UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





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





For the
quarterly period ended September 30, 2010


Or


 ̈
            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 333-153679








AAA PUBLIC
ADJUSTING GROUP, INC.


(EXACT
NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)





Florida
                  26-0325410(State or other jurisdiction or incorporation or
                  (I.R.S. Employer Identification No.)organization)1926 Hollywood Blvd, Suite 100 Hollywood
                  33020(Address of principal executive offices)
                  (Zip Code)





Registrant’s
telephone number, including area code: 954-894-0043





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





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





The
registrant had 6,916,532 of Common stock outstanding as of September 30,
2010.









AAA
PUBLIC ADJUSTING GROUP, INC





TABLE
OF CONTENTS





SEPTEMBER
30, 2010





PageConsolidated
      Financial StatementsBalance
      Sheets
                  
                  
                  2Statements
      of Revenues and Expenses
                  
                  
                  3 -
      4Statements
      of Cash Flows
                  
                  
                  5Notes
      to Financial Statements
                  
                  
                  6 -
      13









AAA
PUBLIC ADJUSTING GROUP, INC


CONSOLIDATED
BALANCE SHEETS


SEPTEMBER
30, 2010 AND DECEMBER 31, 2009





2010
                            
                            
                            2009(unaudited)AssetsCurrent
      AssetsCash
      and cash Equivalents
                            
                            $
                            10,902
                            
                            
                            $
                            12,404Accounts
      receivable (net of allowance for doubtful accounts
      of  $5,723)
                            
                            
                            132,100
                            
                            
                            
                            84,860Prepaid
      expense
                            
                            
                            2,060
                            
                            
                            
                            -Total
      current assets
                            
                            
                            145,062
                            
                            
                            
                            97,264Property,
      plant, and equipment - net
                            
                            
                            52,542
                            
                            
                            
                            74,492Total
      Assets
                            
                            $
                            197,604
                            
                            
                            $
                            171,756Liabilities
      and Stockholders' EquityCurrent
      LiabilitiesNotes
      payable - current portion
                            
                            $
                            25,599
                            
                            
                            $
                            19,452Accounts
      payable - related parties
                            
                            
                            2,584
                            
                            
                            
                            2,584Accounts
      payable and accrued liabilities
                            
                            
                            95,156
                            
                            
                            
                            62,527Deferred
      Compensation
                            
                            
                            75,000
                            
                            
                            
                            -Accounts
      payable to insured
                            
                            
                            35,898
                            
                            
                            
                            24,591Total
      current liabilities
                            
                            
                            234,237
                            
                            
                            
                            109,154Long
      Term LiabilitiesNotes
      payable - net of current
                            
                            
                            37,666
                            
                            
                            
                            53,262Total
      long term liabilities
                            
                            
                            37,666
                            
                            
                            
                            53,262Total
      Liabilities
                            
                            
                            271,903
                            
                            
                            
                            162,416Stockholders'
      Equity (Deficiency)Preferred
      Stock, 20,000,000 shares authorized, no shares issued
                            
                            
                            -
                            
                            
                            
                            -Common
      Stock, 50,000,000 shares authorized at $.0001 par, 6,916,532, and
      6,016,032 shares issued and outstanding at September 30, 2010 and December
      31, 2009, respectively.
                            
                            
                            692
                            
                            
                            
                            602Additional
      paid in capital
                            
                            
                            162,367
                            
                            
                            
                            116,456Stock
      subscription receivable
                            
                            
                            (1,500
                            )
                            
                            
                            -Accumulated
      Deficit
                            
                            
                            (235,858
                            )
                            
                            
                            (107,718
                            )Total
      Stockholders' Equity (Deficiency)
                            
                            
                            (74,299
                            )
                            
