UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 10-QSB



xQUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period endedSeptember 30, 2005



[   ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission file number333-84565



AFV SOLUTIONS, INC.

(Exact name of small business issuer as specified in its charter)



|Nevada                                                         | 90-0006843                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)



408 S. Daytona

Flagler Beach, Florida 32136

(Address of principal executive offices)



(386) 439-4006

(Issuers telephone number)



Copies of Communications to:

Stoecklein Law Group

402 West Broadway, Suite 400

San Diego, CA 92101

(619) 595-4882

Fax (619) 595-4883



Check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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. YesxNo o



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

|Yes o | Nox
|----- | ---



The number of shares of Common Stock, $0.001 par value, outstanding on November 15, 2005, was 20,120,000 shares.



Transitional Small Business Disclosure Format (check one):  Yes o     Nox



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PART I -- FINANCIAL INFORMATION



Item 1. Financial Statements.

AFV Solutions, Inc.

(formerly Dogs International, Inc.)

Consolidated Balance Sheet

(unaudited)



|                                        |                                                     |                                                      |             |              | September 30, | December 31,
|--------------------------------------- | --------------------------------------------------- | ---------------------------------------------------- | ----------- | ------------ | ------------- | ------------
|                                        |                                                     |                                                      |             |              | 2005          | 2004        
|Assets                                  |                                                     |                                                      |             |              |              
|                                        |                                                     |                                                      |             |              |               |             
|Current assets:                         |                                                     |                                                      |             |             
|                                        | Cash                                                |                                                      | $           | 529,216      | $             | 19,799      
|                                        | Prepaid Expenses                                    |                                                      | -           |              | 147          
|                                        |                                                     | Total current assets                                 |             | 529,216      |               | 19,946      
|                                        |                                                     |                                                      |             |              |               |             
|Fixed assets, net                       |                                                     | 490,202                                              |             | 520,852     
|                                        |                                                     | Total fixed assets                                   |             | 490,202      |               | 520,852     
|                                        |                                                     |                                                      |             |              |               |             
|Other assets:                           |                                                     |                                                      |             |             
|                                        | Goodwill                                            |                                                      | 18,269      |              | 18,269       
|                                        |                                                     | Total other assets                                   |             | 18,269       |               | 18,269      
|                                        |                                                     |                                                      |             |              |               |             
|                                        |                                                     |                                                      |             | Total assets | $             | 1,037,687   
|                                        |                                                     |                                                      |             |              |               |             
|Liabilities and Stockholders' (Deficit) |                                                     |                                                      |             |             
|                                        |                                                     |                                                      |             |              |               |             
|Current liabilities:                    |                                                     |                                                      |             |             
|                                        | Bank Overdraft                                      | $                                                    | -           | $            | -            
|                                        | Accrued expenses                                    |                                                      | -           |              | -            
|                                        | Accrued expenses - related party                    |                                                      | 10,500      |              | 6,000        
|                                        | Notes payable                                       |                                                      | 206,000     |              | 6,000        
|                                        | Notes payable - related party                       |                                                      | 30,000      |              | -            
|                                        |                                                     | Total current liabilities                            |             | 246,500      |               | 12,000      
|                                        |                                                     |                                                      |             |              |               |             
|Long term liabilities:                  |                                                     |                                                      |             |             
|                                        | Installment loans                                   |                                                      | 21,601      |              | 36,215       
|                                        | Mortgage payable                                    |                                                      | 176,412     |              | 174,757      
|                                        | Mortgage payable - related party                    |                                                      | 200,000     |              | 200,000      
|                                        | Interest payable - related party                    |                                                      | 28,750      |              | 19,750       
|                                        |                                                     | Total long term liabilities                          |             | 426,763      |               | 430,722     
|                                        |                                                     |                                                      |             |              |               |             
|Stockholders' equity:                   |                                                     |                                                      |             |             
|                                        | Preferred stock, $0.001 par value 20,000,000 shares |                                                      |             |              |              
|                                        |                                                     | authorized, 28,334 shares issued and outstanding     |             | 28           |               | 28          
|                                        | Common stock, $0.001 par value, 100,000,000 shares  |                                                      |             |              |              
|                                        |                                                     | authorized, 20,100,000 shares issued and outstanding |             | 20,100       |               | 20,100      
|                                        | Stock subscription payable                          |                                                      | 930,966     |              | 130,966      
|                                        | Additional paid-in capital                          |                                                      | 990,020     |              | 312,522      
|                                        | Accumulated (deficit)                               |                                                      | (1,576,690) |              | (347,271)    
|                                        |                                                     |                                                      |             |              |               | 364,424     
|                                        |                                                     |                                                      |             |              | $             | 1,037,687   





1



The accompanying notes are an integral part of these financial statements





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AFV Solutions, Inc.

