UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

_________________

 

FORM 10Q

_________________

(Mark One)

 

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

 

For the quarterly period ended September 30, 2015

 

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

 

For the transition period from __________ to ___________

 

Commission file number: 000-54759

 

GREENHOUSE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

 

8400 Crescent Pkwy., Suite 600, Greenwood Village, Colorado 80111

(Address of principal executive offices)

 

(970) 439-1905

(Registrant's Telephone number)

 

                                                                                           

 (Former Address and phone of principal executive offices)

 

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  past 12 months (or for such  shorter  period that the  registrant  was required  to file  such  reports),  and  (2)  has  been  subject  to the  filing requirements for the past 90 days.

 

Yes

[x]

No

[_]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 for 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

[x]

No

[_]

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Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		[_]	Accelerated filer	[_]
Non-accelerated filer		[_]	Smaller reporting company	[x]
(Do not check if a smaller reporting company)

 

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

 

Yes

[_]

No

[x]

 

Indicate the number of share outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

As of November 19, 2015, there were 94,763,939 shares of the registrant's common stock issued and outstanding.

 

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TABLE OF CONTENTS

 

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PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

 

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

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

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

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

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

 

NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

 

Greenhouse Solutions, Inc. (the "Company" or "Greenhouse Solutions"), is a Nevada corporation. The Company was incorporated 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.

 

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 change in the information disclosed in the notes to the financial statements for the year ended September 30, 2015 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 three months and six months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending March 31, 2016.

 

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 an accumulated deficit since inception of $456,605 through September 30, 2015, and has not yet established a minimal on-going source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining 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.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of providing financial consulting services on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

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 if the Company is unable to continue as a going concern.

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      

 

Cash and cash equivalents

 

The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid investments with an original maturity of three months or less as cash equivalents.

 

Revenue recognition

 

The Company 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 the 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 and Diluted 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 share during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. As of September 30, 2015 there were warrants outstanding for 1,625,000 common shares and at September 30, 2014 there were warrants outstanding for 75,000 common shares. These warrants are not included in the diluted loss per share as the effect of the inclusion would be antidilutive.

Reference is made to section titled "Subsequent Events" for further discussion relating to the warrants and stock issuances.

Income Taxes

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.

The Company maintains a valuation allowance with respect to deferred tax asset. 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 operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under Federal tax laws.

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

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.

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 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 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 value of those assets. Fair value 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.

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, are included in operating expenses in the accompanying statements of operations.

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 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. 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 fair 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

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

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.

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.

Office Furniture and Equipment

Office furniture and equipment are recorded at cost and depreciated under the straight line method over the estimated useful life of the asset. At September 30, 2015 the Company had computer equipment of $1,398 with corresponding accumulated depreciation of $233 which is being depreciated over 3 years. There were no corresponding balances for the fiscal year ended September 30, 2014. Depreciation expense for the six months ended September 30, 2015 and 2014 were $210 and Nil respectively.

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 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.

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 of September 30, 2015 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.

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

Recent pronouncements

In September 2015, the FASB issued ASU 2015-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development stage entities, primarily presentation of inception to date financial information. The provisions of the amendments are effective for annual reporting periods beginning after March 15, 2015, and the interim periods therein. However, early adoption is permitted. Accordingly, the Company has adopted this standard as of September 30, 2014.

Management has evaluated accounting standards and interpretations issued but not yet effective as of September 30, 2015, and does not expect such pronouncements to have a material impact on the Company's financial position, operations, or cash flows.

NOTE 3 -  RELATED PARTY TRANSACTIONS

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.

During the quarter ended June 30, 2015 a stockholder of the Company advanced a total of $0, had a balance of $50,011 at the beginning of the quarter of which $50,011 was repaid. These advances are unsecured, not represented by any formal loan agreement and bear no interest.

NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT)

The total number of common shares authorized that may be issued by the Company is 200,000,000 shares with a par value of $0.0001 per share. The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.0001 per share. As at September 30, 2015 there are no preferred shares issued or outstanding.

As at September 30, 2015 the total number of common shares outstanding was 88,447,000. On August 1, 2014, the Company received $45,000 in net proceeds through a private placement for $0.60 per share and will issue 75,000 common shares of the Company. On September 23, 2014 the Company issued 362,000 shares of common stock for monies previously received for common stock at $0.50 per share. On February 18, 2015 the Company received $25,000 in net proceeds through a private placement for $0.20 per share and will issue 125,000 common shares of the Company. On March 3, 2015 the Company received $20,000 in net proceeds through a private placement for $0.20 per share and will issue 100,000 common shares of the Company. During the quarter ended June 30, 2015 the Company received $230,000 in net proceeds through a private placement for $0.20 per share and will issue 1,150,000 common shares of the Company. During the quarter ended September 30, 2015 the Company received $50,000 in net proceeds through a private placement for $0.20 per share and will issue 250,000 common shares of the Company.