                            
                            9,340Total
      Liabilities and Stockholders' Equity
                            
                            $
                            197,604
                            
                            
                            $
                            171,756





The
accompanying notes are an integral part of the financial statements




- 2
-




AAA
PUBLIC ADJUSTING GROUP, INC


CONSOLIDATED
STATEMENTS OF OPERATIONS


FOR THE 9
MONTHS ENDED SEPTEMBER 30, 2010 AND, 2009


(unaudited)





2010
                
                
                2009Revenues
      (net)
                
                $
                476,521
                
                
                $
                875,557Operating
      Expenses:Commissions
      to adjusters
                
                
                302,561
                
                
                
                519,200Consulting
      services – other
                
                
                1,275
                
                
                
                52,770Payroll
                
                
                138,456
                
                
                
                111,031Other
      general and administrative expenses
                
                
                152,242
                
                
                
                196,427Total
      operating expenses
                
                
                594,534
                
                
                
                879,428Profit
      (Loss) from operations
                
                
                (118,013
                )
                
                
                (3,871
                )Other
      income (expense)Interest
      (expense)
                
                
                (10,127
                )
                
                
                (5,283
                )Net
      Income/(Loss) Before Income Taxes
                
                
                (128,140
                )
                
                
                (9,154
                )Provision
      for income tax
                
                
                -
                
                
                
                -Net
      Income/(Loss)
                
                $
                (128,140
                )
                
                $
                (9,154
                )Net
      income (loss) per common share, basic
                
                $
                (0.02
                )
                
                $
                0.00Weighted
      average number of common shares outstanding
                
                
                6,307,441
                
                
                
                6,016,032





The
accompanying notes are an integral part of the financial
statements


- 3
-




AAA
PUBLIC ADJUSTING GROUP, INC


CONSOLIDATED
STATEMENTS OF OPERATIONS


FOR THE 3
MONTHS ENDED SEPTEMBER 30, 2010 AND, 2009


(unaudited)





2010
                
                
                2009Revenues
      (net)
                
                $
                185,957
                
                
                $
                298,378Operating
      Expenses:Commissions
      to adjusters
                
                
                117,753
                
                
                
                187,473Consulting
      services - other
                
                
                -
                
                
                
                13,780Payroll
                
                
                45,637
                
                
                
                43,803Other
      general and administrative expenses
                
                
                50,366
                
                
                
                63,871Total
      operating expenses
                
                
                213,756
                
                
                
                308,927Profit
      (Loss) from operations
                
                
                (27,799
                )
                
                
                (10,549
                )Other
      income (expense)Interest
      (expense)
                
                
                (5,024
                )
                
                
                (1,277
                )Net
      Income/(Loss) Before Income Taxes
                
                
                (32,823
                )
                
                
                (11,826
                )Provision
      for income tax
                
                
                -
                
                
                
                -Net
      Income/(Loss)
                
                $
                (32,823
                )
                
                $
                (11,826
                )Net
      income (loss) per common share, basic
                
                $
                (0.00
                )
                
                $
                (0.00
                )Weighted
      average number of common shares outstanding
                
                
                6,816,532
                
                
                
                6,016,032





The
accompanying notes are an integral part of the financial statements




- 4
-




AAA
PUBLIC ADJUSTING GROUP, INC


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR THE 9
MONTHS ENDED SEPTEMBER 30, 2010 AND  2009


(unaudited)





2010
                    
                    
                    2009Cash
      Flows From Operating Activities:Net
      Income (Loss)
                    
                    $
                    (128,140
                    )
                    
                    $
                    (9,154
                    )Adjustments
      to Reconcile Net Income (Loss) to Net Cash Provided By (Used in) Operating
      Activities:Depreciation
                    
                    
                    21,950
                    
                    
                    
                    23,427Issuance
      of restricted common stock for services
                    
                    
                    6,000Change
      in operating assets and liabilities:(Increase)
      Decrease in accounts receivable
                    
                    
                    (47,240
                    )
                    
                    
                    84,144(Increase)
      Decrease in prepaid expenses
                    
                    
                    (2,060
                    )
                    
