----

----

----

| Nevada                                   |   | 93-1215401                           |
|------------------------------------------|--------|--------------------------------------|
| (State of jurisdiction of Incorporation) |   | (I.R.S. Employer Identification No.) |

| Large accelerated filer o     |   |                                          |   | Accelerated filer o              |
|-------------------------------|--------|-----------------------------------------------|--------|----------------------------------|
|                          |   |                                          |   |                             |
|  Non-accelerated filer o |   | (Do not check if a smaller reporting company) |   | Smaller reporting company ý |

----

|                                     |                                                                     | Page   |
|------------------------------------------|--------------------------------------------------------------------------|--------|
|                                     |                                                                     |   |
| PART I.  FINANCIAL INFORMATION |                                                                     |
|                                     |                                                                     |   |
| Item 1.                                  | Financial Statements                                                     |   |
|                                     |                                                                     |   |
|                                     | Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited)    |   |
|                                     | and December 31, 2009                                                    | 3      |
|                                     |                                                                     |   |
|                                     | Condensed Consolidated Statements of Income for the Three and Six Months |   |
|                                     | Ended June 30, 2010 and 2009 (unaudited)                                 | 4      |
|                                     |                                                                     |   |
|                                     | Condensed Consolidated Statements of Cash Flows for the Six Months Ended |   |
|                                     | June 30, 2010 and 2009 (unaudited)                                       | 5      |
|                                     |                                                                     |   |
|                                     | Notes to Condensed Consolidated Financial Statements (unaudited)         | 6      |
|                                     |                                                                     |   |
| Item 2.                                  | Management’s Discussion and Analysis of Financial Condition        |   |
|                                     | and Results of Operations                                                | 11     |
|                                     |                                                                     |   |
| Item 3.                                  | Quantitative and Qualitative Disclosures and Market Risk                 | 15     |
|                                     |                                                                     |   |
| Item 4.                                  | Controls and Procedures                                                  | 15     |

| PART II.  OTHER INFORMATION |                            |
|---------------------------------------|---------------------------------|
|                                  |                            |   |
| Item 1.                               | Legal Proceedings               | 16 |
|                                  |                            |   |
| Item1A.                               | Risk Factors                    | 16 |
|                                  |                            |   |
| Item 2.                               | Changes in Securities           | 16 |
|                                  |                            |   |
| Item 3.                               | Defaults Upon Senior Securities | 16 |
|                                  |                            |   |
| Item 4.                               | Reserved                        | 16 |
|                                  |                            |   |
| Item 5.                               | Other Information               | 16 |
|                                  |                            |   |
| Item 6.                               | Exhibits                        | 16 |
|                                  |                            |   |
| Signatures                            |                            | 17 |

