| Nevada                                                         | 20-0443575                           |
|----------------------------------------------------------------|--------------------------------------|
| (State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

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| Table of Contents                                                                                                              |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                           | Page   |
| PART I. FINANCIAL INFORMATION                                                                                                  |   |
|                                                                                                                           |   |
| Item 1. Condensed Financial Statements                                                                                         | 1      |
|                                                                                                                           |   |
| Balance Sheet as of September 30, 2010 (Unaudited) and December 31, 2009 (Audited)                                             | 1      |
|                                                                                                                           |   |
| Statements of Operations for the Three and Nine Months Ended September 30, 2010 (Unaudited) and September 30, 2009 (Unaudited) | 3      |
|                                                                                                                           |   |
| Statements of Cash Flows for the Nine Months Ended September 30, 2010 (Unaudited) and September 30, 2009 (Unaudited)           | 4      |
|                                                                                                                           |   |
| Notes to Condensed Financial Statements (Unaudited)                                                                            | 5      |
|                                                                                                                           |   |
| Item 2. Management’s Discussion and Analysis or Plan of Operation                                                        | 11     |
|                                                                                                                           |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                             | 17     |
|                                                                                                                           |   |
| Item 4T. Controls and Procedures                                                                                               | 17     |
|                                                                                                                           |   |
| PART II. OTHER INFORMATION                                                                                                     |   |
|                                                                                                                           |   |
| Item 1. Legal Proceedings                                                                                                      | 19     |
|                                                                                                                           |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                            | 19     |
|                                                                                                                           |   |
| Item 3. Defaults Upon Senior Securities                                                                                        | 19     |
|                                                                                                                           |   |
| Item 4. Reserved                                                                                                               | 19     |
|                                                                                                                           |   |
| Item 5. Other Information                                                                                                      | 19     |
|                                                                                                                           |   |
| Item 6. Exhibits                                                                                                               | 20     |
|                                                                                                                           |   |
| Signatures                                                                                                                     | 21     |
|                                                                                                                           |   |
| Certifications                                                                                                                 |   |
| Exhibit 31.1 - CEO                                                                                                             |   |
| Exhibit 31.2 - CFO                                                                                                             |   |
| Exhibit 32.1 - CEO                                                                                                             |   |
| Exhibit 32.2 - CFO                                                                                                             |   |

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table of contents

PART I

Item 1. 

PREMIER ALLIANCE GROUP, INC

|                                                                           |   |      (Unaudited) |      |
|--------------------------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                                           |   | September 30,                        |      |   | December 31, |   |
|                                                                           |   | 2010                                 |      |   | 2009 |   |
| ASSETS                                                                         |   | (Restated)                           |      |   |   |   |
|                                                                           |   |                                 |      |   |   |   |
| CURRENT ASSETS:                                                                |   |                                 |      |   |   |   |
|   Cash                                                               |   | $                                    | 505,168   |   |   | $ | - |   |
|   Accounts receivable                                                |   |                                 | 2,454,925 |   |   |   | 1,121,186 |   |
|   Marketable securities                                              |   |                                 | 28,326    |   |   |   | 30,918 |   |
|   Deferred income taxes                                              |   |                                 | 31,000    |   |   |   | 15,000 |   |
|   Prepaid expenses                                                   |   |                                 | 150,833   |   |   |   | 37,216 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|     Total current assets                                   |   |                                 | 3,170,252 |   |   |   | 1,204,320 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
| PROPERTY AND EQUIPMENT - at cost less                                          |   |                                 |      |   |   |   |   |   |
|   accumulated depreciation                                           |   |                                 | 51,092    |   |   |   | 11,728 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
| OTHER ASSETS:                                                                  |   |                                 |      |   |   |   |   |   |
|   Goodwill                                                           |   |                                 | 3,193,553 |   |   |   | 1,450,578 |   |
|   Intangible assets - net                                            |   |                                 | 233,697   |   |   |   | 79,800 |   |
|   Investment in equity-method investee                               |   |                                 | 181,767   |   |   |   | 190,432 |   |
|   Investment in cost-method investee                                 |   |                                 | 100,000   |   |   |   | 100,000 |   |
|   Cash surrender value of officers’ life   insurance |   |                                 | 371,427   |   |   |   | 370,032 |   |
|   Deferred income taxes                                              |   |                                 | 29,000    |   |   |   | 46,000 |   |
|   Loan Fees - net                                                    |   |                                 | 28,852    |   |   |   | 0 |   |
|   Deposits and other assets                                          |   |                                 | 16,308    |   |   |   | 6,100 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 | 4,154,604 |   |   |   | 2,242,942 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   | $                                    | 7,375,948 |   |   | $ | 3,458,990 |   |