                    
                    6,667Increase  in
      deferred compensation
                    
                    
                    75,000
                    
                    
                    
                    .Increase
      (Decrease) in accounts payable and accrued liabilities
                    
                    
                    46,937
                    
                    
                    
                    (79,649
                    )Net
      Cash Provided  (Used In) Operating Activities
                    
                    
                    (27,553
                    )
                    
                    
                    25,435Cash
      Flows From Investing Activities:Net
      Cash Provided (Used) in Investing Activities
                    
                    
                    -
                    
                    
                    
                    -Cash
      Flows From Financing Activities:Repayment
      of notes payable
                    
                    
                    (24,449
                    )
                    
                    
                    (13,390
                    )Proceeds
      from sale of common stock
                    
                    
                    35,500
                    
                    
                    
                    -Proceeds
      from notes payable
                    
                    
                    15,000
                    
                    
                    
                    -Net
      Cash Provided (Used) in Financing Activities
                    
                    
                    26,051
                    
                    
                    
                    (13,390
                    )Net
      increase (decrease) in Cash and Cash Equivalents
                    
                    
                    (1,502
                    )
                    
                    
                    12,045Cash
      and Cash Equivalents at beginning of period
                    
                    
                    12,404
                    
                    
                    
                    13,867Cash
      and Cash Equivalents at end of period
                    
                    $
                    10,902
                    
                    
                    $
                    25,912Other
      Cash Flow Items:Cash
      payments for:Income
      tax
                    
                    $
                    -
                    
                    
                    $
                    -Interest
      expense
                    
                    $
                    3,803
                    
                    
                    $
                    5,283Related
      party notes payable donated to capital
                    
                    $
                    -
                    
                    
                    $
                    25,000





The
accompanying notes are an integral part of the financial statements




- 5
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      1 -
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES





Organization





AAA
Public Adjusting Group, Inc was incorporated on October 05, 2007 in the state of
Florida.  AAA Public Adjusting Group, Inc was formerly Florida Claims
Consultants, LLC formed on March 3, 2004 in the state of Florida.  On
October 22, 2007, AAA Public Adjusting Group, Inc consummated an agreement with
Florida Claims Consultants, LLC, pursuant to which Florida Claims Consultants,
LLC, exchanged all of its Members’ interest for 4,000,000 shares of common stock
of AAA Public Adjusting Group, Inc.  The Company has accounted for the
transaction as a combination of entities under common control and accordingly,
recorded the merger at historical cost.  The consolidated, historical
financial statements have been appropriately re-stated.





The
operation’s of the Company is to facilitate insurance claims by insured parties
by representation on their behalf with the insurance companies.





Basis
of Accounting





The books
and records of the Company are maintained on the accrual basis of accounting
which recognizes revenues when earned, regardless of when received and expenses
when incurred, regardless of when paid, which is in accordance with generally
accepted accounting principles.





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. As such, not all of the information and footnotes required by
generally accepted accounting principles for complete financial statements have
been presented.  These consolidated financial statements should be
read in conjunction with the financial statements and related footnotes for the
year ended on December 31, 2009. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and such
adjustments are of a normal recurring nature.  The results of
operations for nine months ended September 30, 2010 are not necessarily
indicative of the results for the full fiscal year ended December 31,
2010.





Principles
of Consolidation





The
consolidated financial statements include the accounts of AAA Public Adjusting
Group, Inc. and its wholly owned subsidiary Florida Claims Consultants,
LLC.  All inter-company transactions and balances have been eliminated
in the consolidated financial statements.




- 6
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      1 -
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES -
Continued





Net
loss per share


Net
income per share is computed by dividing the net income by the weighted average
number of shares outstanding during the period.  Net income per share,
diluted, is not presented as no potentially dilutive securities are
outstanding.





