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EX-31.1 - EXHIBIT 31.1 - Greenhouse Solutions Inc.v326890_ex31-1.htm

 

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 30, 2012 or 

 

¨ 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 000-54759

 

Greenhouse Solutions Inc.

(Exact name of registrant as specified in it’s charter)

 

  Nevada   45-2094634  
  (State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)  
         
  4 Research Dr., Suite 402, Shelton, Connecticut   06484  
  (Address of principal executive offices)   (Zip Code)  

 

(203) 242-3065

(Registrant’s telephone number, including area code)

 

______________________________________________________________________________________

(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.                 xyes   ¨No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 xNo

 

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

 

As of November 9, 2012 there were 7,230,000 common shares par value $0.001 issued and outstanding.

 

 
 

 

TABLE of CONTENTS

 

PART I—FINANCIAL INFORMATION 3
   
Item 1. Financial Statements. 3
   
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations. 13
   
Item 3.  Quantitative and Qualitative Disclosures About Market Risk. 14
   
Item 4.  Controls and Procedures. 14
PART II—OTHER INFORMATION 15
   
Item 1. Legal Proceedings. 15
   
Item 1A. Risk Factors. 15
   
Item 2. Unregistered Sales of Securities and Use of Proceeds. 15
   
Item 3. Defaults Upon Senior Securities. 16
   
Item 4. Submission of Matters to a Vote of Security Holders. 16
   
Item 5. Other Information. 16
   
Item 6. Exhibits. 16
   
SIGNATURES 16

 

2
 

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

GREENHOUSE SOLUTIONS INC.

(A Development Stage Company)

 

FINANCIAL STATEMENTS

 

September 30, 2012

(Unaudited)

 

BALANCE SHEETS
 
STATEMENTS OF OPERATIONS
 
STATEMENT OF STOCKHOLDER’S EQUITY
 
STATEMENTS OF CASH FLOWS
 
NOTES TO FINANCIAL STATEMENTS

 

3
 

 

GREENHOUSE SOLUTIONS INC.

(A Development Stage Company)

 

BALANCE SHEETS

 

   September 30,
2012
   March 31,
2012
 
   (Unaudited)   (Audited) 
ASSETS          
           
CURRENT ASSETS          
Cash  $1   $1 
           
TOTAL ASSETS  $1   $1 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
           
CURRENT LIABILITIES          
Accounts payable and accrued liabilities  $9,227   $1,965 
Due to related parties (Note 3)   46,414    26,039 
           
TOTAL CURRENT LIABILITIES   56,641    28,004 
           
GOING CONCERN (Note 2)          
           
STOCKHOLDERS’ EQUITY(DEFICIT) (Note 5)          
Common stock, 75,000,000 shares authorized with $0.001 par value          
Issued and outstanding          
7,230,000 common shares (March 31, 2012 –7,230,000)   7,230    7,230 
Additional paid-in-capital   34,270    34,270 
Deficit accumulated during development stage   (97,140)   (69,503)
           
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   (55,640)   (28,003)
           
TOTAL LIABILITIES & STOCK HOLDERS’ EQUITY (DEFICIT)  $1   $1 

 

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

 

4
 

 

GREENHOUSE SOLUTIONS, INC.

(A Development Stage Company)

 

STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended
September 30
   Six Months Ended
September 30
   April 8, 2009
(inception) to
September 30,
 
   2012   2011   2012   2011   2012 
                     
REVENUES  $-   $-   $-   $-   $40,034 
Cost of revenues   -    -    -    -    15,065 
                          
GROSS PROFIT   -    -    -    -    24,969 
                          
GENERAL AND ADMINISTRATIVE EXPENSES                         
Professional fees  $11,600   $6,500   $19,240   $10,825   $56,336 
Advertising and marketing   -    4,509    -    4,509    4,509 
Consulting fees        -         -    4,007 
Executive compensation        -         600    4,200 
Filing fees   332    3,428    6,797    3,428    19,814 
Organizational costs        -         -    838 
Other costs        125         701    17,787 
Transfer agent fees   1,200    615    1,600    6,215    21,384 
                          
TOTAL OPERATING EXPENSES   13,132    15,177    27,637    26,278    128,875 
                          
NET OPERATING LOSS   (13,132)   (15,177)   (27,637)   (26,278)   (103,906)
                          