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|                                                                                                      |   |      (Unaudited) |       |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                                                      |   | September 30,                        |       |   | December 31, |   |
|                                                                                                      |   | 2010                                 |       |   | 2009 |   |
|                                                                                                      |   | (Restated)                           |       |   |   |   |
|  LIABILITIES AND STOCKHOLDERS' EQUITY                                                                |   |                                 |       |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |
| CURRENT LIABILITIES:                                                                                      |   |                                 |       |   |   |   |
|   Note payable                                                                                  |   | $                                    | 626,000    |   |   | $ | 211,000 |   |
|   Current portion of long-term debt                                                             |   |                                 | 550,111    |   |   |   | 133,152 |   |
|   Accounts payable                                                                              |   |                                 | 586,488    |   |   |   | 320,027 |   |
|   Accrued expenses                                                                              |   |                                 | 803,499    |   |   |   | 384,990 |   |
|   Income taxes payable                                                                          |   |                                 | 20,135     |   |   |   | 33,086 |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|     Total current liabilities                                                         |   |                                 | 2,586,233  |   |   |   | 1,082,255 |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
| LONG-TERM DEBT                                                                                            |   |                                 | 158,482    |   |   |   | 114,606 |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                             |   |                                 | -          |   |   |   | - |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
| STOCKHOLDERS' EQUITY:                                                                                     |   |                                 |       |   |   |   |   |   |
|   Class A convertible preferred stock, $.001                                                    |   |                                 |       |   |   |   |   |   |
|     par value, 5,000,000 shares authorized,                                           |   |                                 |       |   |   |   |   |   |
|     18,090 Pref A shares issued and     Outstanding,              |   |                                 | 18         |   |   |   | 561 |   |
|   Class B convertible preferred stock, $.001                                                    |   |                                 |       |   |   |   |   |   |
|     par value, 2,000,000 shares authorized,                                           |   |                                 |       |   |   |   |   |   |
|     1,040,000 Pref B shares issued and      Outstanding |   |                                 | 1,040      |   |   |   |   |   |
|   Common stock, $.001 par value, 45,000,000                                                     |   |                                 |       |   |   |   |   |   |
|     shares authorized, 7,949,902 shares                                               |   |                                 |       |   |   |   |   |   |
|     issued and outstanding                                                            |   |                                 | 7,949      |   |   |   | 6,072 |   |
|   Additional paid-in capital                                                                    |   |                                 | 6,022,298  |   |   |   | 3,414,635 |   |
|   Accumulated deficit                                                                           |   |                                 | (1,400,072 | ) |   |   | (1,159,139 | ) |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 | 4,631,233  |   |   |   | 2,262,129 |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                                                      |   | $                                    | 7,375,948  |   |   | $ | 3,458,990 |   |