(formerly Dogs International, Inc.)

Consolidated Statements of Operations

(unaudited)



|                                                                               | Three months ended | Nine months ended
|------------------------------------------------------------------------------ | ------------------ | -----------------
|                                                                               | September 30,      | September 30,    
|                                                                               | 2005               | 2004             
|                                                                               |                    |                  
|                                                                               |                    |                  
|                                                                               |                    |                  
|                                                                               |                    |                  
|Revenue                                                                        | $                  | 80,002           
|Cost of sales                                                                  |                    | 4,160            
|                                                                               |                    |                  
|Gross profit                                                                   |                    | 75,842           
|                                                                               |                    |                  
|Expenses:                                                                      |                    |                  
|General and administrative expenses                                            |                    | 193,005          
|General and administrative expenses - related party                            |                    | 1,500            
|Depreciation                                                                   |                    | 10,550           
|Financing expenses                                                             |                    | 626,498          
|Professional fees                                                              |                    | 59,000           
|Consulting fees                                                                |                    | -                
|Consulting fees - related party                                                |                    | -                
|Research and development                                                       |                    | 288,200          
|Total operating expense                                                        |                    | 1,178,753        
|                                                                               |                    |                  
|                                                                               |                    |                  
|Net operating (loss)                                                           | $                  | (1,102,911)      
|                                                                               |                    |                  
|Other income (expense)                                                         |                    |                  
|Interest income                                                                |                    | 769              
|Interest expense                                                               |                    | (2,679)          
|Interest - related party                                                       |                    | (3,000)          
|                                                                               |                    |                  
|Net (loss)                                                                     | $                  | (1,107,821)      
|                                                                               |                    |                  
|Weighted average number of common shares outstanding - basic and fully diluted |                    | 20,100,000       
|                                                                               |                    |                  
|Net (loss) per share - basic and fully diluted                                 | $                  | (0.06)           





The accompanying notes are an integral part of these financial statements



3



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AFV Solutions, Inc.

(formerly Dogs International, Inc,)

Statements of Stockholders Equity

(unaudited)



|                                                                         | Common  Stock | Preferred Stock | Additional Paid-in Capital | Subscriptions Payable | Accumulated (Deficit) | Total Stockholders Equity
|------------------------------------------------------------------------ | ------------- | --------------- | -------------------------- | --------------------- | --------------------- | --------------------------
|                                                                         | Shares        | Amount          | Shares                     | Amount               
|Balance, January 23, 2002                                                | -             | $             - | -                          | $             -       | $                 -   | $                 -       
|                                                                         |               |                 |                            |                       |                       |                           
|Shares issued for cash                                                   | 15,000,000    | 15,000          | -                          | -                     | (7,500)               | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Shares issued for cash                                                   | 5,000,000     | 5,000           | -                          | -                     | 20,000                | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Net (loss) for the year ended December 31, 2002                          | -             | -               | -                          | -                     | -                     | -                         
|Balance, December 31, 2002                                               | 20,000,000    | 20,000          | -                          | -                     | 12,500                | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Series A Convertible Preferred Stock issued for Asset Purchase Agreement | -             | -               | 28,334                     | 28                    | 169,972               | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Shares issued for Intellectual Property                                  | 100,000       | 100             | -                          | -                     | 24,900                | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Net (loss) for the year ended December 31, 2003                          | -             | -               | -                          | -                     |                       |                           
|Balance, December 31, 2003                                               | 20,100,000    | 20,100          | 28,334                     | 28                    | 207,372               | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Subscription payable                                                     | -             | -               | -                          | -                     | -                     | 130,966                   
|                                                                         |               |                 |                            |                       |                       |                           
|Donated Capital                                                          | -             | -               | -                          | -                     | 105,150               | -                         
|                                                                         |               |                 |                            |                       |                       |                           
|Net (loss) for the year ended December 31, 2004                          | -             | -               | -                          | -                     | -                     | -                         
|Balance, December 31, 2004                                               | 20,100,000    | 20,100          | 28,334                     | 28                    | 312,522               | 130,966                   
|                                                                         |               |                 |                            |                       |                       |                           
|Donated Capital                                                          |               |                 |                            |                       | 51,000                |                           
|                                                                         |               |                 |                            |                       |                       |                           
|Subscriptions payable                                                    |               |                 |                            |                       |                       | 800,000                   
|                                                                         |               |                 |                            |                       |                       |                           
|Warrants issued in connection with financing                             |               |                 |                            |                       | 626,498               |                           
|Net (loss) for the nine months ended September 30, 2005                  | -             | -               | -                          | -                     | -                     | -                         
|Balance, September 30, 2005                                              | 20,100,000    | $20,100         | 28,334                     | $28                   | $990,020              | $930,966                  



4



The accompanying notes are an integral part of these financial statements





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AFV Solutions, Inc.

