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, 2010


Or





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




For the
Transition Period from __________ to __________




COMMISSION
FILE NUMBER: 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     o    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).   o
YES     o 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 o
            Accelerated
      filer oNon-accelerated
      filer o
            Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   x
YES     o 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 12, 2010 the issuer had
4,944,000 shares of common stock, par value $.0001 per share,
outstanding.







PHOTOVOLTAIC
SOLAR CELLS, INC.




FORM
10-Q




For the
quarterly period ended May 31, 2010




INDEX





PagePART I
                FINANCIAL
      INFORMATION
                
                4Item
      1
                Condensed
      Balance Sheets at May 31, 2010 (unaudited) and February 28,
      2010
                
                4Condensed
      Statements of Operations for the three months ended May 31, 2010 and 2009
      and for the period from March 28, 2007 (inception) to May 31, 2010
      (unaudited)
                
                5Condensed
      Statement of Stockholders’ Deficit for the period from March 28, 2007
      (inception) to May 31, 2010 (unaudited)
                
                6Condensed
      Statements of Cash Flows for the three months ended May 31, 2010 and 2009
      and for the period from March 28, 2007 (inception) to May
      31,  2010 (unaudited)
                
                7Notes
      to Condensed Financial Statements (unaudited)
                
                8Item
      2
                Management’s
      Discussion and Analysis or Plan of Operation
                
                10Item
      3
                Quantitative
      and Qualitative Disclosures About Market Risk
                
                11Item
      4
                Controls
      and Procedures
                
                11PART
      II
                Other
      InformationItem
      1
                Legal
      Proceedings
                
                13Item 1 A.
                Risk
      Factors
                
                13Item 2
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                
                15Item 3
                Defaults
      Upon Senior Securities
                
                15Item 4
                Reserved
                
                15Item 5
                Other
      Information
                
                15Item 6
                Exhibits
                
                15Signatures
                
                16





2




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, 2010 are not necessarily
indicative of our prospective financial condition and results of operations for
the pending full fiscal year ending February 28, 2011. 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.




3


PART
I


FINANCIAL
INFORMATION




ITEM 1.   FINANCIAL
STATEMENTS




PHOTOVOLTAIC
SOLAR CELLS, INC.
 (A
Development Stage Company)
 CONDENSED
BALANCE SHEETS
 
 May 31,
                  
                  
                  February 28,2010
                  
                  
                  2010(Unaudited)AssetsCurrent
      assets:Cash
                  
                  $
                  -
                  
                  
                  $
                  -Total
      current assets
                  
                  
                  -
                  
                  
                  
                  -Total
      assets
                  
                  $
                  -
                  
                  
                  $
                  -Liabilities
      and stockholders' deficitCurrent
      liabilities:Accrued
      expenses
                  
                  $
                  80,308
                  
                  
                  $
                  68,799Due
      to stockholder
                  
                  
                  127,709
                  
                  
                  
                  104,939Total
      current liabilities
                  
                  
                  208,017
                  
                  
                  
                  173,738Stockholders'
      deficitPreferred
      stock, par value $.0001 per share; 10,000,000 shares authorized, no
      shares issued and outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      stock, par value $.0001 per share; 50,000,000 shares
      authorized, 4,944,000 shares issued and outstanding
                  
                  
                  494
                  
                  
                  
                  494Additional
      paid-in capital
                  
                  
                  413,176
                  
                  
                  
                  413,176Deficit
      accumulated during the development stage
                  
                  
                  (621,687
                  )
                  
                  
                  (587,408
                  )Total
      stockholders' deficit
                  
                  
                  (208,017
                  )
                  
                  
                  (173,738
                  )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 31,2010
                  
                  
                  2009
                  
                  
                  2010Revenue
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Expenses:General
      and administrative expenses
                  
                  
                  34,279
                  
                  
                  
                  14,729
                  
                  
                  
                  144,205Total
      expense
                  
                  
                  34,279
                  
                  
                  
                  14,729
                  
                  
                  
                  144,205Loss
      from continuing operations
                  
                  
                  (34,279
                  )
                  
                  
                  (14,729
                  )
                  
                  
                  (144,205
                  )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
                  
                  
                  (34,279
                  )
                  
                  
                  (14,729
                  )
                  
