UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2010

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 0-53133

HOME SCHOOL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Florida		26-1983716
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2700 South River Road, Suite 106 Des Plaines, Illinois		60018
(Address of principal executive offices)		(Zip Code)

(847) 391-5079

(Issuer’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 such 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 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 ¨

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


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

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.


Class		Outstanding at March 31, 2010
Common Stock, $.001 par value per share		314,270,862 shares

HOME SCHOOL HOLDINGS, INC.

TABLE OF CONTENTS


		PAGE

Part I Financial Information		1

Item 1. Financial Statements (unaudited)		1

Consolidated Balance Sheet		1

Consolidated Statements of Operations		2

Consolidated Statements of Cash Flows		3

Notes to Consolidated Financial Statements		4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures About Market Risk		21

Item 4. Controls and Procedures		21

Part II Other Information		23

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		23

Item 3. Defaults Upon Senior Securities		23

Item 6. Exhibits		23

Signatures		24

Exhibit 31.1

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

PART I FINANCIAL INFORMATION


Item 1.	Financial Statements

Home School Holdings, Inc.

(a development stage company)

Consolidated Balance Sheet



	(Unaudited) March 31, 2010			(Audited) December 31, 2009
ASSETS

Current Assets
Cash and cash equivalents	$	448		$	1,864
Prepaid Expenses		4,041			4,948
TOTAL CURRENT ASSETS		4,489			6,812

Equipment, net of accumulated depreciation of $5,641 and $5,261 respectively		3,747			4,127
Website, net of accumulated amortization of $797,122 and 732,177 respectively		174,817			239,762

Other Assets
Deposits		2,780			2,780

TOTAL ASSETS	$	185,833		$	253,481

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities
Accounts Payable	$	177,416		$	188,870
Accounts Payable--Related Party		3,695			6,002
Accrued Payroll		486,599			359,439
Accrued Interest--Convertible Note Stockholder		69,791			13,576
Prepaid Advertising		-			1,528
Note Payable		145,000			145,000
Convertible Notes Payable--Stockholder		450,000			450,000
TOTAL CURRENT LIABILITES		1,332,502			1,164,415

Stockholders' deficit
Common Stock - Par value $0.001;
Authorized: 500,000,000
Issued and Outstanding: 314,270,862 and 313,367,450 in March 31, 2010 and December 31, 2009, respectively.		314,271			313,367
Additional paid-in capital		4,593,707			4,545,903
Deficit accumulated during development stage		(6,054,646	)		(5,770,205	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(1,146,669	)		(910,934	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	185,833		$	253,481

The accompanying notes are integral parts of these financial statements.

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)


	For the Three Months Ended March 31						For the period October 17, 2005 (inception) to March 31,
	2010			2009			2010
Revenue - Product Sales, net	$	823		$	6,275		$	114,453
Revenue - Advertising		8,849			5,148			48,999
Total Revenue		9,672			11,423			163,452

Cost of Revenue - Product Sales		201			6,387			86,010
Total Cost of Revenue		201			6,387			86,010

Gross Profit		9,471			5,036			77,442

Operating Expense:

Professional Fees		5,246			48,567			573,730
Board Compensation		13,500			13,500			931,848
Development Expenses		-			-			67,656
Depreciation and Amortization		65,325			82,257			802,762
Marketing		2,460			24,861			242,683
Employee Compensation		139,038			165,725			2,632,295
General and Administrative		12,071			17,088			403,318
Total Operating Expense:		237,640			351,998			5,654,292

Income (Loss) From Operations		(228,169	)		(346,962	)		(5,576,849	)

Other Income (Expense)
Interest Income		-			-			282
Interest Expense		(56,271	)		(50,000	)		(478,078	)
Total Other income (Expense)		(56,271	)		(50,000	)		(477,796	)

Provision for income taxes		-			-			-

Net Loss		(284,440	)		(396,962	)		(6,054,646	)

Net Loss Per Share Basic and Diluted		**			**


Weighted average number of shares outstanding during the period – basic and diluted		313,822,832			289,907,999

** Less than $0.01

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

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Cash Flows

(Unaudited)


	For the Period Ended March 31,						For the period October 17, 2005 (inception) to March 31,
	2010			2009			2010
Cash Flows Used in Operating Activities:
Net Loss	$	(284,440)		$	(396,962	)	$	(6,054,646	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation/Amortization		65,325			82,257			802,762
Commons Stock issued to pay interest expense and accrued interest		-			-			220,242
Debt issued to pay interest expense and accrued interest		-			-			100,000
Shares issued for payment of accounts payable		-			-			74,413
In-kind contribution of interest		-			-			13,547
Start-up expenses		-			-			100,000
Shares issued for services		-			11,880			415,998
Shares issued for interest		-			-			72,000
Stock options issued for services		8,619			52,011			1,642,493
Shares issued for board comp		13,500			13,500			259,000
(Increase) Decrease in:
Prepaid Expenses		(621	)		(2,205	)		(6,741	)
Increase (Decrease) in:
Deferred Revenue		-			-			(2,457	)
Deposits		-			-			(2,780	)
Accrued interest		56,215			47,515			69,791
Accrued payroll		127,160			59,730			644,098
Accounts Payable		(11,454	)		(8,891	)		177,416
Accounts Payable--Related Party		(2,307	)		34,368			3,695

Net Cash Used In Operating Activities		(28,002	)		(106,797	)		(1,471,168	)

Cash Flows From Investing Activities:
Payments for Equipment & Website Development		-			-			(753,493	)

Net Cash Used In Investing Activities		-			-			(753,493	)

