CV Sciences, Inc. - Quarter Report: 2012 September (Form 10-Q)

fsi10q093012.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from________ to ___________

Commission File No. 333-173215

FORECLOSURE SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Texas	32-0326395
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2502 Live Oak Street, Suite 205, Dallas, Texas 75204	(214) 620-8711
(Address of Principal Executive Offices)	(Issuer’s Telephone Number)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No þ

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company þ

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

The number of shares outstanding of the Issuer’s Common Stock as of October 26, 2012 was 7,000,000.

FORECLOSURE SOLUTIONS, INC.
INDEX

			Page
PART I - FINANCIAL INFORMATION

	Item. 1	Financial Statements

		Balance Sheets as of September 30, 2012 and December 31, 2011	3

		Statements of Operations for the three and nine months ended September 30, 2012 and 2011 and for the period from December 9, 2010 (Inception) through September 30, 2012	4

		Statement of Stockholders' Equity (Deficit) for the period from December 9, 2010 (Inception) through September 30, 2012	5

		Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 and for the period from December 9, 2010 (Inception) through September 30, 2012	6

		Notes to the Financial Statements	7

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9

	Item 3.	Quantitative and Qualitative Disclosures about Market Risks	11

	Item 4.	Controls and Procedures	11

Part II - OTHER INFORMATION

	Item 1.	Legal Proceedings	12

	Item 1A.	Risk Factors	12

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12

	Item 3.	Defaults Upon Senior Securities	12

	Item 4.	Mine Safety Disclosures	12

	Item 5.	Other Information	12

	Item 6.	Exhibits	13

FORECLOSURE SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS



	September 30,			December 31,
	2012			2011
	(unaudited)			(audited)

ASSETS

Current Assets:
Cash	$	163		$	1,168
Prepaid expense		-			1,750

Total current assets	$	163		$	2,918


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
Accounts payable	$	26,955		$	20,223
Amount due to related party		50,400			20,800

Total current liabilities		77,355			41,023

Stockholders' Equity (Deficit):
Preferred stock, par value $0.0001; 10,000,000 shares
authorized, no shares issued and outstanding		-			-
Common stock - par value $0.0001; 190,000,000 shares authorized;
7,000,000 shares issued and outstanding		700			700
Additional paid in capital		59,800			59,800
Deficit accumulated during development stage		(137,692	)		(98,605	)

Total stockholders' equity (deficit)		(77,192	)		(38,105	)

Total liabilities and stockholders' equity (deficit)	$	163		$	2,918

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

FORECLOSURE SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
AND FOR THE PERIOD FROM DECEMBER 9, 2010 (INCEPTION) THROUGH SEPTEMBER 30, 2012
(UNAUDITED)


													December 9, 2010
	Three Months Ended						Nine Months Ended						(Inception)
	September 30,						September 30,						through
	2012			2011			2012			2011			September 30, 2012

Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses:
Selling, general and administration		8,875			16,331			36,271			77,006			132,788

Total operating expenses		8,875			16,331			36,271			77,006			132,788

Loss from operations		(8,875	)		(16,331	)		(36,271	)		(77,006	)		(132,788	)

Other expenses:
Interest expense		(964	)		(1,198	)		(2,816	)		(1,425	)		(4,904	)


Loss before taxes		(9,839	)		(17,529	)		(39,087	)		(78,431	)		(137,692	)

Provision for income taxes		-			-			-			-			-

Net loss	$	(9,839	)	$	(17,529	)	$	(39,087	)	$	(78,431	)	$	(137,692	)

Net loss per common share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

Weighted average shares outstanding		7,000,000			7,000,000			7,000,000			6,961,104

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

FORECLOSURE SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM DECEMBER 9, 2010 (INCEPTION) THROUGH SEPTEMBER 30, 2012
(UNAUDITED)

							Deficit
							Accumulated
					Additional		During
	Common Stock				Paid In		Development
	Shares		Amount		Capital		Stage			Total


Balance, December 9, 2010 (Inception)		-	$	-	$	-	$	-		$	-

Shares issued for services		5,000,000		500		-		-			500
Shares issued for cash		1,020,000		102		30,498		-			30,600
Net loss		-		-		-		(8,425	)		(8,425	)

