Greenhouse Solutions, Inc. - FORM 10-Q

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EX-31.1 - EXHIBIT 31.1 - Greenhouse Solutions, Inc.	v240229_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - Greenhouse Solutions, Inc.	v240229_ex32-1.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

Or

o	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: 333-167655

GREENHOUSE SOLUTIONS INC.

(Exact Name of Registrant as Specified in its 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)

Registrant’s telephone number including area code: (203) 242-3065

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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 during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes o No x

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 o		Accelerated filer o
Non-accelerated filer o		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 o No x

Applicable Only to Corporate Issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class		Outstanding as of November 11, 2011
Common Stock, $.001 par value		7,230,000

GREENHOUSE SOLUTIONS INC.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk	5
Item 4. Controls and Procedures	5

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	5
Item 1A. Risk Factors	5
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5
Item 3. Defaults Upon Senior Securities	5
Item 4. Removed and Reserved	5
Item 5. Other Information	6
Item 6. Exhibits	6

SIGNATURES	6

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GREENHOUSE SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

INDEX TO CONDENSED FINANCIAL STATEMENTS

September 30, 2011 and 2010

(Unaudited)

Financial Statements-

Condensed Balance Sheets	F-1

Condensed Statement of Operations	F-2

Condensed Statement of Cash Flows	F-3

Notes to Unaudited Condensed Financial Statements	F-4

GREENHOUSE SOLUTIONS INC.

(An Development Stage Company)

Unaudited Interim Condensed Balance sheets

ASSETS	September 30, 2011			March 31, 2011

Current assets:
Cash and cash equivalents	$	1		$	15,214
Prepaid expense		-			3,150
Total current assets	$	1		$	18,364


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and accrued liabilities	$	2,165		$	10,953
Due to related-party		9,103			3,600
Payroll taxes payable		-			1,090
Total current liabilities		11,268			15,643


Stockholders' equity
Common stock; $.001 par value, 75,000,000 shares authorized;
7,230,000 and 9,730,000 shares issued and outstanding
at September 30, 2011 and March 31, 2011, respectively		7,230			9,730
Additional paid-in-capital		34,270			31,770
Deficit accumulated during development stage		(52,767	)		(38,779	)
Total stockholders' equity (deficit)		(11,267	)		2,721

Total liabilities and stockholders' equity (deficit)	$	1		$	18,364

The accompanying notes are an integral part of the financial statements

F-1

GREENHOUSE SOLUTIONS INC.

(An Development Stage Company)

Unaudited Interim Condensed Statements of Operations

													April 8, 2009
	For the three			For the three			For the six			For the six			(Inception)
	months ended			months ended			months ended			months ended			through
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010			September 30, 2011


Revenues	$	-		$	6,550		$	-		$	6,550		$	40,034
Cost of revenues		-			3,850			-			3,850			15,065
Gross profit		-			2,700			-			2,700			24,969

Expenses
General and administrative
Accounting and audit fees		6,500			3,000			10,825			7,750			28,075
Advertising and marketing		4,509			-			4,509			-			4,509
Consulting		-			-			-			1,200			4,007
Executive compensations		-			600			600						4,200
Filing		3,428			4,175			3,428			4,175			7,703
Organizational cost		-			-			-			-			838
Other		125			1,487			701			3,905			17,569
Salaries and wages		-			-			-			-			4,305
Transfer agent		615			-			6,215			-			18,820
Total expenses		15,177			9,262			26,278			17,030			90,026
Loss from operations		(15,177	)		(6,562	)		(26,278	)		(14,330	)		(65,057	)

Other income (expense)
Other income		-			-			-			-			-
Interest expense		-			-			-			-			-
Loss from continued operations before income taxes		(15,177	)		(6,562	)		(26,278	)		(14,330	)		(65,057	)
Provision for income taxes		-			-			-			-			-
Loss from continued operations		(15,177	)		(6,562	)		(26,278	)		(14,330	)		(65,057	)

Discontinued operations
Loss from operations of discontinued
wholly owned subsidiary		(10,367	)		-			(23,741	)		-			(23,741	)
Gain from disposal of discontinued
wholly owned subsidiary		36,031			-			36,031			-			36,031
Income tax expense		-			-			-			-			-
Gain from discontinued operations		25,664			-			12,290			-			12,290

Net income (loss)	$	10,487		$	(6,562	)	$	(13,988	)	$	(14,330	)	$	(52,767	)




Basic and diluted loss per common share	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)

Basic and diluted weighted average
common shares outstanding		7,230,000			6,200,000			7,230,000			6,200,000

The accompanying notes are an integral part of the financial statements

F-2

GREENHOUSE SOLUTIONS INC.

