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 ~~September~~June 30, ~~2011~~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)

Florida


Florida		65-1126951
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

~~65-1126951~~778 South Military Trail

~~(State~~Deerfield orBeach, ~~other~~Florida ~~jurisdiction~~33442

~~(IRS Employer Identification No.)~~-----------------------------------------------

of incorporation or organization)

1450 S. Dixie Highway, Ste. 201

Boca Raton, Florida 33432

(Address of principal executive offices)

(~~561~~954) ~~347~~570-~~1178~~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~~Yes by[] No ~~check~~[X mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).]

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__~~ [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 [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]~~

~~Indicate~~Non-accelerated byfiler [ ~~check~~] Smaller ~~mark~~reporting ~~whether the registrant is a shell~~ company ~~(as defined in Rule 12b-2 of the Exchange Act). Yes~~ [ ~~] No [~~X]

AsIndicate ofby ~~November~~check ~~21,~~mark ~~2011,~~whether ~~there~~the ~~were~~registrant ~~9,187,730~~is ~~shares~~a ofshell ~~Peer~~company ~~Review~~(as ~~Mediation~~defined ~~and~~in ~~Arbitration,~~Rule ~~Inc.~~12b-2 ~~Common~~of ~~Stock,~~the ~~$0.001~~Exchange ~~par value per share, issued and outstanding~~Act).

Yes [ ] No [X]

As of August 20, 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.

	PART I.	Page
	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Consolidated Balance Sheets as of September 30, 2011 (unaudited) and December 31, 2010	4
	Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2011 and 2010 (unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 2011 and 2010 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	12
Item 4.	Controls and Procedures.	12
	PART II
	OTHER INFORMATION
Item 1.	Legal Proceedings.	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	13
Item 3.	Defaults Upon Senior Securities.	13
Item 4.	Submission of Matters to a Vote of Security Holders.	13
Item 5.	Other Information.	13
Item 6.	Exhibits.	13
Signatures		14

PART I

FINANCIAL INFORMATION


		Page
Item 1. Financial Statements		4
Consolidated Balance Sheets as of June 30, 2012 (Unaudited) and December 31, 2011
Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2012 and 2011 (unaudited)
Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2012 and 2011 (unaudited)
Notes to Consolidated Financial Statements (unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		14

Item 3. Quantitative and Qualitative Disclosures About Market Risk		16

Item 4. Controls and Procedures		16

PART II

OTHER INFORMATION


Item 1. Legal Proceedings		17

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		17

Item 3. Defaults Upon Senior Securities		17

Item 4. Mine Safety Disclosures		17

Item 5. Other Information		17

Item 6. Exhibits		17

Signatures		18

PART I - FINANCIAL INFORMATION

PEER REVIEW MEDIATION AND ARBITRATION, INC.

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Three and Six Months Ended June 30, 2012

PEER REVIEW MEDIATION AND ARBITRATION, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,			September 30, 2011
	December 31, 2011		June 30, 2012 (Unaudited)
	2010			(Unaudited)
ASSETS
ASSETS
Current assets:
Current assets
Cash	$89,351		$302,289
Cash	$	155,655		$	80,978
Accounts receivable	170,634		295,377
Accounts receivable		30,663			221,670
Inventory	14,395		7,197
Inventory		22,294			22,294
Marketable securities	79		79
Marketable securities		79			79
Total current assets	274,459		604,942
Total current assets		208,691			325,021
Fixed assets	1,300,412		1,887,193
Fixed assets		328,522			1,295,594
Less accumulated depreciation	(1,013,716)		(1,105,613)
Less accumulated depreciation		(99,663)			(985,100)
Intangible Assets	723,052		827,053
Intangible Assets		-			770,000
Less accumulated amortization	(54,229)		(113,658)
Other assets	11,604	~~13,584~~	16,831		~~13,425~~
		242,443			1,093,919
	967,123		1,511,806
Total Assets	$1,241,582	~~451,134~~	$2,116,748	$	~~1,418,940~~
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current liabilities:
Accrued payables	$1,094,640	~~633,379~~	$1,497,347	$	~~787,594~~
Related party payables	2,967,348	~~2,797,987~~	3,108,439		~~3,194,043~~
Notes payable - current portion		-			146,013
Total current liabilities	4,061,988		4,605,786
Notes payable – rel. pty. – current portion		189,391			-
Notes payable - related party	755,105		718,951
Capital lease obligation		-			36,848
Capital Lease Obligation	223,081		190,207
Other liabilities		3,894			-
Total liabilities	5,040,174		5,514,944
Total current liabilities		3,624,651			4,164,498
Notes payable		-			667,279
Notes payable – related party		15,000			-
Total Liabilities		3,639,651			4,831,777
Stockholders’ Equity
Preferred stock, Series II, $.001 par value; 1.000,000 shares Authorized; convertible; 1,000,000 issued and outstanding		1,000			1,000
Common stock, $.001 par value; 45,000,000 shares authorized; 9,140,683 (2010) & 9,161,869 (2011)		9,140			9,176
Additional paid in capital		9,054,356			23,615,271
Stock subscription receivable		(7,968,750)			(7,203,750)
Accumulated deficit		(17,625,384)			(19,822,038)
Accumulated other comprehensive income (loss)		(13,673)			(13,673)
Total PRMA stockholders’ equity		(3,187,920)			(3,414,014)
Noncontrolling interest		(597)			1,177
Total Stockholders’ Equity		(3,188,517)			(3,412,837)
Total Liabilities and Stockholders’ Equity	$	451,134		$	1,418,940

