )           (32.4 %)
Other                             333,526           0.7 %          287,603           0.8 %        45,923              16.0 %

Total net revenues             44,774,310         100.0 %       32,806,146         100.0 %    11,968,164              36.5 %

OPERATING EXPENSES
Marketing commissions          24,476,234          54.7 %       18,946,646          57.8 %     5,529,588              29.2 %
Travel commissions and
other costs                     7,204,179          16.1 %        3,876,327          11.8 %     3,327,852              85.9 %
Depreciation and
amortization                      676,167           1.5 %          263,943           0.8 %       412,224             156.2 %
Marketing and selling           1,531,259           3.4 %        1,458,286           4.4 %        72,973               5.0 %
General and
administrative                 11,101,197          24.8 %        6,718,843          20.5 %     4,382,354              65.2 %

Total operating
expenses                       44,989,036         100.5 %       31,264,045          95.3 %    13,724,991              43.9 %

INCOME (LOSS) FROM
OPERATIONS                       (214,726 )        (0.5 %)       1,542,101           4.7 %    (1,756,827 )          (113.9 %)

OTHER INCOME/(EXPENSE)
Interest and dividend
income                             82,891           0.2 %          131,018           0.4 %       (48,127 )           (36.7 %)
Interest expense                  (37,074 )        (0.1 %)          (1,315 )         0.0 %       (35,759 )          2719.3 %
Foreign currency
translation loss                  (17,148 )         0.0 %                -           0.0 %       (17,148 )             n/a

Total other
income/(expense)                   28,669           0.1 %          129,703           0.4 %      (101,034 )           (77.9 %)

INCOME (LOSS) BEFORE
INCOME TAX PROVISION             (186,057 )        (0.4 %)       1,671,804           5.1 %    (1,857,861 )          (111.1 %)

INCOME TAX PROVISION               13,520           0.0 %                -           0.0 %        13,520               n/a


NET INCOME (LOSS)         $      (199,577 )        (0.4 %) $     1,671,804           5.1 % $  (1,871,381 )          (111.9 %)

                                  Six months ended                  Six months ended                      Variance
                                               % of Net                          % of Net        Increase
                            June 30, 2008      Revenues       June 30, 2007      Revenues       (Decrease)      Inc.(Decr.) %

NET REVENUES
Online travel stores and
monthly fees               $    67,313,452           76.9 %  $    41,274,962           72.4 %  $  26,038,490              63.1 %
Travel commissions and
services                        14,148,444           16.2 %        8,394,425           14.7 %      5,754,019              68.5 %
Training programs and
marketing materials              5,276,408            6.0 %        6,713,363           11.8 %     (1,436,955 )           (21.4 %)
Other                              763,573            0.9 %          601,877            1.1 %        161,696              26.9 %

Total net revenues              87,501,877          100.0 %       56,984,627          100.0 %     30,517,250              53.6 %

OPERATING EXPENSES
Marketing commissions           49,544,777           56.6 %       35,701,848           62.7 %     13,842,929              38.8 %
Travel commissions and
other costs                     11,056,595           12.6 %        5,485,015            9.6 %      5,571,580             101.6 %
Depreciation and
amortization                     1,211,829            1.4 %          477,975            0.8 %        733,854             153.5 %
Marketing and selling            2,923,874            3.3 %        2,895,943            5.1 %         27,931               1.0 %
General and
administrative                  26,443,008           30.2 %       13,105,692           23.0 %     13,337,316             101.8 %

Total operating expenses        91,180,083          104.2 %       57,666,473          101.2 %     33,513,610              58.1 %

LOSS FROM OPERATIONS            (3,678,206 )         (4.2 %)        (681,846 )         (1.2 %)    (2,996,360 )           439.4 %

OTHER INCOME/(EXPENSE)
Interest and dividend
income                             152,198            0.2 %          180,554            0.3 %        (28,356 )           (15.7 %)
Interest expense                   (54,097 )         (0.1 %)          (3,926 )          0.0 %        (50,171 )          1277.9 %
Foreign currency
translation loss                   (17,603 )          0.0 %                -            0.0 %        (17,603 )             n/a

Total other
income/(expense)                    80,498            0.1 %          176,628            0.3 %        (96,130 )           (54.4 %)

LOSS BEFORE INCOME TAX
PROVISION                       (3,597,708 )         (4.1 %)        (505,218 )         (0.9 %)    (3,092,490 )           612.1 %

INCOME TAX PROVISION               119,520            0.1 %                -              -          119,520               n/a

NET LOSS                   $    (3,717,228 )         (4.2 %) $      (505,218 )         (0.9 %) $  (3,212,010 )           635.8 %

The RTA numbers represent the number of active RTAs paying $49.95 per month to us as monthly web hosting fees. The New RTAs represent the number of online travel store sites sold during the respective periods. The number of sales, and the number of recurring monthly fees paid, each directly impacts our revenues and expenses. As each new site is sold for $449.95, marketing commissions are paid on that sale. Likewise, each recurring monthly fee paid results in marketing commissions paid to the Reps. As the number of active RTAs grows, the amount of our travel commission revenue grows as well. Correspondingly, our travel commission expense follows suit.

The growth on a year-to-year basis of our organization that is evidenced by the above numbers directly impacts our financial results, both on the revenue side, as well as the expense side. As more sites are sold and maintained, the amount of marketing and travel commissions correspondingly increase, as do other volume related expenses, such as wage and benefit costs. As more sales are made, our entire infrastructure needs to keep pace with the sales volume.

