UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q/A (Amendment No. 1)    x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
September 30, 2009 OR   ̈
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from
 to Commission file number 0-53133   HOME SCHOOL HOLDINGS, INC. (Exact name of registrant as
specified in its charter)    Florida

26-1983716(State or other jurisdiction
of

incorporation or
organization)

(I.R.S. Employer

Identification
Number)  2700 South River Road, Suite
106

Des Plaines,
Illinois

60018(Address of principal executive offices)

(Zip Code) (847) 391-5079 (Issuers telephone number,
including area code) Not applicable (Former name, former address and
former fiscal year, if changed since last report)   Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈ Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈ Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of
large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):  Large accelerated filer

 ̈

Accelerated filer

 ̈Non-accelerated filer

 ̈  (Do not check if a smaller reporting company)

Smaller reporting company

x Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x State the number of shares outstanding of each of
the issuers classes of common equity, as of the latest practicable date.  Class

Outstanding at September 30, 2009Common Stock, no par value per share

312,962,450 shares     EXPLANATORY NOTE

We filed our Quarterly Report on Form 10-Q for the nine
months ended September 30, 2009 with the Securities and Exchange Commission (the SEC) on November 19, 2009. We are
filing this Amendment No. 1 on the Form 10-Q/A on January 26, 2010 to amend and restate our unaudited financial statements for the
nine months ended September 30, 2009 and the related footnote disclosures to reflect the correction of errors, as more fully
described in the following paragraphs.

For the convenience of the reader, this Amended 10-Q amends and restates in its entirety the Quarterly Report on Form 10-Q for the three months ended September 30, 2009 and the nine months ended September 30, 2009. However, this Amended 10-Q amends only items referred to below, in each case as a result of and to reflect the adjustments discussed below and more fully in Note 9 of the accompanying Unaudited Financial Statements and related disclosures, which includes a summary of the effects of these changes on our unaudited balance sheet as of September 30, 2009 and our unaudited statements of operations and cash flows for the nine months ended September 30, 2009.

On December 15, 2009, while preparing our responses to certain comments raised by the Securities and Exchange Commission pertaining to our pending Registration Statement on Form S-1, we identified errors in the preparation of our financial statements in the recording of revenue, costs of revenue, development expenses, amortization expense, interest expense, and general and administrative expenses. On December 15, 2009 the Company determined that a restatement of its unaudited interim financial statements for the six months ended June 30, 2009 and the nine months ended September 30, 2009 was necessary to correct errors in these previously issued financial statements. In preparing our response to the commission pertaining to our financial statements for the six months ended June 30, 2009, the Company discovered errors in its recording of interest expense related to its Convertible Notes Payable 
Stockholder and Loans Payable  Related Party. For the six months ended June 30, 2009 interest expense was overstated by $141,332. The correction of this error was improperly made to the form 10-Q for the nine months ended September 30, 2009 and did not properly apply ASC 250-10-45-22  Correction of an Error in Previously Issued Financial Statements.  As a result, the previously filed form 10-Q for the six months ended June 30, 2009 has been amended and form 10-Q/A Amendment No. 1 for the six months ended June 30, 2009 was filed to restate the financial statements for the periods presented. The previously filed form 10-Q for the nine months ended September 30, 2009 is also being amended to correct the misapplication of ASC 250-10-45-22. Additionally, there was calculation error in the recording interest expense and accrued interest for the three months ended September 30, 2009. This error resulted in interest expense being understated by $1,585.

This amendment No. 1 to our Quarterly Report on Form 10-Q/A for the nine months ended September 30, 2009 amends only the following items:

PART I, Item 1  Unaudited Interim Financial Statements and Notes to the Financial Statements

PART I, Item 2  Managements Discussion and Analysis or Plan of Operation was amended to reflect the corrections to the Companys reported operating results, cash flows and statement of financial position.

HOME SCHOOL HOLDINGS, INC.

TABLE OF CONTENTS



PAGEPart I Financial Information

1Item 1. Financial Statements (unaudited)

1Consolidated Balance Sheet

1Consolidated Statements of Operations

2Consolidated Statements of Cash Flows

3Notes to Consolidated Financial Statements

4Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations

17Item 3. Quantitative and Qualitative Disclosures About Market Risk

25Item 4. Controls and Procedures

25Part II Other Information

26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

26Item 6. Exhibits

28Signatures

28Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2

i

PART I FINANCIAL INFORMATION




Item1.
        Financial Statements



Home School Holdings, Inc.