Cash Flows From Financing Activities:
Proceeds from Sale of Stock		26,586			-			1,529,008
Decrease (Increase) of shareholder receivable		-			-			(1,000	)
Proceeds from Notes Payable - Stockholder		-			111,472			450,000
Proceeds from Convertible Note Payable - Related Party		-			-			556,500
Repayment of Notes Payable - Related Party		-			-			(211,000	)
Repayment of Notes Payable		-			-			(98,399	)

Net Cash Provided by Financing Activities		26,586			111,472			2,225,109

Net Increase (Decrease) in Cash		(1,416	)		4,674			448

Cash at Beginning of Period		1,864			958			-

Cash at End of Period	$	448		$	5,632		$	448

Supplemental disclosure of cash flow information:

Cash paid for interest		-			-			550

Cash paid for taxes		-			-			-

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

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Organization

On May 8, 2009, Home School Holdings, Inc., a Florida corporation (the “Company”, “we”, “our”, and “us”), consummated a Share Exchange Agreement with Home School, Inc. a Delaware corporation (“HSI”), that was dated as of April 29, 2009. As a result of the transactions contemplated by the Share Exchange Agreement, on May 8, 2009, we acquired 100% of the outstanding shares of capital stock of HSI and HSI became a wholly-owned subsidiary of the Company, and the Company changed its name to Home School Holdings, Inc. The Company was formerly known as Narayan Capital Corp. HSI was incorporated in the State of Delaware on October 17, 2005. HSI is engaged in e-commerce and online K-12 instruction for home educating families world-wide, and is a development stage company.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for financial information.

Activities during the development stage include developing the business plan and raising capital. We are a development stage enterprise and, as such, our continued existence is dependent upon our ability to resolve our liquidity problems, principally by obtaining additional debt or equity financing. We have yet to generate a positive internal cash flow, and until meaningful sales of our products begin, we are dependent upon debt and equity funding.

Recent Accounting Literature - FASB Accounting Standards Codification

(Accounting Standards Update (“ASU”) 2009-01)

In June 2009, FASB approved the FASB Accounting Standards Codification (“the Codification”) as the single source of authoritative nongovernmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (“SEC”), have been superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification did not change GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The Codification is effective for interim or annual periods ending after September 15, 2009, and impacts the Company’s financial statements as all future references to authoritative accounting literature will be referenced in accordance with the Codification. There have been no changes to the content of the Company’s financial statements or disclosures as a result of implementing the Codification during the quarter ended September 30, 2009.

As a result of the Company’s implementation of the Codification during the year ended December 31, 2009, previous references to new accounting standards and literature are no longer applicable. In the current year financial statements, the Company will provide reference to both new and old guidance to assist in understanding the impacts of recently adopted accounting literature, particularly for guidance adopted since the beginning of the current fiscal year but prior to the Codification.

Subsequent Events

(Included in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent Events”)

SFAS No. 165 established general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the financial statements are issued or available to be issued (“subsequent events”). An entity is required to disclose the date through which subsequent events have been evaluated and the basis for that date. For public entities, this is the date the financial statements are issued. SFAS No. 165 does not apply to subsequent events or transactions that are within the scope of other GAAP and did not result in significant changes in the subsequent events reported by the Company. SFAS No. 165 became effective for interim or annual periods ending after June 15, 2009 and did not impact the Company’s financial statements. The Company evaluated for subsequent events through the issuance date of the Company’s financial statements. No recognized or non-recognized subsequent events were noted.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Determination of the Useful Life of Intangible Assets

(Included in ASC 350 “Intangibles — Goodwill and Other”, previously FSP SFAS No. 142-3 “Determination of the Useful Lives of Intangible Assets”)

FSP SFAS No. 142-3 amended the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under previously issued goodwill and intangible assets topics. This change was intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under topics related to business combinations and other GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP SFAS No. 142-3 became effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the Company’s financial statements.

Noncontrolling Interests

(Included in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51”)

Consolidation of Variable Interest Entities — Amended

(To be included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”)

SFAS No. 167 amends FASB Interpretation No. 46(R) “Consolidation of Variable Interest Entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS No. 167 is effective for the first annual reporting period beginning after November 15, 2009, with earlier adoption prohibited. The Company will adopt SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on the Company’s financial statements.

Development Stage Risk

Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s business plan will be successfully executed. Our ability to execute our business plan will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Further, we cannot give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable.

In January 2009, the FASB issued FSP EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20, and EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets”. FSP EITF 99-20-1 changes the impairment model included within EITF 99-20 to be more consistent with the impairment model of SFAS 115. FSP EITF 99-20-1 achieves this by amending the impairment model in EITF 99-20 to remove its exclusive reliance on “market participant” estimates of future cash flows used in determining fair value. Changing the cash flows used to analyze other-than-temporary impairment from the “market participant” view to a holder’s estimate of whether there has been a “probable” adverse change in estimated cash flows allows companies to apply reasonable judgment in assessing whether an other-than-temporary impairment has occurred. The adoption of FSP EITF 99-20-1, which is effective for annual reporting periods ending after December 15, 2008, did not have a material impact on our consolidated financial statements.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

In April 2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed,” (“FSP FAS 157-4”). FSP FAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157. FSP FAS 157-4 provides additional authoritative guidance in determining whether a market is active or inactive, and whether a transaction is distressed, is applicable to all assets and liabilities (i.e. financial and nonfinancial) and will require enhanced disclosures. This standard is effective for periods ending after June 15, 2009. The Company is evaluating the impact that this standard will have on the Company’s financial position and results of operations.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” (“FSP FAS 107-1 and APB 28-1”). FSP FAS 107-1 and APB 28-1 amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. FSP FAS 107-1 and APB 28-1 also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in all interim financial statements. This standard is effective for periods ending after June 15, 2009. The Company is evaluating the impact that this standard will have on the Company’s financial position and results of operations.