----

| Emergent Group Inc. and Subsidiaries                         |
|--------------------------------------------------------------|
| Condensed Consolidated Balance Sheets                        |
|                                                         |   |   |   |   |   |   |
|                                                         |   | June 30, |   |   | December 31, |   |
|                                                         |   | 2010 |   |   | 2009 |   |
| ASSETS                                                       |   | (Unaudited) |   |   |
|                                                         |   |   |   |   |   |   |
| Current assets                                               |   |   |   |   |   |   |
| Cash                                                         |   | $ | 5,801,612 |   |   | $ | 7,427,165 |   |
| Accounts receivable, net of allowance for doubtful           |   |   |   |   |   |   |   |   |
| accounts of $95,909 and $83,704                              |   |   | 3,757,239 |   |   |   | 4,006,123 |   |
| Inventory, net                                               |   |   | 1,115,026 |   |   |   | 889,526 |   |
| Prepaid expenses                                             |   |   | 518,216 |   |   |   | 380,825 |   |
| Deferred income taxes                                        |   |   | 357,630 |   |   |   | 557,630 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Total current assets                                         |   |   | 11,549,723 |   |   |   | 13,261,269 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Property and equipment, net of accumulated depreciation and  |   |   |   |   |   |   |   |   |
| amortization of $9,741,711 and $9,031,136                    |   |   | 4,982,822 |   |   |   | 5,545,492 |   |
| Goodwill                                                     |   |   | 1,120,058 |   |   |   | 1,120,058 |   |
| Deferred income taxes                                        |   |   | 21,126 |   |   |   | 21,126 |   |
| Other intangible assets, net of accumulated amortization of  |   |   |   |   |   |   |   |   |
| $348,195 and $300,672                                        |   |   | 407,742 |   |   |   | 455,265 |   |
| Deposits and other assets                                    |   |   | 80,777 |   |   |   | 80,992 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Total assets                                                 |   | $ | 18,162,248 |   |   | $ | 20,484,202 |   |
|                                                         |   |   |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                         |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |
| Current liabilities                                          |   |   |   |   |   |   |   |   |
| Current portion of capital lease obligations                 |   | $ | 1,911,680 |   |   | $ | 1,901,272 |   |
| Dividends payable                                            |   |   | - |   |   |   | 2,710,817 |   |
| Accounts payable                                             |   |   | 1,515,941 |   |   |   | 1,440,122 |   |
| Accrued expenses and other liabilities                       |   |   | 1,608,963 |   |   |   | 2,456,315 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Total current liabilities                                    |   |   | 5,036,584 |   |   |   | 8,508,526 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Capital lease obligations, net of current portion            |   |   | 2,287,669 |   |   |   | 2,670,942 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Total liabilities                                            |   |   | 7,324,253 |   |   |   | 11,179,468 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Commitments and contingencies, note 5                        |   |   | - |   |   |   | - |   |
|                                                         |   |   |   |   |   |   |   |   |
| Shareholders' equity                                         |   |   |   |   |   |   |   |   |
| Preferred stock, $0.001 par value, non-voting 10,000,000     |   |   |   |   |   |   |   |   |
| shares authorized, no shares issued and outstanding          |   |   | - |   |   |   | - |   |
| Common stock, $0.04 par value, 100,000,000 shares authorized |   |   |   |   |   |   |   |   |
| 6,862,762 and 6,776,118 shares issued and outstanding        |   |   | 274,507 |   |   |   | 271,042 |   |
| Additional paid-in capital                                   |   |   | 16,664,252 |   |   |   | 16,507,958 |   |
| Accumulated deficit                                          |   |   | (6,496,117 | ) |   |   | (8,062,324 | ) |
|                                                         |   |   |   |   |   |   |   |   |
| Total Emergent Group equity                                  |   |   | 10,442,642 |   |   |   | 8,716,676 |   |
| Non-controlling interest                                     |   |   | 395,353 |   |   |   | 588,058 |   |
| Total shareholders' equity                                   |   |   | 10,837,995 |   |   |   | 9,304,734 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                   |   | $ | 18,162,248 |   |   | $ | 20,484,202 |   |

----

| Emergent Group Inc. and Subsidiaries                |
|-----------------------------------------------------|
| Condensed Consolidated Statements of Income         |
| (Unaudited)                                         |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   | Three Months Ended |   | Six Months Ended |   |
|                                                |   | June 30, |   | June 30, |   |
|                                                |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                             |   | $ | 7,246,842 |   |   | $ | 7,788,765 |   |   | $ | 14,620,012 |   |   | $ | 15,123,808 |   |
| Cost of goods sold                                  |   |   | 4,392,127 |   |   |   | 4,625,102 |   |   |   | 8,858,289 |   |   |   | 9,036,560 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                        |   |   | 2,854,715 |   |   |   | 3,163,663 |   |   |   | 5,761,723 |   |   |   | 6,087,248 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general, and administrative expenses       |   |   | 1,495,726 |   |   |   | 1,496,742 |   |   |   | 2,955,732 |   |   |   | 2,952,164 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                              |   |   | 1,358,989 |   |   |   | 1,666,921 |   |   |   | 2,805,991 |   |   |   | 3,135,084 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net                               |   |   | (75,286 | ) |   |   | (87,503 | ) |   |   | (146,086 | ) |   |   | (175,989 | ) |
| Gain on disposal of property and equipment          |   |   | 56,476 |   |   |   | 1,950 |   |   |   | 64,323 |   |   |   | 2,550 |   |
| Other income from affiliated entities, net          |   |   | - |   |   |   | - |   |   |   | 190,221 |   |   |   | - |   |
| Other income, net                                   |   |   | 620 |   |   |   | 25,083 |   |   |   | 945 |   |   |   | 30,260 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total other income (expense)                        |   |   | (18,190 | ) |   |   | (60,470 | ) |   |   | 109,403 |   |   |   | (143,179 | ) |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for income taxes and        |   |   |   |   |   |   |   |   |   |
| non-controlling interest                            |   |   | 1,340,799 |   |   |   | 1,606,451 |   |   |   | 2,915,394 |   |   |   | 2,991,905 |   |
| Provision for income taxes                          |   |   | (487,289 | ) |   |   | (573,500 | ) |   |   | (1,077,289 | ) |   |   | (1,051,634 | ) |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before non-controlling interest              |   |   | 853,510 |   |   |   | 1,032,951 |   |   |   | 1,838,105 |   |   |   | 1,940,271 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interests in income of consolidated |   |   |   |   |   |
| limited liability companies                         |   |   | (133,993 | ) |   |   | (163,887 | ) |   |   | (271,897 | ) |   |   | (372,007 | ) |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                          |   | $ | 719,517 |   |   | $ | 869,064 |   |   | $ | 1,566,208 |   |   | $ | 1,568,264 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                            |   | $ | 0.10 |   |   | $ | 0.13 |   |   | $ | 0.23 |   |   | $ | 0.23 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                          |   | $ | 0.10 |   |   | $ | 0.12 |   |   | $ | 0.22 |   |   | $ | 0.22 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic weighted average shares outstanding           |   |   | 6,856,813 |   |   |   | 6,725,579 |   |   |   | 6,824,338 |   |   |   | 6,692,057 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted weighted-average shares outstanding         |   |   | 7,068,876 |   |   |   | 7,089,544 |   |   |   | 7,040,846 |   |   |   | 7,048,247 |   |