Income
Taxes





Income
taxes are accounted for under the asset and liability method as stipulated by
Accounting Standards Codification (“ASC”) 740 formerly Statement of Financial
Accounting Standards (”SFAS”) No. 109, “Accounting for Income Taxes”.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740, the effect on deferred tax assets and
liabilities or a change in tax rate is recognized in income in the period that
includes the enactment date. Deferred tax assets are reduced to estimated
amounts to be realized by the use of a valuation allowance. A valuation
allowance is applied when in management’s view it is more likely than not (50%)
that such deferred tax will not be utilized.





Effective
January 1, 2009, the Company adopted certain provisions under ASC Topic 740,
Income Taxes, (“ASC 740”), which provide interpretative guidance for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. Effective with the Company’s adoption of
these provisions, interest related to the unrecognized tax benefits is
recognized in the financial statements as a component of income taxes. The
Adoption of ASC 740 did not have an impact on the Company’s financial position
and results of operations.





In the
unlikely event that an uncertain tax position exists in which the Company could
incur income taxes, the Company would evaluate whether there is a probability
that the uncertain tax position taken would be sustained upon examination by the
taxing authorities. Reserves for uncertain tax positions would be recorded if
the Company determined it is probable that a position would not be sustained
upon examination or if payment would have to be made to a taxing authority and
the amount is reasonably estimate. As of September 30, 2010, the Company does
not believe it has any uncertain tax positions that would result in the Company
having a liability to the taxing authorities. The Company’s tax returns are
subject to examination by the federal and state tax authorities for the years
ended 2006 through 2009.




- 7
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





Use
of Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.





Cash
and equivalents





The
Company considers all highly liquid instruments with an original maturity of
three months or less to be cash equivalents.





Revenue
Recognition





The
Company recognizes revenues when fees due to the company are reasonably assured
to be collected from our client (the insured) or by the insured’s insurance
carrier and not before. Collectability is not ensured until receipt of our
fee.





Fair
Value of Financial Instruments





The
Company’s financial instruments include cash, accounts receivable, and accounts
payable.  Due to the short-term nature of these instruments, the fair
value of these instruments approximates their recorded value.





Advertising





Advertising
costs, which are included in selling, general and administrative expenses, are
expensed as costs are incurred.  Advertising expenses for the nine
months ended September 30, 2010 and 2009 were $ 7,865 and $ 20,514
respectively.





NOTE
2 - GOING CONCERN





As shown
in the accompanying financial statements, the Company incurred a net loss for
the nine months ended September 30 2010 of $ 128,140, a $ 37,157 net loss
for the year ending December 31, 2009, and cumulative losses since inception are
$235,858.  The Company has a working capital deficit at September 30,
2010 of $ 89,175.  There is no guarantee whether the Company will be
able to generate enough revenue and/or raise capital to support its operations.
This raises substantial doubt about the Company’s ability to continue as a going
concern.  Management states that they are confident that they can
improve operations and raise the appropriate funds to grow their underlying
business. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.




- 8
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      3 -
              PROPERTY AND
      EQUIPMENT


Property
and equipment are recorded at cost.  Expenditures for major additions
and improvements are capitalized and minor replacements, maintenance, and
repairs are charged to expense as incurred.  When property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are removed from the accounts and any resulting gain or loss is
included in the results of operations for the respective
periods.  Depreciation is computed over the estimated useful lives of
the related asset (from 5 - 7 years) using the straight-line method for
financial statement purposes.





The
following is a summary of property and equipment at September 30, 2010 and
December 31, 2009:


September 30,
                  
                  
                  Dec. 31,2010
                  
                  
                  2009Office
      furniture & equipment
                  
                  $
                  26,270
                  
                  
                  $
                  26,270Computer
      equipment
                  
                  
                  14,729
                  
                  
                  
                  14,729Leasehold
      improvements
                  
                  
                  2,469
                  
                  
                  
                  2,469Vehicles
                  
                  
                  125,167
                  
                  
                  
                  125,167Total
      equipment
                  
                  
                  168,635
                  
                  
                  
                  168,635Less
      accumulated depreciation
                  
                  
                  116,093
                  
                  
                  
                  94,143Net
      Property and Equipment
                  
                  $
                  52,542
                  
                  
                  $
                  74,492





Depreciation
expense for the nine months ended September 30, 2010 and 2009 was $ 21,950 and $
23,427 respectively.





