UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549





FORM 10-Q





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





For the Quarterly Period Ended May 31, 2011


Or




 ̈
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: 000-52735





PHOTOVOLTAIC SOLAR CELLS, INC.


(Exact Name of Small Business Issuer as Specified in its Charter)





NEVADA

20-8753132(State or Other Jurisdiction

Incorporation or Organization)

(IRS Employer

Identification No.)





c/o Sichenzia Ross Friedman Ference, LLP


61 Broadway, 32 Floor


New York, NY 10006


(Address of principal executive offices)





(Registrant's telephone number, including area code) (212) 930-9700





(Former Name or Former Address, if Changed Since Last Report)




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x     YES      ̈    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 (§ 229.405 of this chapter) during the preceeding 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 the 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  ̈
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).   x YES      ̈ NO





Indicate the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: As of July 15, 2011 the issuer had 494,405 shares of common stock, par value $.0001 per share, outstanding.








PHOTOVOLTAIC SOLAR CELLS, INC.





FORM 10-Q





For the quarterly period ended May 31, 2011





INDEX





PagePART I
FINANCIAL INFORMATION

4Item 1
Condensed Balance Sheets at May 31, 2011 (unaudited) and February 28, 2011

4Condensed Statements of Operations for the three months ended May 31, 2011 and 2010 and for the period from March 28, 2007 (inception) to May 31, 2011 (unaudited)

5Condensed Statement of Stockholders’ Deficit for the period from March 28, 2007 (inception) to May 31, 2011 (unaudited)

6Condensed Statements of Cash Flows for the three months ended May 31, 2011 and 2010 and for the period from March 28, 2007 (inception) to May 31, 2011 (unaudited)

7Notes to Condensed Financial Statements (unaudited)

8Item 2
Management’s Discussion and Analysis or Plan of Operation

11Item 3
Quantitative and Qualitative Disclosures About Market Risk

13Item 4
Controls and Procedures

13PART II
Other InformationItem 1
Legal Proceedings

14Item 1 A.
Risk Factors

14Item 2
Unregistered Sales of Equity Securities and Use of Proceeds

16Item 3
Defaults Upon Senior Securities

16Item 4
Reserved

16Item 5
Other Information

16Item 6
Exhibits

16Signatures

17





ADVISEMENT





We urge you to read this entire Quarterly Report on Form 10-Q, including the “Risk Factors” section and the financial statements and related notes included herein.  As used in this Report, unless context otherwise requires, the words “we,” “us,” “our,” “the Company,” “Photovoltaic” and “Registrant” refer to Photovoltaic Solar Cells, Inc.  Also, any reference to “common shares,” “Common Stock,” “common stock” or “Common Shares” refers to our $.0001 par value common stock.





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS





Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this Quarterly Report, including those related to our cash, liquidity, resources and our anticipated cash expenditures, as well as any statements other than statements of historical fact, regarding our strategy, future operations, financial position, projected costs, prospects, plans and objectives are forward-looking statements.  These forward-looking statements are derived, in part, from various assumptions and analyses we have made in the context of our current business plan and information currently available to us and in light of our experience and perceptions of historical trends, current conditions and expected future developments and other factors we believe are appropriate in the circumstances. You can generally identify forward looking statements through words and phrases such as “believe”, “expect”, “seek”, “estimate”, “anticipate”, “intend”, “plan”, “budget”, “project”, “may likely result”, “may be”, “may continue”   and other similar expressions, although not all forward-looking statements contain these identifying words. We cannot guarantee future results, levels of activity, performance or achievements, and you should not place undue reliance on our forward-looking statements.





Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described in Part II, Item 1A, “Risk Factors” and elsewhere in this Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or strategic investments. In addition, any forward-looking statements represent our expectation only as of the day this Report was first filed with the Securities and Exchange Commission (“SEC”) and should not be relied on as representing our expectations as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our expectations change.





When reading any forward-looking statement you should remain mindful that actual results or developments may vary substantially from those expected as expressed in or implied by such statement for a number of reasons or factors.  Each forward-looking statement should be read in context with and in understanding of the various other disclosures concerning our company and our business made elsewhere in this Report as well as our public filings with the SEC. You should not place undue reliance on any forward-looking statement as a prediction of actual results or developments. We are not obligated to update or revise any forward-looking statements contained in this Report or any other filing to reflect new events or circumstances unless and to the extent required by applicable law.