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PREMIER ALLIANCE GROUP, INC

|                                             |   | Three months  |         |   | Three months  |   |      | Nine months   |   |   | Nine months   |   |
|--------------------------------------------------|--------|---------------|--------------|--------|---------------|--------|-----------|---------------|--------|--------|---------------|--------|
|                                             |   | ended         |         |   | ended         |   |      | ended         |   |   | ended         |   |
|                                             |   | Sept 30, 2010 |         |   | Sept 30, 2009 |   |      | Sept 30, 2010 |   |   | Sept 30, 2009 |   |
|                                             |   | (Restated)    |         |   |          |   |      | (Restated)    |   |   |          |   |
| NET REVENUE                                      |   | $             | 4,779,321    |   |          | $      | 2,134,719 |          |   | $      | 11,626,607    |   |   | $ | 6,620,738 |   |
| OPERATING EXPENSES:                              |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Cost of revenues                     |   |          | 3,582,664    |   |          |   | 1,538,907 |          |   |   | 8,941,687     |   |   |   | 4,850,285 |   |
|   Selling, general and administrative  |   |          | 1,055,785    |   |          |   | 510,668   |          |   |   | 2,510,489     |   |   |   | 1,550,749 |   |
|   Depreciation                         |   |          | 3,188        |   |          |   | 1,104     |          |   |   | 6,198         |   |   |   | 4,232 |   |
|    Total operating expenses       |   |          | 4,641,637    |   |          |   | 2,050,679 |          |   |   | 11,458,374    |   |   |   | 6,405,266 |   |
| INCOME FROM OPERATIONS                           |   |          | 137,684      |   |          |   | 84,040    |          |   |   | 168,233       |   |   |   | 215,472 |   |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| OTHER (EXPENSE) INCOME:                          |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Interest expense, net                |   |          | (72,889      | )      |          |   | (996      | )             |   |   | (110,802      | )      |   |   | (7,232 | ) |
|   Gain (loss) on marketable securities |   |          | (1,185       | )      |          |   | 40        |          |   |   | (2,593        | )      |   |   | 11,932 |   |
|   Officers’ life insurance       |   |          | 36,497       |   |          |   | 57,646    |          |   |   | 1,395         |   |   |   | 65,990 |   |
|   Equity in net (loss) income of       |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|    equity-method investee         |   |          | (498         | )      |          |   | (1,774    | )             |   |   | (8,665        | )      |   |   | 346 |   |
|   Other income                         |   |          | 2,400        |   |          |   | 0         |          |   |   | 4,875         |   |   |   | 2,400 |   |
|    Total other (expense) income   |   |          | (35,675      | )      |          |   | 54,916    |          |   |   | (115,790      | )      |   |   | 73,436 |   |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET INCOME (LOSS) BEFORE INCOME TAXES            |   |          | 102,009      |   |          |   | 138,956   |          |   |   | 52,443        |   |   |   | 288,908 |   |
| INCOME TAX EXPENSE                               |   |          | (16,796      | )      |          |   | (31,807   | )             |   |   | (19,714       | )      |   |   | (87,702 | ) |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET INCOME (LOSS)                                |   |          | 85,213       |   |          |   | 107,149   |          |   |   | 32,729        |   |   |   | 201,206 |   |
| PREFERRED STOCK DIVIDENDS EARNED                 |   |          | -            |   |          |   | -         |          |   |   | -             |   |   |   | - |   |
| DEEMED DIVIDEND ON PREFERRED STOCK               |   |          | (13,434      | )      |          |   | -         |          |   |   | (273,663      | )      |   |   | - |   |
| NET INCOME (LOSS) AVAILABLE TO COMMON            |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   STOCKHOLDERS                         |   | $             |  71,779 |   |          | $      | 107,149   |          |   | $      | (240,934      | )      |   | $ | 201,206 |   |
| Net income (loss) income per share               |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   | $             | 0.01         |   |          | $      | 0.02      |          |   | $      | (0.03         | )      |   | $ | 0.03 |   |
|   Diluted                              |   | $             | 0.01         |   |          | $      | 0.02      |          |   | $      | (0.03         | )      |   | $ | 0.03 |   |
| Weighted average number of shares                |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   |          | 6,949,359    |   |          |   | 5,897,836 |          |   |   | 7,579,984     |   |   |   | 5,878,018 |   |
|   Diluted                              |   |          | 8,162,408    |   |          |   | 6,458,582 |          |   |   | 7,579,984     |   |   |   | 6,438,764 |   |

