SECURITIES
AND EXCHANGE COMMISSION


Washington
D.C. 20549





FORM
10-Q





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





For the
Quarterly period ended March 31, 2010





 ̈
            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: 333-146744











MACH ONE
CORPORATION


(Exact
name of small business issuer as specified in its charter)





Nevada
            
            88-0338837(State
      or other jurisdiction of
            
            (I.R.S.
      Employer Identification No.)Incorporation
      or organization)





974 Silver Beach Road,
Belgium, WI 53004


(Address
of principal executive offices)





(888)
400-7179


(Issuer's
telephone number)





6430 Congress Drive, West
Bend, WI 53095


(Former
name, former address and former fiscal year, if applicable)








Check
whether the registrant (1) filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act of 1934 during the past 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 (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes  ̈No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.




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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2) of the Exchange Act. Yes  ̈ No x





As of
April 17, 2010, 375,919,689 shares of common stock were
outstanding.






















MACH
ONE CORPORATION





Index





Part
      I - FINANCIAL INFORMATIONItem
      1
            Financial
      StatementsConsolidated
      Balance Sheets at March 31, 2010 (unaudited) and December 31, 2009
      (audited)
            2Consolidated
      Statements of Operations for the quarter ended March 31, 2010 and 2009
      (unaudited)
            3Consolidated
      Statements of Cash Flows for the quarter ended March 31, 2010 and 2009
      (unaudited)
            4Notes
      to Consolidated Financial Statements (unaudited)
            5Item
      2
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            15Item
      3
            Qualitative
      and Quantitative Disclosures about Market Risk
            18Item
      4
            Controls
      and Procedures
            18Part
      II - OTHER INFORMATIONItem
      1
            Legal
      Proceedings
            18Item
      1A
            Risk
      Factors
            18Item
      2
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            18Item
      3
            Defaults
      Upon Senior Securities
            19Item
      4
            Submission
      of Matters of a Vote of Security Holders
            19Item
      5
            Other
      Information
            19Item
      6
            Exhibits
            19SignaturesExhibits















MACH
ONE CORPORATION


CONSOLIDATED
BALANCE SHEETS (unaudited)





March
      31,
              
              
              December
      31,2010
              
              
              2009ASSETSCURRENT
      ASSETSCash
              
              $
              25,432
              
              
              $
              61,979Accounts receivable, net
              
              
              73,845
              
              
              
              156,682Accounts receivable pledged as collateral
              
              
              105,155
              
              
              
              95,309Marketable securities
              
              
              -
              
              
              
              4,223Inventory
              
              
              38,686
              
              
              
              140,828Current assets of discontinued operation
              
              
              86,806
              
              
              
              428,172Other current assets
              
              
              475,096
              
              
              
              480,956Total Current Assets
              
              
              805,020
              
              
              
              1,368,149Property and equipment, net
              
              
              508,074
              
              
              
              555,196Goodwill
              
              
              280,232
              
              
              
              280,232Intangible assets, net
              
              
              1,013,533
              
              
              
              1,034,533Other assets
              
              
              25,000
              
              
              
              25,000TOTAL ASSETS
              
              $
              2,631,859
              
              
              $
              3,263,110CURRENT
      LIABILITIESAccounts payable
              
              $
              820,959
              
              
              $
              991,540Accrued compensation
              
              
              611,981
              
              
              
              487,508Accrued interest
              
              
              72,215
              
              
              
              58,623Current liabilities of discontinued operation
              
              
              338,466
              
              
              
              615,501Short-term notes payable and other debt
              
              
              1,122,618
              
              
              
              969,438Deferred revenue
              
              
              23,725
              
              
              
              23,725Current portion of long-term debt obligations
              
              
              156,912
              
              
              
              33,183Total Current Liabilities
              
              
              3,146,876
              
              
              
              3,179,518Long-term debt, net of current portion
              
              
              3,422,180
              
              
              
              3,504,130STOCKHOLDERS'
      DEFICITPreferred stock, $.05 par value, 10,500,000 shares authorized, 740,000 and
      2,500,000 sharesissued and outstanding at March 31, 2010 and December 31, 2009,
      respectively, liquidationpreference of $620,000 and $1,500,000 at March 31, 2010 and December 31,
      2009, respectively
              
              
              37,000
              
              
              
              125,000Common stock, $.001 par value, 500,000,000 shares authorized, 188,556,279
      and181,346,946 shares issued and outstanding at March 31, 2010 and December
      31, 2009, respectively
              
              
              188,555
              
              
              
              181,346Treasury stock
              
              
              (297,175
              )
              
              
              (327,175
              )Additional paid-in capital
              
              
              11,682,456
              
              
              
              11,248,980Accumulated deficit
              
              
              (15,548,033
              )
              
              
              (14,636,624
              )Accumulated other comprehensive loss
              
              
              -
              
              
              
              (12,065
              )Total Stockholders' Deficit
              
              
              (3,937,197
              )
              
              
              (3,420,538
              )TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              2,631,859
              
              
              $
              3,263,110















MACH
ONE CORPORATION


CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)




Three months ended March
31,2010
              
              
              2009Sales,
      net
              
              $
              371,566
              
              
              $
              327,513Cost
      of goods sold
              
              
              353,735
              
              
              
              297,387Gross profit
              
              
              17,831
              
              
              
              30,126Operating
      expenses
              
              
              757,994
              
              
              
              719,543Loss from continuing operations
              
              
              (740,163
              )
              
              
              (689,417
              )Other
      expense:Realized loss on sale of marketable securities
              
              
              (12,844
              )
              
              
              -Interest expense
              
              
              (104,323
              )
              
              
              (281,856
              )Total
      other expense
              
              
              (117,167
              )
              
              
              (281,856
              )Loss fom continuing operations before provision for income
      taxes
              
              
              (857,330
              )
              
              
              (971,273
              )Income
      tax provision
              
              
              -
              
              
              
              -Net loss from continuing operations
              
              
              (857,330
              )
              
              
              (971,273
              )Less:
      Net loss attributable to non-controlling interest in variable interest
      entity
              
              
              -
              
              
              
              46,888Net
      loss from continuing operations attributable to Mach One
      Corporation
              
              
              (857,330
              )
              
              
              (924,385
              )Loss
      from discontinued operations, net of income tax benefit of $0 and $0,
      respectively
              
              
              (54,079
              )
              
              
              (30,146
              )Net loss attributable to Mach One Corporation
              
              $
              (911,409
              )
              
              $
              (954,531
              )Net loss from continuing operations attributable to Mach One Corporation
      per common share (basic and diluted)
              
              $
              -
              
              
              $
              (0.01
              )Net loss from discontinued operations per common share (basic and
      diluted)
              
              $
              -
              
              
              $
              -Net loss from attributable to Mach One Corporation per common share (basic
      and diluted)
              
              $
              -
              
              
              $
              (0.01
              )Weighted average shares outstanding:Basic and diluted
              
              
              183,057,564
              
              
              
              115,094,054














MACH
ONE CORPORATION


CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)





Three months ended March
31,2010
              
              
              2009Cash
      flows from operating activities:Net
      loss from continuing operations
              
              $
              (857,330
              )
              
              $
              (924,385
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Net loss attributable to non-controlling interest in variable interest
      entity
              
              
              -
              
              
              
              (46,888
              )Depreciation and amortization
              
              
              54,005
              
              
              
              27,915Amortization of deferred financing costs
              
              
              6,090
              
              
              
              170,500Amortization of debt discount, relating to a beneficial conversion
      feature
              
              
              17,708
              
              
              
              -Amortization of prepaid management fees
              
              
              26,250
              
              
              
              7,500Accretion of interest on long-term debt
              
              
              46,454
              
              
              
              -Loss on sale of marketable securities
              
              
              12,844
              
              
              
              -Loss on disposal of equipment
              
              
              14,118
              
              
              
              -Common stock issued for services
              
              
              100,090
              
              
              
              -(Increase) decrease in operating assets:Accounts receivable
              
              
              72,991
              
              
              
              (253,519
              )Inventory
              
              
              102,142
              
              
              
              (350,245
              )Other current  assets
              
              
              29,520
              
              
              
              (571,038
              )Increase in operating liabilities:Accounts payable and accrued expenses
              
