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EX-32 - Greenhouse Solutions, Inc. | ex32.1.htm |
EX-31 - Greenhouse Solutions, Inc. | ex31.1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_________________
FORM 10-Q
_________________
(Mark One)
[X] |
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2016
[_] |
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)
Delaware |
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45-3838831 |
(State of Incorporation) |
|
(IRS Employer ID Number) |
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 |
[_] |
|
No |
[x] |
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 |
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[_] |
Accelerated filer |
[_] |
Non-accelerated filer |
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[_] |
Smaller reporting company |
[x] |
(Do not check if a smaller reporting company) |
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|
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 June 30, 2016, there were 95,281,213 shares of the registrant's common stock issued and outstanding.
TABLE OF CONTENTS
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PART 1 - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
2 |
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Condensed Balance Sheets - March 31, 2016 and June 30, 2016 |
3 |
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Condensed Statements of Operations - Three months ended June 30, 2016 and 2015 |
4 |
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Condensed Statements of Stockholder's Equity - June 30, 2016 |
5 |
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Condensed Statements of Cash Flows - Three months ended June 30, 2016 and 2015 |
6 |
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Notes to the Financial Statements |
7 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
14 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk - Not Applicable |
15 |
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Item 4. |
Controls and Procedures |
16 |
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PART II- OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
17 |
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Item 1A. |
Risk Factors - Not Applicable |
17 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
17 |
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Item 3. |
Defaults Upon Senior Securities - Not Applicable |
17 |
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Item 4. |
Mine Safety Disclosure - Not Applicable |
17 |
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Item 5. |
Other Information - Not Applicable |
17 |
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Item 6. |
Exhibits |
17 |
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Signatures |
18 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
-2-
GREENHOUSE SOLUTIONS INC. | |||||||||||
CONDENSED BALANCE SHEETS | |||||||||||
(Unaudited) | |||||||||||
June 30, | March 31, | ||||||||||
2016 | 2016 | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash | $ - | $ 625 | |||||||||
Inventory | 29,504 | 29,504 | |||||||||
Total Current assets | 29,504 | 30,129 | |||||||||
Fixed assets | |||||||||||
Office equipment | 1,398 | 1,398 | |||||||||
Accumulated depreciation | (373) | (303) | |||||||||
1,025 | 1,095 | ||||||||||
Other assets | |||||||||||
License #2 Reddy | - | 510,000 | |||||||||
License #2 Impairment | (510,000) | ||||||||||
Total Assets | $ 30,529 | $ 31,224 | |||||||||
LIABILITIES & STOCKHOLDERS' DEFICIT | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ 55,582 | $ 46,154 | |||||||||
Accounts payable - related party | 88,500 | 63,000 | |||||||||
Stock offer recission | 15,000 | 15,000 | |||||||||
Advances payable - related party | 1,400 | - | |||||||||
Total current liabilties | 160,482 | 124,154 | |||||||||
Stockholders' Deficit | |||||||||||
Preferred stock, 25,000,000 shares authorized | |||||||||||
with $0.0001 par value. No Preferred | |||||||||||
shares issued or outstanding | |||||||||||
Common stock, 200,000,000 shares authorized | |||||||||||
with $0.0001 par value. 95,281,213 issued and | |||||||||||
outstanding respectively | 9,528 | 9,528 | |||||||||
Additional paid in capital | 2,771,474 | 2,771,474 | |||||||||
Additional paid in capital - Warrants | 1,354,015 | 1,354,015 | |||||||||
Accumulated deficit | (4,264,970) | (4,227,947) | |||||||||
Total Stockholders' Deficit | (129,953) | (92,930) | |||||||||
Total Liabilities and Stockholders' Deficit | $ 30,529 | $ 31,224 | |||||||||
The accompanying notes are an integral part of these financial statements. |
-3-
-4-
-5-
-6-
GREENHOUSE SOLUTIONS,
INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016
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 March 31,
2016 included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission. These 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 nine months ended June 30,
2016 are not necessarily indicative of the results that may be expected for the
year ending March 31, 2017.
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 $4,264,970 through June 30, 2016, 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. -7-
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 shares 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 June 30, 2016 and March 31, 2016 there
were warrants outstanding for 6,900,000 common shares. These warrants are not
included in the diluted loss per share as the effect of the inclusion would be
antidilutive.
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.
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.
-8-
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 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 June
30, 2016 the Company had computer equipment of $1,398 with corresponding
accumulated depreciation of $233 which is being depreciated over 3 years.
Depreciation expense for the quarters ended June 30, 2016 and 2015 were $70
each respectively. -9-
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 June 30, 2016 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.
Recent pronouncements
Management has evaluated accounting standards and interpretations issued
but not yet effective as of June 30, 2016, 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, 2016 a stockholder of the Company
advanced a total of $1,400. In addition the Company incurred
$25,500 in accounts payable to related parties. These payables represent
compensation owed to these parties. These advances are unsecured, not
represented by any formal loan agreement and bear no interest.