(formerly Dogs International, Inc,)

Consolidated Statements of Cash Flow

(unaudited)



|                                          |                                                 | Nine months ended
|----------------------------------------- | ----------------------------------------------- | -----------------
|                                          |                                                 | September 30,    
|                                          |                                                 | 2005             
|                                          |                                                 |                  
|Cash flows from operating activities      |                                                 |                  
|Net (loss)                                | $                                               | (1,229,420)      
|Depreciation                              |                                                 | 31,650           
|Warrants issued for financing             |                                                 | 626,498          
|Adjustments to reconcile net (loss) to    |                                                 |                  
|                                          | net cash (used) by operating activities:        |                  
|                                          | Decrease in prepaid expenses                    |                  
|                                          | (Decrease) in cash overdraft                    |                  
|                                          | Increase in interest payable - related party    |                  
|                                          | Increase in accrued liabilities - related party |                  
|Net cash (used) by operating activities   |                                                 | (566,624)        
|                                          |                                                 |                  
|Cash flows from financing activities      |                                                 |                  
|                                          | Proceeds from notes receivable                  |                  
|                                          | Proceeds from installment loans                 |                  
|                                          | Payment on installment loans                    |                  
|                                          | Proceeds from mortgage loans                    |                  
|                                          | Payment on mortgage loans                       |                  
|                                          | Proceeds from mortgage loans  related party    |                  
|                                          | Interest payable                                |                  
|                                          | Interest payable  related party                |                  
|                                          | Prior period depreciation adjustment            |                  
|                                          | Subscriptions payable                           |                  
|Additional paid in capital                |                                                 | -                
|Donated Capital                           |                                                 | 51,000           
|Net cash provided by financing activities |                                                 | 1,076,041        
|                                          |                                                 |                  
|Net increase (decrease) in cash           |                                                 | 509,417          
|Cash - beginning                          |                                                 | 19,799           
|Cash - ending                             | $                                               | 529,216          
|                                          |                                                 |                  
|Supplemental disclosures:                 |                                                 |                  
|                                          | Interest paid                                   | $                
|                                          | Income taxes paid                               | $                



The accompanying notes are an integral part of these financial statements



6



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AFV Solutions, Inc.

(formerly Dogs International, Inc.)

Notes to Financial Statements



Note 1 - Basis of Presentation



The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein.  It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2004 and notes thereto included in the Company's 10-KSB annual report.  The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of annual results.



Note 2  Going concern



The accompanying financial statements have been prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  For the Company to continue as a going concern the Company must seek additional sources of capital, and the Company must attain future profitable operations. The Company is currently initiating its business plan and is in the process of raising additional capital.  The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.



Note 3  Goodwill



Management periodically reviews the carrying value of acquired intangible assets to determine whether impairment may exist. The Company considers relevant cash flow and profitability information, including estimated future operating results in assessing whether the carrying value of the intangible can be recovered. If the Company determines that the carrying value will not be recovered from undiscounted future cash flows of the acquired business, the Company considers such carrying value as impaired and reduces them by a charge to operations in the amount of the impairment. As of September 30, 2005, management had determined impairment did not exist.







7



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AFV Solutions, Inc.

(formerly Dogs International, Inc.)

Notes to Financial Statements



Note 4  Fixed Assets



The Company records fixed assets at cost and computes depreciation using the straight-line method. The Companys fixed assets consist of the following:



|                              | September 30, 2005
|----------------------------- | ------------------
|Land                          | $ 137,000         
|Vehicles                      | 135,864           
|Furniture and fixtures        | 8,253             
|Operating equipment           | 11,650            
|Buildings and improvements    | 283,764           
|                              |                   
|Total fixed assets            | 576,532           
|Less accumulated depreciation | (86,330)          
|                              |                   
|Total                         | $ 490,202         



The Company recorded depreciation expense of $31,650 during the nine months ended September 30, 2005.



