- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2011

[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from __________ to __________

	Commission File Number: 333-147835

PrismOne Group, Inc .

(Exact name of registrant as specified in its charter)

Nevada	20-8768424
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

146 W. Plant Street, Suite 300, Winter Garden, Florida 34787

(Address of principal executive offices)

321-292-1000

(Registrant’s telephone number)

_________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

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 [X] 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.

[ ] Large accelerated filer

[ ] Non-accelerated filer

[ ] Accelerated filer

[X] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes [X] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 22,731,503 common shares as of May 20, 2011.

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 (§ 229.405 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 [X]

Table of Contents

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
	Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010	F-1
	Unaudited Statements of Operations for the three months ended March 31, 2011 and March 31, 2010	F-2
	Unaudited Statements of Cash Flows for the three months ended March 31, 2011 and March 31, 2010	F-3
	Unaudited Statements of Stockholders’ Deficit as of March 31, 2011	F-4
	Notes to Unaudited Financial Statements	F-5
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 4:	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	13
Item 1A:	Risk Factors	13
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3:	Defaults Upon Senior Securities	13
Item 4:	[Removed and Reserved]	13
Item 5:	Other Information	13
Item 6:	Exhibits	13

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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PrismOne Group, Inc

Balance Sheets

ASSETS

	March 31,			December 31,
	2011			2010
CURRENT ASSETS	(Unaudited)

Cash	$	1,311		$	23
Accounts receivable, net of allowance for doubtful accounts of $65,432 and $65,769 as of March 31, 2011 and December 31, 2010, respectively		37,597			19,567
Investment in equity securities		2,000			2,000
Total current assets		40,908			21,590

Equipment, net of accumulated depreciation of $51,676 and $42,962 as of March 31, 2011 and December 31, 2010, respectively		176,944			141,463
Total long term assets		176,944			141,463

TOTAL ASSETS	$	217,852		$	163,053

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Bank overdrafts	$	40,147		$	4,275
Accounts payable and accrued expenses		346,364			327,816
Capital lease - current portion		35,500			30,705
Preferred dividends accrued - related party		98,311			84,800
Deferred revenue		22,970			11,190
Current note payable- related party		257,766			207,778
Total current liabilities		801,058			666,563

Capital lease, net of current portion		13,436			19,996
Total long term liabilities		13,436			19,996

TOTAL LIABILITIES		814,494			686,559


STOCKHOLDERS' DEFICIT

Preferred stock, $0.001 par value 10,000,000 shares authorized; issued and outstanding 274,000 as of March 31, 2011 and December 31, 2010		274			274
Common stock, $0.001 par value 90,000,000 shares authorized; issued and outstanding 22,731,503 as of March 31, 2011 and December 31, 2010		22,732			22,732
Additional paid in capital		1,276,670			1,165,681
Accumulated deficit		(1,896,318	)		(1,712,193	)

Total stockholders' deficit		(596,642	)		(523,506	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	217,852		$	163,053

The accompanying notes are an integral part of these financial statements.

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PrismOne Group, Inc

Statements of Operations

For the Three Months Ended March 31, 2011 and 2010

(Unaudited)

	2011			2010

REVENUES	$	135,859		$	109,177

COST OF GOODS SOLD		48,179			34,389

GROSS PROFIT		87,680			74,788

OPERATING EXPENSES

General and administrative		23,194			12,668
Professional fees		13,435			-
Management fees -related party		94,500			47,250
Payroll expenses		93,423			95,230
Licenses and permits -related party		30,000			30,883

Total Operating Expenses		254,552			186,031

INCOME (LOSS) FROM OPERATIONS		(166,872	)		(111,243	)

OTHER EXPENSES

Interest expense		(17,253	)		(7,868	)

Total Other Expenses		(17,253	)		(7,868	)

NET INCOME(LOSS)	$	(184,125	)	$	(119,111	)

Comprehensive loss:
Unrealized loss in equity securities held		-			(15,000	)
Total comprehensive loss	$	(184,125	)	$	(134,111	)

Net loss per common share:
Basic and Fully Diluted	$	(0.01	)	$	(0.01	)
Weighted average common shares outstanding:
Basic and Fully Diluted		22,731,503			22,731,503

The accompanying notes are an integral part of these financial statements.