Balance, December 31, 2010		6,020,000		602		30,498		(8,425	)		22,675

Shares issued for cash		980,000		98		29,302		-			29,400
Net loss		-		-		-		(90,180	)		(90,180	)

Balance, December 31, 2011		7,000,000		700		59,800		(98,605	)		(38,105	)

Net loss		-		-		-		(39,087	)		(39,087	)

Balance, September 30, 2012		7,000,000	$	700	$	59,800	$	(137,692	)	$	(77,192	)

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

FORECLOSURE SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
AND FOR THE PERIOD FROM DECEMBER 9, 2010 (INCEPTION) THROUGH SEPTEMBER 30, 2012
(UNAUDITED)

							December 9, 2010
	Nine Months Ended						(Inception)
	September 30,						through
	2012			2011			September 30, 2012

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(39,087	)	$	(78,431	)	$	(137,692	)
Adjustments to reconcile net loss to net cash flows used
in operating activities:
Issuance of common stock for services		-			-			500
Change in operating assets and liabilities:
Prepaid expense		1,750			(2,625	)		-
Accounts payable		6,732			29,903			26,955
Accrued liabilities		-			(7,925	)		-

Net cash flows used in operating activities		(30,605	)		(59,078	)		(110,237	)

CASH FLOWS FROM INVESTING ACTIVITIES		-			-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan from related party		29,600			15,000			50,500
Proceeds from sale of common stock		-			29,400			60,000
Payment of amount due to related party		-			(100	)		(100	)

Net cash flows provided by financing activities		29,600			44,300			110,400

Net increase (decrease) in cash		(1,005	)		(14,778	)		163
Cash, beginning of period		1,168			30,700			-
Cash, end of period	$	163		$	15,922		$	163

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid	$	1,559		$	-		$	1,995

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

FORECLOSURE SOLUTIONS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

NOTE A – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTINGPRONOUNCEMENTS

Interim Financial Reporting

While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"). These interim financial statements follow the same accounting policies and methods of application as used in the December 31, 2011 audited financial statements of Foreclosure Solutions, Inc. (the “Company”). All adjustments are of a normal, recurring nature. Interim financial statements and the notes thereto do not contain all of the disclosures normally found in year-end audited financial statements and these Notes to Financial Statements are abbreviated and contain only certain disclosures related to the nine month periods ended September 30, 2012 and 2011. It is suggested that these interim financial statements be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2011 included in our Form 10K, filed with the Securities Exchange Commission on April 10, 2012. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

Development Stage Activities

The Company is presently in the development stage with no significant revenues from operations. Accordingly, all of the Company’s operating results and cash flows reported in the accompanying financial statements are considered to be those related to development stage activities and represent the cumulative from inception amounts from its development stage activities reported pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915-10-05, Development Stage Entities.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

NOTE B -- GOING CONCERN

The financial statements of the Company have been prepared in conformity with GAAP, and assume that the Company will continue as a going concern. The Company expects to incur losses as it expands. To date, the Company's cash flow requirements have been met through the sale of its common stock, cash advances from related parties, and established trade credit. There is no assurance that additional funds will be available for the Company to finance its operations should the Company be unable to realize profitable operations. These conditions, among others, give rise to substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

FORECLOSURE SOLUTIONS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

NOTE C -- RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2012, H. J. Cole, sole officer and director, advanced the Company $12,300 and $29,600, respectively. These advancesare non-interest bearing and due upon demand as funds become available. During the three and nine months ended September 30, 2011, the Company paid, Mr. Cole $0 and $10,000, respectively, to reimburse him for services rendered, for the cost of licensing fees that he previously incurred for the Company, and to pay for additional training relative to the foreclosure real estate market. These costs were recorded as general and administrative expense in the accompanying financial statements. During 2011, Mr. Cole advanced the Company $20,800 and refunded the Company $5,000 for payments made during the first quarter of 2011. The $20,800 advance is non-interest bearing and due upon demand as funds become available.

NOTE D-- INCOME TAXES

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not expect to pay any significant federal or state income tax for 2012 as a result of the losses incurred during the nine months ended September 30, 2012 as well as additional losses expected for the remainder of 2012 as well as from net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is "more likely than not" that some component or all of the benefits of deferred tax assets will not be realized. As of September 30, 2012, the Company maintains a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period.