Note 5  Long Term Liabilities



The Company has a 5-year note payable in the principal amount of $200,000 with an interest rate of 6% to the Companys former President, Rosemary Williams, pursuant to the Real Estate Acquisition Contract for the purchase of the Bed & Biscuit Inn facility in Flagler Beach.  During the nine months ended September 30, 2005 the Company had accrued interest payable of $28,750.



The Company has a first mortgage payable on the Bed & Biscuit Inn facility in Flagler Beach in the amount of $96,740 with an interest rate of prime plus one percent (currently 5.5%) per annum and monthly interest only payments.



The Company has a second mortgage payable on the Bed & Biscuit Inn facility in Flagler Beach in the amount of $78,244 with a stated interest rate of 9.5% per annum with monthly principal and interest payments in the amount of $669.



On July 21, 2005 the Company received a $200,000 non interest-bearing note from a related party, which is due on demand.



The Company expensed $13,997 in interest during the nine months ended September 30, 2005.





8



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AFV Solutions, Inc.

(formerly Dogs International, Inc.)

Notes to Financial Statements



Note 6  Stockholders equity



The Company is authorized to issue 20,000,000 shares of $0.001 par value preferred stock and 100,000,000 shares of $0.001 par value common stock.



On April 23, 2004, the Company received $130,966 in cash from an officer and stockholder, for the purchase of 52,386 shares of the Companys $0.001 par value common stock, at a price of $2.50 per share. As of September 30, 2005, the Company had not issued the shares and a subscription payable was recorded in the amount of $130,966.



During the period ended September 30, 2005, the Company issued subscriptions for 540,000 shares and 270,000 warrants of its $0.001 par value common stock and for cash in the amount of $800,000.



There were no stock issuances during the nine months ended September 30, 2005.



Note 7  Options and Warrants



On July 8, 2005 the company issued 270,000 detachable warrants with a weighted average price of $2.32.  The value of the warrants using the Black-Scholes pricing model was $626,498 and this was recorded as a financing expense at September 30, 2005.



The assumptions used to value the warrants were: Warranty life-2 years, Stock price-$3.1, Volatility-136%, Strike price-$2.00.



Note 8  Related party transactions



An Officer and director of the Company donated capital in the amount of $51,000 during the three-month period ended June 30, 2005.



During the three-months ended June 30, 2005, an officer lent the Company $30,000 which is non-interest bearing and due on demand.



The Company leases nine hundred square feet of office space from an officer and director of the Company at a fair market value of $500 per month. During the nine months ended September 30, 2005, the Company accrued rent expense to a related party in the amount of $4,500.



9



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FORWARD-LOOKING STATEMENTS



This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.



Forward-looking statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words.  These forward-looking statements present our estimates and assumptions only as of the date of this report.  Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.



Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.  The factors impacting these risks and uncertainties include, but are not limited to:



| |  | increased competitive pressures from existing competitors and new entrants;
| | - | ---------------------------------------------------------------------------

| |  | increases in interest rates or our cost of borrowing or a default under any material debt agreements;
| | - | -----------------------------------------------------------------------------------------------------

| |  | deterioration in general or regional economic conditions;
| | - | ---------------------------------------------------------

| |  | adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | successful entrance into the alternative fuel industry;
| | - | -------------------------------------------------------

| |  | government regulation impacting the alternative fuel industry;
| | - | --------------------------------------------------------------

| |  | ability to attract and maintain customers or sales weakness;
| | - | ------------------------------------------------------------

| |  | inability to achieve future sales levels or other operating results;
| | - | --------------------------------------------------------------------

| |  | the unavailability of funds for capital expenditures; and
| | - | ---------------------------------------------------------

| |  | operational inefficiencies in distribution or other systems.
| | - | ------------------------------------------------------------



For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Results of Operation in this document and in our Annual Report on Form 10-KSB for the year ended December 31, 2004.







1



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Item 2. Managements Discussion and Analysis of Financial Condition and results of Operations.



Overview



We were originally incorporated in the State of Nevada in January of 2002 under the name Juris Travel. On March 17, 2003, we changed our name to Bed and Biscuit Inns of America, Inc., however, following close scrutiny we felt that establishing a holding company structure for us would be the best business strategy. Therefore, on March 24, 2003, we changed our name to Dogs International. On February 9, 2005, we changed our name from Dogs International to AFV Solutions, Inc. (AFV) The name change was effected through an amendment to our articles of incorporation and approved by our board of directors and by a majority consent of our stockholders. A copy of the certificate of amendment to the articles of incorporation was attached as exhibit 3(i)(a) to a Form 8-K filed on March 24, 2005. We changed our name to AFV because we are looking to enter the
alternative fuel industry with our wholly-owned subsidiary AFV Research, Inc. (ARI).