(Continued on next page)

PEER REVIEW MEDIATION AND ARBITRATION, INC.

CONSOLIDATED BALANCE SHEETS


Stockholders' Equity
Preferred stock, Series II, $.001 par value; 1,000,000 shares authorized; convertible; 1,000,000 issued and outstanding	1,000	1,000
Common stock, $.001 par value; 45,000,000 shares authorized; 9,186,574 (2011) and 9,247,485 (2012)	9,186	9,247
Additional paid in capital	22,409,747	25,191,584
Stock subscription receivable	(7,203,750)	(7,203,750)
Accumulated deficit	(20,421,802)	(21,384,213)
Accumulated other comprehensive income (loss)	(13,673)	(13,673)
Total PRMA stockholders' equity	(3,799,990)	(3,399,805)
Noncontrolling interest	1,398	1,609
Total Stockholders' Equity	(3,798,592)	(3,398,196)

Total Liabilities and Stockholders' Equity	$1,241,582	$2,116,748

The accompanying notes are an integral part of the consolidated financial statements.

PEER REVIEW MEDIATION AND ARBITRATION, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

	Three Months				Three Months			Nine Months			Nine Months
	Three Months Ended June 30, 2011		Three Months Ended June 30, 2012	Six Months Ended June 30, 2011		Six Months Ended June 30, 2012
	Ended				Ended			Ended			Ended
Revenue	$2,263,650		$2,466,353	$4,195,573		$4,820,480
	September 30, 2010				September 30, 2011			September 30, 2010			September 30, 2011
Cost of sales	2,018,812		2,051,556	3,686,337		4,039,365
Revenue	$	56,944			$	2,069,437		$	139,480		$	6,265,010
	244,838		414,796	509,236		781,115
Cost of sales		33,651				1,674,386			59,071			5,352,824
Expenses:
		23,293				395,051			80,409			912,186
Depreciation	56,534		75,008	117,087		151,326
Expenses:
Selling, general and administrative	551,108		781,098	1,128,797		1,429,387
Depreciation		13,716				44,821			24,327			161,908
Write-offs	-		-	1,051,900		-
Selling, general and administrative		431,098				504,701			1,223,117			1,633,498
	607,642		856,105	2,297,784		1,580,713
Write offs		-				-			-			1,051,900
Loss from operations	(362,804)		(441,309)	(1,788,548)		(799,598)
		444,814				549,252			1,247,444			2,847,306
Other income (expense)
Loss from operations		(421,521	)			(154,471	)		(1,167,035	)		(1,935,120	)
Interest income	-		-	-		-
Other income (expense)
Interest (expense)	(67,372)		(78,878)	(137,815)		(162,402)
Interest income		5				12			5			12
Beneficial conversion feature - expense	(15,875)		-	(50,688)		(200)
Interest (expense)		(62,933	)			(67,372	)		(185,517	)		(205,187	)
	(83,247)		(78,878)	(188,503)		(162,602)
Beneficial conversion feature - expense		-				(5,938	)		-			(56,626	)
Income (loss) before provision for income taxes	(446,051)		(520,187)	(1,977,051)		(962,200)
		(62,928	)			(73,298	)		(185,512	)		(261,801	)
Provision for income tax	-		-	-		-
Income (loss) before provision for income taxes		(484,449	)			(227,769	)		(1,352,547	)		(2,196,921	)
Net income (loss)	(446,051)		(520,187)	(1,977,051)		(962,200)
Provision for income tax		-				-			-			-
Other comprehensive income (loss) - net of tax
Net income (loss)		(484,449	)			(227,769	)		(1,352,547	)		(2,196,921	)
Unrealized gain (loss) on securities	-		-	-		-
Other comprehensive income (Loss) – net of tax
Comprehensive income (loss)	(446,051)		(520,187)	(1,977,051)		(962,200)
Unrealized gain (loss) on securities		(13	)			-			(65	)		-
Comprehensive (income) loss attributable to noncontrolling interest	455		(105)	754		(211)
Comprehensive income (loss)		(484,462	)			(227,769	)		(1,352,612	)		(2,196,921	)
Comprehensive income (loss) attributable to PRMA	$(445,596)		$(520,292)	$(1,976,297)		$(962,411)
Comprehensive (income) loss attributable to noncontrolling interest		-				(484	)		-			270
Net income (loss) per share (Basic and fully diluted)	$ (0.05)		$ (0.06)	$ (0.22)		$ (0.10)
Comprehensive income (loss) attributable to PRMA	$	(484,462	)		$	(228,253	)	$	(1,352,612	)	$	(2,196,651	)
Weighted average number of common shares outstanding	9,156,311		9,218,230	9,154,117		9,204,002
Net income (loss) per share (Basic and fully diluted)	$	(0.06	)		$	(0.02	)	$	(0.16	)	$	(0.24	)
Weighted average number of common shares outstanding		8,443,924				9,169,234			8,420,573			9,159,156