OTHER INCOME (EXPENSES)                         
Loss from continued operations before income taxes   (13,132)   (15,177)   (27,637)   (26,278)   (103,906)
Provision for income taxes   -    -    -    -    - 
LOSS FROM CONTINUED OPERATIONS   (13,132)   (15,177)   (27,637)   (26,278)   (103,906)
                          
DISCONTINUED OPERATIONS                         
Loss from operations of discontinued wholly owned, net of tax   -    (10,367)   -    (23,421)   (29,265)
Gain from disposal of discontinued wholly owned Subsidiary, net of tax   -    36,031    -    36,031    36,031 
                          
GAIN (LOSS) FROM DISCONTINUED OPERATIONS   -    25,664    -    12,290    6,766 
                          
NET INCOME (LOSS) FOR THE PERIOD  $(13,132)  $10,487   $(27,637)  $(13,988)  $(97,140)
                          
BASIC LOSS PER COMMON SHARE  $(0.00)  $0.00   $(0.00)  $(0.00)     
                          
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
-BASIC
   7,230,000    7,230,000    7,230,000    7,230,000      

 

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

 

5
 

 

GREENHOUSE SOLUTIONS INC.

(A Development Stage Company)

 

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM APRIL 8, 2009 (INCEPTION) TO SEPTEMBER 30, 2012

   Common Stock   Additional   Share   Deficit
Accumulated
During the
     
   Number of
shares
   Amount   Paid-in
Capital
   Subscription
Receivable
   Development
Stage
   Total 
                         
Balance – April 8, 2009   -   $-   $-   $-   $-   $- 
                               
Common stock issued for cash   6,200,000    6,200    -    -    -    6,200 
                               
Net loss for the period   -    -    -    -    (6,202)   (6,202)
                               
Balance – March 31, 2010   6,200,000    6,200    -    -    (6,202)   (2)
                               
Common stock issued for cash   3,530,000    3,530    31,770    -    -    35,300 
                               
Net loss for the period   -    -    -    -    (32.577)   (32,577)
                               
Balance – March 31, 2011   9,730,000    9,730    31,770    -    (38,779)   2,721 
                               
Shares cancelled – September 12, 2011   (2,500,000)   (2,500)   2,500    -    -    - 
                               
Net loss for the period   -    -    -    -    (30,724)   (30,724)
                               
Balance – March 31, 2012   7,230,000    7,230    34,270    -    (69,503)   (28,003)
                               
Net loss for the period   -    -    -    -    (27,637)   (27,637)
                               
Balance, September 30, 2012   7,230,000   $7,230   $34,270   $-   $(97,140)  $(55,640)

 

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

 

6
 

 

GREENHOUSE SOLUTIONS INC.

(A Development Stage Company)

 

STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six months
ended
September 30,
2012
   Six months
ended
September 30,
2011
   April 8, 2009
(Inception) to
September 30,
2012
 
             
CASH FLOWS FROM OPERATING ACTIVITIES               
Net loss for the period  $(27,637)  $(13,988)  $(97,140)
Adjustments to reconcile net loss to net cash used in operating activities:               
Discontinued operations   -    -    - 
Changes in operating assets and liabilities:               
Increase (decrease) in accounts payable & accrued liabilities   7,262    (1,203)   9,227 
                
NET CASH USED IN OPERATING ACTIVITIES   (20,375)   (15,191)   (87,913)
                
CASH FLOWS FROM INVESTING ACTIVITIES               
Due from related party company   -    (26,820)   - 
                
NET CASH USED IN INVESTING ACTIVITIES   -    (26,820)   - 
                
CASH FLOWS FROM FINANCING ACTIVITIES               
Loan from director and stockholder – related party   20,375    (3,600)   46,414 
Loan payable   -    30,390    - 
Proceeds from issuance of common stock   -    -    41,500 
                
NET CASH PROVIDED BY FINANCING ACTIVITIES   20,375    26,798    87,914 
                
NET INCREASE IN CASH   -    (15,213)   1 
                
CASH, BEGINNING   1    15,214    - 
                
CASH, ENDING  $1   $1   $1 
                
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:               
                
Cash paid during the period for:               
Interest  $-   $-   $- 
                
Income taxes  $-   $-   $- 
                
Redemption of common stock and loan from related party  $-   $-   $- 

 

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

 

7
 

 

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

Greenhouse Solutions Inc. (the “Company” or “Greenhouse Solutions”) is a Nevada corporation in the development stage. The Company was incorporation under the laws of the State of Nevada on April 8, 2009. The Company is involved in the sale and distribution of urban gardening products and greenhouses on the North American Market.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation – Unaudited Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended March 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending March 31, 2013.