ARI intends to enter the business of manufacturing Propane, Natural Gas, Hydrogen and electrical conversion kits for trucks, automobiles and industrial equipment. Its customers are intended to include new vehicle manufacturers, major utilities, fleets, and a wide network of installation centers. In addition, ARI will also be a distributor of alternative fuel parts and components.



Critical Accounting Policies



The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments:



| |  | stock-based compensation.
| | - | -------------------------

| |  | revenue recognition
| | - | -------------------



Stock-Based Compensation



In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based Compensation - Transition and Disclosure. This statement amends SFAS No. 123 - Accounting for Stock-Based Compensation, providing alternative methods of voluntarily transitioning to the fair market value based method of accounting for stock based employee compensation. FAS 148 also requires disclosure of the method used to account for stock-based employee compensation and the effect of the method in both the annual and interim financial statements. The provisions of this statement related to transition methods are effective for fiscal years ending after December 15, 2002, while provisions related to disclosure requirements are effective in financial reports for interim periods beginning after December 31, 2002.



2



---





The Company elected to continue to account for stock-based compensation plans using the intrinsic value-based method of accounting prescribed by APB No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Under the provisions of APB No. 25, compensation expense is measured at the grant date for the difference between the fair value of the stock and the exercise price.



Revenue Recognition



For revenue from product sales, the Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101).  SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts.  Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been
delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.



Satisfaction of our cash obligations for the next 12 months.We are aggressively pursuing opportunities within the alternative fuel industry and have discontinued our previous plan of seeking to build and/or acquire upscale pet care facilities. Our cash obligations are anticipated to increase substantially over the next 12 months as we establish ourselves in the alternative fuel industry. The cash would be utilized for operational expenses, including the cash needed to pursue the activities of ARI and acquisitions.



We intend for these funding requirements to be fulfilled through either equity or debt financing.  During the third quarter we prepared a private placement of 34 Investment Units allowing accredited investors to purchase the Investment Units at $30,000 per unit.  During the quarter ended September 30, 2005 we sold units for total proceeds of $810,000 and had received $800,000 by the end of the quarter.  Each unit consisted of 20,000 shares of common stock and 10,000 shares of warrants.  We anticipate that these investments will help sustain some of our cash obligations but we may have future obligations that will be fulfilled by additional equity or debt financing.



Summary of any product research and development that we will perform for the term of the plan.During the nine months ended September 30, 2005 we spent $343,200 on research and development. We anticipate significant research and development expenditures in the future as we move into implementing our revised business plan.



Expected purchase or sale of plant and significant equipment.We do not anticipate purchasing or leasing any additional pet care facilities in the next twelve months. As part of our moving into the alternative fuel industry we anticipate acquiring equipment and other assets related to his industry. However, at this point in time we are unable to accurately determine an estimate for the amount of funds needed for these purchases.



Significant changes in number of employees.The number of employees required to operate our business is currently 7 full-time individuals. As a result of our change in our business plan we are anticipating a substantial change in the number of employees required to operate our facilities. These increases will occur concurrent with our acquisition and/or lease of facilities; however, we will require a substantial infusion of capital prior to commencement of such acquisition.



3



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Results of Operations for the Three and Nine Months Ended September 30, 2005 and 2004 Compared.



|                                                    | Three Months Ended September 30, 2005 | Three Months Ended September 30, 2004 | Nine Months Ended September 30, 2005 | Nine Months Ended September 30, 2004
|--------------------------------------------------- | ------------------------------------- | ------------------------------------- | ------------------------------------ | ------------------------------------
|Revenues                                            | $       80,002                        | $       26,392                        | $      148,193                       | $      86,198                       
|                                                    |                                       |                                       |                                      |                                     
|Cost of Sales                                       | 4,160                                 | 19,858                                | 8,327                                | 23,259                              
|                                                    |                                       |                                       |                                      |                                     
|General and Administrative Expenses                 | 193,005                               | 44,678                                | 266,210                              | 110,627                             
|                                                    |                                       |                                       |                                      |                                     
|General and Administrative Expenses  Related party | 1,500                                 | 1,500                                 | 4,500                                | 4,500                               
|                                                    |                                       |                                       |                                      |                                     
|Total Operating Expenses                            | 1,178,753                             | 53,005                                | 1,356,058                            | 145,379                             
|                                                    |                                       |                                       |                                      |                                     
|Other income (expense)                              | (4,910)                               | (7,608)                               | (13,228)                             | (23,285)                            
|                                                    |                                       |                                       |                                      |                                     
|Net Loss                                            | $ (1,107,821)                         | $    (54,079)                         | $   (1,229,420)                      | $ (105,725)                         