The accompanying notes are an integral part of the consolidated financial statements.

PEER REVIEW MEDIATION AND ARBITRATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Nine Months			Nine Months
	Six Months Ended June 30, 2011		Six Months Ended June 30, 2012
	Ended			Ended
Cash Flows From Operating Activities:
	September 30, 2010			September 30, 2011
Net income (loss)	$(1,977,051)		$(962,200)
Cash Flows From Operating Activities:
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Net income (loss)	$	(1,352,547)		$	(2,196,651)
Depreciation	117,087		151,326
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Beneficial conversion feature – expense	50,688		200
Depreciation		24,326			885,437
Writeoffs	1,051,900		-
Accounts receivable		(29,095)			(191,007)
Changes in assets and liabilities
Accrued payables		269,290			154,215
Accounts receivable	35,351		(73,336)
Related party payables		357,022			396,056
Inventory	-		7,198
Other assets		-			159
Accrued payables	178,756		162,106
Beneficial conversion feature – expense		-			56,626
Related party payables	145,681		141,090
Writeoffs		-			1,051,900
Other assets	7,375		(5,227)
Net cash provided by (used for) operating activities		(732,694)			156,735
Net cash provided by (used for ) operating activities	(460,915)		(578,843)
Cash Flows From Investing Activities: Fixed asset purchases		(1,212)			(967,072)
Cash Flows From Investing Activities:
Business acquisition - net		-			(725,218)
Fixed asset purchases	(12,667)		(61,781)
Net cash provided by (used for) investing activities		(1,212)			(1,692,290)
Business acquisition - net	11,706		(51,353)
Net cash provided by (used for) investing activities	(961)		(113,134)
Cash Flows From Financing Activities:
Notes payable - payments	(237,886)		(60,154)
Capital lease obligation - payments	(46,834)		(32,874)
Option Exercises	283,263		997,943
Net cash provided by (used for) financing activities	404,043		904,915

(Continued on ~~Following~~next ~~Page~~page)

~~The accompanying notes are an integral part of the consolidated financial statements.~~8

PEER REVIEW MEDIATION AND ARBITRATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(Continued From Previous Page)



Net Increase (Decrease) in Cash	57,833	212,938
Cash at the Beginning of the Period	155,655	89,351
Cash at the End of the Period	$97,822	$302,289

Supplemental Disclosure
Cash paid for interest	$9,323	$ 17,087
Cash paid for income taxes	$ -	$ -

Non-cash transactions
Acquired assets, net of liabilities		$335,767

	Nine Months		Nine Months
	Ended		Ended
	September 30, 2010		September 30, 2011
Cash Flows From Financing Activities:
Notes payable - borrowings		-		-
Notes payable – payments		(97,931)		605,007
Capital lease obligation – payments		-		36,848
Related party loans		13,851		-
Equity sales - subsidiary		-		453,000
Option Exercises		828,316		366,023
Net cash provided by (used for) financing activities		744,236		1,460,878
Net Increase (Decrease) In Cash		10,330		(74,677)
Cash At The Beginning Of The Period		27,392		155,655
Cash At The End Of The Period	$	37,722	$	80,978
Schedule of Non-Cash Investing and Financing Activities
In 2011 the Company purchased $11,796 in cash, $49,118 in accounts receivable, and $228,776 in fixed assets, with corresponding liabilities of $491,500 by issuing 5,000 common shares valued at $85,000 and fulfilling a stock subscription payable of $765,000 by issuing 45,000 common shares.
Supplemental Disclosure
Cash paid for interest	$	1,293	$	9,323
Cash paid for income taxes	$	-	$	-

The accompanying notes are an integral part of the consolidated financial statements.