NOTE
      4 -
            LEASE
      COMMITMENTS


The
Company leases its new office in Hollywood, Florida pursuant to a lease
commencing from May 1, 2010 through April 30, 2011 at a minimum annual rent of $
12,720 (payable monthly) inclusive of related sale taxes and utilities. The
remaining lease obligations are:


2010
                  
                  $
                  3,1802011
                  
                  
                  4,240$
                  7,420





The
Company had leased for $ 1,000 a month, an apartment and storage facility from
an officer and a major stockholder of the company under a lease commencing
January 01, 2009 through December 31, 2010.  This lease was cancelled
on July 1, 2009 and no future rents or penalties are due.





Rent
expense for the nine months ended September 30, 2010 and 2009 was $ 11,752 and $
26,262, respectively.




- 9
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      5 -
              NOTES
      PAYABLE


Notes
      payable consist of the following:
                      
                      2010Note
      payable to an investor, payable on demand (due  March 14, 2011)
      interest at 16% plus $5,000
                      
                      $
                      5,000Notes
      payable to financial institutions in monthly  installments of $
      517 including interest at 9.79% to maturity on February 1,
      2012.  The note is collateralized by an
    automobile
                      
                      
                      8,176Notes
      payable to financial institutions in monthly  installments of $
      740 including interest at 7.74% to maturity on May 13,
      2014.  The note is collateralized by an
    automobile
                      
                      
                      27,730Notes
      payable to financial institutions in monthly  installments of $
      759 including interest at 6.1% to  maturity on May 1,
      2013.  The note is collateralized by an
    automobile
                      
                      
                      22,359Total
      Notes Payable
                      
                      $
                      63,265





The
future scheduled payments of notes payable are:





2010
                  
                  $
                  10,0042011
                  
                  
                  20,9962012
                  
                  
                  17,3042013
                  
                  
                  12,0472014
                  
                  
                  2,914$
                  63,265





NOTE
      6 -
            CONCENTRATION OF
      RISK





The
Company did not have funds in excess of the $ 250,000 Federal Deposit Insurance
Corporation’s (FDIC) insured limits. The company has funds on deposit with a
major bank and does not believe that there is a concentration of risk factor.
There is no concentration of risk regarding accounts receivable, as any single
receivable is not material and there are offsetting related
payables.




- 10
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      7 -
            ACCOUNTS RECEIVABLE
      and OFFSETTING PAYABLES





Accounts
receivable reflects net funds due the company for its services and gross funds
due the company and which are offset by any funds due to the insured. These
“net” receivables are offset by related commission payments to adjusting agents.
The insured clients and adjusting agents are not paid until the company has
received appropriate compensation. Related balances at September 30, 2010 and
December 31, 2009 were:





September 30,
                  
                  
                  December 31,2010
                  
                  
                  2009Total
      funds receivable - Net
                  
                  $
                  132,100
                  
                  
                  $
                  84,860Payable
      to insured
                  
                  
                  (35,897
                  )
                  
                  
                  (24,591
                  )Payable
      to adjusting agents
                  
                  
                  (60,781
                  )
                  
                  
                  (15,180
                  )Net
                  
                  $
                  35,422
                  
                  
                  $
                  45,089





Allowances
for doubtful accounts for the periods ended September 30, 2010 and December 31
was $ 5,723.This allowance is net of offsetting payables to insured clients,
adjusting agents and related expenses.





NOTE
      8 -
            CAPITAL
      TRANSACTIONS





A $25,000
unsecured promissory note, bearing interest at 12% and due on or before
September 1, 2009 was contributed to capital, by the president of the company,
during the quarter ending September 30, 2009.