In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset in a Market That Is Not Active” (FSP 157-3), which clarifies the application of SFAS 157 when the market for a financial asset is inactive. Specifically, FSP 157-3 clarifies how (1) management’s internal assumptions should be considered in measuring fair value when observable data are not present, (2) observable market information from an inactive market should be taken into account, and (3) the use of broker quotes or pricing services should be considered in assessing the relevance of observable and unobservable data to measure fair value. The Company adopted the provisions of FSP 157-3, which did not impact the Company’s financial position or results of operations.

May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts--an interpretation of FASB Statement No. 60" ("SFAS No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS No. 163 on its financial statements but does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity at their fair values on the acquisition date, with goodwill being the excess value over net identifiable assets acquired. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary should be reported as equity in the consolidated financial statements. The calculation of earnings issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We do not expect the adoption of SFAS No. 141 (R) and SFAS No. 160 will have a material impact on our consolidated financial statements.

In June 2008, the FASB ratified the consensus reached on EITF Issue No. 07-05, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock. EITF Issue No. 07-05 clarifies the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which would qualify as a scope exception under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. EITF Issue No. 07-05 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption for an existing instrument is not permitted. We do not expect the adoption of EITF Issue No. 07-05 will have a material impact on our consolidated financial statements.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those results.

Revenue Recognition

(Included in Accounting Standards Codification (“ASC”) 650 “Revenue Recognition”

The Company recognizes revenue based on Account Standards Codification (“ASC”) 605 “Revenue Recognition” which contains Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements’ and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

Product sales and shipping revenues, net of promotional discounts, rebates, and return allowances, are recorded when the products are shipped and title passes to customers. Retail sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances, which reduce product revenue, are estimated using historical experience. Revenue from product sales and services rendered is recorded net of sales taxes. Amounts received in advance for subscription services, are deferred and recognized as revenue over the subscription term.

The Company recognizes advertising revenue as earned on a per-impression basis. As traffic moves through websites and pages are served, the contract amount is recognized as revenue. “Impressions” are defined as the number of times a user requests a page on our websites.

Shipping and Handling Costs

Amounts billed to customers in sales transactions related to shipping and handling represent revenues earned for the goods provided and are included in sales. Costs of shipping and handling are included in the cost of goods sold.

Equipment

Equipment is stated at cost, less accumulated depreciation. Expenditures for website maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of five years.

Website

Website assets acquired or developed for online delivery are amortized using the straight-line method over three years. Costs incurred in the planning stage and to operate the site are expensed as incurred while costs of developing applications and infrastructure are capitalized.

Prepaid Expenses

Prepaid expenses include prepayments for insurance coverage and advertising that occurred after the balance sheet date.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Advertising Costs

Advertising costs are expensed as incurred. Total advertising costs charged to operations for the period ended March 31, 2010 and 2009 and the period October 17, 2005 (Inception) to March 31, 2010 amounted to $2,460, $24,861, and $242,683, respectively.

Inventories

Inventories are stated at lower of cost or market. Cost is determined on the first-in, first-out basis

Stock Compensation

(Included in Accounting Standards Codification (“ASC”) 718 “Compensation - Stock Compensation”

The Company adopted Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation” which was previously “SFAS No. 123R, Share-Based Payment (“SFAS 123R”), which requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company accounts for stock-based compensation arrangements with nonemployees in accordance with Accounting Standards Codification (“ASC”) 505-50 “Equity – Equity Based Payments to Non-Employees”, which includes the Emerging Issues Task Force Abstract No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services. The Company records the expense of such services to employees and non employees based on the estimated fair value of the equity instrument using the Black-Scholes pricing model. The measurement date of the fair value of equity instruments issued to non-employees is the earlier of the date on which the counter-party’s performance is complete or the date on which it is probable that performance will occur.

Income Taxes

The Company accounts for income taxes based on Accounting Standards Codification (“ASC”) 740 Income Taxes which was previously Statement of Financial Accounting Standards Board Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes” (“Statement 109”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments including accounts payable and loans and notes payable approximate fair value due to the relatively short period to maturity for these instruments.

Loss Per Share

Basic loss per share is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings per Shares”. As of March 31, 2010 and December 31, 2009, there were 4,767,714 and 5,423,341 common shares issuable upon the exercise of stock options. As of March 31, 2010, there were 9,100,822 common shares issuable upon conversion of debt and accrued interest. These shares were not included in the computation of loss per share because their inclusion is anti-dilutive.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Stock Splits

During 2006, the Company’s stockholders approved a forward stock split of ten thousand for one, in which each stockholder of record received ten thousand common shares in exchange for each share of their currently issued common stock. Subsequently, On April 4, 2008, the Company’s stockholders approved a forward stock split of one hundred eighty for one, in which each stockholder of record received one hundred eighty common shares in exchange for each share of their currently issued common stock. The financial statements have been retroactively adjusted to reflect the stock splits.

Recent Accounting Pronouncements

NOTE 2 - INCOME TAXES

We have sustained net operating losses since inception. The tax effects of significant items comprising our net deferred tax asset and the related valuation allowance as of December 31, 2009, and December 31, 2008, are as follows:


	The Year ended December 31
	2009			2008
Deferred Tax Assets
Federal	$	1,174,373		$	836,659
State	$	167,768		$	119,523
Total	$	1,342,141		$	956,182
Valuation Allowance	$	(1,342,141	)	$	(956,182	)

Due to our operating loss and lack of operating experience, a valuation allowance was provided for our net deferred tax assets at December 31, 2009, and December 31, 2008.