Revenues

|                                         | 2005          | 2004          | Increase/(decrease)
|---------------------------------------- | ------------- | ------------- | -------------------
|$                                        | %            
|For the three months ended September 30: |               |               |                    
|Revenue                                  | $      80,002 | $      26,392 | $    53,610        
|                                         |               |               |                    
|For the nine months ended September 30:  |               |               |                    
|Revenue                                  | $    148,193  | $      86,198 | $    61,995        



Revenues for the three months ended September 30, 2005 were $80,002 compared to revenues of $26,392 in the three months ended September 30, 2004. Revenues for the nine months ended September 30, 2005 were $148,193 compared to revenues of $86,198 in the nine months ended September 30, 2004. This resulted in an increase in revenues of $61,995, from the same period one year ago.  Although we plan to transition our business to the alternative fuel industry, we still have operations through the Bed & Biscuit Inn, which continues to generate revenues for the Company.  The increase in revenues is related to the reopening of the Bed & Biscuit Inn facility in Flagler Beach, Florida, which was previously closed for a several weeks for minor remodeling of the facility.







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Cost of sales



|                                         | 2005            | 2004           | Increase/(decrease)
|---------------------------------------- | --------------- | -------------- | -------------------
|$                                        | %              
|For the three months ended September 30: |                 |                |                    
|Cost of sales                            | $         4,160 | $       19,858 | $   (15,698)       
|                                         |                 |                |                    
|For the nine months ended September 30:  |                 |                |                    
|Cost of sales                            | $         8,327 | $       23,259 | $   (14,932)       



Cost of sales for the three months ended September 30, 2005 was $4,160, a decrease of $15,698 from $19,858 for the same period ended September 30, 2004.  Cost of sales for the nine months ended September 30, 2005 was $8,327, a decrease of $14,932 from $23,259 for the same period ended September 30, 2004.  We had a decrease in cost of goods sold compared to the same period last year because last year we incurred some start up expenses related to our change in business plan from the travel business to our acquisition of the Bed & Biscuit Inn.  This year we have continued to operate our Bed & Biscuit Inn and the cost of sales has stabilized.  We have not had cost of goods associated with our new planned business of alternative fuel.



General and Administrative expenses



|                                         | 2005         | 2004          | Increase/(decrease)
|---------------------------------------- | ------------ | ------------- | -------------------
|$                                        | %           
|For the three months ended September 30: |              |               |                    
|General & Administrative expenses        | $    193,005 | $      44,678 | $  148,327         
|                                         |              |               |                    
|For the nine months ended September 30:  |              |               |                    
|General & Administrative expenses        | $   266,210  | $  110,627    | $  155,583         



General and administrative expenses were $193,005 for the three months ended September 30, 2005 versus $44,678 for the three months ended September 30, 2004, which resulted in an increase of $148,327.  General and administrative expenses were $266,210 for the nine months ended September 30, 2005 versus $110,627 for the nine months ended September 30, 2004, which resulted in an increase of $155,583. The increase in selling and administrative expenses was primarily due to the increase in the Company adding additional operational and administrative personnel, legal and other professional assistance with our plan to enter into the alternative fuel industry with ARI, our wholly owned subsidiary.  We anticipate this transition to create up front costs but we are unable to determine how long these expenses will sustain or if they will continue for an extended amount of time.



Net Loss



|                                         | 2005 | 2004 | Increase/(decrease)
|---------------------------------------- | ---- | ---- | -------------------
|$                                       
|For the three months ended September 30: |      |      |                    

|Net loss                                | $   1,107,821 | $        46,471 | $1,061,350
|--------------------------------------- | ------------- | --------------- | ----------
|                                        |               |                 |           
|For the nine months ended September 30: |               |                 |           
|Net loss                                | $   1,229,420 | $      105,725  | $1,123,695



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The net loss for the three months ended September 30, 2005 was $1,107,821, versus a net loss of $46,471 for the three months ended September 30, 2004, a change in net loss of $1,061,350.  The net loss for the nine months ended September 30, 2005 was $1,229,420, versus a net loss of $105,725 for the nine months ended September 30, 2004, a change in net loss of $1,123,695.  The increase in the net loss was primarily due to the increase in Research and Development costs associated with our transition to the alterative fuel industry as well as the general and administrative expenses incurred as a result of our planned transition.