PEER REVIEW MEDIATION AND ARBITRATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

~~Peer~~We ~~Review~~were ~~Mediation~~incorporated ~~And~~under ~~Arbitration, Inc. (“PRMA”,~~ the ~~“Company”),~~laws ~~was~~of ~~incorporated in~~ the ~~State~~state of Florida on April 16, 2001. We ~~The~~have ~~Company~~been ~~provides~~conducting ~~peer~~business ~~review~~operations ~~services~~ever since, primarily focused on the creation and ~~expertise~~continual development of our core initiatives to ~~law~~partner ~~firms,~~with health care providers in their pursuit to achieve medical ~~practitioners~~excellence. Through our family of core operating systems and solutions, ~~insurance~~we ~~companies~~will introduce investment, ~~hospitals~~technology, innovation and ~~other~~intellectual ~~organizations~~capital inand ~~regard~~expertise to ~~personal~~modernize ~~injury,~~and ~~professional~~optimize ~~liability~~the ~~and~~health ~~quality~~care ~~review.~~provider’s practice.

~~Basis~~Unaudited ofinterim ~~Presentation~~financial statements

The accompanying unaudited financial statements have been prepared in accordance with ~~the instructions to Form 10-Q and do not include all of the information and disclosures required by~~ generally accepted accounting principles ~~for complete financial statements. All adjustments which are,~~ in the ~~opinion~~United States of ~~management,~~America ~~necessary~~ for ainterim ~~fair~~financial ~~presentation~~information ofand ~~the~~with ~~results of operations for~~ the ~~interim~~instructions ~~periods~~to ~~have~~Form ~~been~~10-Q ~~made~~ and ~~are~~Regulation ofS-X. Accordingly, athe ~~recurring~~financial ~~nature~~statements ~~unless~~do ~~otherwise~~not ~~disclosed~~include ~~herein.~~all ~~The results~~ of ~~operations~~the ~~for~~information ~~such~~and ~~interim~~footnotes ~~periods~~required ~~are~~by ~~not~~generally ~~necessarily~~accepted ~~indicative~~accounting ofprinciples ~~operations~~ for acomplete ~~full~~financial ~~year~~statements.

~~Principles~~In the opinion of ~~Consolidation~~management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and six month periods ended June 30, 2012 and 2011; (b) the financial position at June 30, 2012; and (c) cash flows for the six month period ended June 30, 2012 and 2011, have been made.

~~The~~Principles ~~accompanying consolidated financial statements include the accounts~~ of ~~Peer Review Mediation and Arbitration, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in~~ consolidation.

~~Cash~~The accompanying consolidated financial statements include the accounts of PRMA and ~~Cash~~its ~~Equivalents~~wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

~~The~~Minority ~~Company~~Interest ~~considers~~(Non-controlling ~~all highly liquid investments with an original maturity of three months or less as cash equivalents.~~interest)

A subsidiary of the Company has minority shareholders, representing ownership interests of .52% at June 30, 2012. The Company accounts for these minority, or non-controlling interests pursuant to ASC 810-10-65 whereby gains or losses in a subsidiary with a non-controlling interest are allocated to the non-controlling interest based on the ownership percentage of the non-controlling interest, even if that allocation results in a deficit non-controlling interest balance.

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.

PEER REVIEW MEDIATION AND ARBITRATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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.

~~Revenue recognition~~11

~~Revenue~~Accounts ~~is recognized on an accrual basis after services have been performed under contract terms~~Receivable, ~~the~~Credit service price to the client is fixed or determinable, and collectability is reasonably assured. The Company's revenues to date have been earned primarily from consulting fees for arranging medical expert insurance case review.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 ~~sheet~~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.

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.

913

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~MANAGEMENT’S~~This ~~DISCUSSION~~report ~~AND~~contains ~~ANALYSIS~~forward-looking OFstatements 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.