The reconciliation of federal statutory income tax rate to our effective income tax rate is as follows:


	The Year ended December 31
Rate Reconciliation	2009	2008
Expected expense / (benefit) at Federal Statutory Rate	(35)%	(35)%
State tax benefit, net of Federal Benefit	(5)%	(5)%
Stock based compensation	20%	20%
Valuation allowance	20%	20%
Expected tax rate	0%	0%

As of December 31, 2009, the Company has a net operating loss carry forward of $4,473,801 available to offset future taxable income through 2029. The valuation allowance at December 31, 2009 was $1,340,640. The increase in the valuation for the year was $384,458. As of December 31, 2008, the Company has a net operating loss carry forward of $3,275,956 available to offset future taxable income through 2028. The valuation allowance at December 31, 2008 was $956,182. The increase in the valuation allowance for the year ended December 31, 2008 was $449,139.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Deferred Tax Assets

Deferred income taxes reflect the net effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:


	The Year ended December 31
	2009			2008
Deferred Tax Assets
Net Operating Losses	$	1,206,790		$	877,795
Depreciation		$78,387		$	78,387
Deferred Compensation		$56,964		$	0
Total Deferred Tax Assets	$	1,342,141		$	956,182
Net Tax Assets	$	(1,342,141	)	$	(956,182	)

Our 2005 to 2009 tax years remain subject to examination by the IRS for Federal tax purposes.

NOTE 3 - STOCKHOLDERS’ EQUITY

(A) Common Stock Issued for Cash

During 2010, the Company issued 633,412 shares of common stock for cash of $25,336. ($0.04 per share)

During 2009, the Company issued 360,000 shares of common stock for cash of $9,600. ($0.02 per share)

During 2009, the Company issued 360,000 shares of common stock for cash of $12,000. ($0.03 per share)

During 2009, the Company issued 1,342,500 shares of common stock for cash of $53,700. ($0.04 per share)

During 2009, the Company issued 60,000 shares of common stock for cash of $3,000. ($0.05 per share)

During the month of September 2009, the Company issued 1,860,328 shares of common stock for the payment of corporate expenses with a fair market value of $74,413 ($0.04 per share)

During 2008, the Company issued 11,669,220 shares of common stock for cash of $388,970. ($0.03 per share)

(B) Stock Issued for Services

During the months of January – March 2010, the Company issued 270,000 shares of common stock for board compensation with a fair market value of $13,500 ($0.05 per share)

During the month of September 2009, the Company issued 3,150,000 shares of common stock for employee services with a fair market value of $126,000 ($0.04 per share)

During the month of March 2009, the Company issued 360,000 shares of common stock for employee services with a fair market value of $11,880 ($0.03 per share)

During the months of May – December 2009, the Company issued 314,820 shares of common stock for board compensation with a fair market value of $13,500 ($0.05 per share)

During the months of January – April 2009, the Company issued 404,460 shares of common stock for board compensation with a fair market value of $18,000 ($0.03 per share)

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

During the month of May 2009, the company issued 100,000 shares of common stock with a fair market value of $5,000 for services.

During all of 2008, the Company issued 2,160,000 shares of common stock for board compensation with a fair market value of $72,000 ($0.03 per share)

During all of 2008, the Company issued 2,160,000 shares of common stock for the interest expense on a note payable relating to the purchase of Home School Reviews in the amount of $72,000 ($0.03 per share)

(D) Stock Issued for Debt

On June 5, 2009 the Company issued 2,400,000 shares of common stock in consideration for notes payable of $60,000 ($.025 per share).

On September 30, 2009 the Company issued 4,894,265 shares of common stock in consideration for related party notes payable of $220,242 ($.045 per share).

On September 30, 2009 the Company issued 2,037,475 shares of common stock in consideration for related party notes payable of $81,499 ($.04 per share).

(E) Stock Issued in Share Exchange

On May 8, 2009 the Company issued 5,882,917 shares of common stock in consideration as part of the share exchange agreement between the Company and HSI (see Note 1)

(F) Stock Options Issued for Services

The Company has issued options of the Company having a variety of exercise prices generally equal to the share price at the time of issuance; in 2008, however, certain options were granted with exercise prices less than the share price at the time of issuance. The options vest immediately. During the years ended December 31, 2009 and 2008, and the period October 17, 2005 (Inception) to December 31, 2009 the Company recorded compensation expense at of $79,948, $1,663,874 and $1,635,592, respectively, with an offsetting credit to additional paid-in capital. The Company has valued these options at their fair value using the Black-Scholes option pricing method. The assumptions used were as follows:

Options Issued 2008


Expected life	1-2.5 years
Expected volatility	100%
Risk free interest rate	0.37% - 3.11%
Expected dividends	0%
Weighted average grant date fair value	$0.02

Options Issued 2009


Expected life	1-2.5 years
Expected volatility	100%
Risk free interest rate	0.27% - 0.72%
Expected dividends	0%
Weighted average grant date fair value	$0.04

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

The assumptions were arrived at in the following manner: Expected life is simply the actual time until expiration. Expected volatility was selected by first deriving a simple average implied volatility from a portfolio of small public educational product and service companies and then multiplying this result by 1.5 to recognize the Company’s earlier stage of development. The risk free rate was sourced from the US Treasury’s website, and dividends are not being paid.

The following tables summarize all stock option grants to employees and consultants as of December 31, 2009, and the related changes during this period are presented below.

Of the total options granted, all 4,251,047, are fully vested, exercisable and non-forfeitable.

The total grant date fair value of stock options granted during 2009, 2008 and the period October 17, 2005 to December 31, 2009 was $175,418, $1,451,565, and $1,989,520. Included in these amounts are $102,676 of options capitalized in the website in 2007.