(a development stage company)

Consolidated Balance Sheet




(Unaudited)
        
        (Audited)September 30,
        
        December 31,2009RESTATED
        
        2008RESTATEDASSETSCURRENT ASSETSCash
        
        $
        3,814
        
        $
        958Inventory
        
        
        531
        
        
        473Prepaid Expenses
        
        
        13,099
        
        
        6,302TOTAL CURRENT ASSETS
        
        
        17,444
        
        
        7,733Equipment, net of accumulated depreciation of $4,881 and $3,742 respectively
        
        
        4,507
        
        
        5,646Website, net of accumulated amortization of $ 661,431 and $424,629 respectively
        
        
        270,508
        
        
        507,309OTHER ASSETSDeposits
        
        
        2,780
        
        
        2,780TOTAL ASSETS
        
        $
        295,238
        
        $
        523,468LIABILITIES AND STOCKHOLDERS (DEFICIT)CURRENT LIABILITIESAccounts Payable
        
        $
        139,225
        
        $
        131,673Accounts Payable--Related Party
        
        
        
        
        
        39,984Accrued Payroll
        
        
        236,807
        
        
        86,972Accrued Interest--Convertible Note Stockholder
        
        
        6,506
        
        
        172,742Deferred Revenue
        
        
        375
        
        
        375Prepaid Advertising
        
        
        2,239
        
        
        2,700Note Payable
        
        
        100,472
        
        
        40,000Convertible Notes Payable--Stockholder
        
        
        450,000
        
        
        300,000Loans Payable - Related Party
        
        
        
        
        
        70,499TOTAL CURRENT LIABILITIES
        
        
        935,625
        
        
        844,945STOCKHOLDERS EQUITY / (DEFICIT)Common Stock - Par value $0.001; Authorized: 500,000,000; Issued andOutstanding: 312,962,450 and 289,300,685 in September 30, 2009 andDecember 31, 2008, respectively.
        
        
        312,962
        
        
        289,701Additional Paid-In Capital
        
        
        4,575,574
        
        
        3,772,703Shareholder Receivable
        
        
        (1,000
        )
        
        (1,000
        )Deficit accumulated during development stage
        
        
        (5,527,923
        )
        
        (4,382,480
        )Total Stockholders Equity / (Deficit)
        
        
        (640,387
        )
        
        (321,477
        )TOTAL LIABILITIES AND STOCKHOLDERS EQUITY / (DEFICIT)
        
        $
        295,238
        
        $
        523,468



The accompanying notes are integral parts of these financial statements.



1

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)




For the periodFor the
        
        For the
        
        October 17, 2005Three Months Ended
        
        Nine Months Ended
        
        (inception) toSeptember 30,
        
        September 30,
        
        September 30,2009RESTATED
        
        2008RESTATED
        
        2009RESTATED
        
        2008RESTATED
        
        2009RESTATEDRevenue - Product Sales, net
        
        $
        17,086
        
        $
        38,087
        
        $
        31,841
        
        $
        51,446
        
        $
        106,845Revenue - Advertising
        
        
        12,381
        
        
        6,766
        
        
        25,062
        
        
        11,455
        
        
        40,460Total Revenue
        
        
        29,468
        
        
        44,853
        
        
        56,904
        
        
        62,901
        
        
        147,306Cost of Revenue - Product Sales
        
        
        12,539
        
        
        19,368
        
        
        27,867
        
        
        29,874
        
        
        80,360Cost of Revenue - Advertising
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        Total Cost of Revenue
        
        
        12,539
        
        
        19,368
        
        
        27,867
        
        
        29,874
        
        
        80,360Gross Profit
        
        
        16,928
        
        
        25,485
        
        
        29,036
        
        
        33,027
        
        
        66,945Professional Fees
        
        
        23,738
        
        
        24,853
        
        
        175,804
        
        
        84,677
        
        
        546,279Board Compensation
        
        
        11,500
        
        
        16,500
        
        
        10,778
        
        
        559,500
        
        
        877,126Development Expenses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        67,656Depreciation and Amortization
        