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Overview

~~This~~We ~~report~~were ~~contains~~incorporated ~~forward-looking~~under ~~statements within~~ the ~~meaning~~laws of ~~Section 27A of~~ the ~~Securities~~state ~~Act~~ of ~~1933~~Florida ~~and~~on ~~Section~~April ~~21E~~16, of2001. We ~~the~~have ~~Securities~~been ~~Act~~conducting ofbusiness ~~1934.~~operations ~~The~~ever ~~statements~~since, ~~regarding~~primarily ~~Peer~~focused ~~Review~~on ~~Mediation~~the creation and ~~Arbitration,~~continual ~~Inc.~~development ~~and~~of ~~its~~our ~~subsidiaries~~core ~~contained~~initiatives into ~~this~~partner ~~Report~~with ~~that~~health ~~are~~care ~~not~~providers ~~historical~~ in ~~nature,~~their ~~particularly~~pursuit ~~those~~to ~~that~~achieve ~~utilize~~medical ~~terminology~~excellence. ~~such~~Through asour ~~"may,"~~family ~~"will,"~~of ~~"should,"~~core ~~"likely,"~~operating ~~"expects,"~~systems ~~"anticipates,"~~and ~~"estimates~~solutions," ~~"believes"~~we orwill ~~"plans~~introduce investment," ~~or comparable terminology~~technology, ~~are~~innovation ~~forward-looking statements based on current expectations~~ and ~~assumptions,~~intellectual ~~and~~capital ~~entail various risks~~ and ~~uncertainties~~expertise ~~that could cause actual results~~ to ~~differ~~modernize ~~materially~~and ~~from~~optimize ~~those~~the ~~expressed~~health incare ~~such~~provider’s ~~forward-looking statements~~practice.

~~Overview~~Results Of Operations

WeComparison ~~were incorporated under the laws~~ of ~~the~~Results ~~State~~ of ~~Florida~~Operations onfor ~~April~~the ~~16,~~Three ~~2001.~~Months WeEnded ~~have~~June ~~been conducting business operations ever since~~30, ~~primarily~~2012 ~~focused on the creation~~ and continual development of our proprietary Private Network Application which allows direct access to our Peer Review Data Archival resource via our PeerReviewboard.com Internet web site. Our wholly owned subsidiary, Independent Review, Inc., is engaged in providing medical case reviews to the Texas Insurance Commission pursuant to a license from the state of Texas.2011

~~Our~~Sales ~~service~~were ~~enables subscribers~~$2, ~~attorneys~~466,353 ~~insurance~~for ~~claims agents, healthcare providers and consumers~~ the ~~ability~~three tomonths ~~efficiently~~ended ~~search~~June ~~and~~30, ~~engage~~2012, ~~medical~~as ~~experts~~compared ~~for~~to asales ~~variety~~ of ~~medical consulting projects. PRMA maintains a network of independent physicians as members of its Peer Review Board~~$2,263,650 ~~available~~for tothe ~~assist~~three inmonths ~~areas~~ended ~~such~~June ~~as: expert medical opinions and testimony~~30, ~~legal case evaluation and strategy~~2011, ~~assessment~~an increase of ~~damages~~$202, ~~case valuation~~703, ~~medical~~or ~~peer~~%9.0. This ~~review~~increase ~~and~~in ~~chart~~revenue ~~review,~~for ~~independent~~the ~~medical~~three ~~review,~~months ~~quality~~ending ~~and~~June ~~utilization review~~30, ~~medical~~2012 ~~case~~is ~~management,~~due ~~and~~to ~~medical~~the ~~second~~continuation ~~opinion. In~~of ~~addition,~~the weCompany’s ~~offer~~transition afrom ~~diverse~~developmental ~~program~~to ofoperational ~~technology~~combined ~~and~~with ~~innovation~~additional ~~services~~revenues asgenerated ~~member~~from ~~benefits to~~ our ~~member~~first ~~physicians~~accountable ~~through~~care ~~Pro-Med Alliance, our wholly-owned subsidiary~~organization.

~~RESULTS~~Cost OFof ~~OPERATIONS~~sales was $2,051,556 for the three months ended June 30, 2012, as compared to cost of sales of $2,018,812 for the comparable period in 2011, an increase of $32,744, or 2.0%. Cost of sales increased due to the corresponding increase in revenues.

~~Comparison~~For the three months ended June 30, 2012, we incurred operating expenses of ~~Results~~$856,105, which included selling, general and administrative expenses of ~~Operations~~$781,098, ~~for~~compared to operating expense of $607,642 during the ~~Three~~three ~~Months~~months ~~Ended~~ended ~~September~~June 30, 2011, which included selling, general and ~~2010~~administrative expenses of $551,108 for the same period last year, or a 41.7% 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.

