UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________  FORM 10 - Q/A _______________________________  [mark one]  ýQUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended: September 30, 2010  oTRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934   For  the transition period from
  to  Commission File Number 333-139354 _____________________________________________________________  PROPELL CORPORATION (Exact name of registrant as specified in its charter)  Delaware26-1856569(State or other jurisdiction of incorporation or organization)(IRS Employer Identification Number)  305 San Anselmo Avenue, Suite 300, San Anselmo, CA 94960 (Address of principal executive offices including zip code)  (415) 747-8775 (Registrantstelephone number, including area code)  Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý  No o  Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (section 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  o    No  o  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
  Yes o
No
ý  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. (Check one):  Large Accelerated Filer oAccelerated Filer oNon-Accelerated Filer oSmaller Reporting Company ý  Number of shares outstanding of the issuers common stock as of the latest practicable date: 20,846,132 shares of common stock, $.001 par value per share, as of January  11, 2011.     EXPLANATORY NOTE  This Amendment No. 1 to the Quarterly  Report on Form 10-Q for the quarter ended September 30, 2010 is being filed to revise the Section 302 and 906 Certifications and to revise the Balance Sheets and Statement of Cash Flows.     PROPELL CORPORATION  Index  PART I. FINANCIAL INFORMATIONPageItem 1.Consolidated Financial StatementsBalance Sheets as of September 30, 2010
(unaudited) and December 31, 20091Statements
of Operations for the three and nine months ended September 30, 2010 and 2009 (unaudited)2Statement of Stockholders Deficit as of September 30, 2010 (unaudited)3Statements of
Cash Flows for the nine months ended September 30, 2010 and 2009 (unaudited)4Notes to Consolidated Financial Statements5Item 2.Managements Discussion
and Analysis of Financial Conditions and Results of Operations11Item 4.Controls and Procedures14PART II. OTHER INFORMATIONItem 1.Legal Proceedings15Item 2.Unregistered Sales of Equity Securities and Use of Proceeds15Item 3.Defaults Upon Senior Securities15Item 4.Removed and Reserved15Item 5.Other Information15Item 6.Exhibits15


PART I.FINANCIAL INFORMATION  ITEM 1. FINANCIAL STATEMENTS   Propell Corporation and SubsidiariesConsolidated
Balance Sheets
 September
30, 2010December 31,
2009(unaudited)(audited)AssetsCurrent AssetsCash$67,261$121,689Accounts receivable2,4554,176Prepaid expenses1,3204,587Inventory73695,144Deposits - current1,4991,499Assets from Discontinued Operations288-Total Current Assets73,559227,095Property and Equipment, net6,7953,821Other AssetsIntangible assets, net-9,314Website URL, net-5,600Website assets, net501,202501,201Deposits - long term-7,401Total Other Assets501,202523,516Total Assets$581,556$754,432Liabilities and Stockholders' DeficitCurrent Liabilities:Accounts payable$174,966$511,167Accrued liabilities147,5246,648Deferred revenue11,991-Due to related parties103,00051,714Convertible notes payable942,500420,462Notes payable - current100,000104,400Liabilities from Discontinued Operations1,220,284-Total Current Liabilities2,700,2651,094,391Long Term LiabilitiesNotes payable-734,542Total Long Term Liabilities-734,542Total Liabilities2,700,2651,828,933Stockholders' DeficitCommon stock,  0.001 par value; 100,000,000 shares authorized, 22,732,575 issued and 20,846,132 outstanding and 22,482,575  issued and outstanding20,84622,482Additional paid-in capital1,693,5181,694,614Accumulated deficit(3,833,073)(2,791,597)Total Stockholders' Deficit(2,118,709)(1,074,501)Total Liabilities and Stockholders' Deficit$581,556$754,432  See accompanying notes to unaudited consolidated financial statements  1


Propell Corporation and SubsidiariesConsolidated
Statements of Operations (unaudited)
 For the three months ended September 30,
     
     For the nine months ended September 30,2010
     
     2009
     
     2010
     
     2009Net
Revenues:
     
     
     
     $
     15,081
     
     
     $
     305,212
     
     
     $
     62,013
     
     
     $
     669,661Cost of
Goods Sold:
     
     
     
     
     10,675
     
     
     
     53,727
     
     
     
     46,910
     
     
     
     160,152Gross
Profit:
     
     
     
     
     4,406
     
     
     
     251,485
     
     
     
     15,103
     
     
     
     509,509Operating
Expenses:
     
     
     
     
     341,147
     
     
     
     545,519
     
     
     
     963,292
     
     
     
     1,445,334Loss from
Operations
     
     
     
     
     (336,741
     )
     
     
     (294,034
     )
     
     
     (948,189
     )
     
     
     (935,825
     )Other
Income (Expense):
     
     
     
     
     10
     
     
     
     (74
     )
     
     
     (14,986
     )
     
     
     107,450Loss from
Continuing Operations
     
     
     
     
     (336,731
     )
     
     
     (294,108
     )
     
     
     (963,175
     )
     
     
     (828,375
     )Loss from
Discontinued Operations
     
     
     
     
     (191
     )
     
     
     
     
     
     
     (78,301
     )
     
     
     Net
Loss
     
     
     
     $
     (336,922
     )
     
     $
     (294,108
     )
     
     $
     (1,041,476
     )
     
     $
     (828,375
     )Net Loss
Per Share  Basic and Diluted
     
     
     