We prepare our interim financial statements in accordance with United States generally accepted accounting principles.  Our financials and results of operation for the three month period ended May 31, 2011 are not necessarily indicative of our prospective financial condition and results of operations for the pending full fiscal year ending February 29, 2012. The interim financial statements presented in this Quarterly Report as well as other information relating to our company contained in this Quarterly Report should be read in conjunction and together with the reports, statements and information filed by us with the SEC.





PART I


FINANCIAL INFORMATION





ITEM 1.   FINANCIAL STATEMENTS




PHOTOVOLTAIC SOLAR CELLS, INC.


(A Development Stage Company)
 BALANCE SHEETS
 May 31,


February 28,2011


2011(Unaudited)AssetsCurrent assets:Cash

$
-


$
-Total current assets


-



-Total assets

$
-


$
-Liabilities and stockholders' deficitCurrent liabilities:Accounts payable and accrued expenses

$
140,046


$
130,184Due to stockholder


154,090



145,090Total current liabilities


294,136



275,274Stockholders' deficitPreferred stock, par value $.0001 per share; 10,000,000 shares authorized, no shares issued and outstanding


-



-Common stock, par value $.0001 per share; 150,000,000 shares authorized, 494,405 shares issued and outstanding as of May 31, 2011 and February 28, 2011, respectively


49



49Additional paid-in capital


413,621



413,621Deficit accumulated during the development stage


(707,806
)


(688,944
)Total stockholders' deficit


(294,136
)


(275,274
)Total liabilities and stockholders' deficit

$
-


$
-
  The accompanying notes are an integral part of these unaudited condensed financial statements.
  4
 
  PHOTOVOLTAIC SOLAR CELLS, INC.
 (A Development Stage Company)
 CONDENSED STATEMENTS OF OPERATIONS
 (Unaudited)
 Period fromThree Months


Three Months


March 28, 2007Ended


Ended


(Inception) toMay 31,


May 31,


May 31,2011


2010


2011Revenue

$
-


$
-


$
-Expenses:General and administrative expenses


18,862



34,279



230,324Total expense


18,862



34,279



230,324Loss from continuing operations


(18,862
)


(34,279
)


(230,324
)Loss from discontinued operations, net of tax


-



-



(356,457
)Loss on disposition of assets of discontinued operations, net of tax


-



-



(121,025
)Total loss from discontinued operations


-



-



(477,482
)Loss before income taxes


(18,862
)


(34,279
)


(707,806
)Provision for income taxes


-



-



-Net loss

$
(18,862
)

$
(34,279
)

$
(707,806
)Net loss per common share, basic and diluted

$
(0.04
)

$
(0.07
)Weighted average shares outstanding, basic and diluted


494,405



494,405
  The accompanying notes are an integral part of these unaudited condensed financial statements.
 5
  PHOTOVOLTAIC SOLAR CELLS, INC.
 (A Development Stage Company)
 CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
 MARCH 28, 2007 (INCEPTION) to MAY 31, 2011
 (Unaudited)
 
 DeficitAccumulatedAdditional


During theCommon Stock


Paid-in


Development


Stockholders'Shares


Amount


Capital


Stage


DeficitCommon stock issued for patent and cash at $0.18 per share


310,005


$
31


$
56,139


$
-


$
56,170Common stock sold for cash at $1.00 per share


10,000



1



9,999



-



10,000Common stock issued for professional services at $0.10 per share


85,000



9



8,491



-



8,500Common stock sold for cash at $2.00 per share


61,500



6



122,994



-



123,000Common stock issued for professional services at $0.10 per share cancelled by the board of directors


(35,000
)


(4
)


(3,496
)


-



(3,500
)Common stock issued in exchange for equity investment


60,000



6



179,994



-



180,000Net loss


-



-



-



(115,330
)


(115,330
)Balance, February 29, 2008


491,505



49



374,121



(115,330
)


258,840Common stock issued for professional services at $15.00 per share


2,500



-



37,500



-



37,500Common stock sold for cash at $5.00 per share


400



-



2,000



-



2,000Net loss


-



-



-



(378,832
)


