| 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 June 30, 2010 (Unaudited) and December 31, 2009 (Audited)                                        | 1      |
|                                                                                                                 |   |
| Statements of Operations for the Three and Six Months Ended June 30, 2010 (Unaudited) and March 31, 2010 (Unaudited) | 3      |
|                                                                                                                 |   |
| Statements of Cash Flows for the Six Months Ended June 30, 2010 (Unaudited) and June 30, 2009 (Unaudited)            | 4      |
|                                                                                                                 |   |
| Notes to Condensed Financial Statements (Unaudited)                                                                  | 5      |
|                                                                                                                 |   |
| Item 2. Management’s Discussion and Analysis or Plan of Operation                                              | 9      |
|                                                                                                                 |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                   | 14     |
|                                                                                                                 |   |
| Item 4T. Controls and Procedures                                                                                     | 14     |
|                                                                                                                 |   |
|                                                                                                                 |   |
| PART II. OTHER INFORMATION                                                                                           |   |
|                                                                                                                 |   |
| Item 1. Legal Proceedings                                                                                            | 16     |
|                                                                                                                 |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                  | 16     |
|                                                                                                                 |   |
| Item 3. Defaults Upon Senior Securities                                                                              | 16     |
|                                                                                                                 |   |
| Item 4. Other Information                                                                                            | 16     |
|                                                                                                                 |   |
| Item 5. Exhibits                                                                                                     | 17     |
|                                                                                                                 |   |
| Signatures                                                                                                           | 18     |
|                                                                                                                 |   |
| Certifications                                                                                                       |   |
| Exhibit 31.1 – CEO                                                                                             |   |
| Exhibit 31.2 – CFO                                                                                             |   |
| Exhibit 32.1 – CEO                                                                                             |   |
| Exhibit 32.2 – CFO                                                                                             |   |

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PART I

Item 1. 

PREMIER ALLIANCE GROUP, INC

|                                                                           |   |      (Unaudited) |      |
|--------------------------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                                           |   | June 30,                             |      |   | December 31, |   |
|                                                                           |   | 2010                                 |      |   | 2009 |   |
| ASSETS                                                                         |   |                                 |      |   |   |   |
|                                                                           |   |                                 |      |   |   |   |
| CURRENT ASSETS:                                                                |   |                                 |      |   |   |   |
|   Cash                                                               |   | $                                    | 607,801   |   |   | $ | - |   |
|   Accounts receivable                                                |   |                                 | 1,908,247 |   |   |   | 1,121,186 |   |
|   Marketable securities                                              |   |                                 | 29,511    |   |   |   | 30,918 |   |
|   Deferred income taxes                                              |   |                                 | 28,000    |   |   |   | 15,000 |   |
|   Prepaid expenses                                                   |   |                                 | 71,377    |   |   |   | 37,216 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|     Total current assets                                   |   |                                 | 2,644,936 |   |   |   | 1,204,320 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
| PROPERTY AND EQUIPMENT - at cost less                                          |   |                                 |      |   |   |   |   |   |
|   accumulated depreciation                                           |   |                                 | 28,718    |   |   |   | 11,728 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
| OTHER ASSETS:                                                                  |   |                                 |      |   |   |   |   |   |
|   Goodwill                                                           |   |                                 | 2,363,578 |   |   |   | 1,450,578 |   |
|   Intangible assets - net                                            |   |                                 | 138,400   |   |   |   | 79,800 |   |
|   Investment in equity-method investee                               |   |                                 | 182,265   |   |   |   | 190,432 |   |
|   Investment in cost-method investee                                 |   |                                 | 100,000   |   |   |   | 100,000 |   |
|   Cash surrender value of officers’ life   insurance |   |                                 | 334,930   |   |   |   | 370,032 |   |
|   Deferred income taxes                                              |   |                                 | 52,000    |   |   |   | 46,000 |   |
|   Loan Fees - net                                                    |   |                                 | 35,185    |   |   |   | 0 |   |
|   Deposits and other assets                                          |   |                                 | 6,100     |   |   |   | 6,100 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 | 3,212,458 |   |   |   | 2,242,942 |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   |                                 |      |   |   |   |   |   |
|                                                                           |   | $                                    | 5,886,112 |   |   | $ | 3,458,990 |   |