     $
     (0.02
     )
     
     $
     (0.01
     )
     
     $
     (0.05
     )
     
     $
     (0.04
     )Weighted
average number of shares outstanding during the period  basic and diluted
     
     
     
     
     20,846,132
     
     
     
     21,740,909
     
     
     
     21,733,288
     
     
     
     18,706,435   See accompanying notes to unaudited consolidated financial statements  2


Propell Corporation and SubsidiariesConsolidated
Statement of Stockholders DeficitAs of September 30, 2010(unaudited)
 Common Stock$0.01 Par ValueShares
     
     Amount
     
     Additional Paid-in Capital
     
     DistributiontoAffiliates
     
     Accumulated Deficit
     
     Total Stockholders DeficitBalance, January
29, 2008 (Inception)
     
     
     
     
     
     
     
     $
     
     
     
     $
     
     
     
     $
     
     
     
     $
     
     
     
     $
     Issuance of
common stock to acquire Crystal Magic, Inc.
     
     
     
     
     5,400,000
     
     
     
     5,400
     
     
     
     (5,400
     )
     
     
     
     
     
     
     
     
     
     
     Issuance of
common stock to acquire Auleron 2005, LLC
     
     
     
     
     136,088
     
     
     
     136
     
     
     
     (136
     )
     
     
     
     
     
     
     
     
     
     
     Issuance of
common stock to acquire Mountain Capital, LLC
     
     
     
     
     2,094,864
     
     
     
     2,095
     
     
     
     381,709
     
     
     
     
     
     
     
     
     
     
     
     383,804Conversion of
convertible notes to common stock
     
     
     
     
     2,278,000
     
     
     
     2,278
     
     
     
     20,502
     
     
     
     
     
     
     
     
     
     
     
     22,780Reclassification
of intercompany payable
     
     
     
     
     
     
     
     
     
     
     
     
     61,048
     
     
     
     
     
     
     
     
     
     
     
     61,048Distributions to
affiliate
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     (938,664
     )
     
     
     
     
     
     
     (938,664
     )Net loss for the
period ended December 31, 2008
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     (1,107,257
     )
     
     
     (1,107,257
     )Balance,
December 31, 2008
     
     
     
     
     9,908,952
     
     
     
     9,909
     
     
     
     457,723
     
     
     
     (938,664
     )
     
     
     (1,107,257
     )
     
     
     (1,578,289
     )Recognition of
stock based compensation in connection with stock option grants
     
     
     
     
     
     
     
     
     
     
     
     
     43,440
     
     
     
     
     
     
     
     
     
     
     
     43,440Recognition of
shares issued in connection with services rendered
     
     
     
     
     856,667
     
     
     
     857
     
     
     
     285,793
     
     
     
     
     
     
     
     
     
     
     
     286,650Conversion of
convertible notes into common stock
     
     
     
     
     8,650,000
     
     
     
     8,650
     
     
     
     1,763,014
     
     
     
     
     
     
     
     
     
     
     
     1,771,664Issuance of
common stock in rights offering
     
     
     
     
     3,066,956
     
     
     
     3,066
     
     
     
     825,012
     
     
     
     
     
     
     
     
     
     
     
     828,078Distributions to
affiliate
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     (122,542
     )
     
     
     
     
     
     
     (122,542
     )Reclassification
of affiliate distributions as a result of change in control
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     1,061,206
     
     
     
     
     
     
     
     1,061,206Reclassification
of affiliate equity and payables due to change in control
     
     
     
     
     
     
     
     
     
     
     
     
     (1,680,368
     )
     
     
     
     
     
     
     
     
     
     
     (1,680,368
     )Net loss for the
year ended December 31, 2009
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     (1,684,340
     )
     
     
     (1,684,340
     )Balance,
December 31, 2009
     
     
     
     
     22,482,575
     
     
     
     22,482
     
     
     
     1,694,614
     
     
     
     
     
     
     
     (2,791,597
     )
     
     
     (1,074,501
     )Net loss for the
nine months ended September 30, 2010
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     (1,041,476
     )
     
     
     (1,041,476
     )Recognition of
stock repurchases
     
     
     
     
     (1,886,443
     )
     
     
     (1,886
     )
     
     
     (43,114
     )
     
     
     
     
     
     
     
     
     
     
     (45,000
     )Recognition of
stock based consulting in connection with stock option grants
     
     
     
     
     
     
     
     
     
     
     
     
     4,429
     
     
     
     
     
     
     
     
     
     
     
     4,429Recognition of
stock based compensation in connection with stock option grants
     
     
     
     
     
     
     
     
     
     
     
     
     339
     
     
     
     
     
     
     
     
     
     
     
     339Recognition of
stock based compensation
     
     
     
     
     250,000
     
     
     
     250
     
     
     
     37,250
     
     
     
     
     
     
     
     
     
     
     
     37,500Balance, September 30, 2010
     
     
     
     
     20,846,132
     
     
     $
     20,846
     
     
     $
     1,693,518
     
     
     $
     
     
     
     $
     (3,833,073
     )
     
     $
     (2,118,709
     )   See accompanying notes to consolidated financial statements  3