	Number of Options		Weighted Average Exercise Price
Balance at December 31, 2008		70,949,520	$	0.03
Granted		4,251,047	$	0.04
Exercised		0	$	0.00
Expired or Forfeited		70,949,520	$	0.03
Balance at December 31, 2009		4,251,047	$	0.04
Options exercisable at December 31, 2009		4,251,047	$	0.04

Weighted average fair value of options granted during 2009	$	0.041	$	0.041
Intrinsic value of options exercised during 2008	$	0	$	0
Aggregate intrinsic value of options at December 31, 2009	$	0	$	0
Total fair value of options vested during 2009	$	175,418	$	175,418


December 31, 2009 Options Outstanding				Options Exercisable
Range of Exercise Price	Number Outstanding at December 31, 2009	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price	Number Exercisable at December 31, 2009	Weighted Average Exercise Price
$0.03	2,184,375	1.00	$0.04	2,184,375	$0.04
$0.05	2,066,672	1.00	$0.04	2,066,672	$0.04

NOTE 4 - CONVERTIBLE NOTES PAYABLE - STOCKHOLDER

On April 27, 2009, the Company entered into short-term lending arrangements with its shareholders Mr. and Mrs. North. The loan provides $50,000 for two months. The loan pays 5% per month and provides for convertibility at $0.05 per share.

On September 30, 2009, the Company entered into a loan modification agreement with Mike North and Bebe North to restructure the existing convertible notes payable held by Mr. and Mrs. North which had an outstanding value of $670,242 as of September 30, 2009. The first note dated January 16, 2008 had a face value of $300,000 and accrued interest in the amount of $307,742, as of September 30, 2009. The second note dated April 27, 2009 had a face value of $50,000 and accrued interest in the amount of $12,500, as of September 30, 2009. The terms of the existing notes were collectively modified to provide a single set of terms as set forth in the Loan Modification Agreement. The new principal loan amount shall be $450,000 at an interest rate of 4% per year with a maturity date of January, 1 2010. At any time prior to the maturity date, the outstanding principal amount of the loan is convertible into shares of Common Stock at a conversion price of $0.05 per share. At any time prior to the maturity date, all of the outstanding accrued interest shall be converted into restricted shares of Common Stock at a conversion price of $0.045 per share. Accrued interest in the amount of $220,242 from the original notes has been converted into 4,894,265 shares of common stock at a conversion price of $0.045 per share.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

NOTE 5 - NOTES PAYABLE

A note payable issued in 2008 as part of the asset purchase of homeschoolreviews.com had an initial principal amount of $80,000 and an outstanding balance of $40,000 as of December 31, 2008. During 2009 the outstanding balance of $40,000 on this note was paid in full thus completely satisfying the indebtedness and permanently transferring control of the URL.

On January 15, 2009, the Economic Development Council of the City of Ames, Iowa entered into a short term loan arrangement with the Company for $50,000 as part of the negotiation of the Company’s relocation incentive. These funds are provided at 0% interest and are due on demand. Interest at the rate of 6% per year is being imputed on this loan.

NOTE 6 - DEBENTURE

On July 17, 2009 the Company signed a debenture with Tangiers Captial LLC. The debenture has a principal amount of $15,000, an interest rate of 7% per annum and a maturity date of January 16, 2010.

NOTE 7 - RELATED PARTY TRANSACTIONS

During January 2009, the Company entered into short-term lending arrangements with two existing shareholders. Each of the loans provides $50,000 for six months. One loan’s interest is paid in cash with an APR of 18%; this debt is unconvertible. The other pays an APR of 10% and provides for convertibility at $0.033 per share.

During January 2009, the Company entered into a short-term lending arrangement with an existing shareholder. The loan provides $30,000 with interest imputed at of 6% per year. This debt is unconvertible.

On February 6, 2009, the Company entered into short-term lending arrangements with its shareholders. The loan provides $50,000 for six months. The loan pays an APR of 10% and provides for convertibility at $0.06 per share. The loan was converted on June 5, 2009 for 2,000,000 shares of common stock at $0.025 per share.

On April 3, 2009, the Company entered into short-term lending arrangements with its shareholders. The loan provides $10,000 for six months. The loan pays an APR of 10% and provides for convertibility at $0.06 per share. The loan was converted on June 5, 2009 for 400,000 shares of common stock at $0.025 per share.

During the months of January to September, 2009, the Company’s three principal stockholders loaned an additional $81,499 to the Company in exchange for a note payable. These notes are unsecured, due on demand. The balance outstanding at September 30, 2009 was $181,971. These 3 notes were converted on September 30, 2009 for 2,037,475 shares of common stock at $0.04 per share.

On September 30, 2009, Thomas Morrow, CEO converted deferred payroll of $126,000 into 3,150,000 shares of Common Stock at a conversion price of $0.04

On September 30, 2009, Thomas Morrow, CEO paid $74,413 of corporate expenses for 1,860,328 shares of Common Stock.

NOTE 8 - GOING CONCERN

Our financial statements have been prepared on the basis of accounting principles applicable to a going concern. As a result, they do not include adjustments that would be necessary if we were unable to continue as a going concern and would therefore be obligated to realize assets and discharge our liabilities other than in the normal course of operations. As reflected in the accompanying financial statements, the Company is in the development stage with limited revenues, has used cash flows in operations of $1,431,065 from inception of October 17, 2005 to December 31, 2009 and has an accumulated deficit of $5,751,205 through December 31, 2009. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financing plan is to market the registered shares through a share purchase agreement and then to replace our CEO’s shares with unregistered shares so that his share ownership figure remains the same, while the Company gets the funding it needs. The Company currently has such a share purchase agreement in place to carry out this financing plan.