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

In August of 2015 the Company received notice from an investor that they wished to rescind the transaction and have their money refunded. Since the shares had not been issued the refund is shown as a liability of the Company.

Reference is made to the "Subsequent Events" section of these footnotes with additional information regarding the issuance of these common shares.

NOTE 4a - WARRANTS

In connection with the common stock subscriptions referenced above each subscription included one warrant for each share subscribed. These warrants have an exercise price of $0.20 per share and an expiration date that is one year from the date of the subscription.

During the year ended March 31, 2015 the Company issued 300,000 warrants. During the quarter ended June 30, 2015 the Company issued 1,075,000 warrants. During the quarter ended September 30, 2015 the Company issued 250,000 warrants.

As of September 30, 2015 the Company has not received any notifications with respect to any exercise of any outstanding warrants

A summary of warrant activity for the periods indicated is as follows:

	Shares Under Warrant	Exercise Price	Remaining Life
Balance at March 31, 2014	0	$0.00	0.00
Granted	300,000	$0.20	0.21
Exercised	0	0	0.00
Expired	0	0	0.00
Balance at March 31, 2015	300,000	$0.20	0.21
Granted	1,325,000	$0.20	0.60
Exercised	0	0	0
Expired	0	0	0
Balance at September 30,2015	1,625,000	$0.20	0.48

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

NOTE 5 - INCOME TAXES

A reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:

The significant components of deferred income tax assets at September 30, 2015 and 2014 are as follows: 

As of September 30, 2015 and 2014, the Company has no unrecognized income tax benefits. The Company's policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the years ended March 31, 2015 and 2014, and no interest or penalties have been accrued as of September 30, 2015 and 2014. As of September 30, 2015 and 2014 the Company did not have any amounts recorded pertaining to uncertain tax positions.

The tax years from 2010 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.

NOTE 6 - INVESTMENTS

On March 2, 2015 the Company invested $50,000 in Panorama Investment Group for a 2 ½% interest in the group's operation. This was released by Panorama, and the Company has entered into a Joint Venture Agreement with Koios, LLC to market a nutritional product currently in development. For valuation purposes the investment is carried at cost until such time as future events would indicate a revaluation in necessary.

NOTE 7 - RESEARCH AND DEVELOPMENT

During the quarter ended September 30, 2015 the Company spent $15,000 on research and development. The nature of this research was to determine the viability of converting the pill form of our supplement into a functioning beverage form.

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GREENHOUSE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(UNAUDITED)

NOTE 8 - SUBSEQUENT EVENTS

On November 5, 2015 a meeting of the Board of Directors was held. One of the topics discussed was the equalization of the stock issuances versus monies received due to delays in issuances. It was unanimously agreed that all stock subscriptions since August 1, 2014 should be revalued at $0.10 per unit. This action will result in the issuance of an additional 1,925,000 shares of common stock of the Company and 1,925,000 additional warrants.

Additionally the decision was made to include one warrant for each share issued. The warrants will have an exercise price of $0.20 and an expiration date of one year from the date of issue. At the same time all of the previously issued warrants will be granted an expiration date that coincides with the issuance date.

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

This form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate, or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. As reflected in the accompanying financial statements, as of September 30, 2015, we had an accumulated deficit totaling $399,487. This raises substantial doubts about our ability to continue as a going concern.

Plan of Operation

The Company was incorporated under the laws of the State of Nevada on April 8, 2009. We are involved in the sale and distribution of gardening products, greenhouses and CBD enhanced nutraceutical products in the North American market.

We may raise additional capital through the sale of our equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, we hope to generate sufficient capital to execute our business plan of providing greenhouse consulting services, retailing greenhouse and urban gardening products, and producing and retailing CBD enhanced nutraceutical products for human or animal use on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern.

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. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

For the three months ended September 30, 2015 compared to 2014

For the Quarter ended September 30, 2015, we had $0 in revenues compared to $Nil for the same period one year earlier. For the Quarter ended September 30, 2015, General and Administrative expenses  were $9,116 as compared to $6,753 for the quarter ended September 30, 2014. For the Quarter ended September 30, 2015 we incurred expenses of  $8,500 for Consulting Services compared to 9,750 for the same period in 2014. For the Quarter ended September 30, 2015 we incurred $10,352 for professional fees compared to 14,064 for the same period in 2014. For the Quarter ended September 30, 2015 we incurred $7,000 for

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Management Fees compared to $17,400 for the same period in 2014. For the Quarter ended September 30, 2015 we incurred an operating loss of $34,968. This compares to the net loss of $47,967 sustained for the Quarter ended September 30, 2014.