Sales were $2,263,650 for the three months ended September 30, 2011, as compared to sales of $69,630 for the three months ended September 30, 2010, an increase of $2,194,020, or 3,151%. This increase in revenue for the three months ending September 30, 2011 is due to the transition the Company has made from developmental to operational, and due to the additional revenue provided by our Document Management Division, Environmental Division, and Staffing Division.14

~~Cost~~As ofa ~~sales~~result, ~~was~~we incurred a loss of ($2520,~~010,913~~292) ~~for~~during ~~the~~ three months ended ~~September~~June 30, ~~2011~~2012, asor ~~compared~~($0.06) toper ~~cost~~share, ofcompared ~~sales~~with a loss of ($20445,~~318~~596) ~~for~~during the ~~comparable~~three ~~period~~months inended ~~2010~~June 30, ~~an increase of $1~~2011,~~990,595,~~ or ~~9,797%~~($0.05) ~~Cost~~per ~~of sales increased due to the corresponding increase in revenues~~share.

10Comparison of Results of Operations for the Six Months Ended June 30, 2012 and 2011

~~For~~Sales ~~the~~were ~~three months ended September 30~~$4, ~~2011~~820,480 wefor ~~incurred~~the ~~operating~~six ~~expenses~~months ofended ~~$607,642,~~June ~~which included selling~~30, ~~general and administrative expenses of $551~~2012,~~108,~~ as compared to ~~operating~~sales ~~expense~~ of $~~425~~4,~~222~~195,573 ~~during~~for the ~~three~~six months ended ~~September~~June 30, ~~2010~~2011, ~~which~~an ~~included~~increase ~~selling, general and administrative expenses~~ of $~~418~~624,~~888 for the same period last year~~907, or ~~a 31~~14.69% ~~increase in selling, general and administrative expense~~. This increase ~~is due an increase~~ in ~~business~~revenue ~~activity~~for as the ~~Company~~six ~~continues to execute its business plan. Selling, general and administrative expenses during the three~~ months ~~ended~~ending ~~September~~June 30, ~~2011,~~2012 ~~consisted~~is ofdue $103,620 in physician recruitment, $69,080 in administrative expense, $57,567 in operational expense, $17,594 in IT hosting and maintenance, $31,253 in rent, $89,462 in officers and directors compensation, $49,323 in consulting fees, $10,204 in telephone, $14,589 in legal and & professional fees, $5,708 in utilities and maintenance, $15,209 in office supplies, $1,935 in promotion and advertising, and $67,372 in interest expense. Depreciation and amortization expense increased to ~~$56,534 during~~ the ~~three~~continuation ~~months ended September 30, 2011, compared with that~~ of ~~$6,334 for~~ the ~~same~~Company’s ~~period~~transition infrom ~~2010.~~developmental ~~The~~to ~~increase~~operational incombined ~~depreciation~~with ~~and~~additional ~~amortization~~revenues ~~expense~~generated ~~was~~from ~~primarily~~our ~~due~~first toaccountable ancare ~~increase in fixed assets, associated primarily with asset acquisitions~~organization.

AsCost aof ~~result,~~sales wewas ~~incurred a loss of (~~$~~438~~4,~~152)~~039,365 ~~during~~for ~~three~~the six months ended ~~September~~June 30, ~~2011~~2012, oras ~~($0.05) per share,~~ compared ~~with~~to acost ~~loss~~of sales of ($~~439~~3,~~685)~~686,337 ~~during~~for the ~~three~~comparable ~~months~~period ~~ended~~in ~~September 30~~2011, ~~2010~~an increase of $353,028, or ~~($0~~9.~~05)~~6%. ~~per~~Cost ~~share~~of sales increased due to the corresponding increase in revenues.

~~Comparison~~For the six months ended June 30, 2012, we incurred operating expenses of ~~Results~~$1,580,713, which included selling, general and administrative expenses of ~~Operations~~$1,429,387, ~~for~~compared to operating expense of $2,297,784 during the ~~Nine~~six ~~Months~~months ~~Ended~~ended ~~September~~June 30, 2011, which included selling, general and ~~2010~~administrative expenses of $1,128,797 for the same period last year, or a 26.6% 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.

~~Sales~~As ~~were~~a $4result,~~195,573~~ ~~for~~we ~~the~~incurred ~~nine~~a ~~months~~loss ~~ended September 30, 2011, as compared to sales~~ of ($82962,~~536~~411) ~~for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2010~~2012, anor ~~increase~~($0.10) ofper $4share,~~113,037,~~ orcompared ~~4,983%.~~with ~~Our~~a ~~increase~~loss inof ~~revenues~~($1,976,297) during the ~~nine~~six months ended ~~September~~June 30, 2011 ~~is due to the transition the Company has made from developmental to operational~~, ~~and~~or ~~due~~($0.22) toper ~~the additional revenue provided our Document Management Division, Environmental Division, and Staffing Division~~share.