Home School, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

As of March 31, 2010

Since its inception, the Company has been funded by its founders, Board members, employees and persons related to or acquainted with these. It has operated through liquidity challenges in the past by virtue of employee wage deferrals and short-term loans from principals until additional private equity could be sourced. Employees have historically been willing and able to sustain these deferrals as a result of modest personal means and/or with the support of employed spouses. When all wages and salaries are deferred, the Company operates on less than $5,000 per month. At current levels of activity, when all wages are paid, the Company requires $40,000 per month. These modest requirements and the continuing availability of small amounts of private equity from principals, their friends, families and acquaintances, lead the Company to believe it can sustain operations at their current level for the next year.

Management believes that actions presently being taken to raise funds provide the opportunity for the Company to continue as a going concern. Once the Company can access the capital available through the public markets, we believe that this capital and any capital the Company raises through other private placements of our common stock will be adequate to continue as a going concern for the next 12 months. We currently do not have enough cash to operate for the next twelve months without this additional capital.

NOTE 9 - SUBSEQUENT EVENTS

During the period of April 1, 2010 to May 24, 2010, the Company issued 90,000 shares of common stock for board compensation and services with a fair market value of $4,500.

During the period of April 1, 2010 to May 24, 2010, a short term loan to the Company from a related party in the amount of $8,500 was made to provide additional working capital.

We evaluated subsequent events through the date our financial statements were issued on May 24, 2010.

NOTE 10 - LEASED SPACE

The Company conducts much of its operations from 1,900 square feet of leased office space held under a five year noncancelable operating lease expiring December 31, 2013. The Company is unlikely to renew this lease on expiration.

The following schedule of future rental payments required under the lease as of December 31, 2008:


Year Ending December 31,	Amount
2010	$	38,426
2011	$	39,579
2012	$	40,766
2013	$	41,989
Total:	$	160,760

Total rent expense for the periods ended December 31, 2009 and 2008 was $30,160 and $37,016 respectively.


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

The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in this Form 10-Q and in our Report on Form 10-K for the fiscal year ended December 31, 2009 filed on March 31, 2010 with the Securities and Exchange Commission and are hereby referenced.

The statements in this report include forward-looking statements. These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”‘, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers; and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates and conditions in the gaming/entertainment industry in particular; and, the continued employment of our key personnel and other risks associated with competition.

For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements see the “Liquidity and Capital Resources” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this item of this report and the other risks and uncertainties that are set forth elsewhere in this report or detailed in our other Securities and Exchange Commission reports and filings. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

Home School Holdings, Inc., a Florida corporation (the “Company”, “we”, “our”, and “us”), is an Internet-based, fully-interactive home schooling community website, providing products, services, support and guidance to over 54,000 families that are educating their children within the home. More and more families are electing to educate their children within the home for a number of reasons. These families require curriculum, books, school supplies, learning supplements and study aids, support and guidance on the most effective and efficient ways to educate themselves and their children within their home. Our focus is to become the preferred resource to families seeking to educate their children within the home. Our goal is to provide home schooling families with all of the high caliber products and services necessary to enable them to effectively home educate their children.

Going Concern

Our financial statements have been prepared on the basis of accounting principles applicable to a going concern. As a result, they do not include adjustments that would be necessary if we were unable to continue as a going concern and would therefore be obligated to realize assets and discharge our liabilities other than in the normal course of operations. As reflected in the accompanying financial statements, the Company is in the development stage with limited revenues, has used cash flows in operations of $1,471,168 from inception of October 17, 2005 to March 31, 2010 and has an accumulated deficit of $6,054,646 through March 31, 2010. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.

The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however, the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit our ability to continue operations. Our ability to obtain additional funding will determine our ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on our financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, management evaluates these estimates and assumptions, including but not limited to those related to revenue recognition and the impairment of long-lived assets, goodwill and other intangible assets. Management bases its estimates on historical experience and various other assumptions that it believes 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. Actual results may differ from these estimates under different assumptions or conditions.

Stock Compensation

The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), which requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company accounts for stock-based compensation arrangements with nonemployees in accordance with the Emerging Issues Task Force Abstract No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services. The Company records the expense of such services to employees and non employees based on the estimated fair value of the equity instrument using the Black-Scholes pricing model.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements’ and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

The Company recognizes advertising revenue as earned on a per-impression basis. As traffic moves through websites and pages are served, the contract amount is recognized as revenue. “impressions” are defined as the number of times a user requests a page on our websites.

Outlook

The most important metric by which we judge the Company’s performance now and in the near term is top line sales growth. Our current commitment to develop and deliver quality products and services means that, for the near future, bottom line profitability will be a poor indicator of our success. We do not expect our development investment rate to decline meaningfully in the near future. Since investors are certain to be the primary, near term source of liquidity to support our development and marketing efforts, our liquidity will be driven by our ability to attract repeat investments from current shareholders and to find new ones. This in turn may be materially impacted by the general investment climate.

Since K-12 education must continue without regard to economic cycle, we do not expect the current decrease in level of economic activity to have a significant negative impact on sales and earnings. At the margins, home education grows somewhat more quickly in difficult times due to parents of children attending private schools sometimes find the burden of tuition too much to bear in difficult times. This increase in growth is quite small and can only be seen anecdotally. For the most part, K-12 education, both institutional and home-based, continues at a pace determined by age cohort size rather than economic outlook.

Our primary marketing challenge for the coming 12 months is to achieve greater and greater market awareness through our targeted marketing campaign. Our primary developmental and operational challenge is to increase the amount of material we can offer by download for our non-U.S. based users and the amount of material we have both in hard copy and by download for US customers.

Revenues

As our revenues increase, we plan to continue to invest heavily in marketing and sales by increasing the number of national account sales associates and channel management personnel in order to add new customers and increase penetration within our existing customer base, expanding our domestic and international selling and marketing activities, building brand awareness and sponsoring additional marketing events. We expect that in the future, marketing and sales expenses will increase in absolute dollars and continue to be our largest cost. We do not expect our revenues to increase significantly until next year.

