UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





þ
QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended: March 31, 2010





o
TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from:





Commission file number: 0-21255





WE SAVE HOMES, INC.(Exact name of registrant as specified in its charter)





Nevada

26-4238285(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.2300 East Katella Ave., Suite 300

Anaheim, CA

92806(Address of principal executive offices)

(Zip Code)





Issuer’s telephone number: (714) 542-4444





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





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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o   No þ  The registrant is not yet subject to this requirement.





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 filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
o
Accelerated filer
oNon-accelerated filer

(Do not check if a smaller reporting company)
o
Smaller reporting company
þ





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





Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of May 17, 2010 was 14,252,207.














Table of Contents





Part I - Financial InformationItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of March 31, 2010 (Unaudited) and December 31, 2009 (Audited)

3Condensed  Consolidated Statements of Operations for the three months ended March 31, 2010 and 2009  (Unaudited)

4Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009  (Unaudited)

5Notes to Condensed Consolidated Financial Statements (Unaudited)

6Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

11Item 3. Quantitative and Qualitative Disclosures About Market Risk

15Item 4T. Controls and Procedures

15Part II – Other InformationItem 1. Legal Proceedings

16Item 1A. Risk Factors

16Item 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

17Signatures

18





2


We Save Homes, Inc. and Subsidiary CondensedConsolidated Balance Sheets


March 31,

2010


December 31,

2009(Unaudited)


(Audited)ASSETSCurrent assetsCash

$
316


$
33,266Accounts receivable, net


187



5,194Prepaid expenses


5,129



44,418Total current assets


5,632



82,878Property and equipment, net


47,230



52,826Total assets

$
52,862


$
135,704LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilitiesAccounts payable and accrued expenses

$
228,379


$
197,483Accrual for potential penalties and fines


320,336



720,336Unearned income


9,234



13,476Notes payable


288,946



138,916Convertible note payable - related party


100,000



100,000Total current liabilities


946,895



1,170,211Stockholders' deficitPreferred stock $0.001 par value, 10,000,000 shares authorized; none issued or outstanding


-



-Common stock, $0.001 par value: 50,000,000 shares authorized; shares issued and outstanding 14,208,207 and 13,407,707, respectively


14,208



13,408Additional paid-in capital


7,475,707



5,759,228Accumulated deficit


(8,383,948
)


(6,807,143
)Total stockholders' deficit


(894,033
)


(1,034,507
)Total liabilities and stockholders' deficit

$
52,862


$
135,704


See accompanying notes to unaudited condensed consolidated financial statements.




3




We Save Homes, Inc. and Subsidiary


Condensed Consolidated Statement of Operations


(Unaudited)




For the Three Months Ended 
March 31,2010


2009Net revenues

$
1,048


$
377,063General and administrative expenses


1,571,666



469,672Loss from operations


(1,570,618
)


(92,609
)Other income (expense):Rental income


-



6,575Interest expense


(6,187
)


(1,540
)Other income (expense) - net


(6,187
)


5,035Net loss

$
(1,576,805
)

$
(87,574
)Net loss per common share - basic and diluted

$
(0.11
)

$
(0.01
)Weighted average number of common shares outstanding


13,792,307



12,067,500


See accompanying notes to unaudited condensed consolidated financial statements.
  4




We Save Homes, Inc. and Subsidiary CondensedConsolidated Statement of Cash Flows (Unaudited)




For the Three Months Ended 
March 31,2010


2009Cash flows from operating activitiesNet loss

$
(1,576,805
)

$
(87,574
)Adjustments to reconcile net loss to net cash used by operating activities:Share based payments


1,317,279



-Depreciation


5,596



4,968(Increase) decrease in:Accounts receivable


5,007



23,955Due from related parties


-



7,451Prepaid expenses


39,289



(5,000
)Deposits


-



(45,000
)Increase (decrease) in:Accounts payable and accrued expenses


36,371



(17,127
)Unearned income


(4,242
)


-Net cash used in operating activities


(177,505
)