On May
19, 2010, 250,000 shares of restricted common stock were sold for $8,500 cash
and a $1,500 of subscription receivable. On May 27, 2010, 150,000 shares of
restricted common stock were issued for $6,000 of services regarding insurance
leads and marketing and expired September 30, 2010. On June 15, 2010, 250,000 shares of restricted
common stock were sold for $12,000.On July 27, 2010, 250,000
shares of restricted common stock were sold for $15,000.





NOTE
      9 -
            DEFERRED
      COMPENSATION





Commencing
in the first quarter 2010, the officer’s salary is being deferred until there is
sufficient working capital. Deferred compensation at September 30, 2010 was $
75,000.





NOTE
      10 -
            EXPENSE
      RECOVERY





The
company is reimbursed by officers and employees for use of company
vehicles.




- 11
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      11 -
            INCOME
      TAXES


Prior to
the merger in October, 2007, the Company was taxed as a limited liability
company.  As such, income taxes and loss benefits were recognized
individually by the limited liability members.





For
financial statement purposes for the periods ending September 30, 2010, and
December 31, 2009 the reported provision for income taxes differs from the
amount computed by applying the statutory U.S. Federal income tax rate of 34% to
the loss before income taxes as follows:





Federal
      income taxes at statutory rate
                  
                  
                  34
                  %State
      tax rate, net of federal income tax
                  
                  
                  4Offsetting
      Valuation Adjustment
                  
                  
                  (38
                  )Effective
      income tax rate
                  
                  
                  0
                  %





As of
September 30, 2010, the Company had a net operating loss carry forward for
income tax reporting purposes of approximately $230,000 that may be offset
against future taxable income through 2024. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. No tax asset has been reported in the financial
statements, due to the uncertainty that there is a 50% or greater chance the
carry-forwards will expire unused. Accordingly, the potential tax benefits of
the loss carry forwards are offset by a valuation allowance of the same
amount.





NOTE
      12 -
            SHARE BASED PAYMENTS
      FOR CONSULTING SERVICES


During
the second quarter ending June 30, 2010, the Company issued 150,000 shares of
restricted common stock for consulting services.  The estimated value
of the consulting services is $ 6,000.  The consulting service
contract expired on September 30, 2010..





NOTE
      13 -
            SUBSEQUENT
      EVENTS


In May
2009, the FASB issued SFAS No. 165, (ASC 855) “Subsequent Events” which offers
assistance to the established general standards of accounting for and disclosure
of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued.  This guidance
requires disclosure of the date through which events subsequent to the Balance
Sheet date have been evaluated and whether that date represents the date the
financial statements were issued or available to be issued. Subsequent events
have been evaluated thru November 15, 2010, the date financial statements were
available to be issued.


- 12
-




AAA
PUBLIC ADJUSTING GROUP, INC


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





NOTE
      14 -
            NEW ACCOUNTING
      PRONOUNCEMENTS


A.
            ACCOUNTING
      STANDARDS CODIFICATION




The
Financial Accounting Standards Board (FASB) issued Accounting Standards
Codification (ASC) 105-10 in June 2009, to be effective September 15, 2009. This establishes
the ASC codification as the single source of authoritative nongovernmental
Generally Accepted Accounting Principles (GAAP).  All existing
accounting standards are superseded as described in FASB Accounting Standards
Codification (SFAS) No. 168, aside from those issued by the SEC. All
other accounting literature not included in the Codification is
non-authoritative. Adoption of this Codification as of September 30, 2009,
which is reflected in our disclosures and references to accounting standards,
had no change to our financial position or results of operations.