                  
                  (621,687
                  )Provision
      for income taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      loss
                  
                  $
                  (34,279
                  )
                  
                  $
                  (14,729
                  )
                  
                  $
                  (621,687
                  )Net
      loss per common share, basic and diluted
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )Weighted
      average shares outstanding, basic and diluted
                  
                  
                  4,944,000
                  
                  
                  
                  4,944,000
 
 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, 2010
 (Unaudited)
 
 DeficitAccumulatedAdditional
                  
                  
                  During theCommon Stock
                  
                  
                  Paid-in
                  
                  
                  Development
                  
                  
                  Stockholders'Shares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Stage
                  
                  
                  DeficiencyCommon
      stock issued for patent and cash at $0.018 per share
                  
                  
                  3,100,000
                  
                  
                  $
                  310
                  
                  
                  $
                  55,860
                  
                  
                  $
                  -
                  
                  
                  $
                  56,170Common
      stock sold for cash at $0.10 per share
                  
                  
                  100,000
                  
                  
                  
                  10
                  
                  
                  
                  9,990
                  
                  
                  
                  -
                  
                  
                  
                  10,000Common
      stock issued for professional services at $0.01 per share
                  
                  
                  850,000
                  
                  
                  
                  85
                  
                  
                  
                  8,415
                  
                  
                  
                  -
                  
                  
                  
                  8,500Common
      stock sold for cash at $0.20 per share
                  
                  
                  615,000
                  
                  
                  
                  62
                  
                  
                  
                  122,938
                  
                  
                  
                  -
                  
                  
                  
                  123,000Common
      stock issued for professional services at $0.01 per share cancelled by the
      board of directors
                  
                  
                  (350,000
                  )
                  
                  
                  (35
                  )
                  
                  
                  (3,465
                  )
                  
                  
                  -
                  
                  
                  
                  (3,500
                  )Common
      stock issued in exchange for equity investment
                  
                  
                  600,000
                  
                  
                  
                  60
                  
                  
                  
                  179,940
                  
                  
                  
                  -
                  
                  
                  
                  180,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (115,330
                  )
                  
                  
                  (115,330
                  )Balance,
      February 29, 2008
                  
                  
                  4,915,000
                  
                  
                  
                  492
                  
                  
                  
                  373,678
                  
                  
                  
                  (115,330
                  )
                  
                  
                  258,840Common
      stock issued for professional services at $1.50 per share
                  
                  
                  25,000
                  
                  
                  
                  2
                  
                  
                  
                  37,498
                  
                  
                  
                  -
                  
                  
                  
                  37,500Common
      stock sold for cash at $0.50 per share
                  
                  
                  4,000
                  
                  
                  
                  -
                  
                  
                  
                  2,000
                  
                  
                  
                  -
                  
                  
                  
                  2,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (378,832
                  )
                  
                  
                  (378,832
                  )Balance,
      February 28, 2009
                  
                  
                  4,944,000
                  
                  
                  
                  494
                  
                  
                  
                  413,176
                  
                  
                  
                  (494,162
                  )
                  
                  
                  (80,492
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (93,246
                  )
                  
                  
                  (93,246
                  )Balance,
      February 28, 2010
                  
                  
                  4,944,000
                  
                  
                  
                  494
                  
                  
                  
                  413,176
                  
                  
                  
                  (587,408
                  )
                  
                  
                  (173,738
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (34,279
                  )
                  
                  
                  (34,279
                  )Balance,
      May 31, 2010
                  
                  
                  4,944,000
                  
                  
                  $
                  494
                  
                  
                  $
                  413,176
                  
                  
                  $
                  (621,687
                  )
                  
                  $
                  (208,017
                  )
  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 31,2010
                  
                  
                  2009
                  
                  
                  2010Cash
      flows from operating activities:Net
      loss
                  
                  $
                  (34,279
                  )
                  
                  $
                  (14,729
                  )
                  
                  $
                  (621,687
                  )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Issuance
      of equity investments for services
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  180,000Expenses
      paid by stockholder/officer
                  
                  
                  22,770
                  
                  
                  
                  7,500
                  
                  
                  
                  89,184Stock
      issued for professional services
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  42,500Loss
      on disposition of assets
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  121,025Changes
      in operating assets and liabilitiesIncrease
      in accrued expenses
                  