(118,327
)Cash flows from investing activities:Purchase of property and equipment


-



(33,539
)Net cash used in investing activities


-



(33,539
)Cash flows from financing activities:Proceeds from notes payable - stockholder


144,555



-Collection of subscription receivable


-



198,167Net cash provided by financing activities


144,555



198,167Net (decrease) increase in cash


(32,950
)


46,301Cash, beginning of period


33,266



-Cash, end of period

$
316


$
46,301SUPPLEMENTARY CASH FLOW INFORMATION:Income taxes paid

$
-


$
-Interest paid

$
-


$
-SUPPLEMENTARY DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:Accrued settlement paid by stockholder

$
400,000


$
-




See accompanying notes to unaudited condensed consolidated financial statements.




5





We Save Homes, Inc. and Subsidiary
 Notes to Condensed Consolidated Financial Statements
 March 31, 2010 and 2009
 (Unaudited)
   NOTE 1 – Organization and Description of Business
 
 The Company had offered foreclosure mitigation solutions for distressed homeowners. As of August 2009, the Company ceased to offer or accept any new loan modification cases.
 
 The Company now is offering retail subscriptions to an online application which will allow homeowners to store and access information for real estate and mortgage lending activities, such as loss mitigation.   In addition, the Company plans to offer this service to lenders, banks, real estate brokers and professionals to perform various real estate related transactions such as short sales, loan restructure, refinancing and other features to be developed at a later time.
 
 NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies
 
 The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.
 
 The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the years ended December 31, 2009 and 2008.  The interim results for the period ended March 31, 2010 are not necessarily indicative of results for the full fiscal year.
 
 Principles of Consolidation
 
 All significant intercompany accounts and balances have been eliminated in consolidation.
 
 Risks and uncertainties
 
 The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company's operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.
 
 Use of Estimates
 
 The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Significant estimates include collectibility of accounts receivable, recoverability of long-term assets, accruals for contingencies, and valuation of equity instruments granted as compensation to non-employees.




6





Financial Instruments




The Company’s financial instruments consist of cash, accounts receivable, prepaid expenses, accounts payable, notes payable (related party), and convertible notes payable (related party).  The carrying values of cash, accounts receivable, accounts payable, notes payable and convertible notes payable are representative of their fair values due to their short-term maturities.
 
 Revenue Recognition
 
 The Company had generated revenues from providing loan modification services to homeowners through an advance fee agreement.  The Company collected service fees in advance and deposited them into a trust account and recorded the fees as unearned revenues.  Only when the agreed activities or services were completed in their respective phases were the fees withdrawn from the trust account and recognized as revenues.  Since this revenue source is not viable, the Company no longer provides loan modification services.
 
 Fees collected from sales of online subscriptions are recorded as unearned revenues over a period of twelve months.  Subscriptions are recognized ratably over the life of the related agreement. The Company has recorded $9,234 and $13,476 as unearned income under the terms of the online service business model as of March 31, 2010 and December 31, 2009, respectively. The reduction in unearned revenue relates to refunds for services that were never provided.
 
 Share Based Payments
 
 Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.
 
 Earnings Per Share
 
 Earnings per share is calculated in accordance with ASC Topic 260,Earnings Per Share. Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and warrants were converted or exercised. As the Company recorded a net loss for all periods presented, the effect of potential dilutive shares and warrants has not been considered in the calculation of diluted net loss per share as their inclusion would be anti-dilutive. As such, the number of shares used to determine basic and diluted net loss per share is the same.
 
 Recently Issued Accounting Pronouncements
 
 In January 2010, the FASB issued ASU No. 2010-06,“Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). ASU 2010-06 amends ASC 820, “Fair Value Measurements” ("ASC 820") to require a number of additional disclosures regarding fair value measurements. The amended guidance requires entities to disclose the amounts of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers, the reasons for any transfers in or out of Level 3, and information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. The ASU also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. The amended guidance was effective for financial periods beginning after December 15, 2009, except the requirement to disclose Level 3 transactions on a gross basis, which becomes effective for financial periods beginning after December 15, 2010. ASU 2010-06 did not have a significant effect on the Company’s consolidated financial position or results of operations.
 