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PrismOne Group, Inc

Statements of Stockholders Deficit

Three Months Ended March 31, 2011 and the year ended December 31, 2010

(Unaudited)

												Accumulated
					$0.001 Par value							Other			Retained			Total
	Series A Preferred Stock				Common Stock				Additional			Comprehensive			Earnings			Stockholders
	Shares		Amount		Shares		Amount		Paid-In-Capital			Income			(Deficit)			Deficit
Balance at December 31, 2009		274,000	$	274		22,731,503	$	22,732	$	515,962		$	(140,000	)	$	(857,316	)	$	(458,348	)

Contributed capital - debt forgiveness		-		-		-		-		225,837			-			-			225,837

Contributed capital - license/management fees forgiveness		-		-		-		-		478,682			-			-			478,682

Declared Dividends		-		-		-		-		(54,800	)		-						(54,800	)

Realized loss on equity investment		-		-		-		-		-			140,000			-			140,000

Net loss		-		-		-		-		-			-			(854,877	)		(854,877	)

Balance at December 31, 2010 (audited)		274,000	$	274		22,731,503	$	22,732	$	1,165,681		$	-		$	(1,712,193	)	$	(523,506	)

Contributed capital - license/management fees forgiveness		-		-		-		-		124,500			-			-			124,500

Declared Dividends		-		-		-		-		(13,511	)		-						(13,511	)

Net loss		-		-		-		-		-			-			(184,125	)		(184,125	)

Balance at March 31, 2011 (unaudited)	$	274,000	$	274	$	22,731,503	$	22,732	$	1,276,670		$	-		$	(1,896,318	)	$	(596,642	)

The accompanying notes are an integral part of these financial statements.

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PrismOne Group, Inc

Statements of Cash Flows

For the Three Months Ended March 31, 2011 and 2010

(Unaudited)

	3/31/2011			3/31/2010
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$	(184,125	)	$	(119,111	)
A djustments to reconcile net loss to net cash used by operating activities:
Depreciation		8,715			5,467
Donated services		124,500			-
Changes in operating assets and liabilities
Change in accounts receivable		(18,030	)		5,006
Change in accounts receivable - related party		-			(4,747	)
Change in deferred revenue		11,780			-
Change in accounts payable and accrued expenses		18,548			94,823

Net cash used by operating activities		(38,612	)		(18,562	)

CASH FLOWS FROM INVESTING ACTIVITIES

Capitalized salaries for software development		(44,196	)		-
Net cash used by operating activities		(44,196	)		-

CASH FLOWS FROM FINANCING ACTIVITIES

Change in bank overdraft		35,872			(4,172	)
Payments for capital lease obligation		(1,764	)		(4,893	)
Proceeds from notes payable related party		71,339			30,575
Payments for notes payable related party		(21,351	)		-

Net cash provided by financing activities		84,096			21,510

NET INCREASE (DECREASE) IN CASH		1,288			2,948

CASH AT BEGINNING OF PERIOD		23			1,077

CASH AT END OF PERIOD		1,311			4,025

SUPPLIMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

Interest		1,128			564
Income Taxes		-			-

NON CASH

Unrealized loss on equitites held		-			(15,000	)
Dividends Payable		13,511			-

The accompanying notes are an integral part of these financial statements.

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PrismOne Group, Inc

Notes to Unaudited Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

PrismOne Group, Inc., a Nevada corporation, is in the business of developing ideas into practical solutions that apply non-traditional thinking, process review and technology to real world challenges.

Over the past five years, we have taken that approach and developed relevant solutions that address the current challenges in the market. We address the challenge, conceptualize a solution, develop a prototype, and operate the solution to gain real-world insight and feedback prior to marketing to potential clients. Core to any solution is the focus to enable and support our client’s business sustainability efforts to enhance overall operational efficiencies and corporate social responsibility initiatives by deploying technologies and processes to reduce their environmental and energy impact via verifiable and documented means. We currently provide consulting, design, procurement, installation, integration, support and management services related to our Solutions & Services, and are continually refining our Service offerings through research and assessments. The Company has two office locations in Central Florida.

Presentation of Interim Information

The financial information at March 31, 2011 is unaudited, but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, and with the instructions to Form 10-Q. Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual Report on Form 10-K for the year ended December 31, 2010.

The results for the three months ended March 31, 2011 may not be indicative of results for the year ending December 31, 2011 or any future periods.