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|                                                                                                    |   |      (Unaudited) |       |
|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                                                    |   | June 30,                             |       |   | December 31, |   |
|                                                                                                    |   | 2010                                 |       |   | 2009 |   |
|                                                                                                    |   |                                 |       |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                    |   |                                 |       |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |
| CURRENT LIABILITIES:                                                                                    |   |                                 |       |   |   |   |
|   Note payable                                                                                |   | $                                    | 626,000    |   |   | $ | 211,000 |   |
|   Current portion of long-term debt                                                           |   |                                 | 122,611    |   |   |   | 133,152 |   |
|   Accounts payable                                                                            |   |                                 | 417,143    |   |   |   | 320,152 |   |
|   Accrued expenses                                                                            |   |                                 | 657,494    |   |   |   | 384,990 |   |
|   Income taxes payable                                                                        |   |                                 | 22,827     |   |   |   | 33,086 |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|     Total current liabilities                                                       |   |                                 | 1,846,075  |   |   |   | 1,082,255 |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
| LONG-TERM DEBT                                                                                          |   |                                 | 152,998    |   |   |   | 114,606 |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                           |   |                                 | -          |   |   |   | - |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
| STOCKHOLDERS' EQUITY:                                                                                   |   |                                 |       |   |   |   |   |   |
|   Class A convertible preferred stock, $.001                                                  |   |                                 |       |   |   |   |   |   |
|     par value, 5,000,000 shares authorized,                                         |   |                                 |       |   |   |   |   |   |
|     69,772 Pref A shares issued and     Outstanding,            |   |                                 | 69         |   |   |   | 561 |   |
|   Class B convertible preferred stock, $.001                                                  |   |                                 |       |   |   |   |   |   |
|     par value, 2,000,000 shares authorized,                                         |   |                                 |       |   |   |   |   |   |
|     960,000 Pref B shares issued and      Outstanding |   |                                 | 960        |   |   |   |   |   |
|   Common stock, $.001 par value, 45,000,000                                                   |   |                                 |       |   |   |   |   |   |
|     shares authorized, 7,398,220 shares                                             |   |                                 |       |   |   |   |   |   |
|     issued and outstanding                                                          |   |                                 | 7,398      |   |   |   | 6,072 |   |
|   Additional paid-in capital                                                                  |   |                                 | 5,350,464  |   |   |   | 3,414,635 |   |
|   Accumulated deficit                                                                         |   |                                 | (1,471,852 | ) |   |   | (1,159,139 | ) |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 | 3,887,039  |   |   |   | 2,262,129 |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   |                                 |       |   |   |   |   |   |
|                                                                                                    |   | $                                    | 5,886,112  |   |   | $ | 3,458,990 |   |