              
              147,358
              
              
              
              348,949Deferred revenue
              
              
              -
              
              
              
              60,725Total
      adjustments
              
              $
              629,570
              
              
              $
              (606,101
              )Net
      cash used in operating activities
              
              $
              (227,760
              )
              
              $
              (1,530,486
              )Cash
      flows from investing activities:Proceeds from the sale of marketable securities
              
              
              3,444
              
              
              
              -Purchases of marketable securities
              
              
              -
              
              
              
              (2,437
              )Acquisitions, net of cash acquired
              
              
              -
              
              
              
              26,294Purchase of property and equipment, net
              
              
              -
              
              
              
              (179,962
              )Net
      cash provided by (used in)  investing activities
              
              $
              3,444
              
              
              $
              (156,105
              )Cash
      flows from financing activities:Proceeds from short term notes payable
              
              
              108,156
              
              
              
              1,883,523Payments on short term notes payable
              
              
              (52,558
              )
              
              
              -Proceeds from long-term debt
              
              
              -
              
              
              
              5,198Payments on long-term debt
              
              
              (4,675
              )
              
              
              (2,185
              )Proceeds from the sale of common stock
              
              
              116,500Proceeds from the sale of treasury stock
              
              
              10,095
              
              
              
              -Purchase of treasury stock
              
              
              -
              
              
              
              (302,123
              )Net
      cash provided by financing activities
              
              $
              177,518
              
              
              $
              1,584,413Cash
      flows from discontinued operations:Net
      cash used in operating activities
              
              
              (20,749
              )
              
              
              (3,368
              )Net
      cash provided by investing activities
              
              
              31,000
              
              
              
              3,687Net
      cash provided by financing activities
              
              
              -
              
              
              
              -Net
      cash provided by discontinued operations
              
              $
              10,251
              
              
              $
              319Net
      decrease in cash
              
              $
              (36,547
              )
              
              $
              (101,859
              )Cash,
      beginning of period
              
              
              61,979
              
              
              
              635,334Cash,
      end of period
              
              $
              25,432
              
              
              $
              533,475Supplemental
      cash and non-cash flow informationUnrealized gain (loss) on marketable securities
              
              $
              (12,065
              )
              
              $
              101,534Cash paid for interest
              
              $
              9,308
              
              
              $
              630Loss on sale of treasury stock
              
              $
              (19,905
              )
              
              $
              -Common stock issued for prepaid marketing fees
              
              $
              56,000
              
              
              $
              -Conversion of preferred stock into common stock
              
              $
              88,000
              
              
              $
              -Beneficial conversion feature related to short-term debt
              
              $
              (100,000
              )
              
              $
              -Accounts
      payable converted to note payable
              
              $
              179,874
              
              
              $
              -








Note
1.  Basis of Presentation and Nature of Operations





Basis of
Presentation: The interim Consolidated Financial Statements of Mach
One Corporation (Mach One, the Company, we, us or our) are unaudited but, in the
opinion of management, reflect all adjustments necessary for a fair statement of
financial position, results of operations and cash flows for the periods
presented. Except as otherwise disclosed herein, these adjustments consist of
normal, recurring items. The results of operations for any interim period are
not necessarily indicative of full year results. The Consolidated Financial
Statements and Notes are presented in accordance with the requirements for
Quarterly Reports on Form 10-Q and do not contain certain information included
in our annual Consolidated Financial Statements and Notes.




The
preparation of the interim Consolidated Financial Statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the interim Consolidated Financial Statements and the
reported amounts of revenue and expenses for the reporting periods. Despite our
intention to establish accurate estimates and use reasonable assumptions, actual
results may differ from our estimates.




The
December 31, 2009 Consolidated Balance Sheet data was derived from the audited
Consolidated Financial Statements but does not include all disclosures required
by accounting principles generally accepted in the United States of America.
This Form 10-Q should be read in conjunction with our Consolidated Financial
Statements and Notes included in our Annual Report on Form 10-K for the year
ended December 31, 2009.





Nature of Operations:
Mach One Corporation is a global wellness solutions company with operations in
Animal Wellness; Organics & Sustainables; and BioPharm Process Systems.
Through its Animal Wellness Group, the Company focuses on major opportunities
for positive, long-term health and longevity benefits for disease-threatened
animals in the commercial livestock and poultry industries, especially the beef
and dairy sectors. The Organics & Sustainables Group addresses the growing
needs of food manufacturers in the organic foods market who are challenged to
increase production capacity for organic raw commodities and feed stocks that go
into the finished products. The BioPharm Process Systems Group provides
documentation, process modules, process skids, custom tanks and vessels and
custom stainless steel fabrication to the biopharmaceutical
industry.





Note
2. Summary of Significant Accounting Policies





Variable Interest
Entity:  During the quarter ended March 31, 2009, the Company
was considered the primary beneficiary of Progressive Formulations, Inc. (PFI).
PFI is an importer and distributor of soy-based organic food products whose
initial capitalization was provided in the form of loans and inventory by the
Company. PFI is wholly-owned by a shareholder of the Company. Refer to Note 4. Consolidation of Variable
Interest Entity for further information on our consolidated
VIE.





Inventory:  Inventory
consists of finished goods only as of March 31, 2010 and December 31, 2009. The
Company maintains its inventory on a perpetual basis utilizing the first-in
first-out (FIFO) method.  Inventories have been valued at the lower of
cost or market. As of March 31, 2010 and December 31, 2009, management has not
established an obsolescence reserve for inventory, as we believe that all
inventory is usable and that market values of all inventories exceed
cost.





Property and
Equipment:  Property and equipment is reported at cost less
accumulated depreciation.  Maintenance and repairs are charged to
expense as incurred.  The cost of property and equipment is
depreciated over the following estimated useful lives of the related
assets:





Building
            39
      yearsFurniture
      & Fixtures
            7
      yearsMachinery
      & Equipment
            5
      years





Long-Lived and Amortizable
Intangible Assets:  The Company periodically evaluates the
carrying value of long-lived and amortizable intangible assets to be held and
used, including but not limited to, property and equipment and intangible
assets, when events and circumstances warrant such a review.  The
carrying value of a long-lived or amortizable intangible asset is considered
impaired when the anticipated undiscounted cash flow from such asset is less
than its carrying value.  In that event, a loss is recognized based on
the amount by which the carrying value exceeds the fair value of the long-lived
asset.  Fair value is determined primarily using the anticipated cash
flows discounted at a rate commensurate with the risk
involved.  Losses on long-lived and amortizable intangible assets to
be disposed of are determined in a similar manner, except that fair values are
reduced for the cost to dispose.  The Company has reviewed long-lived
and amortizable intangible assets with estimable useful lives and determined
that the remaining net carrying value, after impairing certain assets in 2010,
is recoverable in future periods.












Revenue
Recognition:  The Company recognizes revenue when persuasive
evidence of an arrangement exists, transfer of title has occurred, the selling
price is fixed or determinable, collection is reasonably assured and delivery
has occurred per the contract terms. For certain contracts of MPS, the Company
recognizes revenue based on the percentage of completion method. Revenue is
deferred when customer billings exceed revenue earned.





Segment
Reporting:  The Company operates and manages the business under
one reporting segment. Currently, neither Animal Wellness nor BioPharm Process
Systems has generated significant revenues or acquired significant assets. As
such, the Company operates and manages the business under one reporting
segment.





Goodwill:  Goodwill
is the excess of cost of an acquired entity over the amounts assigned to assets
acquired and liabilities assumed in a business combination. Goodwill is not
amortized. We evaluate the carrying value of goodwill annually during the
quarter ending December 31, and between such annual evaluations if events occur
or circumstances change that would indicate a possible impairment. We use a
discounted cash flow model based on management’s judgment and assumptions to
determine the estimated fair value of the Company. An impairment loss generally
would be recognized when the carrying amount of the Company’s net assets exceeds
the estimated fair value of the reporting unit.





Fair Value of Financial
Instruments:  The respective carrying value of certain
on-balance sheet financial instruments approximates their fair
values.  These financial instruments include cash, accounts
receivable, accounts payable and accrued liabilities, and notes
payable.  Fair values were assumed to approximate cost or carrying
values as most of the debt was incurred recently and the assets were acquired
within one year.  Management is of the opinion that the Company is not
exposed to significant interest, credit or currency risks arising from these
financial instruments.





