UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[ X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-32220

PRIME STAR GROUP, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	87-0636498
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

4560 S. Decatur, Suite 303B, Las Vegas, Nevada 89103

(Address of principal executive offices)

Registrant’s telephone number, including area code: (702) 588-5965

(Issuer’s telephone number)

American Water Star, Inc.

(Former Name)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

~~The~~Large ~~number~~accelerated offiler ~~shares~~[ of] ~~Common~~Accelerated ~~Stock,~~filer ~~$0.001~~[ ~~par~~] ~~value,~~Non-accelerated ~~outstanding~~filer on[ ~~March~~] ~~31,~~Smaller ~~2009,~~reporting ~~was~~company ~~50,442,778~~[X]

The number of shares of Common Stock, $0.001 par value, outstanding on June 30, 2010, was 50,442,778

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

INDEX

	INDEX


	PART I Financial Information	Page No.

Item 1.	Financial Statements
	Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009 (audited)	3
	Statement of Operations for the three months ended June 30, 2010 and 2009 (unaudited)	4
	Statement of Cash Flows for the three months ended June 30, 2010 and 2009 (unaudited)	5
	Footnotes to the financial statements	6
Item 2.	Management’s Discussion and Analysis or Plan or Operation	10
Item 3.	Controls and Procedures	11

	PART II Other Information

Item 1.	Legal Proceedings	12
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	12
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

	PART I Financial Information	Page No.
Item 1.	Financial Statements
	Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009 (audited)	1
	Statement of Operations for the three months ended March 31, 2010 and 2008 (unaudited)	2
	Statement of Cash Flows for the three months ended March 31, 2010 and 2009 (unaudited)	3
	Footnotes to the financial statements	4
Item 2.	Management’s Discussion and Analysis or Plan or Operation	7
Item 3.	Controls and Procedures	9
	PART II Other Information
Item 1.	Legal Proceedings	10
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	10
Item 3.	Defaults Upon Senior Securities	10
Item 4.	Submission of Matters to a Vote of Security Holders	10
Item 5.	Other Information	11
Item 6.	Exhibits	11

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

Prime Star Group, Inc.

Consolidated Balance Sheet

	March 31, 2010 (Unaudited)			December 31, 2009 (Audited)
	June 30,			December 31,
	2010 (Unaudited)			2009 (Audited)
Assets
Current assets:
Cash	$	83,~~230~~180		$	17,060
Inventory		~~305,750~~0.00			305,750
Inventory		~~160,800~~0.00			160,800
Total current assets		~~474~~3,~~780~~180			483,610
Machinery and equipment		755,897			755,897
Intangible assets		10,057			10,057
Total assets		1769,~~240,734~~134			1,249,564
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable and accruals		3,507,445			3,507,445
Accrued Liabilities		45,000			45,000
Accrued compensation - chairman and majority stockholder		916,015			916,015
Advances from related parties		3,950,617			3,950,617
Total current liabilities		8,419,077			8,419,077
Stockholders' deficit
Preferred stock, $0.0001 par value, 25,000,000 shares		-			-
authorized, no shares issued.
Series A preferred convertible, 4,100,0000 shares		-			-
authorized, no shares issued
Common stock, $0.0001 par value, 125,000,000 shares
authorized, 50,442,778 and 44,585,559 shares issued
and outstanding		5,043			4,457
Stock bought or for services not issued 720,000 and 720,000 shares		72			72
Common stock subscribed		10,000			10,000
Additional paid-in capital		42,623,520			42,336,517
Accumulated (deficit)		(49,816,978	)		(49,520,559	)
Total Stockholders’ deficit		(7,~~178~~649,~~343~~943	)		(7,169,513	)
Total liabilities and stockholders’ deficit	$	1769,~~240,734~~134		$	-1,249,564

See notes to consolidated and condensed financial statements.

Prime Star Group, Inc.

Statement of Operations

	For the three months ended March 31,
	2010			2009
Sales	$	-		$	-
Cost of sales		-			-
Gross profit		-			-
Expenses:
Depreciation and amortization		-			-
General and administrative expenses		292,860			780,702
General and administrative expenses –Office Rental		5,896			15,900
related party		-
Loss due to impairment of equipment		-			-
Total cost and expenses		292,860			796,602
Net operating (loss)		(298,756	)		(796,602	)
DISCONTINUED OPERATIONS Loss from Continued Operations
Net loss	$	(292,756	)	$	(796,602	)
Loss per share from continuing operations	$	-		$	-
Loss per share from discontinued operations	$(0.005)			$	(0.05	)
Total loss per share	$	(0.05	)	$	(0.05	)
Weighted average number of
common shares outstanding - basic		50,442,778