Propell Corporation and SubsidiariesConsolidated
Statements of Cash Flows (unaudited)
 For the nine months ended September 30,20102009Cash Flows From Operating Activities:Net loss$(1,041,476)$(828,375)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization17,86227,608Elimination of debt repayment to Loco Lobo, LLC-(75,000)Accrued interest classified as equity-41,664Issuance of common stock for services37,50026,400Issuance of stock options in connection with consulting services4,429-Issuance of stock options in connection with employment services339-Changes in Assets and LiabilitiesDecrease in accounts receivable1,72122,819Decrease (increase) in prepaid expenses3,267(2,166)Decrease in inventory94,40886,203Decrease in deferred charges-4,865Decrease in deposits7,4012,973Increase (Decrease) in accounts payable34,878(16,235)Increase (decrease) in accrued expenses and taxes140,875(32,915)Increase (decrease) in deferred revenue11,991(23,017)Increase (decrease) in due to related parties51,286(1,555)Net Cash Provided By (Used In) Operating Activities(635,519)(766,731)Cash Flows From Investing Activities:Acquisitions of property and equipment(5,922)(5,519)Development of website asset(101,317)Cash received from the consolidation of Crystal Magic, Inc.-7,294Net Cash Provided By (Used In) Investing Activities(5,922)(99,542)Cash Flows From Financing Activities:Distributions to affiliate - Crystal Magic-(122,542)Proceeds from rights offering-828,078Proceeds from note payable100,000100,000Increase (decrease) in intercompany payable to Auleron 2005-(7,778)Proceeds from convertible notes payable522,038-Interest accrued on Convertible debt9,974-Payments on long term debt-(12,186)Repurchase of common stock(45,000)Net Cash Provided (Used in) provided by Financing Activities587,012785,572Net increase (decrease) in cash and cash equivalents(54,428)(80,701)Cash and cash equivalents at beginning of period121,689136,659Cash and cash equivalents at end of period$67,261$55,958Supplemental Cash Flow Information:Cash paid for interest$-$-Cash paid for income taxes--Supplemental Non-Cash Investing and Financing Information:Assets of Crystal Magic merged in due to change of control-(747,106)Liabilities of Crystal Magic merged in due to change of control-2,366,426Equity of Crystal Magic merged in due to change of control-(1,619,320)Reclassification of intercompany payable due to change in control-1,061,206Reclassification of affiliate distribution to intercompany due to change in control-(1,061,206)Conversion of convertible notes payable to stock-(1,730,000)Conversion of convertible notes payable to stock-1,730,000  See accompanying notes to unaudited consolidated financial statements  4