----

| Emergent Group Inc. and Subsidiaries                                                                                                                                                                                                                                                                                                                          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Condensed Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                               |
| (Unaudited)                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                          |   | Six Months Ended |   |
|                                                                                                                                                                                                                                                                                                                                                          |   | June 30, |   |
|                                                                                                                                                                                                                                                                                                                                                          |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |
| Cash flows from operating activities                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |
| Net income                                                                                                                                                                                                                                                                                                                                                    |   | $ | 1,566,208 |   |   | $ | 1,568,264 |   |
| Adjustments to reconcile net income to net cash                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| provided by operating activities:                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                                                                                                                                                                                                                                                                                 |   |   | 1,179,883 |   |   |   | 1,051,508 |   |
| Gain on disposal of property and equipment                                                                                                                                                                                                                                                                                                                    |   |   | (64,323 | ) |   |   | (2,550 | ) |
| Provision for doubtful accounts                                                                                                                                                                                                                                                                                                                               |   |   | 12,205 |   |   |   | 14,450 |   |
| Non-controlling interest in income                                                                                                                                                                                                                                                                                                                            |   |   | 271,897 |   |   |   | 372,007 |   |
| Stock-based compensation                                                                                                                                                                                                                                                                                                                                      |   |   | 142,186 |   |   |   | 107,214 |   |
| Deferred income taxes                                                                                                                                                                                                                                                                                                                                         |   |   | 200,000 |   |   |   | 782,119 |   |
| Other income from affiliated entities, net                                                                                                                                                                                                                                                                                                                    |   |   | (190,221 | ) |   |   | - |   |
| Other expense                                                                                                                                                                                                                                                                                                                                                 |   |   | - |   |   |   | 4,708 |   |
| (Increase) decrease in assets and liabilities                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                                                                                                                                                                                                                                                                           |   |   | 236,679 |   |   |   | (583,264 | ) |
| Inventory                                                                                                                                                                                                                                                                                                                                                     |   |   | (225,500 | ) |   |   | 3,280 |   |
| Prepaid expenses                                                                                                                                                                                                                                                                                                                                              |   |   | (137,391 | ) |   |   | (127,072 | ) |
| Deposits and other assets                                                                                                                                                                                                                                                                                                                                     |   |   | 215 |   |   |   | (4,452 | ) |
| Increase (decrease) in                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                                                                                              |   |   | 190,819 |   |   |   | 307,400 |   |
| Accrued expenses and other liabilities                                                                                                                                                                                                                                                                                                                        |   |   | (814,770 | ) |   |   | (432,378 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities                                                                                                                                                                                                                                                                                                                     |   |   | 2,367,887 |   |   |   | 3,061,234 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Cash flows from investing activities                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Purchase of property and equipment                                                                                                                                                                                                                                                                                                                            |   |   | (223,736 | ) |   |   | (411,821 | ) |
| Cash paid to members of limited liability companies                                                                                                                                                                                                                                                                                                           |   |   | (310,714 | ) |   |   | (491,037 | ) |
| Contributions from new members to limited liability companies                                                                                                                                                                                                                                                                                                 |   |   | 3,750 |   |   |   | 82,500 |   |
| Proceeds from the sale of property and equipment                                                                                                                                                                                                                                                                                                              |   |   | 164,169 |   |   |   | 2,550 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Net cash used in investing activities                                                                                                                                                                                                                                                                                                                         |   |   | (366,531 | ) |   |   | (817,808 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Cash flows from financing activities                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Payments on capital lease obligations                                                                                                                                                                                                                                                                                                                         |   |   | (1,061,729 | ) |   |   | (984,192 | ) |
| Payments on dividends declared                                                                                                                                                                                                                                                                                                                                |   |   | (2,710,817 | ) |   |   | (1,989,750 | ) |
| Proceeds from equipment refinancing                                                                                                                                                                                                                                                                                                                           |   |   | 128,064 |   |   |   | 34,740 |   |
| Proceeds from exercise of options to purchase common stock                                                                                                                                                                                                                                                                                                    |   |   | 17,573 |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Net cash used in financing activities                                                                                                                                                                                                                                                                                                                         |   |   | (3,626,909 | ) |   |   | (2,939,202 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Net decrease in cash                                                                                                                                                                                                                                                                                                                                          |   |   | (1,625,553 | ) |   |   | (695,776 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Cash, beginning of period                                                                                                                                                                                                                                                                                                                                     |   |   | 7,427,165 |   |   |   | 4,586,107 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Cash, end of period                                                                                                                                                                                                                                                                                                                                           |   | $ | 5,801,612 |   |   | $ | 3,890,331 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Interest paid                                                                                                                                                                                                                                                                                                                                                 |   | $ | 161,775 |   |   | $ | 185,884 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   | $ | - |   |   |   |   |   |
| Income taxes paid                                                                                                                                                                                                                                                                                                                                             |   | $ | 1,142,125 |   |   | $ | 344,741 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Supplemental schedule of noncash investing and financing activities:                                                                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| During the six months ended June 30, 2010 and 2009, the Company incurred capital lease obligations of $688,864 and $681,266, respectively, for medical equipment. In addition, equipment purchases of $65,000 are included in accounts payable in the accompanying balance sheet as of June 30, 2010 for which the Company is arranging lease financing. |   |