 In April 2010, The FASB issued ASU No. 2010-17,Revenue Recognition – Milestone Method (Topic 605), to provide guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. The amendments in the update are effective on a prospective basis for milestones achieved for fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted.  The Company is currently assessing the future impact of this new accounting update to its financial statements.
 7
 
 NOTE 3 - Notes Payable and Convertible Notes Payable to Related Parties
 
 At March 31, 2010 and December 31, 2009, notes payable and convertible notes payable to related parties consists of:
 
 2010


2009Note payable:Secured

$
220,428


$
71,916Unsecured


68,518



67,000288,946



138,916Convertible note payable - related party


100,000



100,000$
388,946


$
238,916


During the fiscal years ended December 31, 2009 and 2008, the Company borrowed $463,500 and $100,000, respectively. The Company repaid $275,000 of those borrowings and converted $50,000 of principal into common stock during 2009.  The Company recorded a loss of $1,875 on the debt conversion based on the market value of its common stock. During the three months ended March 31, 2010, a shareholder has advanced cash and paid expenses on behalf of the Company for $144,555. These notes bear interest at 10% and are originally due between 3 and 4 months.





Secured notes payable to stockholder bear interest at 10% per annum and were originally due 3 months from the date of issuance in December, 2009. Their maturity has been extended through December 31, 2010. The notes are secured by all assets of the Company.





Unsecured notes bear interest at 3.25% and are past due. Their original due date was one year from the date of issuance. The Company is in the process of obtaining an extension for the due dates on these loans.





The convertible note is also past due and the Company is in the process of extending the due date for the loan. The note bears interest of 10%, and contains a conversion provision which gives the lender the right to convert the balance due into common stock of the Company at $2.00 per share or at the prevailing offer rate. The fair value of the beneficial conversion feature at the inception of this convertible note was $100,000 which has been fully amortized.





NOTE 4 – Contingencies and Commitments





Due to the discontinuance of its loan modification business, the Company accrued for potential obligations an amount of $200,000 which has been recorded as a liability.





In October 2009, a shareholder asserted a claim and threatened litigation against the Company and certain officers, directors and shareholders. The Company and the individuals involved entered into a settlement in December 2009 with the stockholder, which included the repurchase of 1,816,000 by another shareholder of all of the disputing shareholder’s shares in the Company for $400,000. On January, 2010, the Company obtained a general and mutual release for any potential legal action. The payment of $400,000 has been charged to Additional Paid in Capital.




In December 2009, the Company accrued $120,336 in connection with a dispute with a consultant.




8





NOTE 5 – Stockholder’s Deficit




(A)2010 stock issuance
 
 During the three months ended March 31, 2010, the Company issued 800,500 shares of common stock for services rendered, having a fair value of $1,317,279 (average price of $1.65/share), based upon the quoted closing trading price.
 
 (B)Warrants
  The following is a summary of the Company’s warrant activity:




Warrants


WeightedOutstanding/


AverageExercisable


Exercise PriceExercise - December 31, 2008


-


$
-Granted


15,001



2.00Exercised


-



-Forfeited/Cancelled


-



-Outstanding - December 31, 2009


15,001



2.00Exercisable - December 31, 2009


15,001



2.00Granted


-



-Exercised


-



-Forfeited/Cancelled


-



-Outstanding - March 31, 2010


15,001


$
2.00Exercisable - March 31, 2010


15,001


$
2.00
  The warrants outstanding and exercisable all have an exercise price of $2.00 per share, and a remaining contractual life of 4.57 years. At March 31, 2010 and December 31, 2009, warrants outstanding and exercisable had no intrinsic value.
 
 NOTE 6 – Going Concern and Liquidity
 
 As reflected in the accompanying unaudited condensed consolidated financial statements, for the three months ended March 31, 2010, the Company has a net loss of $1,576,805 and net cash used in operating activities amounted to $177,505. At March 31, 2010, the Company has a working capital deficit of $941,263 and a stockholders’ deficit of $894,033.
 