Income
Taxes:  The Company provides for income taxes using an asset
and liability approach.  Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax bases
of assets and liabilities and the tax rates in effect when these differences are
expected to reverse.  Deferred tax assets are reduced by a valuation
allowance if, based on the weight of the available evidence, it is more likely
than not that some or all of the deferred tax assets will not be
realized.  For all periods presented, the Company has recorded a full
valuation allowance against its deferred tax assets.





The
Company recognizes a financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain
the position following an audit.  For tax positions meeting the
more-likely-than-not threshold, the amount recognized in the financial
statements is the largest benefit that has a greater than fifty percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority.





Comprehensive Income
(Loss): Comprehensive income (loss) includes net loss and items defined
as other comprehensive income. Items defined as other comprehensive income
include unrealized gains (losses) on marketable securities. The Company had
$12,065 and $(101,534) of other comprehensive income (loss) for the quarters
ended March 31, 2010 and 2009, respectively.





Reclassifications:
Certain reclassifications have been made to the 2009 financial statement
presentation to correspond to the current year’s format. Total 2009 equity and
net loss are unchanged due to these reclassifications.





Recent Accounting
Developments In June 2009, the FASB issued guidance to eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity and require ongoing qualitative
reassessments of whether an enterprise is the primary beneficiary of a variable
interest entity. This guidance is effective for fiscal years beginning after
November 15, 2009. The Company’s adoption of this guidance as of January 1, 2010
did not have any impact on the Company's financial statements.





In
January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair
Value Measurements.” This update requires additional disclosure within the roll
forward of activity for assets and liabilities measured at fair value on a
recurring basis, including transfers of assets and liabilities within Level 3 of
the fair value hierarchy. In addition, the update requires enhanced disclosures
of the valuation techniques and inputs used in the fair value measurements
within Levels 2 and 3. The new disclosure requirements are effective for interim
and annual periods beginning after December 15, 2009, except for the disclosure
of purchases, sales issuances and settlements of Level 3 measurements. Those
disclosures are effective for fiscal years beginning after December 15, 2010. As
ASU 2010-6 only requires enhanced disclosures, the Company does not expect that
the adoption of this update will have a material effect on its financial
statements.





Note
3. Going Concern Uncertainty





The
accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern, which assumes the realization of
assets and the satisfaction of liabilities in the normal course of business.
Since inception, until the acquisition of Ceres and MPS in February 2009, the
Company had primarily been engaged in product development and pre-operational
activities.  The Company has accumulated losses totaling $15,548,033
from inception through March 31, 2010, and a net working capital deficit of
$2,341,856 as of March 31, 2010.  The uncertainty related to these
conditions raises substantial doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.














Over the
next 18 months, in order to have the capability of achieving our business plan,
we believe that we will require at least $5,000,000 in additional funding to pay
down certain payables and accruals and to provide working capital. Should we be
unable to obtain additional funding in the next 3 months, we would be required
to further cut expenses in our Organics and Sustainables group and temporarily
halt operations in our Animal Wellness group until such funding is obtained. We
are currently attempting to raise these funds by means of one or more public or
private offerings of debt or equity securities or both. However, at this point,
we have not specifically identified the type or sources of this
funding.  We also are exploring commercial and joint venture financing
opportunities.





Note
4. Consolidation of Variable Interest Entity





The
Company identifies variable interest entities and determines when we should
include the assets, liabilities, non-controlling interests and results of
activities of a VIE in its consolidated financial statement.





In
general, a VIE is a corporation, partnership, limited liability company, trust,
or any other legal structure used to conduct activities or hold assets that
either (1) has an insufficient amount of equity to carry out its principal
activities without additional subordinated financial support, (2) has a group of
equity owners that are unable to make significant decisions about its
activities, or (3) has a group of equity owners that do not have the obligation
to absorb losses or the right to receive returns generated by its
operations.





In 2009,
the Company determined they were required to consolidate PFI as a VIE in our
consolidated statement of operations due to us determining we were the primary
beneficiary of PFI. Therefore, for the quarter ended March 31, 2009, the
consolidated statements of operations have been presented on a consolidated
basis to include the variable interest in PFI.  More specifically, for
the quarter ended March 31, 2009, PFI amounts included in the consolidated
statement of operations of the Company consist of; selling, general and
administrative expenses of $46,888. PFI had no sales during this period. All
significant intercompany accounts and transactions have been eliminated in
consolidation. No amounts from PFI are included in the consolidated balance
sheet as of December 31, 2009 as PFI had reimbursed all advances from Ceres as
of December 31, 2009 and PFI was no longer considered a VIE. No amounts from PFI
are included in the consolidated balance sheet as of March 31, 2010 or the
consolidated statements of operations and cash flows for the quarter ended March
31, 2010 as PFI was no loner considered a VIE of the Company.





Note
5. Discontinued Operations





On March
31, 2010, Ceres adopted a plan to close the business of its wholly-owned
subsidiary, Organic Grain and Milling, Inc. (OGM). As of March 31, 2010,
substantially all operational activities of OGM were discontinued. As a result,
effective in its first quarter of fiscal 2010, the Company classified OGM as
discontinued operations separate from the continuing operations of the Company
for all the periods presented in the financial statements.





The
following table summarizes results of OGM classified as discontinued operations
in the Company’s condensed, consolidated statements of operations for the
quarters ended March 31, 2010 and 2009:





March
      31,
              2010
            
            
            March
      31,
              2009Sales,
      net
            
            $
            127,224
            
            
            $
            483,935Cost
      of goods sold
            
            
            121,271
            
            
            
            422,225Gross
      profit
            
            
            5,953
            
            
            
            61,710Operating
      expenses
            
            
            56,059
            
            
            
            91,856Loss
      from discontinued operations
            
            
            (50,106)
            
            
            
            (30,146)Other
      expense
            
            
            (3,973)
            
            
            
            -Loss
      from discontinued operations before taxes
            
            
            (54,079)
            
            
            
            (30,146)Income
      tax expense (benefit) from discontinued operations
            
            
            -
            
            
            
            -Loss
      from discontinued operations
            
            $
            (54,079)
            
            
            $
            (30,146)















The
following table summarizes the major classes of assets and liabilities in OGM’s
balance sheet as of March 31, 2010 and December 31, 2009:





March
      31,
              2010
            
            
            December
      31,
              2009Cash
            
            $
            388
            
            
            $
            17,923Accounts
      receivable
            
            
            10,950
            
            
            
            133,803Inventory
            
            
            17,115
            
            
            
            182,230Property
      and equipment, net (planned to be sold within 12 months)
            
            
            58,353
            
            
            
            94,216Current
      assets of discontinued operations
            
            $
            86,806
            
            
            $
            428,172Accounts
      payable
            
            $
            276,251
            
            
            $
            518,583Accrued
      liabilities
            
            
            62,215
            
            
            
            2,100Short-term
      note payable
            
            
            -
            
            
            
            94,818Current
      liabilities of discontinued operations
            
            $
            338,466
            
            
            $
            615,501




Note
6. Product License and Asset Purchase





On August
11, 2009, the Company entered into an exclusive license and distribution
agreement to acquire the formulations and worldwide marketing rights to a suite
of products that promote joint and bone health in horses, dogs and humans. These
formulas and related rights are being acquired from Platte Valley State Bank
(Platte Valley), who currently owns all rights pertaining to these products. The
products were previously developed, manufactured and distributed by Clark
Biotechnology, Inc. (CBI). CBI discontinued operations in 2008 due to the death
of its founder.





The
agreement calls for minimum royalties totaling $350,000 to be paid as
follows:





$30,000
            
            September
      11, 2010$80,000
            
            September
      11, 2011$80,000
            
            September
      11, 2012$80,000
            
            September
      11, 2013$80,000
            
            September
      11, 2014





The
Company has imputed interest on these installments at a rate of 12%, which is
equivalent to the Company’s estimated borrowing rate as of the date of the
agreement. The discounted value of the licensed asset totals $243,700 and has
been included in intangible assets on our consolidated balance sheet and a
corresponding liability included in current portion of long-term debt and
long-term debt (refer to Note
11. Long-term debt) as of March 31, 2010.