NOTE 4 - STOCKHOLDER'S 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 June 30, 2016 there are no preferred shares
issued or outstanding.
As at June 30, 2016 the total number of common shares outstanding was
95,281,213. The Company has an ongoing program of private placements to raise
funds to support the operations. During the quarter ended June 30, 2016 the
Company did not receive any proceeds through private placement activity.
-10-
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.
As at June 30, 2016 there were money's received for 662,000 shares that
had not yet been issued.
NOTE 5 - INCOME TAXES
A reconciliation of the provision for
income taxes at the United States federal statutory rate of 34% and a Colorado
state rate of 5% compared to the Company's income tax expense as reported is as
follows:
June
30, 2016
June
30, 2015
Net loss before income taxes
$ (37,023)
$ (158,351)
Income tax rate
39%
39%
Income tax recovery
(14,440)
(61,760)
Valuation allowance change
14,440
61,760
Provision for income taxes
$ -
$ - The significant
components of deferred income tax assets at June 30, 2016 and 2015 are as
follows:
June 30, 2016 June 30, 2015
Net operating loss carry-forward
$ 4,264,900
$ 4,227,900
Valuation allowance
(4,264,900)
(4,227,900)
Net deferred income tax asset
$ -
$ -
As of June 30, 2016 and 2015, 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, 2016 and 2015, and no interest or penalties have been accrued as of
June 30, 2016 and 2015. As of June 30, 2016 and 2015 the Company did not have
any amounts recorded pertaining to uncertain tax positions. Current management
believes that the last time a corporation tax return was filed was for fiscal year
2010. Management is currently taking the necessary actions to correct this
deficiency. Due to a history of ongoing losses it is not expected that there
would be any penalties or interest owed due to the non-filing status.
The tax years from 2011 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.
-11-
NOTE 6 - RESTATEMENT
In connection with the filing of a restated form 10-K for the fiscal year
ended March 31, 2015 there were certain adjustments made in each quarterly
period during the fiscal year. Management has reviewed these changes for this
current quarter and determined that the changes are not material. In the
interests of clarity and information the following notes detailing the changes
are hereby included:
Condensed Statement of Operations
June 30,
June 30,
2015
2015
Restated
As filed
Revenue
$
-
$
-
Cost
of revenues
-
-
Gross
profit
-
-
Operating
expenses
Consulting
services
42,489
52,989
Corporate
communications
15,000
-
Depreciation
expense
70
-
Management
consulting - related parties
25,500
9,000
Professional
fees
41,302
41,302
Research
and development
15,000
-
General
and administrative
18,990
49,130
158,351
152,421
Net
loss from operations
(158,351)
(152,421)
-12-
Condensed Statement of Cash Flows
June 30,
June 30,
2015
2015
Restated
As filed
Cash
Flows from Operating Activities
Net
Loss
(158,351)
(152,421)
Adjustments
to reconcile net loss to net
cash
used in operating activities
Depreciation
70
140
Changes
in operating assets and liabilities
(Decrease)
in accounts payable and accrued liabilities
(78,109)
(84,109)
Increase
in accounts payable - related parties
6,000
6,000
Net
cash used in operating activities
(230,390)
(230,390)
Cash
Flows from Financing Activities
Proceeds
from Common Stock sales
230,000
230,000
Net
(Decrease) in Cash
(390)
(390)
Cash
at the Beginning of the Period
11,164
11,164
Cash
at the End of the Period
$ 10,774
$ 10,774
NOTE 7 - SUBSEQUENT EVENTS
Management has examined the activities of the Company subsequent to the
closing date of these financial statements and had determined that there is
nothing that requires disclosure.
-13-
Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking
Statements and Associated Risks.
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 June 30, 2016, we had
an accumulated deficit totaling $4,025,111. 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. 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.
We
have shifted our focus to developing and selling hemp oil based nutraceutical
products and have entered into a joint venture agreement with Koios, LLC to
further those objectives. 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 Quarter ended June 30, 2016, we had $0 in revenues compared to
$Nil for the same period one year earlier. For the Quarter ended June 30, 2016,
General and Administrative expenses were $4,207 as compared to $18,990 for the
quarter ended June 30, 2015. For the Quarter ended June 30, 2016 we incurred
expenses of $0 for Consulting Services compared to $42,489 for the same period
in 2015. For the Quarter ended June 30, 2016 we incurred $7,299 for
professional fees compared to $41,302 for the same period in 2015. For the
Quarter ended June 30, 2016 we incurred $25,500 for Management Fees paid to
related parties compared to $25,500 for the same period in 2015. For the
Quarter ended June 30, 2016 we incurred Research and Development fees of $0
compared to $15,500 for the corresponding period in 2015. For the Quarter ended
June 30, 2016 we incurred Corporate communication expense in the amount of $0
compared to $15,000 for the corresponding period in 2015. For the Quarter ended
June 30, 2016 we incurred an operating loss of $37,076. This compares to the
net loss of $158,351 sustained for the Quarter ended June 30, 2015.
