UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549   FORM 10-Q  (Mark One)  [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2012  [ ] 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: 000-52712  PEER REVIEW MEDIATION AND ARBITRATION, INC. ------------------------------------------- (Exact name of registrant as specified in its charter)  Florida65-1126951(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)  778 South Military Trail Deerfield Beach, Florida 33442 ------------------------------- (Address of principal executive offices)  (954) 570-7023 -------------- (Registrants telephone number, including area code)  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 (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 [X]  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]  As of August 23, 2012, there were 9,249,337 shares of Peer Review Mediation and Arbitration, Inc. Common Stock, $0.001 par value per share, issued and outstanding.  2     PART I FINANCIAL INFORMATION  PageItem 1.  Financial Statements4Consolidated Balance Sheets as of March 31, 2012 (Unaudited) and December 31, 2011Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2011 (unaudited)Consolidated Statemetns of Cash Flows for the Three Month Periods Ended March 31, 2012 and 2011 (unaudited)Notes to Consolidated Financial Statements (unaudited)Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations13Item 3.  Quantitative and Qualitative Disclosures about Market Risk14Item 4.  Controls and Procedures14  PART II OTHER INFORMATION  Item 1.  Legal Proceedings16Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds16Item 3.  Defaults Upon Senior Securities16Item 4.  Mine Safety Disclosures16Item 5.  Other Information16Item 6.  Exhibits16Signatures17  3     PEER REVIEW MEDIATION AND ARBITRATION, INC. CONSOLIDATED BALANCE SHEETS  December 31, 2011March 31, 2012 (Unaudited)ASSETSCurrent assets:Cash$    89,351$   173,600Accounts receivable170,634225,664Inventory14,39510,796Marketable securities7979Total current assets274,459410,139Fixed assets1,300,4121,825,410Less accumulated depreciation(1,013,716)(1,060,320)Intangible assets723,052827,053Less accumulated amortization(54,229)(83,943)Other assets11,60412,753967,1231,520,953Total Assets$1,241,582$1,931,092LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accrued payables$1,094,640$1,663,687Related party payables2,967,3483,079,035Total current liabilities4,061,9884,742,722Notes payable - related party755,105760,266Capital Lease Obligation223,081191,806Total liabilities5,040,1745,694,794 (Continued on next page)  4    PEER REVIEW MEDIATION AND ARBITRATION, INC. CONSOLIDATED BALANCE SHEETS  Stockholders' EquityPreferred stock, Series II, $.001 par value; 1,000,000 shares authorized; convertible; 1,000,000 issued and outstanding1,0001,000Common stock, $.001 par value; 45,000,000 shares authorized; 9,186,574 (2011) and 9,196,874 (2012)9,1869,196Additional paid in capital22,409,74724,305,942Stock subscription receivable(7,203,750)(7,203,750)Accumulated deficit(20,421,802)(20,863,921)Accumulated other comprehensive income (loss)(13,673)(13,673)Total PRMA stockholders' equity(3,799,990)(3,765,206)Noncontrolling interest1,3981,504Total Stockholders' Equity(3,798,592)(3,763,702)Total Liabilities and Stockholders' Equity$1,241,582$1,931,092  The accompanying notes are an integral part of the consolidated financial statements.  5     PEER REVIEW MEDIATION AND ARBITRATION, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended March 31, 2011Three Months Ended March 31, 2012Revenue$1,931,923$2,354,128Cost of sales1,667,5251,987,809264,398366,319Expenses:Depreciation and amortization60,55376,318Selling, general and administrative576,935648,278Write-offs1,051,900-1,689,388724,596Loss from operations(1,424,990)(338,277)Other income (expense)Interest income7-Interest (expense)(70,443)(83,486)Beneficial conversion feature - expense(34,813)(250)(105,249)(83,736)Income (loss) before provision for income taxes(1,530,239)(442,013)Provision for income tax--Net income (loss)(1,530,239)(442,013)Comprehensive (income) loss attributable to noncontrolling interest299(106)Comprehensive income (loss) attributable to PRMA$(1,529,940)$(442,119)Net income (loss) per share (Basic and fully diluted)$(0.17)$(0.05)Weighted average number of common shares outstanding9,150,1719,189,774  The accompanying notes are an integral part of the consolidated financial statements.  6    PEER REVIEW MEDIATION AND ARBITRATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)


|                                                                                             |  |                                   |  |                                  
|-------------------------------------------------------------------------------------------- |  | --------------------------------- |  | ---------------------------------
|                                                                                             |  | Three Months Ended March 31, 2011 |  | Three Months Ended March 31, 2012
|Cash Flows From Operating Activities:                                                        |  |                                   |  |                                  
|Net income (loss)                                                                            |  | $(1,530,239)                      |  | $(442,013)                       
|                                                                                             |  |                                   |  |                                  
|Adjustments to reconcile net income to net cash provided by (used for) operating activities: |  |                                   |  |                                  
|Depreciation and amortization                                                                |  | 60,553                            |  | 76,318                           
|Beneficial conversion feature - expense                                                      |  | 34,813                            |  | 250                              
|Writeoffs                                                                                    |  | 1,051,900                         |  | -                                
|                                                                                             |  |                                   |  |                                  
|Changes in assets and liabilities:                                                           |  |                                   |  |                                  