The
Company is treating these minimum royalty payments as a purchase of the related
formulations and marketing rights as once these minimum royalty payments are
made, the Company will have sole title to the formulations and marketing
rights.





In
addition, the Company is required to pay additional royalties of 4% of net sales
of the products that exceed $2,000,000 in each year of the agreement. These
royalties will be recorded as incurred. There were no sales of this product
during the period from August 11, 2009 to March 31, 2010.





Note
7. Intangible Assets





Intangible
assets, net at March 31, 2010 and December 31, 2009 consisted of the
following:





March
      31,
              2010
            
            
            December
      31,
              2009Proprietary
      product license
            
            $
            680,000
            
            
            $
            680,000Supplier
      relationship
            
            
            80,000
            
            
            
            80,000Engineering
      methodology and customer list
            
            
            100,000
            
            
            
            100,000Licensed
      assets (See Note 6)
            
            
            243,700
            
            
            
            243,7001,103,700
            
            
            
            1,103,700Less:
      accumulated amortization
            
            
            (90,167
            )
            
            
            (69,167)$
            1,013,533
            
            
            $
            1,034,533








Amortization
of $21,000 and $0 was recorded for the quarters ended March 31, 2010 and 2009,
respectively.





We
periodically reassess the carrying value, useful lives and classification of
identifiable intangible assets. Estimated aggregate amortization expense based
on current intangibles for the next five years is expected to be as follows:
$74,400 remaining in 2010, $156,800 in 2011, $195,200 in 2012, 262,300 in 2013
and $324,833 in 2014.













Note
8.   Composition of Certain Financial Statement
Captions





Other
current assets at March 31, 2010 and December 31, 2009 consisted of the
following:





March
      31,
              2010
            
            
            December
      31,
              2009Prepaid
      management fee
            
            $
            78,750
            
            
            $
            105,000Brand
      trademark held for sale
            
            
            80,000
            
            
            
            80,000Inventory
      advance
            
            
            260,095
            
            
            
            260,095Prepaid
      expenses and other
            
            
            56,251
            
            
            
            35,861$
            475,096
            
            
            $
            480,956





Note
9. Property and Equipment





Property
and equipment at March 31, 2010 and December 31, 2009 consisted of the
following:





March
      31,
              2010
            
            
            December
      31,
              2009Machinery
      & equipment
            
            $
            607,501
            
            
            $
            607,501Leasehold
      improvements
            
            
            99,507
            
            
            
            99,507Computer
      equipment
            
            
            19,248
            
            
            
            37,271Furniture
      & fixtures
            
            
            3,074
            
            
            
            3,074729,330
            
            
            
            747,353Less:
      accumulated depreciation
            
            
            (221,256
            )
            
            
            (192,157
            )$
            508,074
            
            
            $
            555,196





Depreciation
expense related to property and equipment was $33,005 and $25,765 for the
quarters ended March 31, 2010 and 2009, respectively.





Note
10. Short-term Notes Payable and Other Debt





Short-term
notes payable and other debt at March 31, 2010 and December 31, 2009 consisted
of the following:





March
      31,
              2010
            
            
            December
      31,
              2009Short-term
      convertible notes payable
            
            $
            812,354
            
            
            $
            794,646Transfac
      Financing Agreement
            
            
            84,501
            
            
            
            76,345Short-term
      loans and lines of credit
            
            
            225,763
            
            
            
            98,447$
            1,122,618
            
            
            $
            969,438





Short-term
Convertible Notes Payable





Commonwealth
One


The
Commonwealth One round of financing was closed in the quarter ended December 31,
2008. Proceeds from the notes were $550,000. Interest at 12.0% is due with the
principal on various dates from April through June 2009. The notes are unsecured
and are convertible into shares of the Company’s common stock at $0.045 per
share at any time during the term of the notes.





During
the year ended December 31, 2009, $450,000 of the Commonwealth One notes were
converted into 10,000,000 shares of the Company’s common
stock.  Subsequent to March 31, 2010, and as of the date of this
report, the remaining outstanding note totaling $100,000 has been verbally
extended until further notice by the note holder.





Plant
Notes


The
Company also entered into loan agreements with an unrelated individual (Plant
Notes). Proceeds from the agreements totaled $105,000 and interest at 5.0% is
due with the principal on June 30, 2010. The notes are unsecured and are
convertible into shares of the Company’s common stock at $0.50 per share at any
time during the term of the notes.





Blake
Note


In
connection with the acquisition of PRF on December 31, 2008, the Company
acquired a note payable for $100,000 to an unrelated individual (Blake Note).
Interest at 10.0% is payable annually. The note is unsecured and is convertible
into shares of the Company’s common stock at $0.125 per share at any time during
the term of the note.














Tiryaki
Note


In
October 2009, Ceres entered into a loan agreement with a vendor to finance the
outstanding trade accounts payable with a vendor (Tiryaki Note). Upon
execution of the note, the Company reclassed $439,646 of outstanding trade
accounts payable to short term loans payable. Interest at 10% is due with the
principal on June 30, 2010. The note is unsecured and is convertible into shares
of the Company’s common stock at $0.08 per share at any time during the
term.





CMS
Notes


In
December 2009, the Company entered into a round of financing with Charles Morgan
Securities, Inc. Proceeds from the notes (CMS Notes) was $50,000 as of December
31, 2009. Interest at 12.0% is due with the principal on September 30, 2010. The
notes are unsecured and are convertible into shares of the Company’s common
stock at $0.08 per share at any time during the term of the notes. The
conversion price is subject to certain weighted-average anti-dilution
adjustments if the Company were to subsequently issue common stock at a price
below the then-applicable conversion price.





During
the quarter ended March 31, 2010, additional proceeds from the CMS notes were
$100,000. Interest at 12.0% is due with the principal on February 11, 2011. The
notes are unsecured and are convertible into shares of the Company’s common
stock at $0.04 per share at any time during the term of the notes. As the
conversion price of the CMS notes issued during the quarter ended March 31, 2010
was below the then current market price of the Company’s common stock, a
beneficial conversion feature discount was recorded, in the form of a debt
discount, in the amount of $100,000. The discount recorded is being amortized to
interest expense over the life of the notes. Amortization of $17,708 was
recorded for the quarter ended March 31, 2010.





Except
for the CMS notes issued during the quarter ended March 31, 2010, the conversion
prices of all other convertible notes were established at, or above, the then
current market price of the Company’s common stock and therefore, no beneficial
conversion feature discount has been recorded.





A summary
table of short-term convertible notes payable as of March 31, 2010 and December
31, 2009 follows:





March
      31,
              2010
            
            
            December
      31,
              2009Commonwealth
      One
            
            $
            100,000
            
            
            $
            100,000Plant
      Notes
            
            
            105,000
            
            
            
            105,000Blake
      Note
            
            
            100,000
            
            
            
            100,000Tiryaki
      Note
            
            
            439,646
            
            
            
            439,646CMS
      Notes, net of debt discount
            
            
            67,708
            
            
            
            50,000Total
            
            $
            812,354
            
            
            $
            794,646





Transfac
Financing Agreement





In
connection with the acquisition of Ceres, the Company has an accounts receivable
financing agreement (the “Agreement”) with Transfac Capital, LLC
(“Transfac”).  The original Agreement term is one year from the
effective date of June 2, 2008 and is cancelable immediately upon notice by
Transfac, or within ten days of notice by the Company if the Company secures
financing from an FDIC insured institution.  Upon the acquisition of
Ceres by the Company, the term changed to month-to-month and is cancelable
within ten days of notice by Ceres. Under the terms of the Agreement, the
Company may offer to sell its accounts receivable to Transfac each month during
the term of the Agreement, up to a maximum amount outstanding at any time of
$1.5 million in gross receivables submitted, or $1.2 million in net amounts
funded based upon an 80.0% advance rate. The Company is obligated to offer
accounts totaling a minimum of $300,000 in each month, and Transfac has the
right to decline to purchase any offered accounts (invoices).





The
Agreement provides for the sale, on a revolving basis, of accounts receivable
generated by specified debtors. The purchase price paid by Transfac reflects a
discount that is generally 0.7% for the first twenty days, plus an aging fee of
0.034% for each day after the first twenty days. The Company continues to be
responsible for the servicing and administration of the receivables purchased.
Transfac fees are reported in the Company’s consolidated statement of operations
as interest expense and were $7,322 and $4,963 for the quarters ended March 31,
2010 and 2009, respectively.