General and Administrative Expenses

General and administrative expense has been focused on maintaining goods and services required to continue the ongoing operation of the business. The current management team has forgone salary payments throughout the first quarter of 2010 and for most of the fiscal year ended December 31, 2009. Expense for unpaid salaries has been accrued and has been reflected on the balance sheet as an accrued liability.

Research and Development

Research and development expenses consist primarily of salaries and related expenses, and allocated overhead. We have historically focused our research and development efforts on increasing the functionality and enhancing the ease of use of our convergence platform and applications. Because of our open, scalable and secure component-based architecture, we are able to provide our customers with a solution based on a single version of our software application platform. As a result, we do not have to maintain multiple versions, which enables us to have relatively low research and development expenses as compared to traditional enterprise software business models. We expect that in the future, research and development expenses will increase in absolute dollars as we support additional IP telephony platforms, extend our solution offerings and develop new technologies.

Summary of Consolidated Condensed Results of Operations

Any measurement and comparison of revenues and expenses from continuing operations should not be considered necessarily indicative or interpolated as the trend to forecast our future revenues and results of operations.

Results for the Three Months Ended March 31, 2010 Compared to March 31, 2009

Revenues. Sales revenues for the three months ended March 31, 2010 were $9,672. This is a $1,751 decrease from the Company’s revenues generated for the three months ended March 31, 2009 . Our revenues for the three months ended March 31, 2010 were generated primarily from the sales of advertising which resulted in revenues of $8,849 and secondarily from the sales of curriculum and other educational material which resulted in revenues of $823. Curricula sales are expected to increase in the second and third quarters as our customers acquire educational materials in preparation for the upcoming school year. No change in revenues occurred as a result of any price increase in the Company’s products. Our ability to sustain and grow our revenue throughout the remainder of this fiscal year will require the infusion of additional capital which will enable us to implement our business plan and expand our product offerings and advertising programs

Cost of Revenues. Cost of revenues for the three months ended March 31, 2010 decreased to $201 as compared to $6,387 for the three months ended March 31, 2010. This decrease in cost of revenues is related to lower sales volume of curricula in the first quarter.

Gross Profit/Loss. For the three months ended March 31, 2010, we experienced a gross profit from operations of $9,471. Our gross profit as a percentage of revenues is exceptionally high for the first quarter as the majority of our revenue was derived from advertising sources. Management believes this gross profit margin will settle into its typical range of 32% - 40% as our mix of product sales increases along with our advertising revenues.

Executive, Board, Payroll, Marketing and Promotion Expenses. For the three months ended March 31, 2010, the Company had incurred expenses of $154,998 related to marketing and promotions, board compensation and employee compensation. Marketing and promotional expenses consist primarily of salaries, commissions, participation in our customers’ marketing efforts and related personnel expenses for those engaged in the sale and marketing of our products, travel, as well as related trade shows and promotional and public relations expenses. Our sales and marketing team is expected to grow in the future as we expand our sales and marketing activities nationally. We expect our selling and marketing expenses to increase in the future due to an increase in direct expenses related to sales and marketing, including increases to salaries to personnel in marketing and business development, as well as increased bonus payments and sales commissions on our revenues. In addition, as our customer base grows, we will need to participate in additional marketing efforts. The current management team has forgone salary payments throughout the first quarter of 2010 and for most of the fiscal year ended December 31, 2009. Expense for unpaid salaries has been accrued and has been reflected on the balance sheet as a liability. The Board is currently compensated entirely with shares of common stock, with the Chairman receiving $4,500 worth of stock each quarter and each director receiving $3,000 worth of stock. Additionally, most of our Chief Executive Officer’s compensation is paid in stock options.

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2010 were $12,071 compared to $17,088 for the three months ended March 31, 2009. General and administrative expense has been focused on maintaining goods and services required to continue the ongoing operation of the business. General and administrative expenses consisted mainly of amortization of internally developed software, licenses, online and offline marketing costs, professional service fees and rent associated with the operation of the Company’s corporate operations. Management believes these expenses will increase as business continues to grow and as more personnel and larger facilities are required for the operation of the business.

Amortization/Depreciation expense for the continuing operation was $65,325 for the three months ended March 31, 2010 as compared to $82,257 for the three months ended March 31, 2009.

Net Loss. Net loss for the three months ended March 31, 2010 was $284,440 as compared to $396,962 for the three months ended March 31, 2009. The net loss for the three months ended March 31, 2010 and March 31, 2009 was primarily related to employee compensation expense and amortization expense of the web site.

As of the three months ended March 31, 2010, we had an accumulated deficit of $6,054,646.

Impact of Inflation

We believe that the rate of inflation has not had any effect on our product cost or cost of operations. We have the flexibility to offset inflationary increases of various expenses such as the cost of labor and direct payroll taxes. We can arbitrarily increase our sales prices to offset these anticipated increases, all the while trying to increase our subscriber base and continue the improvement of our overall operating procedures and systems. We believe we can absorb most, if not all, increased non-controlled operating costs by increasing sales prices, whenever deemed necessary, and, by operating our Company in the most efficient manner possible.

Liquidity and Capital Resources

The ability of the Company to continue as a going concern is dependent entirely upon the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by its founders, Board members, employees and persons related to or acquainted with these.

As of March 31, 2010, total current assets were $4,489 which consisted of $448 of cash and $4,041 of prepaid expenses. Our current liabilities as of March 31, 2010 were $1,332,502, which consisted of $181,112 of accounts payable expenses, $69,791 of accrued interest expenses, loan payable obligations of $595,000 and accrued payroll of $486,599.

We had negative net working capital of $1,328,013 as of March 31, 2010, compared to negative net working capital of $1,157,603 as of December 31, 2009.