(378,832
)Balance, February 28, 2009


494,405



49



413,621



(494,162
)


(80,492
)Net loss


-



-



-



(93,246
)


(93,246
)Balance, February 28, 2010


494,405



49



413,621



(587,408
)


(173,738
)Net loss


-



-



-



(101,536
)


(101,536
)Balance, February 28, 2011


494,405



49



413,621



(688,944
)


(275,274
)Net loss


-



-



-



(18,862
)


(18,862
)Balance, May 31, 2011


494,405


$
49


$
413,621


$
(707,806
)

$
(294,136
)
 
 The accompanying notes are an integral part of these unaudited condensed financial statements.
  6
  PHOTOVOLTAIC SOLAR CELLS, INC.
 (A Development Stage Company)
 CONDENSED STATEMENTS OF CASH FLOWS
 (Unaudited)
  Period fromThree Months


Three Months


March 28, 2007Ended


Ended


(Inception) toMay 31,


May 31,


May 31,2011


2010


2011Cash flows from operating activities:Net loss

$
(18,862
)

$
(34,279
)

$
(707,806
)Adjustments to reconcile net loss to netcash used in operating activities:Issuance of equity investments for services


-



-



180,000Expenses paid by stockholder/officer


9,000



22,770



112,565Stock issued for professional services


-



-



42,500Loss on disposition of assets


-



-



121,025Changes in operating assets and liabilities:Increase in accrued expenses


9,862



11,509



143,046Net cash used in operating activities


-



-



(108,670
)Cash flows from investing activities:Purchase of equipment under construction


-



-



(13,104
)Purchase of intangible assets


-



-



(14,853
)Net cash used in investing activities


-



-



(27,957
)Cash flows from financing activities:Repayment to officer, net


-



-



(3,083
)Advances from shareholder


-



-



4,510Proceed from the sale of common stock


-



-



135,200Net cash provided by financing activities


-



-



136,627Net (decrease) increase in cash


-



-



-Cash, beginning of period


-



-



-Cash, end of period

$
-


$
-


$
-Supplemental cash flow information:Cash paid for interest

$
-


$
-Cash paid for income taxes

$
-


$
-Non-Cash Financing Activities:Transfer of assets in settlement of debt to officer

$
-


$
-


$
135,000Officer loan assigned to stockholder


-



-



49,100Common stock issued for patent


-



-



55,970Equipment under construction paid for by officer


-



-



171,081Prepaid insurance paid by officer


-



-



1,896Trademark application paid by officer


-



-



1,025Issuance of equity investments for services


-



-



180,000Common stock issued for equity investments


-



-



180,000
 
 The accompanying notes are an integral part of these unaudited condensed financial statements.
  7
 
 PHOTOVOLTAIC SOLAR CELLS, INC.
 (A Development Stage Company)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 MAY 31, 2011
 (Unaudited)
 
 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Organization
 Photovoltaic Solar Cells, Inc. ("we", "us", "our”, “PVSO” or “the Company") was incorporated in the State of Nevada on March 28, 2007 primarily to engage in manufacturing solar cells for use as an alternative method of producing energy (i.e., electricity).
 
 Nature of Operations
 From its inception the Company conducted limited operations according to its business plan, which called for the development of a production line capable of producing solar cells for resale. Members of management loaned working capital funds to the Company, along with contributing a variety of intellectual property, i.e., one U.S. Patent and seven patent applications (provisional patents) or Patent Cooperation Treaty Applications.
 
 We are a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915.
 
 As of May 31, 2011 we are pursuing an acquisition strategy, whereby we will seek to acquire undervalued businesses in markets that provide room for growth ("Acquisition Strategy"). We will engage in identifying, investigating and, if warranted, acquiring companies that will enhance our revenues and increase shareholder value. We will utilize several criteria to evaluate prospective acquisitions including whether the business to be acquired (1) is an established business with viable services or products, (2) has an experienced and qualified management team, (3) has room for growth and/or expansion into other markets, (4) offers the opportunity to achieve and/or enhance profitability, and (5) increases shareholder value.
 
 Going Concern
 The unaudited condensed financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit
 
 We currently have no revenue source and are incurring losses. These factors raise substantial doubt about our ability to continue as a going concern.
 