B
            REVENUE
      RECOGNITION




The
Financial Accounting Standard Board (FASB) in October 2009 issued Account
Standards Update (ASU) 2009-13 Revenue Recognition (Topic 605). This update
provides guidance for revenue recognition consideration in multiple-deliverable
contractual arrangements. The update requires that a vendor determine its best
estimate of selling price in a manner that is consistent with that used to
determine the price to sell the deliverable on a standalone basis. This update
will be effective after June 15, 2010, and early adoption is
permitted.





The
Company does not believe that implementation of
this FASB would have a material effect on the financial
statements.




C
            STOCKHOLDER
      DISTRIBUTION




In
January 2010 FASB issued ASU “Equity” (Topic 505), accounting for distributions
to shareholders with components of stock and cash.  This amendment
affects entities that declare dividends to shareholders that may be paid in cash
or shares at the election of the shareholders with a potential limitation in the
total amount of cash that all shareholders can elect to receive in the
aggregate. The Company does believe that implementation of this FASB would have
a material effect on the financial statements.




- 13
-




Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.





Business
Overview





Our
companyis licensed
by the Florida Department of Insurance as “public insurance adjusters.” A public
insurance adjuster is an authority on loss adjustments that property owners can
retain to assist in
preparing, filing, and adjusting their insurance claims.





We are
operated by claims professionals handling all types of insurance claims. AAA is
committed to representing the client’s interest in evaluating and presenting a
claim to the insurance company responsible for payment.





Our
business is dedicated to representing client interests by maximizing and
expediting their financial recovery and to make sure policy provisions are fully
adhered to. Insurance companies have the benefit of their claims representatives
estimating property damage, the property owner needs an advocate to ensure
proper payment is made.





We
believe the current economic environment will not materially or adversely affect
our business. Our current cash position along with cash flow from continuing
operations will be adequate to sustain operations into the foreseeable
future.





Results
of Operations – Nine Months Ended September 30, 2010





Revenue





For the
nine months ended September 30, 2010 revenue was $476,521 compared with $875,577
for the nine months ended September 30, 2009. This decrease of $399,056 or
approximately 45% is primarily due to a reduction of hurricane related
claims.





Commission
to Adjusters





Commission
expenses for adjusters for the nine months ended September 30, 2010 was $302,561
or approximately 63% of revenue compared with $519,200 or approximately 59% of
revenue for nine months ended September 30, 2009. This decrease is due to the
reduction in revenues from hurricane related claims.





Consulting
Services





Consulting
expense for the nine months ended September 30, 2010 was $1,275 compared to
$52,770 for the nine months ended September 30, 2009. In an effort to cut
expenses we have drastically reduced the outsourcing for the Orlando market
electing to handle these operations in house.





Payroll





Payroll
expense for the nine months ended September 30, 2010 was $138,456 compared to
$111,031 for the nine months ended September 30, 2009. The increase is due to
salary provision to one officer starting January 1, 2010.  This salary
has been deferred until such time as there is sufficient working
capital.









Other
General and Administration Expenses





For the
nine months ended September 30, 2010 other general and administration expenses
were $152,242 compared to $196,427 for the nine months ended September 30, 2009.
This decrease of $44,185 resulted from cost reductions in advertising, rent,
consulting, auto, and other expenses.





Net
Income





The net
loss for the nine months ended September 30, 2010 was ($128,140) compared with a
loss of ($9,154) for the nine months ended September 30, 2009. This decrease is
due to lower revenues, and higher payroll expenses partially offset by decreases
in commissions paid to adjusters, consulting services, and other general and
administrative expenses.





Results
of Operations – Three Months Ended September 30, 2010





Revenue





For the
three months ended September 30, 2010 revenue was $185,957 compared with
$298,378 for the three months ended September 30, 2009. This decrease of
$112,421 or approximately 38% is due to a reduction of hurricane related
claims.





Commission
to Adjusters





Commission
expenses for adjusters for the three months ended September 30, 2010 was
$117,753 or approximately 63% of revenue compared with $187,473 or approximately
63% of revenue for three months ended September 30, 2009. This decrease is due
to the reduction in revenues from hurricane related claims.