~~Cost~~Liquidity ofAnd ~~sales~~Capital was $25,420 for the nine months ended September 30, 2011, as compared to cost of sales of $25,420 for the comparable period in 2010, an increase of $3,653,018, or 14,371%. Cost of sales increased due to the corresponding increase in revenues.Resources

~~For~~At ~~the~~June ~~nine months ended September~~ 30, ~~2011~~2012, we ~~incurred~~had ~~operating expenses of~~ $2302,~~297,030,~~368 ~~which~~in ~~included~~cash ~~selling, general~~ and ~~administrative~~marketable ~~expenses of $1~~securities,~~128,797,~~ as compared to ~~operating expense of~~ $~~802~~89,~~630~~394 ~~during~~in ~~the~~cash ~~nine months ended September 30, 2010, which included selling, general~~ and ~~administrative~~marketable ~~expenses~~securities ofat ~~$792,019~~June ~~for the same period last year~~30, ~~or a 20~~2011.5% The ~~increase~~net incash ~~selling,~~used ~~general and administrative expense. This increase is due an increase~~ in ~~business~~operating ~~activity~~activities asfor the ~~Company~~six ~~continues to execute its business plan. Selling, general and administrative expenses during the nine~~ months ended ~~September~~June 30, ~~2011,~~2012 ~~consisted~~was of $~~212~~578,~~756~~842. inThe ~~physician~~net ~~recruitment,~~cash ~~$141,837~~provided infrom ~~administrative~~financing ~~expense,~~activities ~~$118,198~~for inthe ~~operational~~six ~~expense,~~months ~~$87,839~~ended inJune ~~IT hosting and maintenance~~30, ~~$56,758~~2012 inwas ~~rent,~~ $~~180~~904,~~285~~916. inWe ~~officers~~had ~~and directors compensation,~~ $88295,~~071~~377 in ~~consulting~~account ~~fees,~~receivables ~~$19,603~~as inof ~~telephone,~~June ~~$27~~30,~~839~~ ~~in legal and & professional fees~~2012, ~~$7,696~~as incompared utilities and maintenance, $22,959 in office supplies, $5,705 in licenses/permits, $2,235 in promotion and advertising, $18,448 in miscellaneous fees, and $137,815 in interest expense. Depreciation and amortization expense increased to $~~117~~170,~~087~~634 ~~during~~at ~~the~~June ~~nine months ended September~~ 30, 2011~~, compared with that of $10,611 for the same period in 2010~~. ~~The increase in depreciation and amortization expense was primarily due to an increase in fixed assets, associated primarily with asset acquisitions.~~

AsFor athe ~~result~~six months ended June 30, 2012, we ~~incurred~~had afixed ~~loss~~asset purchases of ($161,~~967,644)~~781 ~~during~~and ~~nine~~business ~~months~~acquisition ~~ended~~– ~~September~~net ~~30,~~expenses ~~2011~~of $51,353, orresulting ~~($0.22)~~in ~~per~~net ~~share,~~cash ~~compared~~used ~~with~~for ainvesting ~~loss~~activities for the period of ($~~868~~113,~~150)~~134. Comparatively, ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2010~~2011, orwe (had fixed asset purchases of $~~0.10)~~12,667 ~~per~~and ~~share~~business acquisition – net increase of $11,706, resulting in net cash used for investing activities for the period of $961.

1115

~~LIQUIDITY~~For ~~AND~~the ~~CAPITAL~~six ~~RESOURCES~~months ended June 30, 2012, we had notes payable – payments of $60,154, capital lease obligation – payments of $32,874, and option exercises of $997,943, resulting in net cash provided by financing activities for the period of $904,915. Comparatively, for the six months ended June 30, 2011, we had notes payable – payments of $237,886, capital lease obligation – payments of $46,834, and option exercises of $283,263, resulting in net cash provided by financing activities for the period of $404,043.