Going Concern

Our financial statements have been prepared on a going concern basis, which assumes that we will continue to realize our assets and discharge our liabilities in the normal course of business. As of March 31, 2011 we had an accumulated deficit of $ 1,896,318 and a working capital deficit of $760,150. This raises substantial doubt about our ability to continue as a going concern. Management’s plans for our continuation as a going concern are dependent upon the attainment of profitable operations and our ability to raise equity or debt financing if and when needed. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

The success of our business plan during the next 12 months and beyond is contingent upon us generating sufficient revenue to cover our costs of operations, or upon us obtaining additional financing. Should our revenues be less than anticipated or our expenses be greater than anticipated, then we may need to business capital through the use of private equity fundraising or stockholder loans. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all. Similarly, there can be no assurance that we will be able to generate sufficient revenue to cover the costs of our business operations.

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Reclassification

Certain reclassifications have been made to the three months ended March 31, 2010 financial statements to conform to the three months ended March 31, 2011 financial statement presentation. These reclassifications had no effect on net loss or cash flows as previously reported.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. As of March 31, 2011 and December 31, 2010, there are no cash equivalents.

Accounts receivable

Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is based on specific identification of certain receivables that are at risk of not being paid. The allowance for doubtful accounts was $65,432 and $65,769 as of March 31, 2011 and December 31, 2010, respectively.

Fixed Assets

Fixed assets are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

The Company depreciates its fixed assets on a straight line basis over a three year life.

Capital Leases

Management evaluates each lease and leases of property and equipment in which the Company, as lessee, has substantially all the risks and rewards of ownership are classified as capital leases in accordance with current accounting guidelines. Capital leases are capitalized at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of interest charges, are included in the borrowings. Each lease payment is allocated between the liability and the interest charge. The interest cost is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property and equipment acquired under capital leases is depreciated over the asset’s useful life or over the short of the asset’s useful life and the lease term if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases are charged to profit or loss on strain-line basis over the period of the lease.

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Revenue Recognition

The Company recognizes revenue for Quartz installation services related to the initial setup of hardware and communications systems upon completion of the installation and acceptance by the customer.

The Company revenues related to Quartz services (voice, data, and communications services) are billed at the beginning of each month for the devices and services delivered and recognized in accordance with current accounting guidance. If a customer adds lines/services, the following month, invoices are adjusted. All long distance is passed to each customer in the following month after service.

The Company revenue for Quartz IT Support services are billed at the beginning of each month for the services provided and recognized in accordance with current accounting guidance. If a customer engages the Company for services out-of-scope, invoices are adjusted the following month.

The Company recognizes revenue for Emerald and is billed to the client once a waste diversion cycle is completed at the customer’s location(s).

Deferred Revenue

Amounts invoiced and collected in advance of product delivery or providing services are recorded as deferred revenue. The Company recognizes revenue for Emerald and is billed to the client once a waste diversion cycle is completed at the customer’s location(s).

Earnings (Loss) per Common Share

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average shares outstanding. Diluted income (loss) per common share is computed by dividing adjusted net income by the weighted average shares outstanding plus potential common shares which would arise from conversion of preferred stock. Potential common shares related to conversion of preferred stock were not included in diluted income (loss) per share since their effects were anti-dilutive.

Income Taxes

Deferred income taxes are recognized for the tax consequences of temporary differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

The Company follows the provisions of the FASB Accounting ASC 740, Income Taxes (“ASC 740”) (formerly referenced as FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109 ). ASC 740 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not recognized a liability as a result of the implementation of ASC 740. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit as of the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files income tax returns in the U.S. federal jurisdiction and in various states.

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Use of Estimates

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

Financial Instruments

In January 2008, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (Formerly referenced as SFAS No. 157 , Fair Value Measurements ) , to value its financial assets and liabilities. The adoption of ASC 820 did not have a significant impact on the Company’s results of operations, financial position or cash flows. ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be paid by an external party for an asset or liability (exit price).

ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs may be used to measure fair value:

·	Level 1 – Active market provides quoted prices for identical assets or liabilities;
·	Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable with market data; and
·	Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2011. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments which include cash, accounts receivable, accounts payable and accrued liabilities are valued using Level 1 inputs and are immediately available without market risk to principal. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The carrying value of note payable to stockholder approximates its fair value because the interest rates associated with the instrument approximates current interest rates charged on similar current borrowings. The Company does not have other financial assets that would be characterized as Level 2 or Level 3 assets.