 

Development Stage Company

 

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. Although the Company has recognized nominal amount of revenue, the Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception has been considered as part of the Company’s development stage activities.

 

Cash and Cash Equivalents

 

For purposes of the Statement of Cash Flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalent.

 

Revenue Recognition

 

The Company is in the development stage and has realized minimal revenues from operations. The Company recognizes revenues when the sale and/or distribution of products is complete, risk of loss and title to the products have transferred to the customer, there is persuasive evidence of an agreement, acceptance has been approved by its customer, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. Net sales will be comprised of gross revenues less expected returns, trade discounts, and customer allowances that will include costs associated with off-invoice markdowns and other price reductions, as well as trade promotions and coupons. The incentive costs will be recognized at the later of the date on which the Company recognized the related revenue or the date on which the company offers the incentive.

 

Basic Income (Loss) Per Share

 

The Company computes loss per share in accordance with “ASC-260,” “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

Income Taxes

 

The Company accounts for income taxes pursuant to SFAS No. 109, “Accounting for Income Taxes” (“SFAS No. 109”). Under SFAS No. 109, now encompassed under ASC 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. Greenhouse Solutions establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operation for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

8
 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Income Taxes (continued)

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change estimate.

 

.Fair Value of Financial Instruments measured on a recurring basis

 

The Company follows paragraph 825-10-50-10 of FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accept in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the in inputs to valuation techniques used to measure fail value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2 Pricing inputs other that quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid rent, accounts payable, accrued expenses, and payroll taxes payable approximated their fair value because of the short maturity of those instruments.

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representation about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not however, practical to determine the fair value of advances from stockholders due to their related party nature.

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Carrying Value, Recoverability and Impairment of Long-Lived Assets

 

The Company has adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include office equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair valued of those assets. Fair valued is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

 

9
 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Carrying Value, Recoverability and Impairment of Long-Lived Assets (continued)

 

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner of use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

 

The impairment charges, if any, is included in operating expenses in the accompanying statements of income and comprehensive income (loss).

 

Common Stock Registration Expenses

 

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

 

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 statement and the reported amounts of revenues and expenses during the reported period. Management bases its estimates on historical experience and on various 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.

 

The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fail value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

 

Subsequent Events

 

The Company follows the guidance in Sections 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

 

10
 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Fair value of financial instruments

 

The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies. The carrying amounts of financial instruments including cash approximate their fair value because of their short maturities.

 

Stock-based Compensation

 

The Company accounts for stock-based compensation issued to employees based on FASB accounting standard for Share Based Payment. It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the FASB accounting standard includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.

 

As at September 30, 2012 the Company had no stock-based compensation plans nor had it granted any stock options. Accordingly no stock-based compensation has been recorded to date.

 

Going Concern

 

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred a net operating loss of $84,008 though the three month period ended September 30, 2012 and has not yet established an on going source of revenues sufficient to cover its operating costs and allow it continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining the adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources of the Company by obtaining capital form management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplish any of its plans.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary it the Company in unable to continue as a going concern.

 

Recent pronouncements

 

The Company has evaluated the recent accounting pronouncements through ASU 2012-09 and believes that none of them will have a material effect on the company’s financial statements.

 

NOTE 3 – RELATED PARTY TRANSACTIONS

 

From time to time, the president and a stockholder of the Company provide advances to the Company for its working capital purposes. These advances bear no interest and are due on demand. During the six month period ended September 30, 2012, the President of the Company advanced $20,375 (March 31, 2012 - $26,039) and in aggregate $46,414 to the Company and the Company did not make any repayment toward these advances as of September 30, 2012.