Propell Corporation and Subsidiaries Notes to Consolidated Financial Statements (unaudited)  Note 1 - Organization and Summary of Significant Accounting Policies (A) Description of the Business We are a company primarily engaged in the on demand e-commerce line of business. We enable
turnkey instant e-commerce for education, military and media partners, providing all necessary technology, on-demand
manufacturing, marketing and fulfillment services at no risk or cost to our partners.  Our primary target markets for our service, called PropellShops, can be divided
into three groups: schools, including K-12 and college; the armed forces; and independent music bands. Our business model is based
upon the formation of strategic partnerships with key targeted companies involved in each of our target markets in order to obtain
access to a large number of customers.  The PropellShops system permits partners with little or no technical or graphic expertise to
quickly become Store Owners and create online shops displaying a wide variety of personalized apparel and other
merchandise featuring the school or organizations brand or other artwork.   The Store Owner then publicizes the
shop to its potential customers, and Propell does all manufacturing, billing, customer support and shipping.  Since Propell does not charge a setup or ongoing fee for e-commerce shops, and merchandise is
only manufactured when ordered, the PropellShops system eliminates almost all risk or investment for Store Owners.  They
carry no inventory, and Propell handles all fulfillment.  Further, Propells on-demand system also
eliminates minimum order quantities and long lead times.  Propell collects all revenue and then distributes a share of every
sale to the Store Owner.  (B) Basis of Presentation & Principles of Consolidation The accompanying unaudited financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and the rules and regulations of the United States
Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of
financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments
(consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The
results for the interim period are not necessarily indicative of the results to be expected for the full year.  The unaudited interim financial statements should be read in
conjunction with the Companys Annual Report on Form 10-K for the year ended December 31, 2009, which contains the audited
financial statements and notes thereto, together with the Managements Discussion and Analysis of Financial Condition and
Results of Operation, for the period ended December 31, 2009. The interim results for the period ended September 30, 2010 are not
necessarily indicative of results for the full fiscal year. All significant inter-company accounts and transactions have been eliminated in consolidation. (C) Use of Estimates The preparation of consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the
following: the amount allocated to goodwill and other intangible assets, the estimated useful lives for amortizable intangible
assets and property, plant and equipment, the fair value of warrants and stock options granted for services or compensation,
respectively, estimates of the probability and potential magnitude of contingent liabilities and the valuation allowance for
deferred tax assets due to continuing operating losses. Making estimates requires management to exercise significant
judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could
change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly
from our estimates. (D) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are reported at realizable value, net of
allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a
standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the
period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation
process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing
operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions
to the allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed
uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of
receivables previously written-off are recorded as credits to the
allowance for doubtful accounts at the time such receivables are
written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts.
There were no recoveries during the three months ended September 30, 2010.  5     (E) Revenue Recognition The Company records revenue when all of the following have
occurred: (1) persuasive evidence of an arrangement exists, (2) the service is completed without further obligation, (3) the sales
price to the customer is fixed or determinable, and (4) collectability is reasonably assured. The Company primarily recognizes revenue for services rendered upon completion of the order. (F) Risks and Uncertainties The Company's operations will be subject to significant risk and
uncertainties including financial, operational, regulatory and other risks associated, including the potential risk of business
failure. The recent global economic crisis has caused a general tightening in the credit markets, lower levels of liquidity,
increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These
conditions not only limit our access to capital, but also make it difficult for our customers, our vendors and us to accurately
forecast and plan future business activities. (G) Cash and Cash Equivalents The Company considers all highly liquid investments with original
maturities of three months or less at the time of purchase to be cash equivalents.  At September 30, 2010 and December
31, 2009, respectively, the Company had no cash equivalents. The Company minimizes credit risk associated with cash by
periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured
limits. At September 30, 2010 and December 31, 2009, the balance exceeded the federally insured limit by $0 and $0,
respectively. (H) Property and Equipment Property and equipment is stated at cost, less accumulated
depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Items of property and equipment with
costs greater than $1,000 are capitalized and depreciated on a straight-line basis over the estimated useful lives, as
follows: Description
Estimated Useful LifeOffice equipment and furniture
2 to 5 yearsLeasehold improvements and fixtures
Lesser of estimated useful life or life of lease  (I) Inventory Inventory is stated at cost using the FIFO (first in, first out) method. (J) Long Lived Assets Long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be
generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. In connection with its CMI subsidiary, the Company took an
impairment charge of $85,527 during the year ended December 31, 2009. (K) Net Loss per Share Basic earnings (loss) per share is computed by dividing the net
income (loss) less preferred dividends for the period by the weighted average number of common shares outstanding. Diluted
earnings (loss) per share is computed by dividing net income (loss) less preferred dividends by the weighted average number of
common shares outstanding including the effect of share equivalents. The Companys share equivalents consist of
1,649,000 stock options and 4,600,434 warrants. Since the Company reported a net loss for the nine months ended
September 30, 2010 and the year ended December 31, 2009, all common stock equivalents would be anti-dilutive; as such there is no
separate computation for diluted earnings per share. (L) Fair Value of Financial Instruments The carrying amounts of the Companys short-term financial
instruments, (including accounts receivable, accounts payable and accrued liabilities) approximate fair value due to the
relatively short period to maturity for these instruments. (M) Share-Based Payment Arrangements Generally, all forms of share-based payments, including stock
option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards grant
date, based on the estimated number of awards that are ultimately expected to vest. Share-based  6     compensation awards issued to non-employees for services rendered