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PREMIER ALLIANCE GROUP,

|                                                                                                                   |   | 2010   |      |   | 2009   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cash flows from operating activities:                                                                                  |   |   |      |   |   |   |
|   Net income (loss)                                                                                          |   | $      | 32,729    |   |   | $      | 201,206 |   |
|   Adjustments to reconcile net income (loss)                                                                 |   |   |      |   |   |   |   |   |
|     to net cash provided by operating activities:                                                  |   |   |      |   |   |   |   |   |
|       Depreciation                                                                       |   |   | 35,749    |   |   |   | 4,232 |   |
|       Amortization of debt discount                                                      |   |   | 83,755    |   |   |   |   |   |
|       Decrease (increase) of cash surrender value                                        |   |   |      |   |   |   |   |   |
|         of officers’ life insurance                                      |   |   | (1,395    | )      |   |   | (65,990 | ) |
|       (Increase) in Deferred income taxes                                                |   |   | 1,000     |   |   |   | (4,000 | ) |
|       Consulting expense paid with warrants                                              |   |   | 47,805    |   |   |   | - |   |
|       Stock issues for services                                                          |   |   |      |   |   |   | 25,500 |   |
|       Equity in (gain) loss of equity-method      investee |   |   | 8,665     |   |   |   | (346 | ) |
|     Changes in operating assets and liabilities:                                                   |   |   |      |   |   |   |   |   |
|       (Increase) Decrease in accounts receivable                                         |   |   | (970,901  | )      |   |   | 30,355 |   |
|       Decrease (Increase) in marketable securities                                       |   |   | 2,591     |   |   |   | (11,932 | ) |
|       (Increase) Decrease in prepaid expenses                                            |   |   | (39,030   | )      |   |   | (6,442 | ) |
|       Decrease in deposits and other assets                                              |   |   | 3,303     |   |   |   | 2,318 |   |
|       Increase (Decrease)in accounts payable                                             |   |   | 266,461   |   |   |   | (36,248 | ) |
|       Increase (Decrease) in accrued expenses                                            |   |   | 281,589   |   |   |   | (4,062 | ) |
|       (Increase) in income taxes receivable                                              |   |   | (61,623   | )      |   |   |   |   |
|       (Decrease) Increase in income taxes payable                                        |   |   | (31,889   | )      |   |   | (65,591 | ) |
|     Net cash (used in) provided by                                                       |   |   |      |   |   |   |   |   |
|       operating activities                                                               |   |   | (341,191  | )      |   |   | 69,000 |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Cash flows from investing activities:                                                                                  |   |   |      |   |   |   |   |   |
|   Acquisitions                                                                                               |   |   | (517,191  | )      |   |   |   |   |
|   Purchases of property and equipment                                                                        |   |   | -         |   |   |   | - |   |
|     Net cash used in investing activities                                                          |   |   | (517,191  | )      |   |   | - |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Cash flows from financing activities:                                                                                  |   |   |      |   |   |   |   |   |
|   Issuance of Common Stock                                                                                   |   |   | 40        |   |   |   |   |   |
|   Issuance of Preferred Stock                                                                                |   |   | 728,000   |   |   |   |   |   |
|   Issue costs and commissions – preferred stock                                                        |   |   | (63,490   | )      |   |   |   |   |
|   Issuance of convertible debentures                                                                         |   |   | 350,000   |   |   |   |   |   |
|   Original issue discount - convertible debentures                                                           |   |   | (28,000   | )      |   |   |   |   |
|   Loan Fees – convertible debentures                                                                   |   |   | (38,000   | )      |   |   | - |   |
|   (Net payments)/Proceeds from line of credit                                                                |   |   | 415,000   |   |   |   | (69,000 | ) |
|     Net cash (used in) provided by                                                                 |   |   |      |   |   |   |   |   |
|       financing activities                                                               |   |   | 1,363,550 |   |   |   | (69,000 | ) |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Net increase in cash                                                                                                   |   |   | 505,168   |   |   |   | - |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Cash - beginning of period                                                                                             |   |   | -         |   |   |   | - |   |
|                                                                                                                   |   |   |      |   |   |   |   |   |
| Cash - end of period                                                                                                   |   | $      | 505,168   |   |   | $      | - |   |