The following table presents assets that are measured and recognized at fair value on a recurring basis as of March 31, 2011:

							Total
							Gains
Description	Level 1		Level 2		Level 3		(Losses)
Investment- common stock	$	2,000	$	-	$	-	$	-

The following table presents assets that are measured and recognized at fair value on a recurring basis as of December 31, 2010:

							Total
							Gains
Description	Level 1		Level 2		Level 3		(Losses)
Investment- common stock	$	2,000	$	-	$	-	$	(33,000)

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Recent Accounting Pronouncements

In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-18 (ASU 2010-18), Receivables (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool That Is Accounted for as a Single Asset-a consensus of the FASB Emerging Task Force. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted. The Company does not expect the provisions of ASU 2010-18 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. The Company does not expect the provisions of ASU 2010-17 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-16 (ASU 2010-16), Entertainment-Casinos (Topic 924): Accruals for Casino Jackpot Liabilities-a consensus of the FASB Emerging Issues Task. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. The amendments should be applied by recording a cumulative-effect adjustment to opening retained earnings in the period of adoption. The Company does not expect the provisions of ASU 2010-16 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-15 (ASU 2010-15), Financial Services-Insurance (Topic 944): How Investments held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments-a consensus of the FASB Emerging Issues Task Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption. The Company does not expect the provisions of ASU 2010-15 to have a material effect on the financial position, results of operations or cash flows of the Company.

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In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities – Oil & Gas - Amendments to Paragraph 932-10-S99-1 (SEC Update). The Amendments are designed to modernize and update the oil and gas disclosure requirements to align them with current practices and changes in technology. The Company does not expect the provisions of ASU 2010-14 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. The Company does not expect the provisions of ASU 2010-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-12 (ASU 2010-12), Income Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts. After consultation with the FASB, the SEC stated that it “would not object to a registrant incorporating the effects of the Health Care and Education Reconciliation Act of 2010 when accounting for the Patient Protection and Affordable Care Act”. The Company does not expect the provisions of ASU 2010-12 to have a material effect on the financial position, results of operations or cash flows of the Company.

In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.

In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for Interim periods within that first reporting period. Early application is not permitted. The Company does not expect the provisions of ASU 2010-10 to have a material effect on the financial position, results of operations or cash flows of the Company.

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In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. This amendment addresses both the interaction of the requirements of this Topic with the SEC’s reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events (paragraph 855-10-50-4). All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The Company does not expect the provisions of ASU 2010-09 to have a material effect on the financial position, results of operations or cash flows of the Company.

In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics. This amendment eliminated inconsistencies and outdated provisions and provided the needed clarifications to various topics within Topic 815. The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments. The amendments to the guidance on accounting for income taxes in reorganization (Subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. For those reorganizations reflected in interim financial statements issued before the amendments in this Update are effective, retrospective application is required. The clarifications of the guidance on the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption. The Company does not expect the provisions of ASU 2010-08 to have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions. This amendment to Topic 958 has occurred as a result of the issuance of FAS 164. The Company does not expect the provisions of ASU 2010-07 to have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements. This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic 718). This standard codifies EITF Topic D-110 Escrowed Share Arrangements and the Presumption of Compensation.

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical Corrections to SEC Paragraphs.

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NOTE 2 – ACCOUNTS RECEIVABLE

	March 31, 2011		December 31, 2010
Accounts receivable		103,029	85,336
Allowance for doubtful accounts		(65,432)	(65,769)
Accounts receivable, net		37,597	19,567

NOTE 3 – FIXED ASSETS

Property and equipment consisted of the following at March 31, 2011 and December 31, 2010:

	March 31, 2011			December 31, 2010
Furniture & equipment		228,620			184,425

Accumulated depreciation		(51,676)	)		(42,962)
Fixed assets, net	$	176,944		$	141,463

Property under capital leases and the related obligation for future lease payments are recorded at an amount equal to the initial present value of those lease payments. Properties under capital leases are amortized on the straight-line method over the life of the lease, or over their estimated service lives. Maintenance and repairs are expensed as they occur. Upon disposition, the cost and related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected in current operations.

Depreciation expense for the quarter ended March 31, 2011 and March 31, 2010 was $8,715 and $5,467, respectively.

NOTE 4 – INVESTMENTS

As of December 31, 2010 the fair value of the Blue Earth common stock had declined to $0.004 per share. Accordingly, the Company reduced the amount of the investment to $2,000. The loss was realized and classified as Other Expenses due to the Company’s determination that the devaluation of the shares was “other than temporary.” As of March 31, 2011 the Blue Earth common stock maintained a market value per share of $0.004. Therefore, no gain or loss was realized for the three months ended March 31, 2011.