(Unaudited)

	For the three months ended June 30,
	2010			2009

Sales	$	-		$	-
Cost of sales		-			-

Gross profit		-			-

Expenses:
Depreciation and amortization		-			-
General and administrative expenses		292,860			780,702
General and administrative expenses –Office Rental		5,896			15,900
related party		-
Loss due to impairment of equipment		-			-

Total cost and expenses		292,860			796,602

Net operating (loss)		(298,756	)		(796,602	)
DISCONTINUED OPERATIONS Loss from Continued Operations
Net loss	$	(292,756	)	$	(796,602	)

Loss per share from continuing operations	$	-		$
Loss per share from discontinued operations	$(0.005		)	$	(0.05	)
Total loss per share	$	(0.05	)	$	(0.05	)
Weighted average number of
common shares outstanding - basic		50,442,778			44,811,078

See notes to consolidated and condensed financial statements.

Prime Star Group, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	For the three months ended
	March 31,
	June 30,
	2010			2009
Net loss from operations	$	(~~298~~472,~~756~~446	)	$	(796,602	)
Adjustments to reconcile net income to net
cash provided by (used by) operations:
Stock based compensation		~~292,860~~			736,730
Write-down of inventory		-466,550			33,972
Changes in assets and liabilities:
Accounts payable and accrued expenses		5,896			10,000
Accrued expenses - Related parties		-			15,900
		0			0
		-			-
Net cash provided from operating activities		-			-
Cash Flows from financing activities
Net increase (decrease) in cash		-			-
Cash - ending	$	-		$	-
Supplemental disclosures:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

See notes to consolidated and condensed financial statements.

Prime Star Group, Inc.

Notes to Financial Statements

1. Significant Accounting Policies

Nature of Business

The Company was originally organized on June 1, 1999 as American Career Centers, Inc. On April 2, 2002 we amended our Articles of Incorporation to change our name to American Water Star, Inc. On April 11, 2008, the Company filed a Certificate of Amendment to Articles of Incorporation with the Nevada Secretary of State. The Amendment changed the Company’s name to Prime Star Group, Inc.; reverse split the shares of the Company on a 1 for 100 basis, reauthorized the par value to $.0001 per share and increased the number of authorized shares to 125,000,000 common and 25,000,000 preferred shares.

2. Preparation of Financial Statements and Interim Presentation

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has adopted a calendar year end of December 31.

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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) valid transactions are recorded, and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

During interim periods the Company follows the accounting policies set forth in its annual audited financial statements filed with the U.S. Securities and Exchange Commission on its Annual Report on Form 10-KSB for the year ended December 31, 2006. The information presented within these interim consolidated financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.

In the opinion of management, the accompanying interim consolidated financial statements, prepared in accordance with the U.S. Securities and Exchange Commission’s instructions for Form 10-QSB, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full calendar year ending December 31, 2009.

3. Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, ~~during~~ the ~~periods ended March 31, 2009 and 2008, the~~ Company incurred losses from discontinued operations ~~of $762,602 and $105,000, respectively~~. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities ~~that~~June 30, 2010 might be necessary should the Company be unable to continue as a going concern

The Company has had no significant operations, assets, or liabilities since November 7, 2005, and accordingly, is fully dependent upon future sales of securities or upon its current management and / or advances or loans from significant or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity. Because of these factors, our auditors have issued an opinion for the Company which includes a statement describing our going concern status. This means, in our auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

The Company’s continued existence is dependent upon its ability to generate sufficient cash flows from its planned business operations as well as to provide sufficient resources to retire existing liabilities and obligations on a timely basis.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain funding through the sales of additional equity securities or, that such funding, if available will be obtained on terms favorable to or affordable by the Company.

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

4. Related Party Transactions

At June 30, 2007 the Company has the following liabilities to its Chairman and major stockholder:

Accrued compensation

$ 136,015

5. Long-term Convertible Debt

None to report for this period.

6. Commitments and Contingencies

Legal proceedings

The Company is involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business. Although it is not possible to predict with certainty the outcome of these unresolved actions, the Company believes these unresolved legal actions will not have a material effect on its financial position or results of operation.