are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more
readily determinable. The expense resulting from share-based payments are recorded in cost of goods sold or general and
administrative expense in the consolidated statement of operations, depending on the nature of the services provided. (N) Recent Accounting Pronouncements  In April 2009, the FASB issued guidance now codified as FASB ASC Topic 820, Fair
Value Measurements and Disclosures,which amends previous guidance to require disclosures about fair value of financial
instruments in interim as well as annual financial statements in the current economic environment. This pronouncement was
effective for periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on our
business, financial condition or results of operations; however, these provisions of FASB ASC Topic 820 resulted in additional
disclosures with respect to the fair value of our financial instruments.  In May 2009, the FASB issued guidance now codified as FASB ASC Topic 855,
Subsequent Events, which establishes general standards of accounting for, and disclosures of, events that occur
after the balance sheet date but before financial statements are issued or are available to be issued. This pronouncement was
effective for interim or fiscal periods ending after June 15, 2009. The adoption of this pronouncement did not have a
material impact on our business, results of operations or financial position; however, the provisions of FASB ASC Topic 855
resulted in additional disclosures with respect to subsequent events.  In June 2009, the Financial Accounting Standards Board (FASB) issued guidance now
codified as FASB Accounting Standards Codification (ASC) Topic 105, Generally Accepted Accounting Principles,
as the single source of authoritative non-governmental U.S. GAAP. FASB ASC Topic 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular
topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included
in the FASB Codification will be considered non-authoritative. These provisions of FASB ASC Topic 105 were effective for interim
and annual periods ending after September 15, 2009 and, accordingly, were effective for the current fiscal reporting period.
The adoption of this pronouncement did not have an impact on our business, financial condition or results of operations, but will
impact our financial reporting process by eliminating all references to pre-codification standards. On the effective date of FASB
ASC Topic 105, the Codification superseded all then-existing non-SEC accounting and reporting standards, and all other
non-grandfathered non-SEC accounting literature not included in the Codification became non-authoritative.  In January 2010, the Financial Accounting Standards Board ("FASB") issued updated
guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. This update requires
new disclosures on significant transfers of assets and liabilities between Level 1 and Level 2 of the fair value
hierarchy (including the reasons for these transfers) and the reasons for any transfers in or out of Level 3. This update
also requires a reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross
basis. In addition to these new disclosure requirements, this update clarifies certain existing disclosure requirements. For
example, this update clarifies that reporting entities are required to provide fair value measurement disclosures for each class
of assets and liabilities rather than each major category of assets and liabilities. This update also clarifies the requirement
for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and
Level 3 fair value measurements. This update became effective for the interim and annual reporting period beginning
January 1, 2010, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and
settlements on a gross basis, which will become effective for the interim and annual reporting period beginning January 1,
2011. We will not be required to provide the amended disclosures for any previous periods presented for comparative purposes.
Other than requiring additional disclosures, adoption of this update does not have a material effect on our consolidated financial
statements.  Note 2 - Property and Equipment Property and Equipment consisted of the following at September 30, 2010 and December 31, 2009. 9/30/2010
12/31/2009Leasehold improvements$0$6,825Furniture and fixtures50037,971Computer and equipment12,48611,782Total12,98656,578Less accumulated depreciation/amortization(6,191)(52,757)Property and equipment, net$6,795$3,821  Note 3 - Prepaid Expenses At September 30, 2010 prepaid expenses consisted solely of prepaid
insurance in the amount of $1,320.  At December 31, 2009 prepaid expenses consisted solely of prepaid insurance in the amount
of $4,587.  Note 4 - Inventory At September 30, 2010 inventory was valued at $736.  At December 31, 2009 inventory was valued at $95,114.  7    Note 5  Website Assets In 2009, the Company developed its primary website and capitalized
the expenses incurred from programming in the amount of $501,201. As of September 30, 2010 this amount remained unchanged. Note 6  Accrued Expenses and Taxes At September 30, 2010 and December 31, 2009 accrued expenses and taxes consisted of the following: 9/30/2010
12/31/2009Payroll$43,573$5,756Taxes341652Interest on Notes101,7100Other1,900240Total$147,524$6,648  Note 7 - Notes and Convertible Notes Payable  In 2009 the Company borrowed $407,500 under the terms of a convertible note payable.
During the nine months ended September 30, 2010 the Company borrowed an additional $535,000 on the same note. This note is
convertible to shares of the Companys common stock at the lenders option at the lower of $0.27 per share or a twenty-five
percent (25%) discount from the next issuance of common stock by the Company. The original note was due on February 28, 2010.
In March 2010, the note was amended to change the due date to June 30, 2010 and the maximum amount of the Note was increased
to $1 Million, of which the Company has borrowed $942,500 as of September 30, 2010.  In July 2010, the holder of the
convertible note agreed to convert the note to shares immediately preceding the closure of a fund raising of at least $1.5
million.  During the year, the Company also borrowed $100,000 under the terms of a note payable. This
note is due on December 31, 2010 or upon the closing of the next financing, whichever occurs first. The note also carries an
interest rate of 8%.  Note 8  Other Income and (Expense) At September 30, 2010 and September 30, 2009 other income (expense) consisted of the following: 9/30/2010
9/30/2009Interest income$14$872Vendor invoice adjustments(15,000)23,420Insurance claim/damaged kiosk
-
6,482Debt forgiveness-76,875Interest Expense
-
(199)Net other income$(14,986)$107,450  Note 9 - Stockholders Deficit (A) Common Stock Issuances of Issuer For the nine months ended September 30, 2010 During the nine months ended September 30, 2010, the Company issued 250,000 shares of common stock
for services rendered having a fair value of $37,500. For the Year ended December 31, 2009 During the year ended December 31, 2009, the Company issued
856,667 shares of common stock for services rendered, having a fair value of $286,650. Of this, 741,667 shares were issued in
connection with severance agreements. During the year ended December 31, 2009, the Company issued
8,650,000 shares of common stock in connection with the conversion of convertible notes in the principal amount of $1,730,000
($0.20 per share). During the year ended December 31, 2009, the Company issued
3,066,956 shares of common stock in two rights offerings for proceeds of $828,078 ($0.27 per share).  8    (B) Stock Option Plan  In 2008 the Companys Board of Directors approved the
Companys 2008 Stock Option Plan (the Stock Plan) for the issuance of up to five (5) million shares of common
stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent
rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and
consultants of the Company and its subsidiaries. The exercise price of stock options under the Stock Plan is determined by the
compensation committee of the Board of Directors, and may be equal to or greater than the fair market value of the Companys
common stock on the date the option is granted. Options become exercisable over various periods from the date of grant, and
generally expire ten years after the grant date. At September 30, 2010 and December 31, 2009, there were 1,624,000 and 1,499,000
options issued and outstanding under the Stock Plan, respectively. In the event of termination, the Company will cease to recognize
compensation expense. There is no deferred compensation recorded upon initial grant date, instead, the fair value of the
share-based payment is recognized ratably over the stated vesting period. The Company has applied fair value accounting for all share based
payment awards since inception. The fair value of each option or warrant granted is estimated on the date of grant using the
Black-Scholes option-pricing model. The Black-Scholes assumptions used in the nine months ended September 30, 2010 are as follows: Nine Months ended 9/30/2010Exercise price$0.15 - $.027Expected dividends0%Expected volatility150%Risk fee interest rate2-02% to 3.59%Expected life of option5-10 yearsExpected forfeitures
0%  The Company records stock based compensation based upon the stated
vested provisions in the related agreements, with recognition of expense recorded on the straight line basis over the term of the
related agreement. The vesting provisions for these agreements have various terms as follows: · annually over one,  two or three years · Monthly over one year  During the nine months ended September 30, 2010, the Company granted 150,000 options to employees and consultants having a fair market value of $4,768. Options
Weighted Average Exercise Price
Weighted Average Remaining
Contractual Life
Aggregate Intrinsic ValueBalance  December 31, 20081,075,000
0.50Granted749,000$0.27Exercised0
-Forfeited325,0000.43Balance  December 31, 20091,499,000$0.40Granted150,000$0.23Exercised0
-Forfeited0$-Balance  September  30, 2010  outstanding1,649,000
0.39
8.15 years
0Balance  September 30, 2010  exercisable836,500$0.437.92 years0   9     Note 10 - Subsequent Events The Company has evaluated for subsequent events between the balance
sheet date of September 30, 2010 and November 5, 2010, the date the financial statements were issued noting no events that require
adjustment of, or disclosure in, the consolidated financial statements for the period ended September 30, 2010. Note 11 - Going Concern  The Company has negative working capital, has incurred operating losses since inception, and
its operating activities to date have required financing from outside institutions and related parties. The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern.  The Company will continue to need
outside financing to support its internal growth.  Management continues to seek funding to pursue its business plans.  10    Item 2. Managements Discussion and Analysis of Plan of Operations  The following discussion of our financial condition and results of operations should be
read in conjunction with the notes hereto and our audited financial statements and notes thereto for the fiscal year ended
December 31, 2009. In addition to historical information, the following discussion contains forward-looking statements that
involve risks, uncertainties and assumptions. Where possible, we have tried to identify these forward looking statements by using
words such as anticipate, believe, intends, or similar expressions. Our actual results could
differ materially from those anticipated by the forward-looking statements due to important factors and risks including, but not
limited to, those set forth under Risk Factors in Part I, Item 1A of our financial statements and notes for the fiscal
year ended December 31, 2009.  The following Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is intended to help the reader understand our results of operations and financial condition.  Our discussion and analysis of our financial condition and results of operations are based
upon our consolidated financial statements as of and for the periods ending September 30, 2010 and September 30, 2009, which have
been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial
statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial
statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our
estimates and assumptions. Our estimates are based on our historical experience and other assumptions that we believe to be
reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or
conditions. Our critical accounting policies, the policies we believe are most important to the presentation of our financial
statements and require the most difficult, subjective and complex judgments are outlined below in Critical Accounting
Policies.  FORWARD LOOKING STATEMENTS  Certain statements made in this report may constitute forward-looking statementson our current expectations and projections about future events. These forward-looking statements involve
known or unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be
materially different from any future results, performance or achievements expressed or implied by the forward-looking
statements.In some cases you can identify forward-looking statements by terminology such
as may, should, potential, continue, expects, anticipates,
intends, plans, believes, estimates,and
similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number
of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking statements are made as
of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new
information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties,
the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from
those discussed in the forward-looking statements.  Company Overview Propell Corporation is a Delaware corporation originally formed on
January 29, 2008 as CA Photo Acquisition Corp. On April 10, 2008 Crystal Magic, Inc. (CMI), a Florida Corporation,
 merged with an acquisition subsidiary of Propells, which was formed solely for the purpose of the merger of CMI with
and into Propell. As part of this transaction, the Company issued an aggregate of 5,400,000 shares to the former shareholders of
CMI. On May 6, 2008, the Company acquired both Mountain Capital, LLC
(d/b/a Arrow Media Solutions) (AMS) and Auleron 2005, LLC (d/b/a Auleron Technologies) (AUL) and made each
a wholly owned subsidiary. A total of 2,094,864 shares of the Companys common stock were issued to the members of Mountain
Capital, LLC and a total of 136,088 shares of the Companys common stock were issued to the members of AUL. The mergers were completed in order to form a consolidated
enterprise with subsidiaries that each have experience in complementary parts of the imaging and personalized products industries,
and to expand their capabilities both online and at retail. In mid-2009, Management decided to concentrate its efforts and
assets on its e-commerce business. Shortly thereafter, AUL and AMS began to wind down operations.  In January 2010, AUL was
dissolved. In late 2009, AMS assigned its warranty responsibilities and its inventory to a third party and ceased operations. The
Company is in the process of settling with creditors and expects to dissolve AMS by the end of 2010.  11     OUR PLAN OF OPERATIONS  Our Company  We are a Delaware company primarily engaged in the on demand e-commerce line of business. We
enable turnkey instant e-commerce for education, military and media partners, providing all necessary technology,
on-demand manufacturing, marketing and fulfillment services at no risk or cost to our partners.  Our primary target markets for our service, called PropellShops, can be divided