The
Company accounts for the sale of receivables under the Agreement as a secured
borrowing with a pledge of the subject receivables as collateral. Accounts
receivable pledged as collateral on the accompanying consolidated balance sheets
in the amounts of $105,155 and $95,309 as of March 31, 2010 and December 31,
2009, respectively, represents the gross receivables that have been designated
as “sold” and serve as collateral for short-term debt in the amounts of $84,501
and $76,345 as of March 31, 2010 and December 31, 2009,
respectively.





Short
Term Loans and Lines of Credit





In
September 2009, the Company entered into a loan agreement with Thomsen Group,
LLC. The note balance as of March 31, 2010 and December 31, 2009 is $0 and
$50,118, respectively. Interest is at 8.0%, principal and interest payments are
due upon demand, and the note is unsecured. Thomsen Group, LLC is majority-owned
by a director of the Company.














The
Company acquired a bank line of credit with the acquisition of Ceres. The
balance is $48,298 and $48,329 as of March 31, 2010 and December 31, 2009,
respectively. Interest is at 7.5%, interest payments are due monthly, and
principal is due upon demand, and the note is unsecured.





In
January 2010, Ceres entered into a loan agreement with a vendor to finance the
outstanding trade accounts payable (NDM Note). Upon execution of the note, the
Company reclassed $179,874 of outstanding trade accounts payable to short term
loans payable. Interest is at 6%. Monthly payments of $2,000 are due each month
with the remaining principal and interest due on October 1, 2010. The balance
outstanding as of March 31, 2010 is $177,465. The note is secured by the
potential proceeds from an unrelated litigation matter in which Ceres is the
plaintiff.





The
Company has recorded accrued interest on short-term notes payable and other
debt of $72,215 and $58,623 as of March 31, 2010 and December 31, 2009,
respectively.





Note
11. Long-term Debt





Long-term
debt at March 31, 2010 and December 31, 2009 consisted of the
following:





March
      31,
              2010
            
            
            December
      31,
              2009Zero
      Coupon Convertible Subordinated Notes Payable, interest at 5.0%, principal
      and interest due December 12, 2013, convertible into shares of common
      stock of the Company at $0.125 per share at any time, unsecured (total
      maturity value of $3,808,298)
            
            $
            3,176,845
            
            
            $
            3,137,601Liability
      for license agreement (total maturity value of $350,000) (See Note
      6)
            
            
            262,288
            
            
            
            255,077Unsecured
      note payable, related party (See Note 13)
            
            
            105,861
            
            
            
            105,861U.S.
      Small Business Administration term loan with interest at prime plus 2.75%,
      6.0% at March 31, 2010, due June 7, 2011, principal and interest payment
      of $2,246 due monthly, secured by the assets of Ceres
            
            
            34,098
            
            
            
            38,7743,579,092
            
            
            
            3,537,313Less
      current portion:
            
            
            (156,912
            )
            
            
            (33,183)Total
      long-term debt
            
            $
            3,422,180
            
            
            $
            3,504,130





In
December 2008, the Company issued Zero Coupon Convertible Subordinated notes
payable with a maturity date of December 12, 2013 for proceeds of $3,035,000. No
payments are required on the notes until maturity at which time the principal
amount of $3,808,298 is due. Original interest discount (OID) accrues at a rate
of 5% per year on the accreted value of the note. The holder may at any time
during the term of the note convert the accreted value of the notes into shares
of common stock of the Company. If either an event of default occurs under the
note, as defined in the note agreement, or a change of control occurs with
respect to the Company, the holder of the note may put the note to the Company
at its accreted value.





The
conversion prices of the Zero Coupon Convertible Subordinated notes ($0.125 per
share) were established at, or above, the then current market price of the
Company’s common stock and therefore, no beneficial conversion feature discount
has been recorded. The conversion price is subject to weighted-average
anti-dilution adjustments in the event we issue common stock at a price below
the then-applicable conversion price other than common stock issuances or option
grants to the Company's employees, directors or officers.





The
Company does not consider these anti-dilution features to be an embedded
derivative and therefore subject to variable accounting due to the embedded
instrument not meeting the net settlement characteristic as noted in ASC
815-10-15-83(c) and ASC 815-10-15-99.   More specifically, to
meet the net settlement characteristics, an embedded instrument must be able to
be either (1) net settled under contract terms, (2) net settled through a market
mechanism or (3) net settled by delivery of derivative instrument or asset
readily convertible to cash.  The Company believes the embedded
instrument cannot be net settled via contract terms or a market mechanism and
although settlement of the embedded instrument could be made with the delivery
of the Company's common stock (i.e. an asset), due to the Company's stock being
lightly traded as per ASC 815-10-15-130 and as illustrated at ASC 815-10-55-87,
88 and 89 (Cases B through D), to be considered "readily convertible to cash",
the number of shares of stock to be exchanged must be small relative to the
stock's daily transaction volume.  Currently, the Company’s daily
transaction volume of their common stock is very low.  However, moving
forward, as required in ASC 815-10-15-139, the Company will continually evaluate
whether or not the common stock is considered to be readily convertible to
cash.  In the event the Company's daily trading volume of their common
stock were to increase significantly to the point where the shares to be
exchanged in connection with the convertible notes would be relatively small in
relation to the daily trading volume, the contract would then satisfy the net
settlement characteristic and likely may need to be accounted for as a
derivative.












Under
current accounting guidance, i f the
terms of a contingent conversion option does not permit an issuer to compute the
number of shares that the holder would receive if the contingent event occurs
and the conversion price is adjusted, an issuer shall wait until the contingent
event occurs and then compute the resulting number of shares that would be
received pursuant to the new conversion price.  The number of shares
that would be received upon conversion based on the adjusted conversion price
would then be compared with the number that would have been received before the
occurrence of the contingent event. The excess number of shares multiplied by
the commitment date stock price equals the incremental intrinsic value that
results from the resolution of the contingency and the corresponding adjustment
to the conversion price. That incremental amount shall be recognized when the
triggering event occurs.





Future
minimum payments on long-term debt at March 31, 2010 are as
follows:





Years
      ending December 31,2010,
      remaining
            
            $
            45,7882011
            
            
            204,1712012
            
            
            80,0002013
            
            
            3,888,2982014
            
            
            80,000$
            4,298,257





Note 12. Basic and Diluted Earnings
(Loss) Per Share





The
Company computes earnings (loss) per share under two different methods, basic
and diluted, and presents per share data for all periods in which statements of
operations are presented.  Basic earnings (loss) per share is computed
by dividing net income (loss) by the weighted average number of shares of common
stock outstanding.  Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common stock and
common stock equivalents outstanding. The table below shows the calculation of
basic and diluted loss per share for the quarters ended March 31, 2010 and 2009,
respectively:





2010
            
            
            2009Loss:Net
      loss from continuing operations attributable to Mach One
      Corporation
            
            $
            (857,330
            )
            
            $
            (924,385
            )Net
      loss from discontinued operations per common share
            
            
            (54,079
            )
            
            
            (30,146
            )Net
      loss from attributable to Mach One Corporation
            
            $
            (911,409
            )
            
            $
            (954,531
            )Number
      of shares:Weighted-average
      shares outstanding
            
            
            183,057,564
            
            
            
            115,094,054Loss
      per share:Net
      loss from continuing operations attributable to Mach One Corporation per
      common share (basic and diluted)
            
            $
            -
            
            
            $
            (0.01
            )Net
      loss from discontinued operations per common share (basic and
      diluted)
            
            
            -
            
            
            
            -Net
      loss attributable to Mach One Corporation per common share (basic and
      diluted)
            
            $
            -
            
            
            $
            (0.01
            )





As of
March 31, 2010, the Company had (i) 1,240,000 shares of common stock issuable
under convertible preferred stock arrangements, (ii) 200,000 shares of common
stock issuable upon the exercise of outstanding warrants and (iii) 39,951,039
shares of common stock issuable under convertible financing arrangements.
 As of March 31, 2009, the Company had (i) 10,000,000 shares of common
stock issuable under convertible preferred stock arrangements, (ii) 200,000
shares of common stock issuable upon the exercise of outstanding warrants and
(iii) 22,705,493 shares of common stock issuable under convertible financing
arrangements.   These 41,391,039 and 32,905,493 shares as of March 31, 2010
and 2009, respectively, which would be reduced by applying the treasury stock
method, were excluded from diluted weighted average outstanding shares amount
for computing the net loss per common share, because the net effect would be
antidilutive for each of the periods presented.