During the three months ended March 31, 2010, operating activities used cash of $28,802 as compared to the three months ended March 31, 2009, where we used cash of $106,797 in operating activities. The cash used by operating activities for the three months ended March 31, 2010 was due primarily to reducing our trade accounts payable.

We had a net decrease in cash of $1,416 for the three months ended March 31, 2010. Cash flows from financing activities represented the Company’s principal source of cash for the three months ended March 31, 2010. Cash flows from financing activities during the three months ended March 31, 2010 consisting of cash proceeds in the amount of $28,586 from the issuance of common stock.

Off-Balance Sheet Arrangements

None

Recent Accounting Pronouncements

Recent Accounting Literature - FASB Accounting Standards Codification

(Accounting Standards Update (“ASU”) 2009-01)

As a result of the Company’s implementation of the Codification during the quarter ended September 30, 2009, previous references to new accounting standards and literature are no longer applicable. In the current quarter financial statements, the Company will provide reference to both new and old guidance to assist in understanding the impacts of recently adopted accounting literature, particularly for guidance adopted since the beginning of the current fiscal year but prior to the Codification.

Subsequent Events

(Included in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent Events”)

Determination of the Useful Life of Intangible Assets

(Included in ASC 350 “Intangibles — Goodwill and Other”, previously FSP SFAS No. 142-3 “Determination of the Useful Lives of Intangible Assets”)

Noncontrolling Interests

(Included in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51”)

SFAS No. 160 changed the accounting and reporting for minority interests such that they will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS No. 160 became effective for fiscal years beginning after December 15, 2008 with early application prohibited. The Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer records an intangible asset when the purchase price of a noncontrolling interest exceeds the book value at the time of buyout. Any excess or shortfall for buyouts of noncontrolling interests in mature restaurants is recognized as an adjustment to additional paid-in capital in stockholders’ equity. Any shortfall resulting from the early buyout of noncontrolling interests will continue to be recognized as a benefit in partner investment expense up to the initial amount recognized at the time of buy-in. Additionally, operating losses can be allocated to noncontrolling interests even when such allocation results in a deficit balance (i.e. book value can go negative).

The Company presents noncontrolling interests (previously shown as minority interest) as a component of equity on its consolidated balance sheets. Minority interest expense is no longer separately reported as a reduction to net income on the consolidated income statement, but is instead shown below net income under the heading “net income attributable to noncontrolling interests.” The adoption of SFAS No. 160 did not have any other material impact on the Company’s financial statements.

Consolidation of Variable Interest Entities — Amended

(To be included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”)

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51 “ . This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners.

SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We are currently evaluating the disclosure implications of this statement.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

We have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. We believe that adequate controls are in place to monitor any hedging activities. We do not currently have any sales or own assets and operate facilities in countries outside the United States and, consequently, we are not affected by foreign currency fluctuations or exchange rate changes. Overall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations.


Item 4.	Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our first fiscal quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) were not effective at a reasonable assurance level.

Changes in Controls and Procedures

There were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the first quarter of our last fiscal that year materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


	•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

	•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

	•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2010. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

Based on the assessment performed, management has concluded that the Company’s internal control over financial reporting is not effective and does not provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements as of March 31, 2010 in accordance with generally accepted accounting principles. As of March 31, 2010, our management has determined that we have a material weakness in our internal control over financial reporting related to not having a sufficient number of personnel to provide the appropriate level of segregation of duties. Remediation of this weakness is dependent on acquiring capital to appropriately staff our accounting and finance functions.

This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

/s/ Thomas Morrow

Chairman and Chief Executive Officer

PART II OTHER INFORMATION


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

Unregistered Sales of Equity Securities

The following is a summary of transactions by us involving sales of our securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”), during the three months ended September 30, 2009. Each offer and sale was made in reliance on Section 4(2) of the Securities Act, or Regulation D promulgated under Section 4(2) of the Securities Act, as transactions by an issuer not involving any public offering. The purchasers were “accredited investors,” officers, directors or employees of the registrant or known to the Company and its management through pre-existing business relationships, family, friends and employees. All purchasers were provided access to all material information which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All holders of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the registrant. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration under the Securities Act, in any further resale or disposition.

During the quarter ended March 31, 2010, we issued 633,412 shares of common stock to investors for cash in the amount of $25,336.

During the quarter ended March 31, 2010, we issued 270,000 shares of common stock for board compensation with a fair market value of $13,500.


Item 3.	Defaults Upon Senior Securities.

On July 17, 2009 the Company signed a debenture with Tangiers Captial LLC. The debenture has a principal amount of $15,000, an interest rate of 7% per annum and a maturity date of January 16, 2010. The Company is currently in default on the payment of this obligation and is working to raise the capital in order to retire this debt.


Item 6.	Exhibits

(a) Exhibits

Exhibit 31.1 302 Certification – Thomas Morrow

Exhibit 31.2 302 Certification – Tony Langford

Exhibit 32.1 906 Certification – Thomas Morrow

Exhibit 32.2 906 Certification – Tony Langford

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.


	HOME SCHOOL HOLDINGS, INC.

DATE: May 24, 2010	By:	/s/ Thomas Morrow
		Thomas Morrow
		Chairman and Chief Executive Officer
		(Principal Authorized Officer)

DATE: May 24, 2010	By:	/s/ Tony Langford
		Tony Langford
		Chief Financial Officer
		(Principal Accounting Officer)

Home School Holdings, Inc.

Index to Exhibits


Exhibit Number	Description

Exhibit 31.1	302 Certification – Thomas Morrow

Exhibit 31.2	302 Certification – Tony Langford

Exhibit 32.1	906 Certification – Thomas Morrow

Exhibit 32.2	906 Certification – Tony Langford

Home School Holdings, Inc. 10-Q