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PREMIER ALLIANCE 

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| Current assets                           | $               - |   |
|------------------------------------------|----------------------------------------------------------------------------------------------|--------|
| Property and equipment                   | 20,000                                                                                       |   |
| Intangible assets-customer relationships | 67,000                                                                                       |   |
| Goodwill                                 | 913,000                                                                                      |   |
| Total assets acquired                    | 1,000,000                                                                                    |   |
| Liabilities assumed                      | -                                                                                            |   |
| Net assets acquired                      | $1,000,000                                                                                   |   |

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| Current assets                                   | $       412,121 |   |
|--------------------------------------------------|----------------------------------------------------|--------|
| Property and equipment                           | 25,562                                             |   |
| Intangible assets-non compete                    | 57,500                                             |   |
| Intangible assets – customer relationships | 49,800                                             |   |
| Goodwill                                         | 829,974                                            |   |
| Total assets acquired                            | 1,374,957                                          |   |
| Liabilities assumed                              | 155,857                                            |   |
| Aggregate Purchase Price                         | $1,219,100                                         |   |

|                                      |   | Three months ended September 30, 2009 |      |   | Nine months ended September 30, 2009 |   |
|-------------------------------------------|--------|---------------------------------------|-----------|--------|--------------------------------------|--------|
| Net revenues                              |   | $                                     | 3,516,100 |   |                                 | $      | 11,204,749 |   |
| Operating income (loss)                   |   |                                  | 121,589   |   |                                 |   | 252,218 |   |
| Net income (loss) per share – basic |   |                                  | 0.02      |   |                                 |   | 0.03 |   |
| Net income (loss) per share- diluted      |   |                                  | 0.02      |   |                                 |   | 0.03 |   |

|                                      |   | Three months ended September 30, 2010 |      |   | Nine months ended September 30, 2010 |   |
|-------------------------------------------|--------|---------------------------------------|-----------|--------|--------------------------------------|--------|
| Net revenues                              |   | $                                     | 5,290,312 |   |                                 | $      | 15,148,937 |   |
| Operating income (loss)                   |   |                                  | 71,747    |   |                                 |   | (35,569 | ) |
| Net income (loss) per share – basic |   |                                  | 0.01      | *      |                                 |   | (0.04 | )   * |
| Net income (loss) per share- diluted      |   |                                  | 0.01      | *      |                                 |   | (0.04 | )   * |

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| Options                           | Shares    | Weighted Average Exercise Price |
|-----------------------------------|-----------|---------------------------------|
| Outstanding at January 1, 2010    | 600,000   | $0.75                           |
| Issued                            | 325,000   | $1.00                           |
| Outstanding at June 30, 2010      | 925,000   | $0.84                           |
| Issued                            | 275,000   | $1.00                           |
| Outstanding at September 30, 2010 | 1,200,000 | $0.88                           |

| Options                           | Shares                         | Weighted Average Exercise Price |
|-----------------------------------|--------------------------------|---------------------------------|
| Outstanding at January 1, 2010    | -                              | -                               |
| Issued                            | 1,509,740                      | $0.77                           |
| Outstanding at June 30, 2010      | 1,509,740                      | $0.77                           |
| Issued                            |     60,000 | $0.77                           |
| Outstanding at September 30, 2010 | 1,569,740                      | $0.77                           |

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Item 2. Management’s 

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Item 3.

Item 4T. 

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PART II

Item

Item 2. 

Item 3. Defaults 

Item 4

Item 5. 

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Item 

| 31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350). |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350). |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Written Statement of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Written Statement of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|------|----------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

|                   |   | PREMIER ALLIANCE GROUP, INC.        |   |
|------------------------|--------|-------------------------------------|--------|
|                   |   | (Registrant)                        |   |
| DATE: January 19, 2012 | By:    | /s/ Mark S. Elliott                 |   |
|                   |   | Mark S. Elliott                     |   |
|                   |   | President (Chief Executive Officer) |   |
|                   |   |                                |   |
|                   |   |                                |   |
| DATE: January 19, 2012 | By:    | /s/ Larry W. Brumfield              |   |
|                   |   | Larry W. Brumfield                  |   |
|                   |   | Chief Financial Officer and         |   |
|                   |   | Principal Financial Officer         |   |

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