Note
13. Related Party Transactions





We lease
our office and warehouse facility in Belgium, Wisconsin from Monte B. Tobin, our
Chairman, and his wife, (the Tobins) under a five-year net lease. The facility
consists of approximately 3,500 square feet of office space and 1,000 square
feet of warehouse space, with an option to increase the warehouse space by up to
500 feet. We currently pay a base rent of approximately $4,006 per month. The
Tobins hold a note receivable from the Company representing unpaid rent and
interest from 2005 and 2006 totaling $105,861. Interest accrues at 12% per year.
The note matures on January 1, 2011. Total rent included in our statements
of operations related to this lease was $12,018 and $10,650, for the
quarters ended March 31, 2010 and 2009 respectively.














Note
14. Stockholders’ Equity





Common
Stock





The
Company is authorized to issue 500,000,000 shares of $.001 par value common
stock. The Company has 188,556,279 shares of its common stock issued and
outstanding at March 31, 2010. Dividends may be paid on outstanding shares as
declared by the Board of Directors. Each share of common stock is entitled to
one vote.





Preferred
Stock





The
Company is authorized to issue 10,500,000 shares of $0.05 par value preferred
stock.





Pursuant
to the acquisition of MPS, the Company issued 500,000 shares of Series B
Preferred Stock. The Series B Preferred Stock shares are convertible at any time
into common shares at a ratio of two common shares for each preferred share. In
addition, each preferred share has one vote for each common share outstanding
and has a liquidation preference of $1.00 per share ($500,000 at March 31, 2010
and December 31, 2009, respectively).





Pursuant
to the acquisitions of Ceres, the Company issued 8,000,000 shares of Series C
Preferred Stock. The Series C Preferred Stock shares are convertible at any time
into common shares at a ratio of one common share for each preferred share. In
addition, each Preferred share has one vote for each common share outstanding
and has a liquidation preference of $.50 per share ($120,000 and $1,000,000 at
March 31, 2010 and December 31, 2009, respectively). In December 2009, 6,000,000
shares of the Series C Preferred Stock were converted into 6,000,000 shares of
common stock. During the quarter ended March 31, 2010, an additional 1,760,000
shares of the Series C Preferred Stock were converted to 1,760,000 shares of
common stock.





Stock
Issuances





During
the quarter ended March 31, 2010, the Company issued:





·
            3,608,333
      shares of common stock valued at $116,500 (various amounts between $0.03
      and $0.06 per share) for cash.


·
            700,000
      shares of common stock valued at $56,000 ($0.08 per share) for prepaid
      marketing services. This amount was recorded as other current assets in
      the consolidated balance sheet and is being amortized ratably over the
      period of the marketing contract.


·
            1,141,000
      shares of common stock valued at $100,090 (approximately $0.09 per share)
      for professional services. This amount is included in the Company’s
      consolidated statements of operations for the quarter ended March 31,
      2010.


·
            1,760,000
      shares of the Series C preferred stock were converted to 1,760,000 shares
      of the Company’s common stock.




Stock
Warrants





At March
31, 2010 and December 31, 2009, the Company had a total of 200,000 warrants
outstanding to purchase the Company's common stock at an exercise price of
$0.125 per share.  The warrants expire on January 3,
2014.





Treasury
Stock





During
the quarter ended March 31, 2010, the Company sold 120,000 shares of its common
stock held in treasury stock for $10,095 in cash, at an average price of $0.08
per share. The shares had a cost basis of $0.25 per share. Losses on sale of our
treasury shares are recorded in additional paid in capital in the equity section
of our consolidated balance sheet as of March 31, 2010.





Note
15. Commitments and Contingencies





Operating
Leases





Our
principal executive office is located at 974 Silver Beach Road, Belgium,
Wisconsin 53004. The lease payment of $4,006 per month on 3,500 square feet of
offices and manufacturing and expired in March 2010. We also lease office space
in St. Paul, MN. The lease payment is $3,600 per month and is paid on a
month-to-month basis. We also lease a manufacturing facility in Oakland,
Nebraska. The lease payment is $3,000 per month and expires in August 2010. We
have not renewed the lease on the facility in Belgium, though we continue to
lease on a month-to-month basis at $4,006 per month. Total rent expense under
operating leases for the quarters ended March 31, 2010 and 2009, was $33,563 and
$24,800, respectively. Our commitment for rent due for the remainder of 2010
under these operating leases is $15,000.





Litigation
Matters





The
Company periodically is subject to claims and lawsuits that arise in the
ordinary course of business.  It is the opinion of management that the
disposition or ultimate resolution of such claims and lawsuits will not have a
material adverse effect on the financial position of the Company.












Earn-Out
Agreement





In
connection with the acquisition of Modular Process Constructors, LLC (MPS) in
February 2009, the Company executed an earn-out agreement for the issuance of up
to 35% of the Company’s issued and outstanding common stock based on the
percentage of MPS net income to total consolidated net income of the Company for
the three-year period ending December 31, 2011. Under current accounting
guidance, contingent consideration arrangements such as this are to be recorded
as a liability or equity at it estimated fair value at the time of the
acquisition. As of December 31, 2009 (the end of the measurement period for the
acquisition), the Company determined that the contingent consideration has no
discernable fair value.





Note
16. Income Taxes





Realization
of our net operating loss carryforwards and other deferred tax temporary
differences are contingent upon future taxable earnings.  Our net
deferred tax assets have been reduced fully by a valuation allowance, as
realization is not considered to be likely based on an assessment of the history
of losses and the likelihood of sufficient future taxable income.





We are
subject to income taxes in the U.S. federal jurisdiction and various state
jurisdictions. As of December 31, 2009, we are no longer subject to U.S. federal
tax examinations for tax years before 2006.  We are subject to state
tax audits until the applicable statutes of limitations expire.





We
recognize interest and penalties accrued on any unrecognized tax benefits as a
component of income tax expense.  As of December 31, 2009, there were
no such items accrued and we had no unrecognized tax benefits.  We do
not expect any material changes in our unrecognized tax positions over the next
12 months.





Note
17. Subsequent Events





Financing


On April
1, 2010, the Company entered into a note payable of $100,000. Interest at 12.0%
is due with the principal on March 31, 2011. The note is unsecured and is
convertible into shares of the Company’s common stock at $0.04 per share at any
time during the term of the note.





Acquisition


On April
14, 2010, the Company completed an acquisition of WhiteHat Holdings, LLC, a
Delaware limited liability company (WhiteHat), through the merger of WhiteHat
into White Hat Acquisition Corp., a wholly-owned subsidiary of the Company
(Merger Sub), pursuant to a Plan and Agreement of Merger entered into by the
parties on February 25, 2010 (the Merger Agreement).  The Merger Sub
will change its name to WhiteHat Holdings, Inc. and will operate as a wholly
owned subsidiary of Mach One.





Pursuant
to the terms of the Merger Agreement, as partial consideration (i) $400,000
shall be deposited into a WhiteHat account not later than April 30,2010, to be
used by WhiteHat to pay its legal, accounting, marketing and debt expenses
and to further the development of its business, and (ii) all of the issued
and outstanding shares of common and preferred stock of WhiteHat were converted
into 154,798,780 shares of Mach One common stock and distributed to the WhiteHat
shareholders pro rata. In addition, $987,000 of WhiteHat indebtedness was
cancelled and converted into 15,343,750 shares of Mach One common
stock.  Upon the close of the acquisition, the former WhiteHat
shareholders owned approximately 45% of the total issued and outstanding common
stock of Mach One.  In the event that less than $400,000 is deposited
into a WhiteHat account by April 30, 2010, Mach One shall issue additional
shares of its common stock (Penalty Shares) to the WhiteHat shareholders, pro
rata.  In addition, Mach One is obligated to provide additional
capital to the WhiteHat subsidiary of not less than $1,600,000 on or before July
4, 2010.  In the event Mach One fails to provide such capital within
the required time period, Mach One will issue to the former WhiteHat
shareholders up to 33,691,592 additional shares of its common stock (Additional
Shares).  However, in no event will the total number of shares issued
to the WhiteHat shareholders at the closing, together with any Penalty Shares
and/or Additional Shares exceed 49.9% of Mach One’s issued and outstanding
common stock.