 We will pursue an acquisition strategy whereby we will seek to acquire businesses with a history of operating revenues in markets that provide room for growth. We will engage in identifying, investigating and, if warranted, acquiring companies that will enhance revenues and increase shareholder value. In the event that our limited financial resources prove to be insufficient to implement our acquisition strategy, we will be required to seek additional financing, through either equity or debt financing.   However, there can be no assurance that we will be able to   successfully complete an equity or debt financing to implement our acquisition strategy.
 
 Basis of Presentation
 The accompanying interim unaudited condensed financial statements as of May 31, 2011 and for the three month periods ended May 31, 2011 and 2010 have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and explanatory notes for the year ended February 28, 2011 as included in the Company’s 10-K for that year. The results of the three months ended May 31, 2011 are not necessarily indicative of the results to be expected for the full year ending February 29, 2012.
  8
 
 The condensed financial statements as of February 28, 2011 have been derived from the audited financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America.
 
 Use of Estimates
 These unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from such estimates.
 
 Net Loss Per Share
 The Company follows ASC Topic 260, "Earnings Per Share" in calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share considers the effect of common equivalent shares. There were no common share equivalents at May 31, 2011 or 2010.
 
 Fair Value of Financial Instruments
 Our short-term financial instruments, including accrued expenses and payables to stockholder, consist primarily of instruments without extended maturities the fair value of which, based on management’s estimates, reasonably approximate their book value.
 
 Recent Accounting Pronouncements
 
 Recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements.
 
 NOTE 2 - STOCKHOLDERS’ DEFICIT
 
 The Company is authorized to issue 150,000,000 shares of $0.0001 par value common stock and 10,000,000 shares of $0.0001 par value preferred stock.
 
 On November 29, 2010, pursuant to corporate actions approved by a joint consent of stockholders holding a majority of shares of common stock entitled to vote on the proposed actions and our Board of Directors, the Company adopted resolutions approving the following corporate actions:
 
 1.
To effect a reverse split of the Company's issued and outstanding common stock in a ratio of one new share for every ten shares issued and outstanding; and
 
 2.
To amend and restate the Company's Articles of Incorporation to authorize an increase of our authorized shares to 160,000,000 shares, consisting of: (i) 150,000,000 shares of common stock; and (ii) 10,000,000 shares of blank check preferred stock.
 
 The 1 for 10 reverse split became effective January 20, 2011. The amendment to the Articles of Incorporation was effective on May 25, 2011.
 
 9
 
 All share and per share amounts have been retroactively restated to reflect the reverse split.
 
 NOTE 3 – RELATED PARTY TRANSACTIONS
 
 During the three month periods ended May 31, 2011 and 2010 our majority shareholder Waterford Capital Acquisition Co. IX, LLC (“Waterford”) made certain net payments on behalf of the Company aggregating $9,000 and $22,770, respectively. These advances are noninterest bearing. The total amount due to Waterford at May 31, 2011 is $154,090.
  10


Item 2.  Management's Discussion and Analysis or Plan of Operation





Overview





We are a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915, originally incorporated in the State of Nevada on March 28, 2007.  From inception until November of 2008, our business plan was to produce and market inexpensive solar cells.





In November of 2008, our board of directors determined that the implementation of our business plan was no longer financially feasible.  At such time, we discontinued the implementation of our prior business plan and are now pursuing an acquisition strategy, whereby we will seek to acquire undervalued businesses in markets that provide room for growth ("Acquisition Strategy").





The Company, based on proposed business activities, is a "blank check" company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Securities Exchange Act of 1934, as amended, the Company also qualifies as a “shell company,” because it has no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company intends to comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, for so long as we are subject to those requirements.





On January 7, 2009, we entered into a securities purchase agreement and indemnification agreement with our controlling shareholders and Waterford Capital Acquisition Co. IX, LLC (“Waterford”).  Pursuant to the agreements, Waterford purchased an aggregate of 410,000 previously issued and outstanding shares of our common stock, comprising approximately 83% of our issuance and outstanding capital stock, from the control shareholders, as well as certain promissory notes.