----

| 1.  | BUSINESS |
|----------|----------|

| 2.  | BASIS OF PRESENTATION |
|----------|-----------------------|

----

|                                            |   | Three Months Ended |      |   | Six Months Ended |   |
|-------------------------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                                            |   | June 30,           |      |   | June 30,         |   |
|                                            |   | 2010               |      |   | 2009             |   |   | 2010 |   |   | 2009 |   |
|                                            |   |               |      |   |             |   |   |   |   |   |   |   |
| Numerator -                                     |   |               |      |   |             |   |   |   |   |   |   |   |
| Net income attributable to common               |   |               |      |   |             |   |   |   |   |   |   |   |
| shareholders                                    |   | $                  | 719,517   |   |             | $      | 869,064 |   |   | $ | 1,566,208 |   |   | $ | 1,568,264 |   |
| Denominator -                                   |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average number of common               |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| shares outstanding during the period            |   |               | 6,856,813 |   |             |   | 6,725,579 |   |   |   | 6,824,338 |   |   |   | 6,692,057 |   |
| Dilutive effect of stock options and warrants   |   |               | 212,063   |   |             |   | 363,965 |   |   |   | 216,508 |   |   |   | 356,190 |   |
| Common stock and common stock                   |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| equivalents used for diluted earnings per share |   |               | 7,068,876 |   |             |   | 7,089,544 |   |   |   | 7,040,846 |   |   |   | 7,048,247 |   |