As of the
date of this report, the Company has deposited all of the $400,000 and the
WhiteHat shareholders have agreed to forgo the issuance of any Penalty
Shares.





Debt
Conversion


On April
16, 2010, $50,000 of the CMS notes, and $3,000 of related accrued interest, were
converted to 1,325,000 shares of the Company’s common stock at $0.04 per share.
The note converted had an original conversion rate of $0.08 per share. Since the
actual conversion rate was lower, the Company will recognize and record a
beneficial conversion feature charge in its Statement of Operations of $50,000
during the quarter ending June 30, 2010.




















Item 2.Management’s Discussion and Analysis
or Plan of Operation





NOTE
REGARDING FORWARD-LOOKING STATEMENTS





Sections
of this Form 10-Q, including the Management's Discussion and Analysis or Plan of
Operation, contain “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended (the “Securities Act”), Section
21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
and the Private Securities Litigation Reform Act of 1995, as amended. These
forward-looking statements are subject to risks and uncertainties and other
factors that may cause our actual results, performance or achievements to be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statements. You should not unduly rely on these
statements. Forward-looking statements involve assumptions and describe our
plans, strategies, and expectations. You can generally identify a
forward-looking statement by words such as “may,” “should,” “would,”
“could,” “plan,” “goal,” “potential,” “expect,” “anticipate,” “estimate,”
“believe,” “intend,” “project,” and similar words and variations thereof. This
Quarterly Report on Form 10-Q contains forward-looking statements that address,
among other things,





CRITICAL ACCOUNTING POLICIES AND
ESTIMATES:





The
preparation of the financial information contained in this 10-Q requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities.  We evaluate these estimates on an ongoing basis,
including those related to allowances for doubtful accounts and returns,
inventory valuation, the carrying value and any impairment of goodwill and
intangible assets, and income taxes. These critical accounting policies are
discussed in more detail in the Management’s Discussion and Analysis of
Financial Condition and Results of Operations contained in our Annual Report on
Form 10-K for the year ended December 31, 2009.





RECENT
ACCOUNTING DEVELOPMENTS





See Note
2 to the accompanying interim consolidated financial statements for a summary of
recent accounting developments.





Plan
of Operation





Overview





Ceres
Organic Harvest Inc. (Ceres), an acquisition that closed Feb. 20, 2009, is now
part of the Mach One Organics and Sustainables Group (OSG). The Ceres
acquisition included Organic Grain & Milling, Inc. (OGM), it’s wholly-owned
subsidiary.  OGM
sourced organic grains from Midwestern farms and supplied them to the food and
feed industries through its elevator in North Dakota.  On March 31,
2010, Ceres adopted a plan to close the OGM business. As of March 31, 2010,
substantially all operational activities of OGM were discontinued. Ceres
supplies organic grain and grain-based ingredients to the food and animal feed
industries. Ceres is currently launching a new line of oat-based products using
a proprietary oat cultivar with substantially higher fiber and beta-glucan
content, which was developed in a cooperative breeding program between the North
Dakota State University and the United States Department of Agriculture’s (USDA)
Agricultural Research Service. Ceres has corporate offices in St. Paul,
Minnesota. The integration of organic foods and animal feeds to the Mach One
package of global wellness solutions extends Mach One’s reach as well as its
ability to expand its success in sustainable bio-solutions. OSG is headquartered
in Minneapolis, Minnesota.





Modular
Process Constructors, LLC (dba MPS-BioPharm), an acquisition that closed Feb.
19, 2009, is now part of Mach One’s BioPharm Process Systems Group and engages
in the design and manufacture of constructed systems for the biopharmaceutical
industry. It offers process modules and skids, custom tanks and vessels, and
sanitary stainless steel flow equipment, along with professional project
management, design qualifications, detail design, component procurement,
schedule metrics and reporting. With the addition of MPS-BioPharm, it enables
Mach One to accelerate production of biopharmaceutical, Nutraceutical, and
BridgeTM Iggs on a global basis. The BioPharm Process Systems Group is
headquartered in Kenosha, Wisconsin.





WhiteHat
Holdings, LLC (WhiteHat) was acquired on April 14, 2010. In combining with
WhiteHat, the Company is creating a new, consumer-driven business unit, the
Nutritional Products Division, focused on healthy food and beverages. WhiteHat s
committed to promoting the health and wellness of children by providing healthy
and nutritious products and related services to support healthy eating habits
and regular physical activity, especially during the pre-teen years. WhiteHat
produces a variety of great-tasting, fortified juice beverages for kids under
the brand Dog On It! TM that
are made with all-natural ingredients and loaded with calcium and vitamins A, B,
C, D & E – without adding excess sugar or high fructose corn syrup. WhiteHat
is headquartered in Atlanta, GA.




Today
Mach One and its four Operating Groups—Nutritional Products, Animal Wellness,
Organics and Sustainables, and BioPharm Process Systems—offer a broad range of
solutions to global health problems, from promoting health and wellness of
children, to helping calves develop immunity at birth, to carefully managing
organic grain crops, to testing equipment that helps detect compromised food
products long before they can cause a problem. Currently, Nutritional Products,
Animal Wellness and BioPharm Process Systems generate neither significant
revenues nor  have acquired significant assets. As such, the Company
operates and manages the business under one reporting segment.












We have
not generated significant operating revenues, and as of March 31, 2010 we had
incurred a cumulative consolidated net loss from inception of
$15,548,033.





For the
three-month periods ended March 31, 2010 and 2009, our consolidated net losses
were $911,409 and $954,531 respectively. Our current liabilities as of March 31,
2010 exceed current assets by $2,341,856.





Over the
next 18 months, in order to have the capability of achieving our business plan,
we believe that we will require at least $5,000,000 in additional funding to pay
down certain payables and accruals and to provide working capital. Should we be
unable to obtain additional funding in the next 3 months, we would be required
to further cut expenses in our Organics and Sustainables group and temporarily
halt operations in our Animal Wellness group until such funding is obtained. We
are currently attempting to raise these funds by means of one or more public or
private offerings of debt or equity securities or both. However, at this point,
we have not specifically identified the type or sources of this
funding.  We also are exploring commercial and joint venture financing
opportunities.





Results
of Operations





Quarter
Ended March 31, 2010 Compared to Quarter Ended March 31, 2009





Net sales
for the quarter ended March 31, 2010 were $371,566 compared to $327,513 for the
same period last year. Net sales increased as 2010 includes a full three months
of operations of Ceres, while only 2009 includes operations from the February
20, 2009 acquisition date. This is offset by a slow down in Ceres operations
during 2010 due to economic conditions in the organic food industry and due to a
lack of funding for expansion opportunities. In addition sales at Animal
Wellness decreased approximately $32,000.





Cost of
goods sold were $353,735 for the quarter ended March 31, 2010 compared to
$297,387 for the quarter ended March 31, 2009. Cost of goods sold increased as
2010 includes a full three months of operations of Ceres, while 2009 includes
operations from the acquisition date. This is offset by a slow down in Ceres
operations during 2010 due to economic conditions in the organic food industry
and due to a lack of funding for expansion opportunities. In addition, cost of
good sold at Animal Wellness decreased approximately $43,000.





Gross
profit for the quarter ended March 31, 2010 was $17,831 compared to gross profit
of $30,126 for the same period last year. Gross profit decreased due to economic
conditions in the organic food industry and due to the sale of inventory at
lower prices to raise working capital.





Operating
expenses increased to $757,994 in the quarter ended March 31, 2010 from $719,543
in the same quarter in 2009. Operating expenses increased as 2010 includes a
full three months of operations of Ceres, while 2009 includes operations from
the acquisition date. The expected increase was partially offset by cost control
measures that the Company has taken due to lack of current funding.