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NOTE 5 – RELATED PARTY TRANSACTIONS

Note Payable from Shareholder and Due to Shareholder

On July 20, 2010, Jamie Zweifel, a Company Director and stockholder loaned the Company $50,000. The loan is unsecured, is due 36-months from the date of issuance, and bears interest at 8.0% per annum. As of March 31, 2011 and December 31, 2010, $52,833 and $51,833, respectively was due Mr. Zweifel.

On occasion, an entity wholly owned by the company’s CEO and majority stockholder loans the Company funds. The loan is unsecured, is due 36-months from the date of issuance, and bears interest at 8.0% per annum. As of March 31, 2011 and December 31, 2010 $19,670 and $19,298, respectively, was due to Burshan LLC.

On occasion, the company’s CEO and majority stockholder loans the Company funds. The loan is unsecured, is due 36-months from the date of issuance, and bears interest at 8.0% per annum. As of March 31, 2011 and December 31, 2010 $93,983 and $67,325, respectively, was due to the CEO.

On occasion, an entity wholly owned by the Company CEO’s spouse loaned the Company funds. The loan is unsecured, is due 36-months from the date of issuance, and bears interest at 8.0% per annum. As of March 31, 2011 and December 31, 2010, $110,382 and $83,810, respectively, was due to Kaleida Ventures LLC.

Interest expenses for the period ended March 31, 2011 and March 31, 2010 was $4,615 and $3,946, respectively.

License Agreements

The Company licenses certain proprietary intellectual property and technology to support its clients from Burshan LLC, an entity owned and controlled by the Company’s CEO, Samir Burshan. On January 1, 2009 the license fees were reduced from $10,000 to $5,000 per month at the existing location. A second location was added effective March 1, 2009 at an additional $5,000 per month. The terms of both agreements are 10 years with a 5 year rolling renewal. Related party license fees are recorded as operating expenses and for the quarter and year ended March 31, 2011 and 2010 $30,000.

As of March 31, 2011 and 2010, the license fees owed were waived by Burshan, LLC. Thus, the Company recorded the amount forgiven as additional paid in capital. Additionally, effective December 31, 2010, all License Agreements between PrismOne and Burshan LLC are inactivated for a period of 2 years. Accordingly, all fees are recorded and the amount forgiven is and will be treated as additional paid in capital. On January 1, 2013, the agreements will return to be in force unless a decision to do otherwise is made.

Management Agreements

The Company leases furnished office space as well as computer equipment, networking gear and communications equipment in the form of a management agreement with Burshan LLC for $31,500 per month. The agreements are for a period of 10 years with rolling renewals for 5 years. Management fees to related party are recorded as operating expenses and for the quarter and year ended March 31, 2011 and 2010 were $94,500 and $47,250 respectively.

As of December 31, 2010, the management fees owed were waived by Burshan LLC. Thus, the Company recorded the amount forgiven as additional paid in capital. Additionally, effective December 31, 2010, all Management Agreements between PrismOne and Burshan LLC are inactivated for a period of 2 years. Accordingly, all fees are recorded and the amount forgiven is and will be treated as additional paid in capital. On January 1, 2013, the agreements will return to be in force unless a decision to do otherwise is made.

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NOTE 6 - STOCKHOLDERS’ DEFICIT

Preferred Stock- Series A

The Company has authorized 10,000,000 shares of $0.00 par value preferred stock available for issuance. 274,000 shares of preferred stock are outstanding as of March 31, 2011 and December 31, 2010.

The holders of the preferred stock are entitled to dividends at the rate of 6.5% (the Dividend Rate) calculated annually in December in arrears, when and as if declared by the Board of Directors. The Dividend Rate shall not exceed 1% of gross revenue but cannot less than 2% of the Stated Value of the Series A Preferred Stock. The Stated Value is defined as $10.00 per outstanding share of Series A Preferred Stock. Dividends declared although remaining unpaid as of March 31, 2011 were as follows:

Year	Amount
2011	$	13,511
2010		54,800
2009		30,000
Total	$	98,311

The preferred shares have fifty votes per share on all matters submitted to a vote of the common stockholders of the Corporation, receive preference to common stockholders with respect to liquidation of the Company and are redeemable in the form of cash or stock at the option of the Company. In the event of notification of the Company’s intent to redeem the preferred stock, the preferred stock holders may elect to convert the shares to 50 shares of common stock.

Common Stock

The authorized common stock is 90,000,000 shares at no par value. As of March 31, 2011 and December 31, 2010, the Company had 22,731,503 shares of common stock issued and outstanding.