 The ability of the Company to continue its operations is dependent on Management's plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.
 
 9





The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives.  The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future.  There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. Subsequent to March 31, 2010, the Company borrowed approximately $48,000 from a stockholder, in addition to amounts outstanding as of March 31, 2010.
 
 The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
 
 NOTE 7 – Subsequent Events
 
 Increase in secured notes payable – stockholder
 Subsequent to March 31, 2010 the Company has increased its outstanding debt by approximately $48,000 to a certain lender through a series of secured promissory notes that bear interest at 10%. Each note is 3 months in duration. The Company has extended all the matured notes with this lender so that each now has a maturity date of December 31, 2010. The extension agreement also provides for repayment in advance of maturity if the Company achieves certain revenue thresholds.
 
 Issuance of common stock
 Subsequent to March 31, 2010 the Company issued 43,500 shares of restricted common stock for services and wages valued at $42,195 (average price of $0.97/share) based upon the quoted closing trading prices. The shares were issued for certain consulting and advisory services.
  10
 ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 General
 
 The following discussion and analysis should be read in conjunction with our condensed financial statements and notes thereto, included elsewhere in this Quarterly Report on Form 10-Q (“Report”). Except for the historical information contained in this Report, the following discussion contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results may differ materially from the results discussed in the forward-looking statements as a result of certain factors including, but not limited to, those discussed in the section of this Report titled “Risk Factors”, as well as other factors, some of which will be outside of our control. You are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. You should refer to and carefully review the information in future documents we file with the SEC.
 
 Overview
 
 Plan of Operation
 
 We Save Homes, Inc. (the “Company" or “WESA”) has not generated sufficient revenue so it intends to report its plan of operation below. The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.
 
 History
 
 The Company was organized under the laws of the State of Nevada on May 19, 2006.  On March 23, 2009, the Company, exchanged, pursuant to a Share Exchange Agreement with its now-subsidiary, Mortgage Modification Legal Network (“MMLN”), (the “Share Exchange Agreement”), an aggregate of 10,000,000 shares of its common stock for all of the issued and outstanding shares of common stock of MMLN from the MMLN security holders. On March 30, 2009, our Board of Directors and shareholders approved a change in our name to We Save Homes, Inc. (“WESA”). The Company on May 20, 2009 amended its Articles of Incorporation with the State of Nevada and amended its Bylaws to change its end of fiscal year to December 31, effective June 8, 2009. The Amendment also allowed the Company to consummate its name change to We Save Homes, Inc.  On June 8, 2009, the Company received notice from the State of Nevada confirming the Amendment.  The principal offices are located at 2300 East Katella Ave., Suite 300, Anaheim, CA 92806. Our telephone number is (714) 542-4444.  Our website is www.wesavehomes.com.
 
 The Company, through its subsidiary, MMLN, during 2009 offered potential foreclosure mitigation solutions for distressed homeowners using two (2) business models.  First, MMLN had a retail program that employed both "grass roots" and "technology based" efforts to reach out directly to the troubled homeowner by helping to inform and provide information as to their various foreclosure mitigation options.  Second, MMLN had an affiliate program that marketed specifically to real estate and mortgage professionals. However, the subsidiary discontinued the affiliate program in the second quarter of 2009 due to increased regulation, potential liabilities that outweighed the benefits thereof, and a high degree of significant risks associated with this program. Also in that quarter the Company received a letter from the California Department of Real Estate requesting information regarding business activities in the state of California involving loan modification services. In this correspondence, the DRE also questioned the business activities of a back-end service provider and its licensing status to operate in the state of California (Note 5).  As a result the Company ceased outsourcing back-end processing and brought these activities in-house.  During the third quarter of 2009 determined that the business would ultimately not become successful, and ceased to offer or accept any new loan modification cases.
  11
 
 Business
 
 We Save Homes, Inc. provides a full-range of products and services for commercial and residential mortgage servicers throughout the nation. The Company’s regulatory-compliant default management solutions save time, eliminate errors, and increase efficiency.
 