Interest
expense decreased to $104,323 in the quarter ended March 31, 2010 from $281,856
in the same quarter in 2009. Interest expense decreased as approximately $2.0
million of convertible notes payable outstanding during the quarter ended March
31, 2009 were subsequently converted to common stock or paid off in
2009.





Liquidity
and Capital Resources





We had a
cash balance of $25,432 as of March 31, 2010 and a cash balance of $61,979 as of
December 31, 2009.





The value
of our marketable securities on March 31, 2010 decreased to $0 from $4,223 as of
market close on December 31, 2009. The decrease is due to the sale of our
remaining marketable securities during the quarter ended March 31,
2010.





Accounts
receivable as of March 31, 2010 decreased to $179,000 from $251,991 at December
31, 2009 due to a slowdown in operations at Ceres due to economic conditions
affecting the organic food industry.





Inventory
as of March 31, 2010 decreased to $38,686 from $140,828 at December 31, 2009 due
to a slowdown in operations at Ceres due to economic conditions affecting the
organic food industry. Additionally, lack of funding has forced the Company to
delay inventory purchases for future sales.





Total
assets at March 31, 2010 are $2,631,859 compared to $3,263,110 at December 31,
2009. This decrease is attributable to a slowdown in operations at Ceres due to
economic conditions affecting the organic food industry. This slowdown has
resulted in decrease to accounts receivable and inventory.





As of
March 31, 2010, we have current liabilities totaling $3,146,876 compared to
$3,179,518 at December 31, 2009.  Changes are due to normal operations
and to accrual increases for both interest payable and payroll
payable.





Long term
debt as of March 31, 2010 is $3,422,180 compared to $3,504,130 at December 31,
2009.












Operating
Activities





Net cash
used in operations decreased to $227,760 during the quarter ended March 31, 2010
from $1,530,486 during the quarter ended March 31, 2009. The decrease in
operating cash flows was primarily due to the slow-down of operating activities
due to a lack of current funding, a decrease in net loss and significant changes
in working capital levels from the prior year. More specifically, the changes in
working capital in the quarter ended March 31, 2010 included decreases in
accounts receivable, inventory and other assets and increases in accounts
payable and accrued expenses. Accounts receivable decreased due to a decrease in
monthly sales at Ceres and MPS. The decrease in inventory is primarily a result
of a reduction of inventory levels to generate working capital. The increase in
accounts payable and accrued expenses was driven by our current lack of
capital.





Investing
Activities





Net cash
from (used in) investing activities increased to $3,444 during the quarter ended
March 31, 2010 from a use of $156,105 during the quarter ended March 31, 2009.
In 2009, we had available funds to purchase property and equipment ($179,962),
whereas our current lack of funds precluded our ability to invest in any
property and equipment.





Financing
Activities





Net cash
provided by financing activities during the quarter ended March 31, 2010 was
$177,518, compared to $1,584,413 during the quarter ended March 31, 2009. The
primary reason for the decrease in cash provided by financing activities was our
inability to close on current funding needs. More specifically, during the
quarter ended March 31, 2009, cash provided by the issuance of debt was
approximately $1.9 million, whereas in the same period in 2010, the cash
provided by issuance of debt and common stock combined was only approximately
$235,000. Partially offsetting this decrease, proceeds from the sale of treasury
stock during the quarter ended March 31, 2010 was approximately $10,000 compared
to the use of approximately $302,000 in cash to purchase treasury stock during
the same period in 2009.





Our
longer-term working capital and capital requirements will depend upon numerous
factors, including revenue and profit generation, the cost of filing,
prosecuting, defending, and enforcing patent claims and other intellectual
property rights, competing technological and market developments, collaborative
arrangements. Additional capital will be required in order to attain our goals.
We cannot assure you that funds from our future operations or funds
provided by our current financing activities will meet the requirements of our
operations, and in that event, we will continue to seek additional sources
of financing to maintain liquidity. We are actively pursuing all potential
financing options as we look to secure additional funds both to stabilize and to
grow our business operations. Our management will review any financing options
at their disposal, and will judge each potential source of funds on its
individual merits. We cannot assure you that we will be able to secure
additional funds from debt or equity financing, as and when we need to, or if we
can, that the terms of this financing will be favorable to us or our
stockholders.

















Item
3. Qualitative and Quantitative Disclosures About Market Risk.





None.





Item
4.  Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





We
maintain disclosure controls and procedures designed to provide reasonable
assurance that information required to be disclosed in our reports filed
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer as
appropriate, to allow timely decisions regarding required disclosures.  A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met.





As of
March 31, 2010, our Chief Executive Officer and Chief Financial Officer carried
out an evaluation of the effectiveness of our disclosure controls and procedures
as such term is defined in Rules 13a-15(e) under the Securities and Exchange Act
of 1934 (The “Exchange Act”). Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were not effective as of March 31, 2010 in ensuring that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in applicable rules and forms and that such information is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, in a manner that allows timely decisions
regarding required disclosure because of those material weaknesses relating to
internal controls that are described in Item 9A(T). of the Company’s Form 10-K
for the year ended  December 31, 2009, filed April 16,
2010.





Notwithstanding
the material weaknesses that existed as of March 31, 2010, our Chief Executive
Officer and Chief Financial Officer have concluded that the financial statements
included in this report present fairly, in all material respects, the financial
position, results of operations and cash flows of the Company in conformity with
accounting principles generally accepted in the United States of
America.





Changes
in Internal Controls





During
the fiscal quarter ended March 31, 2010, there were no changes in our internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
 Management has concluded that the material weaknesses in internal control,
as described in Item 9A(T). of our Form 10-K for the year ended December 31,
2009, have not been fully remediated.  We are committed to finalizing our
remediation action plan and implementing the necessary enhancements to our
policies and procedures to fully remediate the material weaknesses discussed
above. Due to our lack of sufficient capital, we expect these material
weaknesses to continue until our capital needs are met.







PART
II—OTHER INFORMATION





Item
1. Legal Proceedings.





Not
Applicable.





Item
1A. Risk Factors.





The
Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange
Act and is not required to provide the information required under this
item.





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





On
various dates during quarter ended March 31, 2010, Mach One issued 3,608,333
shares of common stock valued at $116,500 (various amounts between $0.03 and
$0.06 per share) for cash.





On
various dates during quarter ended March 31, 2010, Mach One issued 1,141,000
shares of common stock valued at $100,090 (approximately $0.09 per share) for
professional services.





On February 4, 2010, Mach
One issued700,000 shares of common stock valued at $56,000 ($0.08 per
share) for prepaid marketing services.





On
various dates during the quarter ended March 31, 2010, 1,760,000 shares of the
Series C preferred stock were converted to 1,760,000 shares of the Company’s
common stock.













All of
the investors above are sophisticated individuals who had the opportunity to
review all of the Company’s SEC filings and to discuss with the officers and
directors of the Company the business and financial activities of the Company.
All of the investors acquired their Common Stock and/or Preferred Stock (the
“Securities”) for investment and not with a view toward distribution. All of the
stock certificates issued, or to be issued upon conversion, to the thirty
Pacific Rim shareholders and the stock certificates issued to Thomsen and to the
nine Ceres shareholders have been, affixed with an appropriate legend
restricting sales and transfers. Therefore, based on the foregoing, the Company
issued the Securities in reliance upon the exemptions from registration provided
by Section 4(2) of the Securities Act of 1933 and/or Regulation D, there
under.





Item 3.Defaults Upon Senior
Securities.





Not
Applicable.





Item 4.Submission of Matters of a Vote of
Security Holders





None.





Item
5. Other Information





Not
Applicable.





Item
6. Exhibits





(a)
Exhibits: The following exhibits are filed with this report:





31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a)
under The Securities Exchange Act of 1934 as amended. *





31.2 Certification pursuant to Rule 13a-14(a) or 15d-14(a)
under The Securities Exchange Act of 1934 as amended. *





32. Certifications pursuant to 18 U.S.C section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *


___________________________


* The
Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or
otherwise subject to liability under that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.

















SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.





Mach
      One CorporationDate:
      May 24, 2010
            By:
            /s/
      Tad M. BallantyneTad M. Ballantyne,
              Chief Executive OfficerBy:
            /s/
      Patrick G. SheridanPatrick
      G. Sheridan,
              Chief
      Financial Officer