Going Concern



The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of us as a going concern. Our cash position may be inadequate to pay all of the costs associated with our operations. We intend to use borrowings and security sales to mitigate the effects of our cash position, however no assurance can be given that debt or equity financing, if and when required will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue existence.



Off-Balance Sheet Arrangements.



We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.



Liquidity and Capital Resources at September 30, 2005 and December 31, 2004.



The following table summarizes total assets, accumulated deficit and stockholders equity.



|                     | September 30, 2005 | December 31, 2004   
|-------------------- | ------------------ | --------------------
|Total Assets         | $       1,037,687  | $          559,067  
|Accumulated Deficit  | $    (1,576,690)   | $       (347,271)   
|Stockholders Equity | $          364,424 | $          116,345  
|                     |                    |                     
|Working Capital      | $          282,716 | $              7,946



A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing. Since inception, we have financed our cash flow requirements through issuances of common stock and cash generated from our operations. As we continue our activities, we may continue to experience net negative cash flows from operations, pending receipt of significant revenues.



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Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings and bank borrowings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.  In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to cease or significantly curtail our operations. This would materially impact our ability to continue operations.



We believe that existing capital and anticipated funds from operations will not be sufficient to sustain operations and expansion over the next twelve months. We anticipate substantial increases in our cash requirements; which will require additional capital generated from either the sale of common stock, the sale of preferred stock, or debt financing. Consequently, we will be required to seek additional capital in the future to fund operations and expansion, if any, through additional equity or debt financing or credit facilities. No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity. In either case, the financing could have a negative impact on our financial condition and our Stockholders. During the quarter ended September 30, 2005 we conducted a private placement whereby we made 34 Investment Units available,
which consisted of 20,000 shares of common stock and 10,000 warrants at a purchase price of $30,000 per unit.  As of September 30, 2005 we had sold $810,000 worth of our units and received $800,000 in proceeds.



We anticipate that we will incur operating losses in the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, expand our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.



FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATIONS



RISKS RELATING WITH TO BUSINESS AND MARKETPLACE



We are uncertain as to our ability to obtain additional capital necessary to continue our business.



We have incurred an accumulated deficit for the nine months ended September 30, 2005 of $1,576,690. As a result of these losses and negative cash flows from operations, our ability to continue operations will be dependent upon the availability of capital from outside sources unless and until we achieve profitability.



We will depend almost exclusively on outside capital to pay for the deficit in our working capital. Such outside capital may include the sale of additional stock, loans from our officers and directors, and/or commercial borrowing. There can be no assurance that capital will continue to be available if necessary to meet these continuing operational costs or, if the capital is available, it will be on terms acceptable to our company. The issuances of additional equity securities by our company could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our company's liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable, our business and future success may be adversely affected.



7



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Our company has no operating history in the alternative fuel industry and there can be no assurance that we will be successful in the entry into the industry or that we will be able to develop our business plan to integrate this new line of business.



Our proposed operations are subject to all of the risks inherent in the establishment of a new business, including licensing risks, insufficient capital, unforeseen problems, and expenses and complications encountered with the early phases of operations in a business. Moreover, our lack of an operating history in the alternative fuel industry makes it impossible to predict whether or not the company will operate profitably if it is able to successfully enter such industry. While we have brought on management that is familiar with this industry, there can be no assurances that we will be able to locate, hire and retain the necessary personnel to initiate, manage and operate this new line of business, develop and implement necessary systems, obtain contracts and obtain financing as contemplated in our business plan.



Historically, our sole revenue generating property is located in Florida and, accordingly, we could be disproportionately harmed by an economic downturn in this area of the country or a natural disaster, such as a hurricane.



Our sole revenue producing asset, the Bed and Biscuit Inn, is located in Flagler Beach, Florida. This concentration in Florida makes our business disproportionately affected by economic conditions, competition and real and personal property tax rates in Florida. Natural disasters in Florida, such as hurricanes and/or tropical storms, would disproportionately affect our business operations. It is also possible that because of our Florida concentration, a change in Florida laws applicable to the pet boarding industry or a change in zoning laws may have a greater impact on us than a change in comparable laws in another geographical area. Adverse developments in Florida could harm our revenue or increase our operating expenses.



Future acquisitions may strain our business and resources and may result in dilution to our stockholders.