----

| 3.  | DEBT OBLIGATIONS |
|----------|------------------|

| 4.  | STOCK OPTION PLANS |
|----------|--------------------|

----

|                           |   | Number of Options |    |   | Weighted Average Exercise Price |   |
|--------------------------------|--------|------------------------|---------|--------|---------------------------------|--------|
|                           |   |                   |    |   |                            |   |
| Outstanding at January 1, 2010 |   |                   | 305,965 |   |                            | $      | 2.34 |   |
| Options Granted                |   |                   | -       |   |                            | $      | - |   |
| Options Exercised              |   |                   | (43,174 | )      |                            | $      | 0.67 |   |
| Options Canceled               |   |                   | (11,136 | )      |                            | $      | 5.75 |   |
|                           |   |                   |    |   |                            |   |   |   |
| Outstanding at June 30, 2010   |   |                   | 251,655 |   |                            | $      | 2.48 |   |
|                           |   |                   |    |   |                            |   |   |   |
| Exercisable at June 30, 2010   |   |                   | 205,716 |   |                            | $      | 2.06 |   |

|     |          |   |       |   |    |        |   | Weighted        | Weighted        |   | Weighted    |       |   | Weighted    |   |
|----------|---------------|--------|------------|--------|---------|-------------|--------|-----------------|-----------------|--------|-------------|------------|--------|-------------|--------|
|     |          |   |       |   |    |        |   | Average         | Average         |   | Average     |       |   | Average     |   |
|     |          |   |       |   |    |        |   | Remaining       | Remaining       |   | Exercise    |       |   | Exercise    |   |
| Range of |          |   | Stock      |   |    | Stock       |   | Contractual     | Contractual     |   | Price of    |       |   | Price of    |   |
| Exercise |          |   | Options    |   |    | Options     |   | Life of Options | Life of Options |   | Options     |       |   | Options     |   |
| Prices   |          |   | Oustanding |   |    | Exercisable |   | Outstanding     | Exercisable     |   | Outstanding |       |   | Exercisable |   |
|     |          |   |       |   |    |        |   |            |            |   |        |       |   |        |   |
| $        | 0.40          |   |       |   | 176,033 |        |   |            | 176,033         |   | 3.02 years  | 3.02 years |   | $           | 0.40   |   |   | $ | 0.40 |   |
| $        | 2.15 - 8.00   |   |       |   | 69,000  |        |   |            | 23,061          |   | 8.18 years  | 7.67 years |   | $           | 4.25   |   |   | $ | 4.01 |   |
| $        | 20.00 - 51.00 |   |       |   | 6,622   |        |   |            | 6,622           |   | 1.27 years  | 1.27 years |   | $           | 39.28  |   |   | $ | 39.28 |   |
|     |          |   |       |   |    |        |   |            |            |   |        |       |   |        |   |   |   |   |   |   |
| $        | 0.40 - 51.00  |   |       |   | 251,655 |        |   |            | 205,716         |   | 4.39 years  | 3.49 years |   | $           | 2.48   |   |   | $ | 2.06 |   |

----

|                       |   |      |    |   | Weighted        |   |   | Weighted   |   |   |      |   |
|----------------------------|--------|-----------|---------|--------|-----------------|--------|--------|------------|--------|--------|-----------|--------|
|                       |   |      |    |   | Average         |   |   | Average    |   |   |      |   |
|                       |   |      |    |   | Remaining       |   |   | Grant Date |   |   | Aggregate |   |
|                       |   | Number of |    |   | Contractual     |   |   | Fair Value |   |   | Intrinsic |   |
|                       |   | Shares    |    |   | Life (in years) |   |   | Per Share  |   |   | Value     |   |
|                       |   |      |    |   |            |   |   |       |   |   |      |   |
| Nonvested, January 1, 2010 |   |      | 228,797 |   |            |   | 2.8    |       |   | $      | 3.75      |   |   | $ | 789,795 |   |
| Granted                    |   |      | 45,000  |   |            |   |   |       |   | $      | 8.46      |   |   |   |   |   |
| Forfeited/Cancelled        |   |      | -       |   |            |   |   |       |   | $      | -         |   |   |   |   |   |
| Vested                     |   |      | (52,700 | )      |            |   |   |       |   | $      | 3.89      |   |   |   |   |   |
| Nonvested, June 30, 2010   |   |      | 221,097 |   |            |   | 2.7    |       |   | $      | 4.67      |   |   | $ | 564,240 |   |