into three groups: schools, including K-12 and college; the armed forces; and independent music bands. Our business model is based
upon the formation of strategic partnerships with key targeted companies involved in each of our target markets in order to obtain
access to a large number of customers.  The PropellShops system permits partners with little or no technical or graphic expertise to
quickly become Store Owners and create online shops displaying a wide variety of personalized apparel and other
merchandise featuring the school or organizations brand or other artwork. The Store Owner then publicizes the
shop to its potential customers, and Propell does all manufacturing, billing, customer support and shipping.  Since Propell does not charge a setup or ongoing fee for e-commerce shops, and merchandise is
only manufactured when ordered, the PropellShops system eliminates almost all risk or investment for Store Owners. They
carry no inventory, and Propell handles all fulfillment. Further, Propells on-demand system also
eliminates minimum order quantities and long lead times. Propell collects all revenue and then distributes a share of every
sale to the Store Owner.  Our principal offices are located at 305 San Anselmo Avenue, Suite 300, San Anselmo, CA 94960.
Our telephone number is (415) 747-8775. Our fiscal year end is December 31.  Critical Accounting Policies  Management believes that the critical accounting policies and estimates discussed below
involve the most complex management judgments due to the sensitivity of the methods and assumptions necessary in determining the
related asset, liability, revenue and expense amounts. Specific risks associated with these critical accounting policies are
discussed throughout this MD&A, where such policies have a material effect on reported and expected financial results. For a
detailed discussion of the application of these and other accounting policies, refer to the individual Notes to the Financial
Statements for the three and nine months ended September 30, 2010.  Revenue Recognition  The Company recognizes revenues when products are shipped or services are delivered to
customers, pricing is fixed or determinable, and collection is reasonably assured. Net revenues include product sales net of
returns and allowances.  Use of estimates  The preparation of financial statements in conformity with U.S. generally accepted accounting
principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial
statements. Estimates are based on historical experience, management expectations for future performance, and other assumptions as
appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived
assets, which is based on such factors as estimated future cash flows.  We re-evaluate estimates on an ongoing basis;
therefore, actual results may vary from those estimates.  Fair Values of Financial Instruments  The carrying values of cash, accounts receivable, accounts payable and accrued expenses
approximate the fair values of these instruments due to their short-term nature. The carrying amount for borrowings under the
financing agreement approximates fair value because of the variable market interest rates charged for these borrowings. We adopted
FASB ASC Topic 820, Fair Value Measurements & Disclosures, for financial assets and financial liabilities in the first
quarter of fiscal 2009, which did not have an impact on our financial statements.  Concentration of Credit Risk  Financial instruments, which potentially subject us to concentrations of credit risk, consist
of cash and cash equivalents and accounts receivable. We place our cash with high quality financial institutions and at times may
exceed the FDIC insurance limit. We extend credit based on an evaluation of the customers financial condition, generally
without collateral. Exposure to losses on receivables is principally dependent on each customers financial condition. We
monitor our exposure for credit losses and maintain allowances for anticipated losses, as required.   12    Recently Issued Accounting Standards  For a discussion of the adoption and potential impacts of recently issued accounting
standards, refer to the Recent Accounting Pronouncements section of Note 1, Reorganization and Summary of
Significant Accounting Policies, in the Notes to Financial Statements.  Consolidated Results of Operations for the three months ended September 30, 2010 and September 30, 2009  For the three months ended September 30, 2010 as compared to the three months ended September
30, 2009, net revenues were $15,081 and $305,212, respectively; cost of goods sold were $10,675 and $53,727, respectively;
operating expenses were $341,147 and $545,519, respectively, and other income was $10 and other expense was $74,
respectively. Results from the three months ended September 30, 2009 include results from our Auleron and CMI operations, which
were discontinued in late 2009 and June 2010, respectively. Results for the three months ended September 30, 2010 are solely
attributable to our ecommerce operations. For the three months ended September 30, 2009, our e-commerce business generated
$5,629 in revenue with a gross profit of $2,030. Year-over-year growth in revenue for our e-commerce business was 267%
  In addition, the net loss from discontinued operations was $191 and $0, respectively. All totaled, the Company posted
a net loss of $336,922 and $294,108, respectively.  For the three months ended September 30, 2010 as compared to the three months ended September
30, 2009 revenue decreased 95% or $290,131; however since for the period ended September 30, 2010 both AMS and CMI were not
consolidated into the financial statements, any comparison between the two periods would not be indicative of overall company
performance.  Consolidated Results of Operations for the nine months ended September 30, 2010 and September 30, 2009  For the nine months ended September 30, 2010 as compared to the nine months ended September
30, 2009, net revenues were $62,013 and $669,661, respectively; cost of goods sold were $46,910 and $160,152, respectively;
operating expenses were $963,292 and $1,445,334, respectively, and other income (expense) was $(14,986) and $107,450,
respectively. Results from the nine months ended September 30, 2009 include results from our Auleron and CMI operations, which
were discontinued in late 2009 and June 2010, respectively. Unlike prior quarters, the revenue generated during the last three
months has been solely derived from our ecommerce operations. For the nine months ended September 30, 2009, our e-commerce
business generated $8,954 in revenue with a minimal gross profit. Year-over-year growth in revenue for our e-commerce business was
593%. In addition, net loss from discontinued operations was $78,301 and $0, respectively. All totaled, the Company posted a net
loss of $1,041,476 and $828,375, respectively.  For the nine months ended September 30, 2010 as compared to the nine months ended September
30, 2009 revenue decreased 91% or $607,648; however since for the period ended September 30, 2010 both AMS and CMI were not
consolidated into the financial statements other than to reflect the discontinuance of their operations, any comparison between
the two periods would not be indicative of overall company performance.  Nine Months Ended September 30, 2010 - Cash Flow Activity  Propells primary sources and uses of cash for the nine months ended September 30, 2010,
included losses from continuing operations, adjusted for non-cash items of income and expense and working capital needs, payments
of notes payable totaling $838,942 offset by an influx of $622,038 in cash from notes payable. Net cash provided by
operating activities from continuing operations was $204,083 for the nine months ended September 30, 2010 primarily as a result of
a write down of assets from discontinued operations and loans from related parties of $103,000. Propells primary sources and
uses of cash from operating activities for the period were losses from operations, as adjusted for non-cash items of income and