 These solutions include:
 
 •
REO Management and Servicing: servicing Real Estate Owned (REO) properties.
 •
Property Preservation: ensuring that unoccupied properties are quickly secured and remain adequately protected throughout the default process.  This segment also includes Home Rehabilitation Services: transforming a neglected property into a marketable property quickly, efficiently and cost-effectively.
 •
Property Inspections: offering nationwide commercial and residential inspection services, including 24-hour rush and Saturday service.
 •
Licensed Independent Escrow Services - an independent escrow corporation serving escrow needs throughout California.
 •
Short Sale Processing and Negotiations:  identifying borrower candidates to list properties, streamlining and expediting the Short Sale process. A short sale is the sale of property where the sale proceeds fall short of the balance owed on the property’s loan.
 
 We Save Homes, Inc. utilizes advanced technology solutions to streamline and simplify the default management process.  The Company meets the specific needs of commercial and residential mortgage servicers throughout the nation through a technology portfolio, which includes:
 
 •
Mitigation software—which ensures fast and efficient load modifications according to FDIC and HAMP regulations.
 •
Document management and processing—which is a regulatory-compliant system to enable mortgage servicers to overcome the inefficiencies and high costs of conventional document handling, while speeding and simplifying data aggregation, task management, tracking and reporting.
 
 We Save Homes, Inc. provides a turnkey, full-service solution to enhance businesses and improve customer relationships. The Company is committed to maximizing its clients’ asset preservation while reducing costs, streamlining operations and optimizing borrower relationships.  The technical solutions developed by We Save Homes, Inc. enable default mortgage servicers to meet the increasing demands of an ever-evolving and competitive economy.
 
 Results of Operations
 
 Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009
 
 Revenues –For the period ending March 31, 2010 our net revenue was $1,048 and our revenue for the period ending March 31, 2009 was $377,063.  The substantial decrease is due to the cessation of the loan modification business during the second quarter of 2009. Revenue for the period ending March 31, 2009 consisted solely of loan modification revenue. During 2010, our revenues comprised fees received from retail subscription for online applications which will allow homeowners to store and access information for real estate and mortgage lending activities.During 2009 our revenues were comprised of fees received from various law offices and a back end service provider in connection with the marketing and administrative support of loan modification services.  Revenue is presented on a Net basis, deducting fees paid to real estate professionals and back end service provider. David, pls confirm the above highlighted paragraph.
 
 General and administrative expenses – General and administrative expenses increased to $1,571,666 for the period ending March 31, 2010 as compared to $469,672 for the prior year primarily due to non-cash expenses from issuance of common stock shares for compensation, consulting and other professional fees in the amount of $1,317,279.
  12
 
 Loss from operations – Loss from operations for the period ending March 31, 2010 was $1,570,618 as compared to $92,609 for the prior year.  The increase in loss from operations is primarily due to increased general and administrative expenses relating to share-based payments.
 
 Liquidity and Capital Resources
 
 Cash and working capital – At March 31, 2010, we had cash of $316 compared to $33,266 at December 31, 2009. At March 31, 2010, we had a working capital deficit of $941,263 as compared to a working capital deficit of $1,087,333 at December 31, 2009.
 
 Cash used in operations – During the period ending March 31, 2010, net cash used in operations was $177,505 and consisted principally of a net loss of $1,576,805 and was offset by share based payments of $1,317,279 and depreciation of $5,596. For the period ending March 31, 2009, net cash used in operations amounted to $118,327 consisting principally of a net loss of $87,574, depreciation of $4,968.
 
 Investing activities – During the period ending March 31, 2009 we used $33,539 of cash to acquire property and equipment. There were no investing cash flows for the period ending March 31, 2010.
  Financing activities – During the period ending March 31, 2010 we financed our operations by receiving loans of $144,555.  During the same period in 2009 we received proceeds of $186,510 from the collection of a subscription receivable.
 