Additional Paid in Capital

License fees owed in the amount of $30,000 and $113,545 as of March 31, 2011 and December 31, 2010, respectively, were waived and were recorded as additional paid in capital.

Management fees owed in the amount of $94,500 and $365,137 as of March 31, 2011 and December 31, 2010, respectively, were waived and were recorded as additional paid in capital.

NOTE 7 – CONCENTRATIONS

As of March 31, 2011, there were three significant customers who account of 11%, 19% and 38% of the total sales for the quarter ended March 31, 2011. As of December 31, 2010, there were three significant customers who account for 11%, 18% and 32% of the total sales for the year ended December 31, 2010.

As of March 31, 2011, there were two significant customers who account for 74% and 13% of the total accounts receivable for the quarter ended March 31, 2011. As of December 31, 2010 there were two significant customers who account for 72% and 12% of the total accounts receivable for the year ended December 31, 2010.

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NOTE 8 – COMMITMENTS AND CONTINGENCIES

Capital Leases

The Company entered into a capital lease for equipment on September 2, 2009. The lease term is 36 months with monthly installments of $1,690 and an interest rate of 17.90%. In addition, the Company entered into a capital lease for equipment on February 18, 2010. The lease term is 36 months with monthly installments of $670 and an interest rate of 8%.

Future minimum lease payments (principal and interest) as of March 31, 2011 were:

	Amount
Year 1	$	43,212
Year 2		15,152
Total		58,364

Operating Leases

The Company currently leases two locations from a related party. Each lease is for a period of ten years with rolling renewals for a period of five years each. Future minimum lease payments as of March 31, 2011 were:

	Location 1		Location 2		Total
Year 1		252,000		126,000		378,000
Year 2		252,000		126,000		378,000
Year 3		252,000		126,000		378,000
Year 4		252,000		126,000		378,000
Year 5		252,000		126,000		378,000
Total	$	1,260,000	$	630,000	$	1,890,000

The Company is also obligated under a License Agreement to a related party for the Core License for the technology and Intellectual Property located at each leased location. Future minimum lease payments as of March 31, 2011 were:

	Location 1		Location 2		Total
Year 1		60,000		60,000		120,000
Year 2		60,000		60,000		120,000
Year 3		60,000		60,000		120,000
Year 4		60,000		60,000		120,000
Year 5		60,000		60,000		120,000
Total	$	285,000	$	285,000	$	570,000

Legal Matters

The Company is not currently involved in any litigation that would have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

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NOTE 9 – INCOME TAXES

At March 31, 2011 and December 31, 2010, the Company had a federal operating loss carry forwards of $1,896,318 and $1,026,964, which begins to expire in 2027.

Components of net deferred tax assets, including a valuation allowance, are as follows at March 31, 2011 and December 31, 2010:

	2011			2010
Deferred tax assets:
Net operating loss carry forward	$	377,256		$	359,437
Total deferred tax assets	377,256			359,437
Less: Valuation allowance		(377,256	)		(359,437)
Net deferred tax assets	$	-		$	-

The valuation allowance for deferred tax assets as of March 31, 2011 and December 31, 2010 was $377,256 and $356,781, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of March 31, 2011 and December 31, 2010 and maintained a full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at March 31, 2011 and December 31, 2010:

	2011			2010
Federal statutory rate		(35.0	)%		(35.0	)%
State taxes, net of federal benefit		(0.00	)%		(0.00	)%
Change in valuation allowance		35.0	%		35.0	%
Effective tax rate		0.0	%		0.0	%

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NOTE 10 – SEGMENT INFORMATION

Description of Segments

The Company is principally organized by line of business. While the CEO evaluates results in a number of different ways, the lines of business of the operation is the primary basis for which the allocations of resources and financial results are assessed. The revenues are reported by the following two segments:

-	Business Infrastructure – marketed under the brand as PrismOne Quartz , is a managed technology service targeted to vertical market clients with either a high number of employees, multi-locations, or growth challenges.

Waste Diversion Management – a solution identified under the brand PrismOne Emerald ( E nhanced M aterial Management and E lectronic R eporting with A uditable L ife-cycle D ocumentation), is a web-based Environmental Management System that tracks and certifies the volume of waste stream that is diverted from landfill for select clients.

The basis of segmentation is newly adapted in the financial statements dated March 31, 2011. Prior to the quarter ended March 31, 2011, the business was not segmented.