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PREMIER ALLIANCE GROUP, INC

|                                             |   | Three months  |         |   | Three months  |   |      | Six months    |   |   | Six months    |   |
|--------------------------------------------------|--------|---------------|--------------|--------|---------------|--------|-----------|---------------|--------|--------|---------------|--------|
|                                             |   | Ended         |         |   | Ended         |   |      | Ended         |   |   | Ended         |   |
|                                             |   | June 30, 2010 |         |   | June 30, 2009 |   |      | June 30, 2010 |   |   | June 30, 2009 |   |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |
| NET REVENUE                                      |   | $             | 3,971,927    |   |          | $      | 2,045,699 |          |   | $      | 6,847,286     |   |   | $ | 4,486,019 |   |
| OPERATING EXPENSES:                              |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Cost of revenues                     |   |          | 3,082,290    |   |          |   | 1,523,668 |          |   |   | 5,359,023     |   |   |   | 3,311,378 |   |
|   Selling, general and administrative  |   |          | 843,312      |   |          |   | 498,289   |          |   |   | 1,454,704     |   |   |   | 1,040,081 |   |
|   Depreciation                         |   |          | 1,818        |   |          |   | 1,448     |          |   |   | 3,010         |   |   |   | 3,128 |   |
|    Total operating expenses       |   |          | 3,927,420    |   |          |   | 2,023,405 |          |   |   | 6,816,737     |   |   |   | 4,354,587 |   |
| INCOME (LOSS) FROM OPERATIONS                    |   |          | 44,507       |   |          |   | 22,294    |          |   |   | 30,549        |   |   |   | 131,432 |   |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| OTHER (EXPENSE) INCOME:                          |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Interest expense, net                |   |          | (35,085      | )      |          |   | (2,759    | )             |   |   | (37,913       | )      |   |   | (6,236 | ) |
|   Gain (loss) on marketable securities |   |          | (1,763       | )      |          |   | 7,947     |          |   |   | (1,408        | )      |   |   | 11,892 |   |
|   Officers’ life insurance       |   |          | (52,182      | )      |          |   | 50,696    |          |   |   | (35,101       | )      |   |   | 8,344 |   |
|   Equity in net (loss) of              |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|    equity-method investee         |   |          | (94          | )      |          |   | 2,120     |          |   |   | (8,167        | )      |   |   | 2,120 |   |
|   Other income                         |   |          | 0            |   |          |   | 2,400     |          |   |   | 2,474         |   |   |   | 2,400 |   |
|    Total other (expense) income   |   |          | (89,124      | )      |          |   | 60,404    |          |   |   | (80,115       | )      |   |   | 18,520 |   |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET INCOME (LOSS) BEFORE INCOME TAXES            |   |          | (44,617      | )      |          |   | 82,698    |          |   |   | (49,566       | )      |   |   | 149,952 |   |
| INCOME TAX (EXPENSE) BENEFIT                     |   |          | (13,916      | )      |          |   | (12,814   | )             |   |   | (2,918        | )      |   |   | (55,895 | ) |
|                                             |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET (LOSS) INCOME                                |   |          | (58,533      | )      |          |   | 69,884    |          |   |   | (52,484       | )      |   |   | 94,057 |   |
| PREFERRED STOCK DIVIDENDS EARNED                 |   |          | -            |   |          |   | -         |          |   |   | -             |   |   |   | - |   |
| DEEMED DIVIDEND ON PREFERRED STOCK               |   |          | (260,229     | )      |          |   | -         |          |   |   | (260,229      | )      |   |   | - |   |
| NET (LOSS) INCOME AVAILABLE TO COMMON            |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   STOCKHOLDERS                         |   | $             | (318,762     | )      |          | $      | 69,884    |          |   | $      | (312,713      | )      |   | $ | 94,057 |   |
| Net income (loss) per share                      |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   | $             |   (0.05 | )      |          | $      | 0.01      |          |   | $      | (0.04         | )      |   | $ | 0.02 |   |
|   Diluted                              |   | $             | (0.05        | )      |          | $      | 0.01      |          |   | $      | (0.04         | )      |   | $ | 0.01 |   |
| Weighted average number of shares                |   |          |         |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   |          | 6,628,820    |   |          |   | 5,867,945 |          |   |   | 7,111,009     |   |   |   | 5,867,945 |   |
|   Diluted                              |   |          | 6,628,820    |   |          |   | 6,428,691 |          |   |   | 7,111,009     |   |   |   | 6,428,691 |   |