7. New Accounting Standards

On July 1, 2009, the Company adopted Accounting Standards Update (“ASU”) No. 2009-01, “Topic 105 - Generally Accepted Accounting Principles - amendments based on Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles” (“ASU No. 2009-01”). ASU No. 2009-01 re-defines authoritative GAAP for nongovernmental entities to be only comprised of the FASB Accounting Standards Codification™ (“Codification”) and, for SEC registrants, guidance issued by the SEC. The Codification is a reorganization and compilation of all then-existing authoritative GAAP for nongovernmental entities, except for guidance issued by the SEC. The Codification is amended to effect non-SEC changes to authoritative GAAP. Adoption of ASU No. 2009-01 only changed the referencing convention of GAAP in Notes to the Consolidated Financial Statements.

In October 2009, the FASB issued an Accounting Standards Update ("ASU") regarding accounting for own-share lending arrangements in contemplation of convertible debt issuance or other financing. This ASU requires that at the date of issuance of the shares in a share-lending arrangement entered into in contemplation of a convertible debt offering or other financing, the shares issued shall be measured at fair value and be recognized as an issuance

cost, with an offset to additional paid-in capital. Further, loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. This ASU is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

On December 15, 2009, the FASB issued ASU No. 2010-06 Fair Value Measurements and Disclosures Topic 820 “Improving Disclosures about Fair Value Measurements”. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

Reclassifications

Certain reclassifications have been made to prior periods to conform to current presentation.

8. Restatements

There are no restatements for the three months ended ~~March~~June 3130, 2010.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

· Our current deficiency in working capital; · Our ability to comply with SEC reporting requirements; · Loss of our real and personal property as a result of foreclosure or sale of our assets by receiver; · Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations; · Loss of customers or sales weakness; · Our ability to collect accounts receivable; · Inability to achieve future sales levels or other operating results; and · The unavailability of funds for capital expenditures.

·For ~~Our~~a ~~ability~~detailed description of these and other factors that could cause actual results to ~~comply~~differ ~~with~~materially ~~SEC~~from ~~reporting~~those ~~requirements;~~expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operation” in this document and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009.

~~· Loss of our real and personal property as a result of foreclosure or sale of our assets by receiver;~~9

· Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

· Loss of customers or sales weakness;

· Our ability to collect accounts receivable;

· Inability to achieve future sales levels or other operating results; and

· The unavailability of funds for capital expenditures.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operation” in this document and “Risk Factors” in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

Item 2. Management’s Discussion and Analysis or Plan of Operation

OVERVIEW AND OUTLOOK

Prime Star Group, Inc. (formerly American Water Star, Inc.) was started as a company which developed, marketed, sold, and distributed bottled water with branded beverages: Hawaiian Tropical, Geyser Fruit, Geyser Sport, Geyser Fruta, Fling, Bartender’s Best, and Vintner’s Private Reserve. The company also has Wild Grill Food Gourmet Fusion Sliders and Seafood Patties. The products are orientated to the health conscious consumer looking for an alternative to products containing high sugar and caffeine levels. Our seafood products are high in Omega 3 and are a healthy and delicious alternative to red meat. Our customers included single and multi-store retail operations, governmental agencies, and distributors who in turn sell to retail stores, convenience stores, schools and other outlets. In addition, we branched into the private label and co-packing industries since the fourth quarter of 2004 and we are expending that division in the third quarter of 2010 to include our soon to be launched high end alcohol products.

We initially sold our products exclusively through distributors who then supplied our products to retailers. Although we continued to use distributors, we also expanded our sales effort through sales directly to retailers.

We believe that private label and co-packaging of beverages for other corporations will allows us to avoid costly marketing expenses that would otherwise be associated with brand development, launch, and continuing promotions. We anticipated the distribution of our sales over the next couple of years to be approximately 50% to 60% on private labeling.

CURRENT OPERATIONS

We had no revenues for either the ~~three~~six months ended ~~March~~June 3130, 2010 and 2009.

For the ~~three~~six months ended ~~March~~June 3130, ~~2009~~2010, we incurred general and administrative expenses of $~~292~~5,~~860~~896 ~~for~~, ~~share~~we ~~issuance~~issued ~~for~~no ~~investor~~shares ~~relations~~during ~~and~~the ~~lease~~three ~~expenses~~months ofending ~~$5,896~~June ~~for a total of $292~~30,~~860. This~~ ~~compares~~2010 ~~with~~and ~~general~~a ~~and~~write ~~administrative~~down ~~expenses~~of inventory of $~~780~~466,~~702~~550 ~~and~~resulting ~~related~~in ~~party~~an ~~expenses~~increase ofin ~~$15.900~~operating ~~for~~loss ~~the corresponding period~~ of ~~the~~to ~~prior year~~$472,446. AsWe aalso ~~result of the foregoing, the company~~ had a ~~loss~~matching ~~for~~decrease ~~the three months ended March 31, 2010~~ of ~~$298,756,~~inventory ~~compared to a net loss~~ of $~~796~~466,~~602for the three months ended March 31, 2009~~550.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes total current assets, liabilities and working capital at March 31, 2010 compared to December 31, 2009.