Our Acquisition Strategy is focused on pursuing a strategy of growth by acquiring undervalued businesses. We will utilize several criteria to evaluate prospective acquisitions including whether the business to be acquired (1) is an established business with viable services or products, (2) has an experienced and qualified management team, (3) has room for growth and/or expansion into other markets, (4) offers the opportunity to achieve and/or enhance profitability, and (5) increases shareholder value.





Competition of Our Acquisition Strategy





In  connection  with  our  Acquisition  Strategy,  we  expect  to encounter intense competition from other entities having business objectives similar to ours, including: venture capital firms, blind pool companies, large industrial and financial institutions, small  business investment companies  and  wealthy individuals. Many of these entities are well-established and have greater experience, financial resources and technical knowledge than us. Our limited financial resources may compel us to select certain less attractive acquisition prospects than those of our competitors.





We believe that our future is dependent upon the consummation of a merger, acquisition or other business combination between us and a viable entity. There can be no assurance that we will be able to complete any merger, acquisition or other business combination between us and a viable entity. Additionally, management believes that we may need to raise additional funds through equity or debt financing to complete a merger, acquisition or other business combination between us and a viable operating entity. There can be no assurance that we will be able to successfully complete an equity or debt financing to complete an acquisition, merger or other business combination between us and a viable operating entity.





Employees





We have a total of 1 employee which includes our Chief Executive Officer. Our employee is considered a part-time employee and he does not currently receive compensation.





Critical Accounting Policies





The preparation of our 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 financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments:


11





Use of Estimates - These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, our management has estimated the value of our shares issued for compensation and our net operating loss for tax purposes. Actual results could differ from those estimates.





Going Concern - The financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit.




We are currently in the process of implementing our new business plan, focusing on our acquisition strategy. At present, we have no cash on hand and are dependent on our majority stockholder to provide working capital advances. There can be no assurance that upon implementing our new business plan, we will be successful or that we will start producing sufficient revenues to maintain our operations. The foregoing matters raise substantial doubt about our ability to continue as a going concern.





Results of Operations





Comparison of the Three Month Period Ended May 31, 2011 to the Three Month Period Ended May 31, 2010





Revenue





We have no revenue from operations for the three month periods ended May 31, 2011 and 2010.





General and Administrative Expenses





General and administrative expenses were $18,862 and $34,279 for the three months ended May 31, 2011 and 2010, respectively. General and administrative expenses consist primarily of professional fees and due diligence expense related to potential acquisitions. The decrease in general and administrative expenses of $15,417 or 45%, results primarily from due diligence expense of $16,505 incurred in 2010, with no comparable expense in 2011.





Plan of Operation





We are pursuing an Acquisition Strategy, whereby we will seek to acquire undervalued businesses in markets that provide room for growth. We will primarily engage in identifying, investigating and, if investigation warrants, acquiring companies that will enhance our revenues and increase shareholder value. We will utilize several criteria to evaluate prospective acquisitions including whether the business to be acquired (1) is an established business with viable services or products, (2) has an experienced and qualified management team, (3) has room for growth and/or expansion into other markets, (4) offers the opportunity to achieve and/or enhance profitability, and (5) increases shareholder value.





Liquidity and Capital Resources





As of May 31, 2011 we had a working capital deficit of $294,136.  We have no cash on hand as of July 15, 2011. We currently are dependent on our majority stockholder to provide working capital advances. Accordingly, in the immediate future, management will need to raise additional funds in order to continue operating. There can be no assurances that we will be able to obtain additional funds if and when needed.





Additionally, as we are considered a “shell” or “blank check” company, purchasers of our securities cannot currently rely on Rule 144 promulgated under the Securities Act with regard to the resale of their shares. Accordingly, any financing in the form of equity may be deeply discounted to compensate the investors for the added risk and inability to rely on Rule 144.





Recent Accounting Pronouncements





Recent accounting pronouncements issued by the FASB and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements.


12


Item 3.  Quantitative and Qualitative Disclosures About Market Risk





A smaller reporting company is not required to provide the information required by this Item.




Item 4.  Controls and Procedures





Evaluation of Disclosure Controls and Procedures





We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “ SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.





In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.





Evaluation of Disclosure Controls and Procedures





Based on management’s evaluation (with the participation of our CEO and Chief Financial Officer (Principal Accounting Officer)), as of the end of the period covered by this report, our CEO and Principal Accounting Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.