(An Development Stage Company)

Unaudited Interim Condensed Statements of Cash Flows


							November 19, 2008
	For the six			For the six			(Inception)
	months ended			months ended			through
	September 30, 2011			September 30, 2010			September 30, 2011

Operating activities:
Net loss	$	(13,988	)	$	(14,330	)	$	(52,767	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock issued for services		-			-			-
Gain from discontinued operations		(29,265	)		-			(29,265	)
Expenses paid by shareholder/officer		9,103			-			9,103
Changes in operating assets and liabilities:								-
Decrease (increase) in accounts receivable					(6,550	)		-
Decrease (increase) in prepaid expense		3,150			-			-
Increase (decrease) in accounts payable & accrued liabilities		(1,203	)		15,969			9,750
Increase (decrease) in payroll taxes payable		(7	)		-			1,083
Net cash (used in) operating activities		(32,210	)		(4,911	)		(62,096	)

Cash flows from investing activities:
Cash paid from disposal of discountued operation		(9,801	)		-			(9,801	)
Net cash (used in) investing activities		(9,801	)		-			(9,801	)

Financing activities:
Loan from director and stockholder		(3,600	)		1,200			-
Loan distingushed from disposal of discontinued operations		30,398			-			30,398
Proceeds from issuance of common stock		-			-			41,500
Net cash provided by financing activities		26,798			1,200			71,898

Increase (decrease) in cash and cash equivalents
from operating, investing and financing activities		(15,213	)		(3,711	)		1

Cash and cash equivalents, beginning of period		15,214			3,932			-
Cash and cash equivalents, end of period	$	1		$	221		$	1

The accompanying notes are an integral part of the financial statements

F-3

GREENHOUSE SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010

(Unaudited)

NOTE 1 – ORGANIZATION AND OPERATIONS

Greenhouse Solutions Inc. (the “Company” or “Greenhouse Solutions”) is a Nevada corporation in the development stage. The Company was incorporated under the laws of the State of Nevada on April 8, 2009. The Company is involved in 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 interim financial information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2011 and notes thereto which were filed with the Securities and Exchange Commission on May 16, 2011.

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 reporting within the statements 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 equivalents.

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. These 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.

F-4

Loss per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the periods. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the three months ended September 30, 2011 and 2010.

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 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 the 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 in estimate.

Fair value of financial instruments measured on a recurring basis

The Company follows paragraph 825-10-50-10 of the 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

accepted 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 inputs to valuation techniques used to measure fair 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 than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

F-5

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 approximate 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. Representations 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 the 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 the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes office equipment, are reviewed for impairment whenever events or changes in circumstances indicate that 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 value of those assets. Fair value is generally determined using the asset’s 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 or 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.

F-6

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 statements 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 fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to and estimated useful lives of office equipment; 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 Section 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.

Recently issued accounting pronouncements

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

NOTE 3 – 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 $52,767 through September 30, 2011, 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 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.

F-7

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 for the Company by obtaining capital from 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 accomplishing 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 if the Company is unable to continue as a going concern.

NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from stockholder

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 three months ended September 30, 2011, the President of the Company advanced $9,103 in aggregate to the Company and the Company did not make any repayment toward these advances as of September 30, 2011.

NOTE 5 – 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 Province of Ontario, Canada of the Company the BUYER, in consideration for cash payment of $1 and other good and valuable consideration in hand received. The BUYER accepts $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 $29,265, net of asset minus liabilities

NOTE 6 – STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock

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 from inception (April 8, 2009) to March 31, 2011, the Company issued:

6,200,000 shares of common stock at $0.001 per share to its Directors and officers for total proceeds of $6,200: and

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, 2011, the Company had not issued any shares, granted any stock options, or recorded any share-based compensation.

NOTE 7 – 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 no reportable subsequent events to be disclosed.

F-8

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. In addition we expect to reduce our exposure to foreign currency exchange fluctuation between US and Canadian dollars that could adversely impact our operations. We 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, 2011 we have generated $40,034 in revenues, and have incurred $65,057 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, 2011.

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 March 31, 2011, 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

For the three months ended September 30, 2011 compared to the three months ended September 30, 2010

During the three months ended September 30, 2011 and 2010 we have generated no revenues and incurred total operating expenses in the amount of $15,177 and $9,262 for the same period. The increase was primarily attributable to increases in accounting and audit expenses and advertising and marketing expenses.

During the three months ended September 30, 2011 the company realized a net income of $10,487 compared to a net loss of $6,562 for the same period in 2010. The net gain resulted from the sale of the discontinued operations of the company’s subsidiary.

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 $65,057 in operating losses since inception. As of September 30, 2011, we had $1 in cash and no prepaid expenses compared to $15,214 in cash and $3,150 in prepaid expenses at March 31, 2011. As of September 30, 2011, we had a working capital deficiency of $(11,262), compared to a working capital of $2,721 as of March 31, 2011.

Net cash used in operating activities for the three months ended September 30, 2011 was $32,210, compared with net cash used in operating activities of $4,911 for the prior year period. The majority of the increase in net cash used was due to an increase in operating losses due to higher operating expenses.

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.

Recent Accounting Pronouncements

See Note 2 to the Financial Statements.

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

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange

Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer concluded as of the evaluation date that our disclosure controls and procedures

were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.

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 EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

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

3.1 Articles of Incorporation (i)

3.2 Bylaws (i)

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

(i) Incorporated by reference to the Form S-1 registration statement filed on June 21, 2010.

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 21, 2011

		GREENHOUSE SOLUTIONS INC.

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

Greenhouse Solutions, Inc. - FORM 10-Q - November 21, 2011

Attached files

Greenhouse Solutions, Inc. Reports