	March 31,		December 31,		Increase / (Decrease)
					Increase / (Decrease)
	2010		2009		$				%
	June 30, 2010		December 31, 2009		$				%
Current Assets	$	~~474,780~~3180	$	483,610	$	(8480,~~830~~430	)		199.3	%
Current Liabilities	$	8,419,077	$	8,419,077	No change			No change
Working Capital Deficit	$	7,~~944~~178,~~297~~343	$	7,~~935~~169,~~467~~513		(8,830	)		1	%

As of ~~March~~June 3130, 2010, we had a working deficit of $7,~~944~~178,~~297~~343 compared to working deficit of $7,~~935~~169,~~467~~513 as of December 31, 2009. As of ~~March~~June 3130, 2010, we had $83,~~230~~ 180 cash on hand. The large decrease to current assets is due to the write-down of inventory.

As described throughout this filing, during the fourth quarter of 2005 and continuing through the first quarter of 2006, foreclosure proceedings were begun on all of our real, personal, tangible, and intangible property, including all buildings, structures, leases, fixtures, and moveable personal property. On March 2, 2006, all of the real property was sold through a foreclosure sale, and on March 23, 2006, all personal property was sold through a UCC sale. As we begin to rebuild our operations, we expect future short-term business operations to be funded principally by private placements and additional short-term borrowings. However, there is no assurance that we will be successful in raising needed capital through borrowings from third parties and/or issuance of equity.

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 is material to investors.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, during the periods ended ~~March~~June 3130, ~~2009~~2010 and ~~2008~~2009, the Company incurred losses from discontinued operations ~~of $796,602 and $105,000, respectively~~. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no form commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. However, there is no legal obligation for either management or significant stockholders to provide additional future funding.

Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the date of this filing, Roger Mohlman, our Chief Executive Officer and Principal Financial Officer, of evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15. Based upon his evaluation, Mr. Mohlman concluded that as of September 30, 2006, our disclosure controls and procedures were not effective in timely alerting him to material information required to be included in our periodic Securities and Exchange Commission filings at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies, which result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material weaknesses, which have caused management to conclude that, as of September 30, 2006, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We were unable to meet our requirements to timely file our Form 10-QSB for the period ended September 30, 2005; our Form 10-KSB for the year ended December 31, 2005; our quarterly reports on Form 10-QSB for the periods ended March 31, 2006, June 30, 2006 and September 30, 2006; our Form 10-KSB for the year ended December 31, 2006; and our Form 10-QSB for the periods ended March 31, 2007 and June 30, 2007. Management evaluated the impact of our inability to timely file periodic reports with the Securities and Exchange Commission on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted in the inability to timely make these filings represented a material weakness.11

91. We were unable to meet our requirements to timely file our Form 10-QSB for the period ended September 30, 2005; our Form 10-KSB for the year ended December 31, 2005; our quarterly reports on Form 10-QSB for the periods ended March 31, 2006, June 30, 2006 and September 30, 2006; our Form 10-KSB for the year ended December 31, 2006; and our Form 10-QSB for the periods ended March 31, 2007 and June 30, 2007, our form 10-K for 2009 and form 10-Q for the first quarter of 2010. Management evaluated the impact of our inability to timely file periodic reports with the Securities and Exchange Commission on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted in the inability to timely make these filings represented a material weakness.

We did not maintain a sufficient complement of finance and accounting personnel with adequate depth and skill in the application of generally accepted accounting principles as demonstrated by significant adjustments to our financial statements identified by our independent registered accounting firm in the preparation of this quarterly report. In addition, we did not maintain a sufficient complement of finance and accounting personnel to handle the matters necessary to timely file our Form 10-KSB for the year ended December 31, 2005 and our Forms 10-QSB for the three months ended March 31, 2006, the six months ended June 30, 2006 and the nine months ended September 30, 2006, or the Form 10-KSB for year ended December 31, 2006, or the Form 10-QSB for the three months ended March 31, 2007 or the six month ended June 30, 2007 or the form 10-KSB for year ended December 31, 2007, quarter ended March 31, 2008 and quarter ended June 30, 2008. We were unable to timely file our Form 10-K for December 31, 2009 and our first Quarter Form 10-Q for March 31, 2010. Management evaluated the impact of our lack of sufficient finance and accounting personnel on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted in our lack of sufficient personnel represented a material weakness.