AtOff-Balance ~~September~~Sheet ~~30, 2011, we had $97,901 in cash and marketable securities.~~Arrangements

~~During~~We ~~the~~have ~~quarter~~not ~~ending~~entered ~~September~~into ~~30,~~any ~~2011,~~off-balance ~~operations~~sheet ~~were~~arrangements ~~funded~~that ~~through~~have ~~the~~or ~~exercise~~are ofreasonably ~~our~~likely ~~outstanding~~to ~~Common~~have ~~Stock~~a ~~Purchase~~current ~~Options. On~~or ~~April~~future 2,effect ~~2009~~on our ~~registration~~financial ~~statement~~condition, ~~was~~changes ~~deemed~~in ~~effective~~financial bycondition, ~~the~~revenues ~~SEC~~or ~~wherein we registered 323~~expenses,~~940~~ ~~shares~~results of ~~our~~operations, ~~Common Stock that underlie previously issued purchase options. As of the date of this report we have received an aggregate of $3~~liquidity,~~313,712~~ ~~from~~capital ~~the~~expenditures ~~exercise~~or ofcapital ~~these~~resources ~~Purchase Options~~ and ~~issued~~would ~~189,355~~be ~~shares~~considered ofmaterial ~~our Common Stock as a result. It is management’s intent~~ to ~~use the funds generated by the exercising of these options to execute the business plan~~investors.

~~The~~ITEM ~~net cash used in operating activities for the quarter ended September 30, 2011 was $470,627~~3. QUANTITATIVE ~~The~~AND ~~net~~QUALITATIVE ~~cash~~DISCLOSURES ~~provided~~ABOUT ~~from~~MARKET ~~financing activities for the quarter ended September 30, 2011 was $547,145~~RISK. We had $97,901 in cash and cash equivalents as of September 30, 2011, compared to $102,808 in cash and cash equivalents as of September 30, 2010. We had $115,132 in account receivables as of September 30, 2011, as compared to $45,910 at September 30, 2010.

~~Off-Balance~~Not ~~Sheet Arrangements~~applicable.

WeITEM ~~have~~4. CONTROLS ~~not~~AND 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.PROCEDURES

~~ITEM~~Evaluation 3of 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 June 30, 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 financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of the date of this report, management has not filed its 10-Q for the quarter ending March 31, 2012, and is working to file this report as soon as possible. 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.

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~16

~~Not~~PART ~~applicable~~II. OTHER INFORMATION

ITEM 4T1. LEGAL ~~Controls and Procedures~~PROCEEDINGS

During the three months ended September 30, 2011, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting,None

~~Evaluation~~ITEM of2. UNREGISTERED ~~Disclosure~~SALES ~~Controls~~OF ~~and~~EQUITY ~~Procedures~~SECURITIES AND USE OF PROCEEDS

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2011. Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to be effective as of September 30, 2011 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 financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.None

12ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~PART II. OTHER INFORMATION~~None

ITEM 14. Mine Safety Disclosure

~~LEGAL~~Not ~~PROCEEDINGS~~applicable

~~None~~ITEM 5. OTHER INFORMATION

~~ITEM 2.~~None

~~UNREGISTERED~~ITEM ~~SALES~~6. EXHIBITS ~~OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~None~~ Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~ITEM~~ Exhibit 3.32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~DEFAULTS~~ Exhibit ~~UPON~~101.INS** XBRL ~~SENIOR~~Instance ~~SECURITIES~~Document

~~None~~ Exhibit 101.SCH** XBRL Taxonomy Extension Schema Document

~~ITEM~~ Exhibit 4101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document

~~SUBMISSION~~ Exhibit OF101.DEF** XBRL ~~MATTERS~~Taxonomy TOExtension ADefinition ~~VOTE~~Linkbase ~~OF SECURITY HOLDERS~~ Document

~~None~~ Exhibit 101.LAB** XBRL Taxonomy Extension Label Linkbase Document

~~ITEM~~ Exhibit 5101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document

~~OTHER~~* Filed ~~INFORMATION~~herewith

~~None~~**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.

~~ITEM 6.~~17

~~EXHIBITS~~ SIGNATURES

Exhibit No.	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

13PEER REVIEW MEDIATION AND ARBITRATION, INC.

~~SIGNATURES~~Dated: August 20, 2012

~~Pursuant~~By: to/s/Willis ~~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.~~Hale

~~PEER~~ Willis ~~REVIEW MEDIATION~~Hale

~~AND~~ Chief ~~ARBITRATION,~~Executive ~~INC.~~Officer

~~Dated~~By: ~~November~~ ~~21,~~/s/Marc ~~2011~~E. Combs

~~By:~~ Marc ~~/s/Willis~~E. ~~Hale~~Combs

~~Willis Hale,~~ Chief ~~Executive~~Financial Officer

~~By:s/Marc E. Combs~~18

Marc E. Combs, Chief Financial Officer

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