 

NOTE 4 – SALE OF DISCOUNTINUED OPERATIONS

 

On September 9, 2011, the Company entered into an agreement with 1850261 Ontario, Inc. (“BUYER”), a note holder, to sell 100% of the interest in Greenhouse Solutions, Inc., a wholly owned subsidiary incorporated under the laws of the Province of Ontario, Canada. The Buyer, in consideration for cash payment of $1.00 and other good and valuable consideration in had received. The BUYER accepted $10,979 in liabilities from the Company, as well the right to collect $3,150 of prepaid expense from a third party. The gain recorded from the disposal of the subsidiary is $36,031, net of assets minus liabilities transferred.

 

11
 

 

NOTE 5 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

The Total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of $0.001 per share. No other class of stock is authorized.

 

During the period inception, (April 8, 2009) to September 30, 2012, the Company issued:

 

a)6,200,000 shares of common stock at $0.001 per share to its Directors and officers for total proceeds of $6,200: and
b)3,530,000 shares of common stock at $0.010 per share for total proceeds of $35,300.

 

On September 12, 2011, a shareholder of the Company returned 2,500,000 restricted shares of common stock to treasury and the shares were cancelled by the Company. The shares were returned to treasury for no consideration to the shareholder. Following the cancellation the Company now has 7,230,000 shares of common stock outstanding.

 

As of September 30, 2012, the Company has not issued any shares, granted any options, or recorded any share-based compensation.

 

NOTE 6 – SUBSEQUENT EVENTS

 

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were to reportable subsequent events to disclose.

 

12
 

 

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

 

Forward-Looking Statements and Associated Risks.

 

The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q.

 

Plan of Operation

 

The Company was incorporated under the laws of the State of Nevada on April 8, 2009.  The Company was involved in the sale and distribution of gardening products and greenhouses in the North American market.  On September 2, 2009 we incorporated a wholly owned (ownership interest – 100%) subsidiary Greenhouse Solutions Inc. an Ontario, Canada, based company to facilitate our operations and  cross border goods transfer to and from Canada. We did conduct our operations in Canada through our Canadian subsidiary and our operations in USA through our parent corporation, Greenhouse Solutions Inc. (USA). References in this Report to “Greenhouse Solutions” refer to Greenhouse Solutions Inc. and its subsidiary, on a consolidated basis, unless otherwise indicated or the context otherwise requires. Operations of our subsidiary were discontinued and sold on September 9, 2011.

 

As of September 30, 2012, we have generated $40,034 in revenues, and have incurred $97,140 in losses since our inception on April 8, 2009. We have relied upon revenues, the sale of our securities in unregistered private placement transactions, and cash advances from our directors to fund our operations during the period from inception on April 8, 2009 to September 30, 2012. 

 

We are a development stage company and we do not expect to generate revenue for the next 12 months which would be sufficient to sustain our operations.  Accordingly, for the foreseeable future, we will continue to be dependent on additional financing in order to maintain our operations and continue with our corporate activities.  Due to the uncertainty of our ability to meet our financial obligations and to pay our liabilities as they become due, in their report on our financial statements for the period from inception (April 8, 2009) to September 30, 2012, our registered independent auditors included additional comments indicating concerns about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our registered independent auditors.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Results of Operations

 

   Three Months Ended
September 30, 2012
   Six Months Ended
September 30, 2012
   From Inception on
April 8, 2009 Through
September 30, 2012
 
Revenue  $Nil   $Nil   $40,034 
Operating Expenses   13,132    27,637    128,875 
Net Income (Loss)   (13,132)   (27,637    (97,140)

 

For the three month period ended September 30, 2012, our operating expenses consist of Professional fees of $11,600, Advertising and marketing expense of Nil, Consulting expense of Nil, Filing cost of $332, Other costs of Nil, and Transfer Agent fees of $1,200 resulting is a loss from continued operations of $13,132 as compared to Professional fees of $6,500, Advertising and marketing expense of $4,509, Consulting expense of Nil, Filing cost of $3,428, Other costs of $125, and Transfer Agent fees of $615 resulting in a loss from continued operations of $15,177 for the three month period ended September 30, 2011.

 

For the six month period ended September 30, 2012, our operating expenses consist of Professional fees of $19,240, Advertising and marketing expense of Nil, Consulting expense of Nil, Filing cost of $6,797, Other costs of Nil, and Transfer Agent fees of $1,600 resulting is a loss from continued operations of $27,637 as compared to Professional fees of $10,825, Advertising and marketing expense of $4,509, Consulting expense of Nil, Filing cost of $3,428, Other costs of $701, and Transfer Agent fees of $6,215 resulting in a loss from continued operations of $26,278 for the six month period ended September 30, 2011.