| 5. | COMMITMENTS AND CONTINGENCIES |
|----|-------------------------------|

| 6.  | RELATED PARTY TRANSACTIONS |
|----------|----------------------------|

| 7.  | LIMITED LIABILITY COMPANIES |
|----------|-----------------------------|

----

----

|                                               |   | Three Months Ended June 30, |      |   | Six Months Ended June 30, |   |
|----------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|
|                                               |   | 2010                        |      |   | %                         |   |   | 2009 |   |   | % |   |   | 2010 |   |   | % |   |   | 2009 |   |   | % |   |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue                                            |   | $                           | 7,246,842 |   |                      |   | 100 | % |   | $ | 7,788,765 |   |   |   | 100 | % |   | $ | 14,620,012 |   |   |   | 100 | % |   | $ | 15,123,808 |   |   |   | 100 | % |
| Cost of goods sold                                 |   |                        | 4,392,127 |   |                      |   | 61 | % |   |   | 4,625,102 |   |   |   | 59 | % |   |   | 8,858,289 |   |   |   | 61 | % |   |   | 9,036,560 |   |   |   | 60 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                       |   |                        | 2,854,715 |   |                      |   | 39 | % |   |   | 3,163,663 |   |   |   | 41 | % |   |   | 5,761,723 |   |   |   | 39 | % |   |   | 6,087,248 |   |   |   | 40 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general, and administrative expenses      |   |                        | 1,495,726 |   |                      |   | 21 | % |   |   | 1,496,742 |   |   |   | 19 | % |   |   | 2,955,732 |   |   |   | 20 | % |   |   | 2,952,164 |   |   |   | 20 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                             |   |                        | 1,358,989 |   |                      |   | 18 | % |   |   | 1,666,921 |   |   |   | 22 | % |   |   | 2,805,991 |   |   |   | 19 | % |   |   | 3,135,084 |   |   |   | 20 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                             |   |                        | (18,190   | )      |                      |   | 0 | % |   |   | (60,470 | ) |   |   | -1 | % |   |   | 109,403 |   |   |   | 1 | % |   |   | (143,179 | ) |   |   | -1 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for income                 |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| taxes and noncontrolling interest                  |   |                        | 1,340,799 |   |                      |   | 18 | % |   |   | 1,606,451 |   |   |   | 21 | % |   |   | 2,915,394 |   |   |   | 20 | % |   |   | 2,991,905 |   |   |   | 19 | % |
| Provision for income taxes                         |   |                        | (487,289  | )      |                      |   | -7 | % |   |   | (573,500 | ) |   |   | -7 | % |   |   | (1,077,289 | ) |   |   | -7 | % |   |   | (1,051,634 | ) |   |   | -7 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income before noncontrolling interest          |   |                        | 853,510   |   |                      |   | 11 | % |   |   | 1,032,951 |   |   |   | 14 | % |   |   | 1,838,105 |   |   |   | 13 | % |   |   | 1,940,271 |   |   |   | 12 | % |
|                                               |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interest in income of consolidated |   |                        |      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| limited liability companies                        |   |                        | (133,993  | )      |                      |   | -2 | % |   |   | (163,887 | ) |   |   | -2 | % |   |   | (271,897 | ) |   |   | -2 | % |   |   | (372,007 | ) |   |   | -2 | % |
| Net income                                         |   | $                           | 719,517   |   |                      |   | 9 | % |   | $ | 869,064 |   |   |   | 12 | % |   | $ | 1,566,208 |   |   |   | 11 | % |   | $ | 1,568,264 |   |   |   | 10 | % |

----

----

----

----

| ExhibitNumber | Description                                                                                                                  |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                              |
| 11.1     | Statement re: computation of earnings per share.  See condensed consolidated statement of operations and notes thereto. |
| 31(a)         | Rule 13a-14(a) Certification – Chief Executive Officer *                                                                    |
| 31(b)         | Rule 13a-14(a) Certification – Chief Financial Officer *                                                                    |
| 32(a)         | Section 1350 Certification – Chief Executive Officer *                                                                      |
| 32(b)         | Section 1350 Certification – Chief Financial Officer *                                                                      |

----

----

|                                    | EMERGENT GROUP INC. |                                 |
|-----------------------------------------|---------------------|--------------------------------------|
|                                    |                |                                 |   |
| Date: August 11, 2010    | By:                 | /s/ Bruce J. Haber              |   |
|                                    |                | Bruce J. Haber,                      |   |
|                                    |                | Chairman and Chief Executive Officer |   |
|                                    |                |                                 |   |

|                              |   |                                  |   |
|-----------------------------------|--------|---------------------------------------|--------|
| Date: August 11, 2010   | By:    | /s/ William M. McKay             |   |
|                              |   | William M. McKay,                     |   |
|                              |   | Chief Financial Officer and Secretary |   |
|                              |   |                                  |   |