Changes in Internal Control Over Financial Reporting





There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





Inherent Limitations on Effectiveness of Controls





Our management, including the CEO and Principal Accounting Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.


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PART II


OTHER INFORMATION





Item 1.   Legal Proceedings





None





Item 1A.  Risk Factors





We have described below a number of uncertainties and risks which, in addition to uncertainties and risks presented elsewhere in this Quarterly Report, may adversely affect our business, operating results and financial condition.  The uncertainties and risks enumerated below as well as those presented elsewhere in this Quarterly Report should be considered carefully in evaluating our company and our business and the value of our securities. The following important factors, among others, could cause our actual business, financial condition and future results to differ materially from those contained in forward-looking statements made in this Quarterly Report or presented elsewhere by management from time to time.





Our limited resources may not be sufficient for us to implement our Acquisition Strategy.





We have limited resources. We are pursuing an acquisition strategy, whereby we will seek to acquire undervalued businesses.  The implementation of our strategy is highly dependent on retaining professions such as lawyers, accountants and investment bankers to consummate any proposed transaction.  As a result of our limited resources, we may not have sufficient capital to retain such professions and as a result, may not be able to successfully implement our strategy.





We May Not be Able to Continue as Going Concern





Based on our limited operations, lack of revenue and relatively minimal assets there can be no assurance that we will be able to continue as a going concern or complete a merger, acquisition or other business combination.





We Will Need Additional Financing in Order to Execute Our Business Plan and it may be Extremely Expensive





We are entirely dependent upon our limited available financial resources to implement our Acquisition Strategy. We cannot ascertain with any degree of certainty the capital requirements for the successful execution of our Acquisition Strategy. In the event that our limited financial resources prove to be insufficient to implement our Acquisition Strategy, we will be required to seek additional financing. Also, in the event of the consummation of an acquisition, we may require additional financing to fund the operations or growth of the target. Additionally, as we are considered a “shell” or “blank check” company, purchasers of our securities cannot currently rely on Rule 144 promulgated under the Securities Act with regard to the resale of their shares. Accordingly, any financing in the form of equity may be deeply discounted to compensate the investors for the added risk and inability to rely on Rule 144. Depending on such discount, our current shareholders may be substantially diluted.





Additional Financing May Not Be Available to Us





There can be no assurance that additional financing will be available on acceptable terms, or at all. To the extent that additional financing proves to be unavailable when needed, we would, in all likelihood, be compelled to abandon plans of further acquisitions, and would have minimal capital remaining to pursue other targets. Our inability to secure additional financing, if needed, could also have a material adverse effect on our continued development or growth. We have no arrangements with any bank or financial institution to secure additional financing and there can be no assurance that any such arrangement, if required or otherwise sought, would be available on terms deemed to be commercially acceptable to us and in our best interests.





Competition for Acquisitions





We expect to encounter intense competition from other entities having business objectives similar to ours. Many of these entities, including venture capital firms, partnerships and corporations, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with identifying and effecting acquisitions directly or through affiliates. Many of these competitors possess greater financial, technical, human and other resources than us and there can be no assurance that we will have the ability to compete successfully. Our financial resources will be limited in comparison to those of many of our competitors. This inherent competitive limitation may compel us to select certain less attractive acquisition prospects. There can be no assurance that such prospects will permit us to achieve our stated business objectives.


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We May Be Subject to Uncertainty in the Competitive Environment of a Target





In the event that we succeed in completing an acquisition, we will, in all likelihood, become subject to intense competition from competitors of the target. In particular, certain industries which experience rapid growth frequently attract an increasingly large number of competitors, including competitors with greater financial, marketing, technical, human and other resources than the initial competitors in the industry. The degree of competition characterizing the industry of any prospective target cannot presently be ascertained. There can be no assurance that, subsequent to a consummation of an acquisition, we will have the resources to compete effectively in the industry of the target, especially to the extent that the target is in a high growth industry.