 

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Financing Activities

 

We intend to seek additional funding through public or private financings to fund our operations through fiscal 2012 and beyond. However, if we are unable to raise additional capital when required or on acceptable terms, or achieve cash flow positive operations, we may have to significantly delay product development and scale back operations both of which may affect our ability to continue as a going concern.

 

Satisfaction of Our Cash Obligations for the Next Twelve Months

 

As of September 30, 2012, our cash balance was $1. Our plan for satisfying our cash requirements for the next twelve months is through sale of shares of our common stock, third party financing, and/or traditional bank financing. We do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

 

During the three months ended September 30, 2012 the company realized a net loss of $13,132 compared to a net loss of $10,487 for the same period in 2011.

 

We do not own, either legally or beneficially, any patents or trademarks. We had applied for a U.S. trademark for “Greenhouse Life” with the U.S. Trademark and Patent Office (U.S.P.T.O.) on August 23, 2010. The serial number for the application is 85113305. We had applied for a trademark in an international class 006 (Metal greenhouse frames; Metal greenhouses; Transportable greenhouses of metal for household use) and international class 019 (Modular greenhouses not of metal; Non-metal greenhouse frames; Pre-fabricated greenhouses not of metal).  On July 8 2011 we abandoned the trademark application.

 

Liquidity and Capital Resources

 

We have incurred $84,008 in operating losses since inception. As of September 30, 2012, we had $1 in cash compared to $1 in cash at March 31, 2012.  As of September 30, 2012, we had a working capital deficiency of $42,509, compared to a working capital of $28,004 as of March 31, 2012.

 

Net cash used in operating activities for the six months ended September 30, 2012 was $20,375, compared with net cash used in operating activities of $15,191 for the six months ended September 30, 2011. 

 

The Company must raise additional funds in order to fund our continued operations.  We may not be successful in our efforts to raise additional funds or achieve profitable operations. Even if we are able to raise additional funds through the sale of our securities or through the issuance of debt securities, or loans from our directors or financial institutions our cash needs could be greater than anticipated in which case we could be forced to raise additional capital. At the present time, we have no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to us on commercially acceptable terms or at all. These conditions raise substantial doubt as to our ability to continue as a going concern, which may make it more difficult for us to raise additional capital when needed. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.

 

Off Balance Sheet Arrangements

 

None.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

 

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In connection with this quarterly report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's principal executive officer and principal financial officer. Based upon that evaluation, our company's principal executive officer and principal financial officer concluded that subject to the inherent limitations noted in this Part II, Item 9A(T) as of March 31, 2012, our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting, as discussed below.

 

Management's Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

 

Our management, including our principal executive officer and principal financial officer, conducted an assessment of the effectiveness of our internal control over financial reporting based on certain criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2012 due to the following material weaknesses:

 

Our company does not have in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. Going forward, with material, complex and non-routine transactions, management will gain a thorough understanding of the transaction and seek guidance from third-party experts or consultants. Management corrected any errors prior to the release of our company’s September 30, 2012 financial statements.

 

Our company’s administration is composed of one administrative individual resulting in a situation where there is no segregation of duties. In order to remedy this situation we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duties is feasible.

 

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this quarterly report.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Currently we are not involved in any pending litigation or legal proceeding.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 

 

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

 

None

 

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Item 3. Defaults Upon Senior Securities.

 

None

 

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

 

None

 

Item 5. Other Information.

 

None

 

Item 6. Exhibits.

 

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

 

Exhibit No.   Description
     
31.1   Section 302 Certification of George Dory - Director, Chief Executive Office, President, Treasurer, chief financial officer and principal accounting officer of the Company *
32.1   Section 906 Certification of George Dory - Director, Chief Executive Office, President, Treasurer, chief financial officer and principal accounting officer of the Company *

 

*filed herewith

 

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.

 

November 14, 2012

 

  GREENHOUSE SOLUTIONS INC.
   
  By: /s/  George Dory
    George Dory
    President, Chief Executive Officer (Principal Executive Officer) and Director

 

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