|Accounts receivable                                                                          |  | (47,352)                          |  | (3,623)                          
|Inventory                                                                                    |  | -                                 |  | 3,599                            
|Accrued payables                                                                             |  | 108,858                           |  | 277,044                          
|Related party payables                                                                       |  | 122,074                           |  | 111,687                          
|Other assets                                                                                 |  | (356)                             |  | (1,149)                          
|Net cash provided by (used for) operating activities                                         |  | (244,373)                         |  | 22,113                           
|                                                                                             |  |                                   |  |                                  
|Cash Flows from Investing Activities:                                                        |  |                                   |  |                                  
|Fixed asset purchases                                                                        |  | (10,071)                          |  | -                                
|Business acquisition - net                                                                   |  | 11,706                            |  | -                                
|Net cash provided by (used for) investing activities                                         |  | (1,635)                           |  | -                                
|                                                                                             |  |                                   |  |                                  
|Cash Flows from Financing Activities:                                                        |  |                                   |  |                                  
|Notes payable - payments                                                                     |  | (104,392)                         |  | (18,839)                         
|Capital lease obligation - payments                                                          |  | (21,739)                          |  | (31,275)                         
|Option Exercises                                                                             |  | 432,063                           |  | 112,250                          
|Net cash provided by (used for) financing activities                                         |  | 305,932                           |  | 62,136                           
|                                                                                             |  |                                   |  |                                  

(Continued on next page)  7    PEER REVIEW MEDIATION AND ARBITRATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)


|                                    |  |                 |  |                
|----------------------------------- |  | --------------- |  | ---------------
|Net Increase (Decrease in Cash      |  | 63,194          |  | 84,249         
|                                    |  |                 |  |                
|Cash at the Beginning of the Period |  | 155,655         |  | 89,351         
|Cash at the End of the Period       |  | $218,849        |  | $173,600       
|                                    |  |                 |  |                
|Non-cash Transactions:              |  |                 |  |                
|Acquired Assets, net of liabilities |  |                 |  | $335,767       
|                                    |  |                 |  |                
|Supplemental Disclosure             |  |                 |  |                
|Cash paid for interest              |  | $    9,323      |  | $  11,685      
|Cash paid for income taxes          |  | $             - |  | $             -

The accompanying notes are an integral part of the consolidated financial statements.  8     PEER REVIEW MEDIATION AND ARBITRATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  We were incorporated under the laws of the state of Florida on April 16, 2001.  We have been conducting business operations ever since, primarily focused on the creation and continual development of our core initiatives to partner with health care providers in their pursuit to achieve medical excellence. Through our family of core operating systems and solutions, we will introduce investment, technology, innovation and intellectual capital and expertise to modernize and optimize the health care providers practice.  Unaudited interim financial statements  The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three month period ended March 31, 2012; (b) the financial position at March 31, 2012; and (c) cash flows for the three month period ended March 31, 2012, have been made.  Principles of consolidation  The accompanying consolidated financial statements include the accounts of PRMA and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.  Minority Interest (Noncontrolling interest)  A subsidiary of the Company has minority shareholders, representing ownership interests of .52% at March 31, 2012.  The Company accounts for these minority, or noncontrolling interests pursuant to ASC 810-10-65 whereby gains or losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance.  9     Use of Estimates  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and 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.  Recently Issued Accounting Pronouncements  Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification (ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.   Cash and cash equivalents  The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.  Income tax  The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.   Net income (loss) per share  The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.  10     Accounts Receivable, Credit Risk  Accounts receivable consist of amounts due for the delivery of services to our customers and clients.    An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Companys customer credit worthiness, and current economic trends.  