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PREMIER ALLIANCE GROUP, INC

|                                                                                     |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flows from operating activities:                                                    |   |   |       |   |   |   |
|   Net income (loss)                                                            |   | $      | (52,484    | )      |   | $      | 94,057 |   |
|   Adjustments to reconcile net income (loss)                                   |   |   |       |   |   |   |   |   |
|     to net cash provided by operating activities:                    |   |   |       |   |   |   |   |   |
|       Depreciation                                         |   |   | 14,225     |   |   |   | 3,128 |   |
|       Amortization of debt discount                        |   |   | 25,771     |   |   |   |   |   |
|       Decrease (increase) of cash surrender value          |   |   |       |   |   |   |   |   |
|         of officers’ life insurance        |   |   | 35,101     |   |   |   | (8,343 | ) |
|       (Increase) in Deferred income taxes                  |   |   | (19,000    | )      |   |   | (6,000 | ) |
|       Consulting expense paid with warrants                |   |   | 47,805     |   |   |   | - |   |
|       Equity in (gain) loss of equity-method investee |   |   | 8,167      |   |   |   | (2,120 | ) |
|     Changes in operating assets and liabilities:                     |   |   |       |   |   |   |   |   |
|       (Increase) Decrease in accounts receivable           |   |   | (787,061   | )      |   |   | 264,703 |   |
|       Decrease (Increase) in marketable securities         |   |   | 1,408      |   |   |   | (11,892 | ) |
|       (Increase) Decrease in prepaid expenses              |   |   | (34,161    | )      |   |   | (34,221 | ) |
|       Decrease in deposits and other assets                |   |   | -          |   |   |   | 2,318 |   |
|       Increase (Decrease)in accounts payable               |   |   | 97,116     |   |   |   | 12,285 |   |
|       Increase (Decrease) in accrued expenses              |   |   | 272,503    |   |   |   | (47,517 | ) |
|       (Decrease) Increase in income taxes payable          |   |   | (10,259    | )      |   |   | (65,398 | ) |
|     Net cash (used in) provided by                         |   |   |       |   |   |   |   |   |
|       operating activities                                 |   |   | (400,869   | )      |   |   | 201,000 |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Cash flows from investing activities:                                                    |   |   |       |   |   |   |   |   |
|   Acquisitions                                                                 |   |   | (1,000,000 | )      |   |   |   |   |
|   Purchases of property and equipment                                          |   |   | -          |   |   |   | - |   |
|     Net cash used in investing activities                            |   |   | (1,000,000 | )      |   |   | - |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Cash flows from financing activities:                                                    |   |   |       |   |   |   |   |   |
|   Issuance of Common Stock                                                     |   |   | 40         |   |   |   |   |   |
|   Issuance of Preferred Stock                                                  |   |   | 672,000    |   |   |   |   |   |
|   Issue costs and commissions – preferred stock                          |   |   | (62,370    | )      |   |   |   |   |
|   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    |   |   |   | (201,000 | ) |
|     Net cash (used in) provided by                                   |   |   |       |   |   |   |   |   |
|       financing activities                                 |   |   | 2,008,670  |   |   |   | (201,000 | ) |
|                                                                                     |   |   |       |   |   |   |   |   |
| Net increase in cash                                                                     |   |   | 607,801    |   |   |   | - |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Cash - beginning of period                                                               |   |   | -          |   |   |   | - |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Cash - end of period                                                                     |   | $      | 607,801    |   |   | $      | - |   |

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PREMIER ALLIANCE GROUP, INC

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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                                                                                   |   |

|                                      |   | Three months ended June 30, 2009  |      |   | six months ended June 30, 2009  |   |
|-------------------------------------------|--------|----------------------------------------|-----------|--------|--------------------------------------|--------|
| Net revenues                              |   | $                                      | 3,372,385 |   |                                 | $      | 7,688,649 |   |
| Operating income (loss)                   |   |                                   | (73,998   | )      |                                 |   | 130,629 |   |
| Net income (loss) per share – basic |   |                                   | (0.01     | )      |                                 |   | 0.02 |   |
| Net income (loss) per share- diluted      |   |                                   | (0.01     | )      |                                 |   | 0.02 |   |

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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                           |

| 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                           |

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Item 2

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Item 3. 

Item 4T.

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PART II

Item 1. 

Item 2

Item 3.

Item 4

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Item 5

| 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). |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | 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 04, 2012 | By:    | /s/ Mark S. Elliott                 |   |
|                   |   | Mark S. Elliott                     |   |
|                   |   | President (Chief Executive Officer) |   |
|                   |   |                                |   |
|                   |   |                                |   |
| DATE: January 04, 2012 | By:    | /s/ Larry W. Brumfield              |   |
|                   |   | Larry W. Brumfield                  |   |
|                   |   | Chief Financial Officer and         |   |
|                   |   | Principal Financial Officer         |   |

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