 We have incurred significant losses since our inception, including $1,576,805 and $87,574 for the three months ending March 31, 2010 and 2009, respectively, and we have relied on proceeds from sales of our common stock, along with convertible note borrowings, to fund operations and business development and growth. While the majority of the accumulated deficit or losses is the result of non-cash expenses from issuance of common stock shares to various parties for advisory, marketing services and compensations, we expect that we will continue to experience net losses in the foreseeable future.  The audited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we have to curtail operations.
 
 We continue to be engaged in additional fund-raising activities to fund future operations, capital expenditures, potential acquisitions of businesses, and provide additional working capital. However, there is no assurance that additional financing will be available on favorable terms or at all.  If we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders.  If we do not raise additional capital, then we will experience significant financial hardship and will have considerable difficulty to fund operations, business development, growth and continue as a going concern.  At March 31, 2010 we do not have sufficient cash to meet our needs for the next twelve months.
 
 Critical Accounting Policies
  The discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
  13
  Recent Accounting Pronouncements
  For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our unaudited condensed consolidated financial statements, see “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies”.
 
 Going Concern
 
 As reflected in the accompanying unaudited condensed consolidated financial statements, for the three months ended March 31, 2010, the Company has a net loss of $1,576,805 and net cash used in operating activities amounted to $177,505. At March 31, 2010, the Company has a working capital deficit of $941,263 and a stockholders’ deficit of $894,033.
 
 The ability of the Company to continue its operations is dependent on Management's plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.  The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.
 
 The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives.  The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future.  There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. Subsequent to March 31, 2010, the Company borrowed approximately $48,000 from stockholder, in addition to amounts outstanding as of March 31, 2010.
 
 The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
  14
  ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 As a smaller reporting company, we are not required to provide this disclosure.
 
 ITEM 4(T).    CONTROLS AND PROCEDURES
 
 (a) Disclosure Controls and Procedures
 
 Regulations under the Securities Exchange Act of 1934 require public companies to maintain “disclosure controls and procedures,” which are defined to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
 
 We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the period covered by this Report.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2010, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.
 
 A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.  Management has identified the following three material weaknesses in our disclosure controls and procedures:
 
 1.           We do not have written documentation of our internal control policies and procedures.  Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act.  Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
 
 2.           We do not have sufficient segregation of duties within accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
 
 3.           We do not have review and supervision procedures for financial reporting functions. The review and supervision function of internal control relates to the accuracy of financial information reported. The failure to review and supervise could allow the reporting of inaccurate or incomplete financial information. Due to our size and nature, review and supervision may not always be possible or economically possible.  Management evaluated the impact of our significant number of audit adjustments and has concluded that the control deficiency that resulted represented a material weakness.
 
 To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
 
 (b) Changes in internal control over financial reporting
 
 During the three months ended March 31, 2010, the Company has not made any changes to internal control over financial reporting.
  15
 
 PART II OTHER INFORMATION
 
 ITEM 1.    LEGAL PROCEEDINGS
 
 Not applicable.
 
 ITEM 1A.    RISK FACTORS
 
 The information to be reported under this item has not changed since it was disclosed in the previously filed Form 10-K, dated May 17, 2010.
 
 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
 
 Not applicable.
  16
 
 ITEM 6.    EXHIBITS.
 
 The following exhibits are filed herewith or incorporated by reference:
 
 Exhibit

Number

Description3.1

Amended and Restated Articles of Incorporation of We Save Homes, Inc. (1)3.2

Bylaws of We Save Homes, Inc. (1)31.1

Section 302 Certificate by the Company’s President and Interim-Chief Financial Officer*32.1

Section 906 Certificate by the Company’s President and Interim-Chief Financial Officer *
 
 * Filed herewith.
 (1)Filed as Exhibits to Schedule 14C on April 9, 2009
 
 17
  SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 We Save Homes, Inc.May 24, 2010
By:
/s/ Ryan BoyajianRyan BoyajianChairman, President and Interim-Chief Financial Officer