Based on managements review of accounts receivable, no allowance for doubtful accounts was considered necessary, based on consideration of our history with our clients.   Receivables are determined to be past due, based on payment terms of original invoices.  The Company does not typically charge interest on past due receivables.  Inventory  Inventory is reported at its cost basis.  Property and equipment  Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life.  Revenue recognition  Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.  Financial Instruments  The carrying value of the Companys financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and due to related parties, as reported in the accompanying balance sheets, approximates fair value.  Long-Lived Assets  In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.  11     Marketable Securities  The Company's marketable securities are classified as available-for-sale, are presented in the balance sheets at fair market value, and consist entirely of equity securities. Gains and losses are determined using the specific identification method.  Comprehensive income (loss)  The Company accounts for comprehensive income (loss) under ASC 220, which establishes standards for reporting and display of comprehensive income and its components. Unrealized gains (losses) from marketable securities are reported as other comprehensive income (loss) in the consolidated statements of income and comprehensive income and as accumulated other comprehensive income (loss) in stockholders equity.  Stock based compensation  The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.  12      ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The statements regarding Peer Review Mediation and Arbitration, Inc. and its subsidiaries contained in this Report that are not historical in nature, particularly those that utilize terminology such as may, will, should, likely, expects, anticipates, estimates, believes or plans, or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements.  Overview We were incorporated under the laws of the state of Florida on April 16, 2001.  We have been conducting business operations ever since, primarily focused on the creation and continual development of our core initiatives to partner with health care providers in their pursuit to achieve medical excellence. Through our family of core operating systems and solutions, we will introduce investment, technology, innovation and intellectual capital and expertise to modernize and optimize the health care providers practice.   Results Of Operations Comparison of Results of Operations for the Three Months Ended March 31, 2012 and 2011  Sales were $2,354,128 for the three months ended March 31, 2012, as compared to sales of $1,931,923 for the three months ended March 31, 2011, an increase of $422,205, or %21.9.  This increase in revenue for the three months ending March 31, 2012 is due to the continuation of the Companys transition from developmental to operational combined with additional revenues generated from our first accountable care organization.  Cost of sales was $1,987,809 for the three months ended March 31, 2012, as compared to cost of sales of $1,667,525 for the comparable period in 2011, an increase of $320,284, or 19.2%. Cost of sales increased due to the corresponding increase in revenues.  For the three months ended March 31, 2012, we incurred operating expenses of $724,596, which included selling, general and administrative expenses of $648,278, compared to operating expense of $1,689,388 during the three months  13     ended March 31, 2011, which included selling, general and administrative expenses of $576,935 for the same period last year, or a 12.4% increase in selling, general and administrative expense.  This increase is due an increase in business activity as the Company continues to execute its business plan.  As a result, we incurred a loss of ($442,119) during three months ended March 31, 2012, or ($0.05) per share, compared with a loss of ($1,529,940) during the three months ended March 31, 2011, or ($0.17) per share.  Liquidity And Capital Resources  At March 31, 2012, we had $173,679 in cash and marketable securities, as compared to $89,430 in cash and marketable securities at March 31, 2011.  The net cash provided from operating activities for the three months ended March 31, 2012 was $22,113. The net cash provided from financing activities for the three months ended March 31, 2012 was $62,136. We had $225,664 in account receivables as of March 31, 2012, as compared to $127,133 at March 31, 2011.  Off-Balance Sheet Arrangements We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Not applicable.   ITEM 4. CONTROLS AND PROCEDURES  Evaluation of Disclosure Controls and Procedures:  Our chief executive officer and chief financial officer have concluded that the disclosure controls and procedures were not effective as of March 31, 2012.  These controls are meant to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal  14     financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  This quarterly report for quarter ended March 31, 2012 was not filed in accordance with the time period specified in the Commissions Rules and Forms.  Management is in the process of implementing internal controls to ensure that similar situations do not occur in the future and that required SEC filings will be timely.  15      PART II. OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS  None  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  None  ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None  ITEM 4. MINE SAFETY DISCLOSURES  Not Applicable  ITEM 5. OTHER INFORMATION  None  ITEM 6. EXHIBITS  Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 101.INS**   XBRL Instance Document Exhibit 101.SCH**   XBRL Taxonomy Extension Schema Document Exhibit 101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document Exhibit 101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document Exhibit 101.LAB**   XBRL Taxonomy Extension Label Linkbase Document Exhibit 101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document *  Filed herewith **XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.  16     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.  PEER REVIEW MEDIATION AND ARBITRATION, INC.  Dated:  August 23, 2012  By: /s/Willis Hale ------------------------------- Willis Hale Chief Executive Officer   By: /s/Marc E. Combs ------------------------------- Marc E. Combs Chief Financial Officer  17