Information about Reportable Segments

March 31, 2011	Business Infrastructure			Waste Diversion Management		Total
Total sales revenue		90,047			45,812		135,859
Other revenue/income		0			0		0
Total segment revenue		90,047			45,812		135,859

Segment EBIT		(168,754	)		1,882		(166,872	)
Interest expense							(17,253	)
Income(loss) before taxes							(184,125	)
Segment total assets		66,690			151,662		218,352
Segment total liabilities		769,776			31,207		800,983
Net liabilities		(703,086	)		120,455		(582,631	)

NOTE 11 – SUBSEQUENT EVENTS

The Company evaluated and noted no subsequent events through the date the financial statements were issued.

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Company Overview and Plan of Operation

PrismOne Group, Inc., a Nevada corporation, is in the business of developing ideas into practical solutions that incorporate non-traditional process review and technology, and driven by the ambition to make our clients lifestyle and workscape easier by applying non-traditional thinking to real world challenges.

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Sales and Distribution Strategy

In 2011, PrismOne will roll out the beta of EMERALD ( E nhanced M aterial Management and E lectronic R eporting with A uditable L ife-cycle D ocumentation), a web based Environmental Management System that tracks and certifies the volume of waste stream that is diverted from landfill to select clients. During the course of 2011, PrismOne will continue to develop and enhance EMERALD to incorporate client beta comments as well as address local municipal, State and Federal suggestions. Additionally PrismOne will engage with other current and potential clients to introduce them to EMERALD. Our expectations are for the gradual increase in quantity managed by EMERALD which has seen a 100% increase month over month. EMERALD will integrated with other offerings from PrismOne currently under development.

With the evident weakness in the residential housing market, our initial goal for deployment of PRISM ( P resence R esponse and I ntegrated S ystems M anagement) has been put on hold pending improvement in economic outlook for that industry.

In order to achieve our goal, we intend to increase awareness of our Products and Services with potential customers, who we anticipate will be business owners, building managers, and community managers, and to actively partner with or acquire technologies or companies that enhance our product offering. Currently, beyond the web presence of www.prismone.com , we do not actively market our products or services but have relied on a word-of-mouth process to attract clients. While this has been successful, we believe that a much greater growth can be realized with the introduction of a coordinated marketing campaign. We intend to do this by engaging in the following:

Attending national and regional networking, communications, and building technology events and conferences that incorporate sustainability and a “green” focus . There are events and conferences managed by regional and central institutions and organizations to promote products and services related to the sustainability within various vertical markets and include computer networking, communications, and building technology industries. We plan to attend a number of events attended by merchants and representatives in these industries in order to further expose our product. These events will include trade meetings, promotional events, seminars, and conferences.

Developing direct marketing programs . In addition to attending the foregoing conferences and seminars, we intend to market directly to business owners, building managers, community managers, local, regional and state governments. Our marketing will include conducting seminars and the use of online and traditional advertising media such as newspapers and trade publications.

Promoting to the public through internet-based and traditional media advertising . We intend to use Internet-based and social media to promote our product directly to the public to raise public awareness of our Products and Services. A priority for marketing will be to enhance our current client facing web presence, www.prismone.com and to further engage the public via Facebook page for PrismOne.

We do not currently employ any sales personnel. In the short term, we intend continue to use the services of our management to sell our Product. As we expand our business operations, however, we plan to employ sales representatives to promote and sell our products and services to potential customers nationally and internationally. These sales representatives will be responsible for soliciting, selecting and securing accounts within a particular regional territory. We expect to pay such sales representatives on a commission basis. In addition, we may pay each sales representative a base salary. We expect to provide service and support to our sales representatives, including advertising and sales materials.

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Research and Development

If we can generate sufficient working capital, we plan to continually enhance existing solutions and develop new solutions and services utilizing our existing technology and we plan to bring new products to market as they become available throughout 2011. New solutions and services in Business Infrastructure and Waste Diversion will be built upon the core Quartz and Emerald platforms respectively now in place. We believe that our next generation platform offers more functionality and covers more of the market place that our research shows is there. There can be no assurance that we will have sufficient working capital to undertake these activities.

Sales Personnel

Results of Operations for the three months ended March 31, 2011 and March 31, 2010.

Income . We recorded $135,859 in total revenues for the three months ended March 31, 2011. Our cost of goods sold for the three months ended March 31, 2011 was $48,179, resulting in gross profit of $87,680. By comparison, we recorded $109,177 in revenues for the three months ended March 31, 2010. Our cost of goods sold for the three months ended March 31, 2010 were $34,389 resulting in gross profit of $74,788.