We May Pursue an Acquisition with a Target Operating Outside the United States Which will Entail the Additional Risks Relating to Doing Business in a Foreign Country





We may effectuate an acquisition with a target whose business operations or even headquarters, place of formation or primary place of business are located outside the United States. In such event, we may face the significant additional risks associated with doing business in that country. In addition to the language barriers, different presentations of financial information, different business practices, and other cultural differences and barriers that may make it difficult to evaluate such a target, ongoing business risks may result from the internal political situation, uncertain legal systems and applications of law, prejudice against foreigners, corrupt practices, uncertain economic policies and potential political and economic instability that may be exacerbated in various foreign countries.





Harvey Judkowitz, our CEO, is Critical to Our Future Success





Our ability to successfully carry out our business plan and to consummate additional acquisitions will be dependent upon the efforts of Mr. Judkowitz. Notwithstanding the significance of Mr. Judkowitz, we have not obtained any "key man" life insurance on his life. The loss of the services of Mr. Judkowitz would have a material adverse effect on our ability to successfully achieve our business objectives. If additional personnel are required, there can be no assurance that we will be able to retain such necessary additional personnel.





The Uncertain Structure of an Acquisition May Result in Risks Relating to the Market for Our Common Stock





We may form one or more subsidiary entities to effect an acquisition and may, under certain circumstances, distribute the securities of subsidiaries to our stockholders. There can be no assurance that a market would develop for the securities of any subsidiary distributed to stockholders or, if a market were to develop, no assurances as to the prices at which such securities might trade.





We Expect to Pay No Cash Dividends





We do not expect to pay dividends to the holders of common stock. Accordingly, any return on a stockholders’ investment will require the appreciation of our common shares.  There can be no assurance that the value of our common shares will increase.





Indemnification of Officers and Directors





Our Certificate of Incorporation provides for the indemnification of our officers and directors to the fullest extent permitted by the laws of the State of Nevada. It is possible that the indemnification obligations imposed under these provisions could result in a charge against our earnings, if any, and thereby affect the availability of funds for other uses.





Taxation Considerations May Impact the Structure of an Acquisition and Post-merger Liabilities





Federal and state tax consequences will, in all likelihood, be major considerations for us in consummating an acquisition. The structure of an acquisition or the distribution of securities to stockholders may result in taxation of us, the target or stockholders. Typically, these transactions may be structured to result in tax-free treatment to both companies, pursuant to various federal and state tax provisions. We intend to structure any acquisition so as to minimize the federal and state tax consequences to both the us and the target. Management cannot assure that an acquisition will meet the statutory requirements for a tax-free reorganization, or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on both parties to the transaction.




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We May Be Deemed an Investment Company and Subjected to Related Restrictions





The regulatory scope of the Investment Company Act of 1940, as amended (the "Investment Company Act"), which was enacted principally for the purpose of regulating vehicles for pooled investments in securities, extends generally to companies engaged primarily in the business of investing, reinvesting, owning, holding or trading in securities. The Investment Company Act may, however, also be deemed to be applicable to a company which does not intend to be characterized as an investment company but which, nevertheless, engages in activities which may be deemed to be within the definitional scope of certain provisions of the Investment Company Act. We believe that our anticipated principal activities, which will involve acquiring control of an operating company, will not subject us to regulation under the Investment Company Act. Nevertheless, there can be no assurance that at some future point we will not be deemed to be an investment company. If we are deemed to be an investment company, we may become subject to certain restrictions relating to our activities, including restrictions on the nature of our investments and the issuance of securities. In addition, the Investment Company Act imposes certain requirements on companies deemed to be within its regulatory scope, including registration as an investment company, adoption of a specific form of corporate structure and compliance with certain burdensome reporting, record keeping, voting, proxy, disclosure and other rules and regulations. In the event of the characterization of us as an investment company, our inability to satisfy such regulatory requirements, whether on a timely basis or at all, would, under certain circumstances, have a material adverse effect on us.





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





None





Item 3.  Defaults Upon Senior Securities





None





Item 4.  Reserved





None





Item 5.  Other Information





None





Item 6.   Exhibits





31.1
Certification of the Chief Executive and the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 32.1
Certification of the Chief Executive and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350


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SIGNATURES





In accordance with Section 13 or 15(d) 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.





PHOTOVOLTAIC SOLAR CELLS, INC.Dated: July 20, 2011
By:
/S/ Harvey JudkowitzHarvey Judkowitz, Chief Executive Officer and Principal

Accounting Officer


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