While we are not currently a party to any agreements or commitments and have no understandings with respect to any acquisitions, we may find it necessary to acquire additional businesses, to remain competitive. In the event that we identify an appropriate acquisition candidate, we may not be able to negotiate the terms of any such acquisition successfully, finance such acquisition or integrate such acquired business, products or technologies into our existing business and operations. Further, the negotiation of potential acquisitions, as well as the integration of an acquired business, could cause significant diversions of management time and resources. Any potential acquisition, whether or not consummated, could seriously harm our business, operating results and financial condition. If we consummate one or more significant acquisitions in which the consideration consists of stock or
other securities, our stockholders could suffer significant dilution of their interests in us. If we were to proceed with one or more significant acquisitions in which the consideration included cash, we could be required to use a substantial portion of our available cash to consummate any such acquisition. Acquisition financing may not be available on favorable terms, or at all. In addition, we may be required to impair significant amounts of goodwill and other intangible assets in connection with future acquisitions, which may seriously harm our operating results.



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RISKS FACTORS RELATING TO OUR COMMON STOCK



Since our shares are thinly traded, and trading on the OTC Bulletin Board may be sporadic because it is not an exchange, stockholders may have difficulty reselling their shares.



Our common shares are currently quoted for public trading on the Over-the-Counter Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with limited business operations. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.



In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.



Because our common stock is deemed a low-priced Penny stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.



Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10.  Those rules require broker-dealers, before effecting transactions in any penny stock, to:



| |  | Deliver to the customer, and obtain a written receipt for, a disclosure document;
| | - | ---------------------------------------------------------------------------------

| |  | Disclose certain price information about the stock;
| | - | ---------------------------------------------------

| |  | Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
| | - | ----------------------------------------------------------------------------------------------------------------

| |  | Send monthly statements to customers with market and price information about the penny stock; and
| | - | -------------------------------------------------------------------------------------------------

| |  | In some circumstances, approve the purchasers account under certain standards and deliver written statements to the customer with information specified in the rules.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.



|ITEM 3. | CONTROLS AND PROCEDURES
|------- | -----------------------



We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, our appointed sole officer, effective as of July 13, 2005, Mr. Jeffrey Groscost evaluated the effectiveness of our disclosure controls and procedures in his position as our President and Principal Accounting Officer. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Groscost concluded that our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



9



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PART II--OTHER INFORMATION





|Item 1. | Legal Proceedings.
|------- | ------------------



We may become involved in various routine legal proceedings incidental to our business. However, to our knowledge as of the date of this report, there are no material pending legal proceedings to which we are a party or to which any of its property is subject.



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



During the third and fourth quarters we sold 34 Units, each unit consisted of 20,000 shares of common stock and 10,000 warrants at a purchase price of $30,000 per unit.  Each warrant entitles the holder to purchase 1 share of common stock at $2.00 per share for a two year period.  We sold the subscriptions to 18 individual accredited investors and at the end of the third quarter had collected $800,000, all of which was paid in cash.  As of September 30, 2005 none of the shares or warrants had been issued  We anticipate the additional $220,000 to be collected during the fourth quarter.  Out of the $1,020,000 total proceeds, we anticipate offering expenses of $10,000 and $102,000 in commissions and/or finders fees.



We believe that the sale of the units was exempt from registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Sections 4(2), and/or Regulation D, Rule 506. The units were sold directly by us and did not involve a public offering or general solicitation. The purchasers of the units were afforded an opportunity for effective access to files and records of our company that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the purchasers, immediately prior to selling the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The purchasers had the opportunity to speak with our management on several occasions prior to their investment decision.



Subsequent Issuance



On October 17, 2005, we issued 20,000 shares of common stock to HVH Trust pursuant to a unit subscription agreement executed on August 10, 2005.  We believe the issuance and sale of the unit was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Sections 4(2) and/or Regulation D, Rule 506.



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|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------



None.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------



None.



|Item 5. | Other Information.
|------- | ------------------



| | None.
| | -----



|Item 6. | Exhibits and Reports on Form 8-K.
|------- | ---------------------------------



a) Exhibits



|31*     Certification pursuant to Section 302 of the Sarbanes-Oxley Act
|-----------------------------------------------------------------------
|32*     Certification pursuant to Section 906 of the Sarbanes-Oxley Act

*Filed herewith



b) Reports on Form 8-K

| | Form 8-K filed on August 9, 2005  Appointment of Jeffrey Groscost as President.
| | --------------------------------------------------------------------------------





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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.



AFV SOLUTIONS, INC.

(Registrant)



By:/s/
Jeffrey Groscost

| | Jeffrey Groscost,                          | 
| | ------------------------------------------ | 
| | President and Principal Accounting Officer
| | (On behalf of the registrant and as        | 
| | principal accounting officer)              | 
| |                                            | 



Date: November
21, 2005