                  
                  11,509
                  
                  
                  
                  7,229
                  
                  
                  
                  80,308Net
      cash used by 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 by investing activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (27,957
                  )Cash
      flows from financing activities:Advances
      from/(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,
2010
 (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, 2010 we are pursuing an acquisition strategy, whereby we will seek to
acquire undervalued businesses with a history of operating revenues 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) is accretive to earnings, (5) offers the
opportunity to achieve and/or enhance profitability, and (6) increases
shareholder value.
  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
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 condensed financial statements as of May 31,
2010 and for the three month periods ended May 31, 2010 and
2009 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 financial
statements should be read in conjunction with the audited financial statements
and explanatory notes for the year ended February 28, 2010 as included in the
Company’s 10-K for that year. The results of the three months ended May 31,
2010 are not necessarily indicative of the results to be expected for the full
year ending February 28, 2011.
  8
 
 Use of
Estimates
 These
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, 2010 or
2009.
 
 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 50,000,000 shares of $0.0001 par value common
stock and 10,000,000 shares of $0.0001 par value preferred stock.
 
 NOTE 3 –
RELATED PARTY TRANSACTIONS
  During
the three month periods ended May 31, 2010 and 2009 our majority shareholder
Waterford Capital Acquisition Co. IX, LLC (“Waterford”) made certain net
payments on behalf of the Company aggregating $22,770 and $7,500, respectively.
These advances are noninterest bearing. The total amount due to Waterford at May
31, 2010 is $127,709.
 
 NOTE 4 –
SETTLEMENT AGREEMENT
 
 The
Company had entered into a nonbinding letter of intent with regard to the
reverse acquisition of PVSO by Jinpeng Poly Chem, Inc. (“Jinpeng”). During May,
2010 we reached a settlement agreement with Jinpeng whereby the letter of intent
was terminated. Pursuant to the settlement agreement, Jinpeng made a cash
payment of $20,000 representing partial reimbursement of expenses incurred by
us. This payment was received by Waterford, which had paid the expenses on our
behalf. Jinpeng also issued us 16,000 shares of its common stock. We have
assigned no value to these common shares as Jinpeng is a privately held company
with no current market for its shares. The Jinpeng common shares have no readily
ascertainable fair value.





9




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 with a history of operating revenues in markets that provide room for
growth ("Acquisition Strategy").





On
January 7, 2009, we entered into a stock 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 4,100,000 previously issued and
outstanding shares of our common stock, comprising approximately 83% of our
issuance and outstanding capital stock, from the control
shareholders.




Our
Acquisition Strategy is focused on pursuing a strategy of growth by acquiring
undervalued businesses with a history of operating revenues. 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) is  accretive to earnings, (5) offers the
opportunity to  achieve
and/or  enhance  profitability,  and  (6)  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 operating
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
operating 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:




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.


10


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, 2010 to the Three Month Period Ended May
31, 2009




Revenue





We have
no revenue from operations for the three month periods ended May 31, 2010 and
2009.





General
and Administrative Expenses





General
and administrative expenses $34,279 and $14,729 for the three months ended May
31, 2010 and 2009, respectively. General and administrative expenses consist
primarily of professional fees and due diligence expense related to potential
acquisitions. The increase in general and administrative expenses of $19,550, or
133%, results primarily from due diligence expense of $16,505 incurred in 2010,
with no comparable expense in 2009.





Plan
of Operation




We are
pursuing an Acquisition Strategy, whereby we will seek to acquire undervalued
businesses with a history of operating revenues 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. Our Acquisition Strategy is focused on pursuing a
strategy of growth by acquiring undervalued businesses with a history of
operating revenues. 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) is accretive to earnings, (5) offers the opportunity to achieve and/or
enhance profitability, and (6) increases shareholder value.





Liquidity
and Capital Resources





As of May
31, 2010 we had a working capital deficit of $208,017.  We have no
cash on hand as of June 30, 2010. 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.





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.


11





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.


12





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.


13





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.


14





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







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 200232.1
              Certification
      of the Chief Executive and the Chief Financial Officer pursuant to 18
      U.S.C. Section 1350





15





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 13, 2010
                  By:
                  /S/
      Harvey JudkowitzHarvey
      Judkowitz, Chief Executive Officer and Principal
                    Accounting
      Officer





16