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

General

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report. This information should also be read in conjunction with the information contained in the Company’s audited financial statements and related notes for the year ended December 31, 2011 included in our Form 10K, filed with the Securities Exchange Commission on April 10, 2012, which reports are incorporated herein by reference. The reported results will not necessarily reflect future results of operations or financial condition.

Throughout this Quarterly Report on Form 10-Q (the "Report"), the terms "we," "us," "our," "Foreclosure Solutions," or "our Company" refers to Foreclosure Solutions, Inc., a Texas corporation.

The Company maintains a website at www.foreclosurecat.com.

Overview

Foreclosure Solutions, Inc., a Texas corporation ("Foreclosure Solutions" or the "Company"), was incorporated on December 9, 2010. We are a start-up, development stage company with no subsidiaries. We have only recently begun operations, have no sales or revenues, and therefore rely upon the sale of our securities to fund our operations. We have a going concern uncertainty as of the date of our most recent financial statements.

We are not a blank check company. Rule 419 of Regulation C under the Securities Act of 1933 defines a "blank check company" as a (i) development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person, and (ii) is issuing a penny stock. Accordingly, we do not believe that our company may be classified as a "blank check company" because we intend to engage in a specific business plan and do not intend to engage in any merger or acquisition with an unidentified company or other entity.

We will generate revenue by selling our realtor services to prospective homebuyers interested in foreclosed residential properties. In some instances, these services will be provided by realtors employed or retained by our Company. In other instances, we will refer these services to outside realtors. We will collect a fixed portion of the realtor commissions. In order to promote our realtor services, we will provide prospective homebuyers with comprehensive and easy-to-use information on foreclosed residential properties over the Internet on our website. Potential homebuyers can search our web-based database free of charge, but are required to register in order to save favorite listings and searches and to receive free e-mail updates when new properties become available that match their previous search criteria. Each registered user of our website will receive follow-up e-mails offering the user the ability to schedule an appointment with one of our realtors to view properties the user has seen on our website and to alert the user to new properties that match the user’s previous search criteria. We own rights to our domain name, www.foreclosurecat.com.

Initially, our focus will be on homebuyers interested in purchasing foreclosed residential properties in Dallas, Tarrant, Denton and Collin Counties in the State of Texas. Depending upon market conditions and market acceptance of our realtor services, we may expand into other counties in the State of Texas.

Our principal business activities will be: promoting, marketing, and selling realtor services to prospective homebuyers interested in foreclosed residential properties and developing, maintaining, and updating a comprehensive and easy to use web-based database of information on foreclosed residential properties that can be accessed by prospective homebuyers free of charge and can be used by us to promote our realtor services.

We have no revenues, minimal assets, and have incurred losses since inception. We have only recently begun operations. Since our inception, we have been involved primarily in organizational activities and launching our website. We have built a management team, developed our business plan, reviewed potential markets, researched various products and services which we will offer, reviewed marketing strategies, raised capital, retained experts in law and accounting, purchased access to the data to be initially included in our web-based database, designed and built our website and network infrastructure (including our web-based database), and launched our website.

Our sole officer and director, H.J. Cole, is a licensed realtor and will provide realtor services for properties located within a reasonable distance of our offices. For properties not located within a reasonable distance of our offices, we will locate another realtor for the homebuyer. We will have executed a blanket agreement with each realtor prior to introducing our client to the realtor. We will charge all realtors (including our sole officer and director) a fixed percentage of the commission collected by the realtor on the transaction, estimated at this time to be 25%. No fees are due or payable if a transaction is not consummated.

Results of Operations

The following discussion of our results of operations should be read in conjunction with our financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Results for the three month periods ended September 30, 2012 and 2011

Revenues and Cost of Revenues

We had no revenue or cost of revenues during the above referenced periods.

General and Administration

Our general and administrative expenses consist of accounting and administrative costs, professional fees and other general corporate expenses. General and administrative expenses for the three month period ended September 30, 2012 were $8,875 compared to $16,331 for the three month period ended September 30, 2011. The $7,456 decrease was largely related to legal and accounting expense associated with the filing of our Form S-1 filed in 2011, partially offset by refunded costs associated with our website produced in 2011.