Consulting
Services





Consulting
expense for the three months ended September 30, 2010 was $0 compared to $13,780
for the three months ended September 30, 2009. We have completely reduced the
outsourcing for the Orlando market electing to handle these operations in
house.





Payroll





Payroll
expense for the three months ended September 30, 2010 was $45,637 compared to
$43,803 for the three months ended September 30, 2009.





Other
General and Administration Expenses





For the
three months ended September 30, 2010 other general and administration expenses
were $50,366 compared to $63,871 for the three months ended September 30, 2009.
This decrease of $13,505 resulted from cost reductions in advertising, rent,
consulting, auto, and other expenses.





Net
Income





The net
loss for the three months ended September 30, 2010 was ($32,823) compared with a
loss of ($11,826) for the three months ended September 30, 2009. This decrease
is due to lower revenues partially offset by lower payroll expenses, decreases
in commissions paid to adjusters, consulting services, and other general and
administrative expenses.







Liquidity
and Capital Resources





On
September 30, 2010, the Company had $10,902 in available cash, a decrease of
$1,502 from December 31, 2009. Net cash provided by operating activities
decreased $50,870 due to lower revenues.  Net cash used in financing
activities increased $47,295 due to repayment of car notes and sales of
securities.





On May 3,
2010 the Company issued a demand, promissory note to an investor for
$15,000.  The note will be repaid in the amount of $20,000 together
with 16% interest on any unpaid balance. The demand for repayment shall not be
made before September 14, 2010.  On August 2, 2010, $10,000 was
repaid. Subsequent renegotiation of the note extended the payoff period to March
14, 2011 by a $5,000.00 fee.





We
anticipate that the finalization of negotiations for additional funding from
several different investment sources as well as our growing in-house marketing
strategies, which were recently implemented, will result in our existing cash
and projected cash flows will be sufficient to support our operations for at
least the next twelve months.





Item
3.  Quantitative and Qualitative Disclosures about Market
Risk





Not
Applicable





Item
4.  Controls and Procedures.





As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company carried out an evaluation under the
supervision of Frederick Antonelli, the Company’s Principal Executive Officer
and Chief Financial Officer (the “Reviewing Officers”), of the effectiveness of
the Company's disclosure controls and procedures as of the end of the period
covered by this Quarterly Report on Form 10-Q. Based on that evaluation,
the Reviewing Officers concluded that our disclosure controls and procedures are
effective in ensuring that information required to be disclosed by us in the
reports we file or submit under the 1934 Act is recorded, processed, summarized,
and reported within the time periods specified in the SEC's rules and
forms.





There
have been no changes in internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting during the period covered by this
report.





Part
II





Item
1. Legal Proceedings





None







Item
1.a.





Not
Applicable





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





The
company has made three unregistered sales of securities as follows:





1.
              150,000
      shares to Discount Leads, Inc. for $6,000 in services2.
              250,000
      shares to Shawn Zaremski for $15,0003.
              250,000
      shares to Cornick Capital Inc. for $10,000 ($8,500 in cash $1,500 in
      receivables)4.
              250,000
      shares to Liane Hassan for $12,0005.
              500 shares to Marc Houser for a marketing
  seminar





Item
3.  Defaults upon Senior Securities





None





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





None





Item
5.Other
Information





None





Item
6. Exhibits





Exhibit
    31.1
            Certification of the Principal
      Executive Officer and Chief Financial Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of
2002





Exhibit
    32.1
            Certification of the Principal
      Executive Officer and Chief Financial Officer pursuant to U.S.C. Section
      1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002





SIGNATURES





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





Date: November
      15, 2010
                AAA
      Public Adjusting Group, Inc.By:
                /s/
      Frederick AntonelliPrincipal
      Executive Officer and Chief Financial
                  Officer,
      Director
                  (Principal
      Executive Officer and Principal Financial
                  and
      Accounting Officer)