Operating and Other Expenses . Operating expenses were $254,552 for the three months ended March 31, 2011, compared to $186,031 for the three months ended March 31, 2010. Our operating expenses for both quarters consisted of administrative expenses, payroll, management fees, and licenses and permits. During the three months ended March 31, 2011, we incurred other expenses in the form of interest expense in the amount of $17,253. During the three months ended March 31, 2010, we experienced interest expense of $7,868.

Net Loss . We recorded a loss of $184,125 for the three months ended March 31, 2011, compared to a net loss of $119,111 for the three months ended March 31, 2010.

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Liquidity and Capital Resources

At March 31, 2011, we had $40,908 in current assets and $801,058 in current liabilities, resulting in a working capital deficit of $760,150.

At present, we have only $1,311 in cash on hand. We anticipate that we will require approximately $500,000 in order to fully implement our business plan. Our revenues are not sufficient to cover our business operations at their current or expanded levels, and we may need to obtain additional debt or equity financing. We do not currently have any arrangements in place to secure such financing, and there is no guarantee that we will be able to obtain financing should it be required. In connection with raising this additional capital, we would incur appropriate accounting and legal fees. Should our revenues be sufficient to cover the costs of any such expansion, we will not seek additional financing.

Off Balance Sheet Arrangements

We do not have 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 that are material to our investors.

Going Concern

Our financial statements have been prepared on a going concern basis, which assumes that we will continue to realize our assets and discharge our liabilities in the normal course of business. During the three months ended March 31, 2011, we generated a net loss of $184,125, and ended the period with a working capital deficit of $760,150. These circumstances have raised a substantial doubt about our ability to continue as a going concern. Management’s plans for our continuation as a going concern are dependent upon the continuing attainment of profitable operations, our ability to extend payment of management and license fees payable to Burshan, LLC, a related party, and our ability to raise equity or debt financing if and when needed. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The success of our business plan during the next 12 months and beyond is contingent upon us generating sufficient revenue to cover our costs of operations, or upon us obtaining additional financing. Should our revenues be less than anticipated or our expenses are greater than anticipated, then we may need to delay payment of management and license fees to a related party and/or seek to obtain business capital through the use of private equity fundraising or shareholders loans. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all. Similarly, there can be no assurance that we will be able to generate sufficient revenue to cover the costs of our business operations.

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Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon the Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition and allowance for uncollectable accounts receivable. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates given a change in conditions or assumptions that have been consistently applied.

The critical accounting policies used by management and the methodology for its estimates and assumptions are as follows:

Revenue Recognition. The Company revenues related to Quartz services (voice, data, and communications services) are billed at the beginning of each month for the devices and services delivered and recognized in accordance with current accounting guidance. If a customer adds lines/services, the following month, invoices are adjusted. All long distance is passed to each customer in the following month after service.

The Company recognizes revenue for Emerald and is billed to the client once a waste diversion cycle is completed at the customer’s location(s).

Deferred Revenue. Amounts invoiced and collected in advance of product delivery or providing services are recorded as deferred revenue. The Company recognizes revenue for Emerald and is billed to the client once a waste diversion cycle is completed at the customer’s location(s).

Allowance for Uncollectable Accounts. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is based on specific identification of certain receivables that are at risk of not being paid..

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Recently Issued Accounting Pronouncements

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In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical Corrections to SEC Paragraphs.

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Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined) in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our chief executive officer and chief financial officer concluded that, as of the end of the period ended December 31, 2010, our disclosure controls and procedures were not effective (1) to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to us, including our chief executive and chief financial officers, as appropriate to allow timely decisions regarding required disclosure.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2011. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on this assessment, Management has identified the following four material weaknesses that have caused management to conclude that, as of March 31, 2011, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

As of March 31, 2011, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

As of March 31, 2011, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

As of March 31, 2011, we did not maintain effective controls over financial reporting. Specifically controls were not designed and in place to ensure that the financial impact of certain complex equity and liability transactions were appropriately and correctly reported. The transactions were identified by the auditors and calculated and reported correctly as of March 31, 2011.

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a- 15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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

None.

Item 3. Defaults upon Senior Securities

None

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
3.1	Articles of Incorporation (1)
3.2	ByLaws (1)
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification 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 of 2002

(1)	Previously included as an exhibit to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 22, 2009.

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SIGNATURES

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

	PrismOne Group, Inc.

Date:	May 23, 2011

	By: /s/ Samir Burshan Samir Burshan Title: Chief Executive Officer, Chief Financial Officer and Director