Remediation of Material Weaknesses

To remediate the material weaknesses in our disclosure controls and procedures identified above, we are being assisted by outside accounting personnel. We do not believe that this outsourcing will be effective once we commence significant operations. As a result, our internal controls may continue to be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision. However, we believe, once funding is available and have established criteria by which we will retain the expertise required to provide adequate and effective financial reporting.

Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings

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

~~During~~None ~~the period ending March 31, 2010, the Company issued 5,857,219 shares of common stock~~ for ~~consulting~~this ~~and investor relations services totaling $287,003~~quarter.

Item 3. Defaults by the Company upon its Senior Securities

None for this quarter.

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

None for this quarter.

Item 5. Other Information

The Company’s ~~subsidiary~~has rescinded the agreement between Isla Nena Direct Distributors announced in March of 2010, ~~Wild~~and ~~Grill~~the ~~Foods~~rental agreement signed with Aqua Pura, ~~Inc~~CA on December 1, 2009. Management ~~has~~feels ~~begun~~due to ~~ship~~subsequent ~~product~~events asand ofthe current economic climate, the ~~beginning~~deals ofwere not in the ~~second~~best ~~quarter~~interest of ~~2010~~the company or its shareholders. AsThe ofcompany ~~June~~also ~~10,~~has ~~2010,~~rescinded ~~$465~~the distribution agreement with Beverage Source 1,~~203~~ ofLLC ~~our~~and ~~gourmet~~will ~~sliders~~seek ~~have~~a ~~been~~new ~~invoiced~~distributor tofor ~~our~~its ~~various~~products ~~distributors~~on the East Coast.

Item 6. Exhibits

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3(i)(a)	Articles of Incorporation		10-KSB	12/31/99	3.1	04/13/00
3(i)(b)	Certificate of Amendment to the Articles of Incorporation		10-KSB	12/31/99	3.2	04/13/00
3(i)(d)	Certificate of Amendment to the Articles of Incorporation		10-QSB	03/31/02	3.4	05/20/02
3(ii)(a)	Bylaws of the Company		10-KSB	12/31/99	3.3	04/13/00
4.1	Certificate of Change in Number of Authorized Shares		S-8		4.3	04/05/02
4.2	Certificate of Designation Series A Convertible Preferred Stock		S-8		4.4	04/05/02
4.3	Amended Stock Plan		10-QSB	09/30/04	4.1	11/19/04
4.4	Securities Purchase Agreement with Laurus Master Fund, Ltd.		8-K		4.1	11/04/04
4.5	Registration Rights Agreement with Laurus Master Fund, Ltd.		8-K		4.2	11/04/04
4.6	Master Security Agreement with Laurus Master Fund, Ltd.		8-K		4.3	11/04/04
4.7	Subsidiary Agreement between All-Star Beverages and Laurus Master Fund, Ltd.		8-K		4.4	11/04/04
10.1	Employment Agreement with Roger Mohlman		10-KSB	12/31/02	10.4	04/16/03
10.2	Trademark and Design License Agreement for use of Hawaiian Tropic name		10-KSB	12/31/02	10.6	04/16/03
10.3	Employment Agreement with Daniel Beckett		8-K		10	05/19/05
10.4	Forbearance Agreement with Laurus Master Fund, Ltd.		8-K		10.1	08/10/05
10.5	Secured Convertible Note with Laurus Master Fund, Ltd.		8-K		10.2	08/10/05
10.6	Master Security Agreement with Laurus Master Fund, Ltd.		8-K		10.3	08/10/05
10.7	Subsidiary Guarantee with Laurus Master Fund, Ltd		8-K		10.4	08/10/05
10.8	Deed of Trust, Assignments of Rents, Security Agreement and Fixture Filing for the benefit of Laurus Master Fund		8-K		10.5	08/10/05
20.1	Notice of Trustee’s Sale		8-K		10.1	12/29/05
20.2	Copy of the Statement of Breach or Non-Performance and Notice of Election to Sell		8-K		10.2	12/29/05
31	Certification of Roger Mohlman Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act	X
32	Certification of Roger Mohlman, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act	X

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SIGNATURES

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

	PRIME STAR GROUP, INC. (Registrant)
Date: June 18, 2010	By:	/s/ Roger Mohlman
Date: August 11, 2010	By:	/s/ Roger Mohlman
		Roger Mohlman
		Chief Executive Officer
		Principal Financial Officer and Principal Accounting Officer

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