For the six months ended September 30, 2015 compared to 2014

For the Six months ended September 30, 2015, we had $0 in revenues compared to $Nil for the same period one year earlier. For the Six months ended September 30, 2015, General and Administrative expenses were $28,246 as compared to $7,428 for the quarter ended September 30, 2014. For the Six months ended September 30, 2015 we incurred expenses of $76,489 for Consulting Services compared to $9,750 for the same period in 2014. For the Six months ended September 30, 2015 we incurred $51,654 for professional fees compared to $19,564 for the same period in 2014. For the Six months ended September 30, 2015 we incurred $16,000 for Management Fees compared to $17,400 for the same period in 2014. For the Six months ended September 30, 2015 we incurred an expense of $15,000 for Research and Development compared to $Nil for the same period in 2014. For the Six months ended September 30, 2015 we incurred an operating loss of $187,389. This compares to the net loss of $54,142 sustained for the Quarter ended September 30, 2014.

Our auditor has expressed substantial doubt as to whether we will be able to continue to operate as a "going concern" due to the fact that the Company has an accumulated deficit of $421,637 as of September 30, 2015, and has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to 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.

Financing Activities

On August 1, 2014, the Company received $45,000 in net proceeds through a private placement for $0.60 per share and will issue 75,000 common shares of the Company. As of the date of these financial statements these share have not been issued. On February 18, 2015 the Company received $25,000 in net proceeds through a private placement for $0.20 per share and will issue 125,000 common shares of the Company. On March 3, 2015 the Company received $20,000 in net proceeds through a private placement for $0.20 per share and will issue 100,000 common shares of the Company. During April of 2015 the Company received $230,000 in net proceeds through a private placement for $0.20 per share and will issue 1,150,000 common shares of the Company. In July of 2015 the Company received $50,000 in net proceeds through a private placement for $0.20 per share and will issue 250,000 common shares of the Company In August of 2015 the Company received notice that an offer to purchase 75,000 shares for $15,000 was being rescinded. As the monies have not been repaid as of the date of these financial statements it is shown on the books of the Company as an outstanding liability. As of the date of these financial statements, the 1,625,000 common shares have not been issued.

On November 7, 2014, the Company received $30,011 in funds advanced by a stockholder of the Company. On November 13, 2014, the Company received an additional $30,000 from the same stockholder. On March 12, 2015 the Company repaid $10,000 on these loans During the month of April 2015 the Company repaid the balance of $50,011 thereby retiring this obligation. These are considered advances that are due on demand and bear no interest.

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Investing Activities

On March 2, 2015 the Company made an investment of $50,000 in a license from a non-publicly traded venture KOIOS for a hemp product marketing effort for a 2.5% interest. The carrying cost reported on these financial statements represents our actual investment in the company and is not adjusted for any activity within the company.

We intend to seek additional funding through public or private financings to fund our operations through fiscal 2015 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.

Liquidity and Capital Resources

As at September 30, 2015, our cash balance was $4,318 as compared to $Nil at September 30, 2014. Our plan for satisfying our cash requirements for the next twelve months is through the 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.

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.

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ITEM 4.  CONTROLS AND PROCEDURES

 

Management's Report on 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.

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 concluded that subject to the inherent limitations noted in this Part II, Item 9A(T) as  of September 30, 2015, 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.

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, 2015 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

 

None.

 

ITEM 1A.  RISK FACTORS

 

Not Applicable to Smaller Reporting Companies.

 

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company sold in a private placement, 1,000,000 units, at $0.10 per unit, consisting of common shares and warrants to purchase shares of common stock at $0.20 for proceeds of $100,000. The Company relied on the exemption from registration provided under Regulation D, Rule 506 for accredited investors.  One of the investments of $50,000 did not come in until October 2, 2015 and is not reflected in the financial statements for the period ended September 30, 2015.

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On October 23, 2015, the Company approved the issuance of 634,213 shares of common stock for services and 3,000,000 shares of common stock for license rights.  The Company relied on the exemption from registration provided under Section 4(a)2 as a transaction not involving any public offering of securities, therefore exempt from Registration under the Securities Act of 1933.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

Exhibits.  The following is a complete list of exhibits filed as part of this Form 10-Q.  Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

31.1		Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
32.1		Certification of Chief Executive Officer and Acting Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document (1)
101.SCH		XBRL Taxonomy Extension Schema Document (1)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (1)
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (1)
101.LAB		XBRL Taxonomy Extension Label Linkbase Document (1)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (1)

(1)   Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

 

 

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

GREENHOUSE SOLUTIONS, INC.

(Registrant)

Dated:  November 23, 2015                                By: /s/ Rik J. Deitsch                                                      

                                                                            Rik J. Deitsch

                                                                            (Chief Executive Officer, Principal Executive

                                                                            Officer, Acting Chief Financial Officer 

                                                                            and Principal Accounting  Officer) 

 

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