Results for the nine month periods ended September 30, 2012 and 2011

Revenues and Cost of Revenues

We had no revenue or cost of revenues during the above referenced periods.

General and Administration

Our general and administrative expenses consist of accounting and administrative costs, professional fees and other general corporate expenses. General and administrative expenses for the nine month period ended September 30, 2012 were $36,271 compared to $77,006 for the nine month period ended September 30, 2011. The $40,735 decrease was largely related to consulting, legal, and accounting expense associated with the filing of our Form S-1 filed in 2011 and costs associated our website produced in 2011.

Liquidity and Capital Resources

As of September 30, 2012, our cash balance was $163, our outstanding debt totaled $77,355 (of which $50,400 represents advances made to the Company by Mr. Cole), and our working capital deficit was $77,192.

The Company has yet to attain a level of operations which allows it to meet its current overhead. We do not contemplate attaining profitable operations until such time as management executes its plans for future operations nor is there any assurance that such an operating level can ever be achieved once such plans are executed. We expect to be dependent upon obtaining additional financing in order to adequately fund working capital, infrastructure and expenses in order to execute plans for future operations so that we can achieve a level of revenue adequate to support our cost structure, none of which can be assured. These factors raise substantial doubt about our ability to continue as a going concern and the accompanying financial statements do not include any adjustments related to the recoverability or classification of asset carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

Off-Balance Sheet Arrangements

None.

New Accounting Pronouncements

There have been no material changes to the Company’s significant accounting policies as summarized in Note A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. The Company does not expect that the adoption of any recent accounting pronouncements will have a material impact on its financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our Company is a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and, as such, is not required to provide the information required under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms and is accumulated and communicated to Mr. Cole, as appropriate, in order to allow timely decisions in connection with required disclosure.

Evaluation of Disclosure Controls and Procedures

Mr. Cole evaluated the effectiveness of the design and operation of our Company's disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) as of the end of the period covered by this quarterly report. Based on such evaluation, he concluded that the Company's disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. During the most recently completed three-month period ended September 30, 2012, there has been no significant change in the Company's internal control over financial reporting that has affected, or is reasonably likely to affect, the Company's internal control over financial reporting.

Changes in Internal Controls

During the three months ended September 30, 2012, there were no significant changes in internal controls of the Company, or other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Foreclosure Solutions is a smaller reporting company and is not required to provide the information required by this item.

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

The Company did not sell any unregistered equity securities during the three and nine months ended September 30, 2012.

Item 3. Defaults upon Senior Securities and Use of Proceeds.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.	Date	Name of Document

3.1	12/08/10	Certificate of Formation of Foreclosure Solutions, Inc. (1)
3.2	n/a	Bylaws of Foreclosure Solutions, Inc. (1)
4.1	n/a	Stock Certificate for Common Stock, form of (1)
10.1	03/25/11	Agreement with iHouse Web Solutions (1)
10.2	03/08/11	Agreement with North Texas Real Estate Information Systems, Inc. (1)
10.3	n/a	Referral Agreement, form of (2)
31.1	08/08/12	Certification of CEO of Periodic Report pursuant to Rule 13a-14a and Rule 14d-14(a).*
31.2	08/08/12	Certification of CFO of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).*
32.1	08/08/12	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	08/08/12	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*
101.INS	n/a	XBRL Instance Document*
101.SCH	n/a	XBRL Taxonomy Extension Schema Document*
101.CAL	n/a	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	n/a	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	n/a	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	n/a	XBRL Taxonomy Extension Presentation Linkbase Document*

(1) Previously included as an exhibit to our Registration Statement on Form S-1 filed on March 31, 2011 and incorporated herein by reference.

(2) Previously included as an exhibit to our Registration Statement on Form S-1/A, Amendment No. 1, filed on June 20, 2011 and incorporated herein by reference.

SIGNATURES

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

DATE: October 26, 2012

	FORECLOSURE SOLUTIONS, INC.


	By: /s/ H.J. Cole
	H. J. Cole
	Principal Executive Officer and
	Principal Financial Officer