The following table sets forth information concerning (i) the number of RTAs that were added to, and those that were deactivated from (by non-payment or cancellation), our organization during each of the three months and six months ended June 30, 2008 and 2007, and (ii) the weighted average number of active RTAs during each such period:

               Beginning Balance                                        Ending Balance    Average Renewals
 Year 2008        Active RTAs         New RTAs        Deactivations      Active RTAs       for the Period
  3 months
 ended June
  30, 2008            138,814            23,396            30,638             131,572            134,823

  6 months
 ended June
  30, 2008            131,802            54,289            54,519             131,572            135,534



               Beginning Balance                                         Ending Balance    Average Renewals
 Year 2007        Active RTAs          New RTAs        Deactivations      Active RTAs       for the Period
  3 months
 ended June
  30, 2007              82,932            34,309            16,897             100,344             95,123

  6 months
 ended June
  30, 2007              59,333            67,724            26,713             100,344             84,743

An RTA's travel website can be deactivated for a number of reasons. For example, the payment method used to pay for monthly web hosting fees may no longer be valid or may have been changed and an RTA may fail to update this information. If the RTA fails to provide payment for future months' web hosting fees in advance of the service being provided, the website will be deactivated automatically. We also have a cancellation policy that allows an RTA to voluntarily discontinue his or her website; such a website is deactivated at the time the request is made. We reserve the right to deactivate any website which we believe may have fraudulent activity associated with it or with its owner. RTA sites may be reactivated by simply resuming payment of web hosting fees from that point forward.

Deactivations of our RTAs' travel websites in relation to the number of new online travel store sales (websites) during a specified period is a key component in the calculation performed to determine the average lifespan that an RTA remains with our Company. If the proportion of RTA deactivations were to grow as a percentage of active paying RTAs, the average lifespan of an RTA would decrease and vice versa. In the event of such a decrease, we would accelerate the time frame over which we recognize the income and offsetting expense relating to the RTA initial sign up fees. This acceleration would have a positive impact on our bottom line, as the amount of revenue deferred from an RTA's sign-up fees outweighs the offsetting deferred expense for commissions related to such sign-up. With no change in the commission structure, we expect the trend of revenues exceeding the related expenses to continue.

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

We reported a net loss for the second quarter ended June 30, 2008 of $199,577 or $0.00 per diluted share compared to net income of $1,671,804 or $0.02 per diluted share for the comparable quarter of 2007. Included in the net loss for the three months ended June 30, 2008, is a $351,071 gain related to the two charter cruises that took place during the second quarter. At March 31, 2008, we recorded a reserve for the anticipated loss on the two charter cruises of $1,700,000. An increase in expected sales along with a reduction of the anticipated penalties and surcharges resulted in the gain of $351,071 in the three months ended June 30, 2008.

Net Revenues

Net revenues totaled $44,774,310 and $32,806,146 in the second quarter of 2008 and 2007, respectively.

· Online travel store sales increased $1,047,606 or 8.3% in the second quarter of 2008 to $13,634,791 from the $12,587,185 reported in the comparable prior year quarter. The increase is due to increases in both the average number of store sales for which we are able to recognize revenue, along with an increase in the average amount of revenue recognizable for each store sale. The average number of store sales for which we were able to recognize revenue increased to 10,684 in 2008 from 7,970 in 2007. In addition, the average amount of recognized revenue from each store sale increased to $449.95 in 2008 from $438.41 in 2007. We believe this significant growth year over year in average RTAs is attributable to the emerging market shift to the Internet for travel services which presents the opportunity for advancement of products and services by referral relationships and the growth in the desire for home-based businesses.

· Monthly renewal fees increased $8,966,857 or 83.9% in the second quarter of 2008 to $19,719,273 from the $10,722,416 reported in the comparable prior year quarter. The increase is in direct relation to the number of active paying RTAs. The weighted average of paying RTAs per month increased from 95,123 in 2007 to 134,823 for the same period in 2008. We believe this significant growth year over year in average RTAs is also attributable to the emerging market shift to the Internet for travel services which presents the opportunity for advancement of products and services by referral relationships and the growth in the desire for home-based businesses.

· Travel commissions and services for the second quarter of 2008 increased $2,963,086 or 50.6% to $8,819,817 from the $5,856,731 reported in the comparable prior year quarter. The increase in travel commissions is attributable to the growth in gross travel retail bookings driven by the number of customers utilizing us as their travel provider in 2008. Also contributing to the growth in travel commissions is the fact that we held more travel educational events/tradeshows in the second quarter of 2008 compared to 2007, which in turn increases product awareness, making our RTAs more effective in selling travel. As the increase in travel bookings occur, a preferred travel bonus, or override, is given by certain vendors in addition to commission. A portion of the anticipated bonus for the second quarter of 2008 has been recorded as travel commission revenue with an offsetting receivable. Also contributing to the increase in travel services for the three months ended June 30, 2008, is the fact that we chartered two ships with revenues totaling $1,048,192.

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

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

Operating Expenses

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

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

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

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

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

§ Salaries and benefits increased by $2.1 million primarily as a result of additional staffing requirements at the home office directly related to the increased sales of online travel stores and continuing renewals of RTAs as well as salary increases of existing staff.

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

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

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

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

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

§ Contract labor increased $1.3 million primarily related to increased . . .