expense which included:  · A decrease in accounts receivables of $1,721 brought about by closing our Crystal Magic operation  · The write off of all inventory of $95,144 related to our CMI subsidiary partially offset by $736 in inventory held by PropellShops.  · A marked decrease of $284,916 in accounts payable and due to related parties  · An increase in accrued expenses, taxes and deferred revenue of $152,866 manly consisting of $99,518 in interest due on convertible notes  Net cash provided by investing activities for the nine months ended September 30, 2010, was
$3,393 attributable to PropellShops web development offset by the acquisition of property and equipment.  Net cash used in financing activities was $261,904 which included $522,038 from our notes
offering that convert into common stock, $100,000 from a short-term note, offset by a $838,942 payment of notes payable and
$45,000 used to reacquire common stock. The convertible  note is convertible to shares of the Companys common stock at
the lenders option at the lower of $0.27 per share or a twenty-five percent (25%) discount from the next issuance of common stock
by the Company. The original note was due on February 28, 2010. In March 2010, the note was amended to change the due date
to June 30, 2010 and the maximum amount of the Note was increased to $1 Million, of which the Company
has borrowed $942,500 as of September 30, 2010. In July 2010, the holder of the convertible
note agreed to convert the note to shares immediately preceding the closure of a fund raising of at least $1.5 million.  13      Our ability to continue to execute on our plan of operations is contingent on our ability to
raise additional capital to further develop our Internet initiatives and expand our marketing of our existing product line.  Liquidity and Capital Resources.  To date, our primary sources of cash have been funds raised from the sale of our securities,
including convertible debt offerings, notes and revenue derived from our CMI subsidiary; however as a result of the cessation of
our CMI operations we will no longer receive revenues from CMI, and therefore will have to rely on outside funding until such time
as our PropellShops product derives enough revenue to sustain business operations. Although we anticipate that our Internet
business will eventually provide the needed revenue, it is difficult for us to assess exactly when this will occur.  In an effort to improve our operating results and increase our revenues we will continue to
seek strategic partners. On June 14, 2010 we and our wholly owned subsidiary entered into a merger agreement with
Designbyhumans.com. Upon closing of the Merger Agreement, DBH was to merge with and into the Acquisition Sub with DBH being the
surviving entity. DBHs obligation to consummate the Merger was conditioned upon us receiving a commitment for financing of
at least $1,500,000 and the conversion by all current note holders, other than note holders of Crystal Magic, Inc., of their debt
to equity. On September 20, 2010, due to our inability to receive a commitment for financing, DBH terminated the
Merger Agreement. We will continue to discuss a merger if we are successful in raising the requisite financing. There can be
no assurance that such financing will be available or if available that it will be on favorable terms and that we can complete a
merger with DBH.  We have incurred negative cash flow from operations since we started our business. We have
spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our
planned product development effort. Based on our current plans, we believe that our cash will not be sufficient to enable us to
meet our planned operating needs in the next 12 months.  However, the actual amount of funds we will need to operate is subject to many factors, some
of which are beyond our control. We have based our estimate on assumptions that may prove to be wrong. We may need to obtain
additional funds sooner or in greater amounts than we currently anticipate. Potential sources of financing include strategic
relationships, public or private sales of our shares or debt and other sources. We may seek to access the public or private equity
markets when conditions are favorable due to our long-term capital requirements. We do not have any committed sources of financing
at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to
us, or at all. If we raise funds by selling additional shares of common stock or other securities convertible into common stock,
the ownership interest of our existing stockholders will be diluted. If we are not able to obtain financing when needed, our
partnership with DBH may be at risk and we may be unable to carry out the rest of our business plan. As a result, we may have to
significantly limit our operations and our business, financial condition and results of operations would be materially harmed.  The Company leases its office space on a month-to-month lease.  It has no other lease obligations.  Off Balance Sheet Arrangements  There are no off balance sheet arrangements.  Item 4. Controls and Procedures  (a) Evaluation of disclosure controls and procedures  Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (Exchange
Act), the Company carried out an evaluation, with the participation of the Companys management, including the
Companys Chief Executive Officer (CEO), who also serves as our principal financial and accounting officer, of
the effectiveness of the Companys disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange
Act) as of the end of the period covered by this report. Based upon that evaluation, the Companys CEO concluded that the
Companys disclosure controls and procedures as of September 30, 2010 are effective to ensure that information required to be
disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed,
summarized and reported, within the time periods specified in the SECs rules and forms, and that such information is
accumulated and communicated to the Companys management, including the Companys CEO, as appropriate, to allow timely
decisions regarding required disclosure.  (b) Changes in Internal Control over Financial Reporting  There has been no change in our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our fiscal quarter ended September 30, 2010 that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  14     Part II.   OTHER INFORMATION  Item 1. Legal Proceedings  None.  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds update issuances for the quarter  During the nine months ended September 30, 2010, the Company issued 250,000 shares of common
stock to an individual for services rendered having a fair value of $37,500. The securities were issued in reliance on Section
4(2) of the Securities Act of 1933, as amended (the Act), since the issuance by us did not involve a public offering.
In addition, the shares were clearly marked as restricted. This restriction ensures that these shares will not be immediately
redistributed into the market.  Item 3. Defaults upon senior Securities  Our CMI subsidiary is in default on four separate loans which in the aggregate is
approximately $848,916, and which are either made or guaranteed by the U.S. Small Business Administration (SBA). In September
2010, the SBA seized substantially all of the assets of CMI and subsequently sold these assets.  Item 4.  Removed and Reserved  None.  Item 5.  Other Information  None.  Item 6.  Exhibits  Regulation
S-B NumberExhibit31.1Certification of the Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2Certification of the Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act   15    SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.   DATE: January 13, 2011PROPELL CORPORATION
(Registrant)   By:/s/Edward L. BernsteinEdward L. Bernstein Chief Executive Officer and Chief Financial Officer
(Principal Executive Officer and Principal Financial Officer)      16