-14-
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 $4,264,970 as of June 30, 2016, 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
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.
We intend to seek additional funding through public or private financings
to fund our operations through fiscal 2017 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.
Investing Activities
The Company had no investing activities for the three
months ended June 30, 2016.
Liquidity and Capital Resources
As at June 30, 2016, our cash balance was $Nil as compared to $10,774 at
June 30, 2015. 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.
-15-
GREENHOUSE SOLUTIONS INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Quarter Ended
June 30,
2016
2015
As Restated
REVENUE
$ -
$ -
Cost of revenues
-
-
GROSS PROFIT
-
-
Operating Expenses:
Consulting services
-
42,489
Corporate communications
-
15,000
Depreciation expense
70
70
Management consulting - related parties
25,500
25,500
Professional fees
7,299
41,302
Research and development
15,000
General and administrative
4,207
18,990
Total operating expenses
37,076
158,351
Net loss from operations
(37,076)
(158,351)
Other income (expense)
Other income
109
-
Interest (expense)
(56)
-
Total other income (expense)
53
-
Net loss
$ (37,023)
$ (158,351)
Net income (loss) per share
(Basic and fully diluted)
$ (0.00)
$ (0.00)
Weighted average number of
common shares outstanding
95,219,213
87,909,500
The accompanying notes are an integral part of these financial
statements.
GREENHOUSE SOLUTIONS INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30, 2016
June 30, 2015
As Restated
Cash Flows From Operating Activities:
Net income (loss)
$ (37,023)
$ (158,351)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation
70
70
Changes in operating assets and liabilities
Increase (decrease) in accounts payable and accrued liabilities
9,429
(78,109)
Increase (decrease) in accounts payable - related parties
25,500
6,000
Increase in related party advances
1,400
-
-
NET CASH USED IN OPERATING ACTIVITIES
(624)
(230,390)
CASH FLOWS USED IN INVESTING ACTIVITIES
$ -
Investment
-
Purchase of Fixed assets
-
NET CASH USED IN INVESTING ACTIVITIES
-
CASH FLOWS FROM FINANCING ACTIVITIES
-
-
Proceeds from Common Stock sales
-
230,000
-
-
NET CASH PROVIDED BY FINANCING ACTIVITIES
-
230,000
Net Increase (Decrease) In Cash
(624)
(390)
Cash At The Beginning Of The Period
624
11,164
Cash At The End Of The Period
$ -
$ 10,774
Schedule of Non-Cash Investing and Financing Activities
Advances contributed to capital b;y related party
$ -
$ 42,082.00
$ -
$ -
Supplemental Disclosure
Cash paid for interest
$ -
$ -
Cash paid for income taxes
$ -
$ -
The accompanying notes are an integral part of these financial statements.
GREENHOUSE SOLUTIONS INC.
STATEMENT OF STOCKHOLDER'S EQUITY
Common Stock
Common
Paid in
Amount
Paid in
Stock
Capital
Accumulated
Stockholders'
Shares
($0.001 Par)
Capital
Subscribed
Warrants
Deficit
Deficit
Balances - March 31, 2014
86,760,000
$ 8,676
$ 74,906
$ 31,000
$ -
$ (132,118)
$ (17,536)
Sale of common stock
62,000
6
30,994
(31,000)
-
Common stock subscribed
90,000
90,000
Common stcok retired to treasury
(11,000,000)
(1,100)
1,100
-
Stock issued for IP licenses
11,000,000
1,100
1,098,900
1,100,000
Net loss for the period
(1,287,098)
(1,287,098)
Balances - March 31, 2015
86,822,000
8,682
1,205,900
90,000
-
(1,419,216)
(114,634)
Shares issued for cash
2,350,000
235
434,765
(90,000)
345,000
Stock offer rescinded
(75,000)
(8)
(14,992)
(15,000)
Shares issued for licenses
3,000,000
300
509,700
510,000
Shares issued for services - RP
55,274
6
5,994
6,000
Shares issued for services
1,578,939
158
258,262
258,420
Shares for private placement exp
1,550,000
155
371,845
372,000
Paid in Capital - Warrants
-
-
-
-
1,354,015
1,354,015
Net loss for the period
(2,808,731)
(2,808,731)
Balances - March 31, 2016
95,281,213
9,528
2,771,474
-
1,354,015
(4,227,947)
(92,930)
Net loss for the period
(37,023)
(37,023)
Balances - June 30, 2016
95,281,213
$ 9,528
$ 2,771,474
$ -
$ 1,354,015
$ (4,264,970)
$ (129,953)
The accompanying notes are an integral part of these financial statements.
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.
Management has carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. Due to the lack of personnel and outside directors, management acknowledges that there are deficiencies in these controls and procedures. For further information and disclosures the reader is directed to the most recent filing of Form 10-K annual report on file with the United States Securities and Exchange Commission, specifically ITEM 9A Controls and Procedures.
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 June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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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 had no unregistered sales of equity securities in the three months ended June 30, 2016.
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: August 25, 2016 |
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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