        
        75,509
        
        
        80,797
        
        
        237,940
        
        
        240,473
        
        
        666,311Marketing
        
        
        
        
        
        15,556
        
        
        34,411
        
        
        75,828
        
        
        232,128Employee Compensation
        
        
        163,938
        
        
        56,687
        
        
        496,458
        
        
        304,074
        
        
        2,419,577General and Administrative
        
        
        14,621
        
        
        18,717
        
        
        56,819
        
        
        73,601
        
        
        374,851Total Operating Expenses
        
        
        289,306
        
        
        213,110
        
        
        1,012,210
        
        
        1,338,152
        
        
        5,183,928Loss from Operations
        
        
        (272,378
        )
        
        (187,625
        )
        
        (983,174
        )
        
        (1,305,126
        )
        
        (5,116,983
        )Extinguishment of DebtInterest Income
        
        
        0
        
        
        0
        
        
        0
        
        
        153
        
        
        282Interest Expense
        
        
        (57,430
        )
        
        (64,996
        )
        
        (162,270
        )
        
        (184,935
        )
        
        (411,222
        )Total Other Income/Expense
        
        
        (57,430
        )
        
        (64,996
        )
        
        (162,270
        )
        
        (184,781
        )
        
        (410,940
        )Provision for Income Taxes
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        Net Loss
        
        $
        (329,807
        )
        $
        (252,621
        )
        $
        (1,145,443
        )
        $
        (1,489,907
        )
        $
        (5,527,923
        )Net Loss Per Share - basic and diluted
        
        
        **
        
        
        **
        
        
        **
        
        
        **Weighted average number of sharesoutstanding during the period -basic and diluted
        
        
        302,467,154
        
        
        284,989,708
        
        
        298,500,579
        
        
        282,810,751



** Less than $0.01



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



2

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Cash Flows

(Unaudited)




For the periodFor the Period Ended
        
        10/17/2005September 30,
        
        (inception) to2009RESTATED
        
        2008RESTATED
        
        9/30/2009RESTATEDCash Flows Used in Operating Activities:Net Loss
        
        $
        (1,145,443
        )
        $
        (1,489,907
        )
        $
        (5,527,923
        )Adjustments to reconcile net loss to net cash used in operationsDepreciation/Amortization
        
        
        237,940
        
        
        240,473
        
        
        666,311Commons Stock issued to pay interest expense and accrued interest
        
        
        220,242
        
        
        
        
        
        220,242Debt issued to pay interest expense and accrued interest
        
        
        100,000
        
        
        
        
        
        100,000Shares issued for payment of accounts payable
        
        
        74,413
        
        
        
        
        
        74,413In-kind contribution of interest
        
        
        2,462
        
        
        
        
        
        8,023Start-up expenses
        
        
        
        
        
        
        
        
        100,000Shares issued for services
        
        
        137,880
        
        
        54,000
        
        
        410,998Shares issued for interest
        
        
        
        
        
        
        
        
        72,000Stock options issued for services
        
        
        138,836
        
        
        730,831
        
        
        1,692,726Shares issued for board comp
        
        
        38,500
        
        
        55,500
        
        
        232,000(Increase) Decrease in:Prepaid Expenses
        
        
        (7,758
        )
        
        (2,949
        )
        
        (14,060
        )Inventory
        
        
        (58
        )
        
        (1,531
        )
        
        (531
        )Deferred Revenue
        
        
        
        
        
        375
        
        
        (2,082
        )Deposits
        
        
        
        
        
        
        
        
        (2,780
        )Accrued interest
        
        
        (166,236
        )
        
        (26,576
        )
        
        6,506Accrued payroll
        
        
        149,836
        
        
        (178,714
        )
        
        394,307Accounts Payable
        
        
        7,552
        
        
        60,294
        
        
        139,225Accounts Payable--Related Party
        
        
        (39,984
        )
        
        24,913
        
        
        Net Cash Used In Operating Activities
        
        
        (251,817
        )
        
        (533,292
        )
        
        (1,430,588
        )Cash Flows From Investing Activities:Payments for Equipment & Website Development
        
        
        
        
        
        (125,657
        )
        
        (753,493
        )Net Cash Used In Investing Activities
        
        
        
        
        
        (125,657
        )
        
        (753,493
        )Cash Flows From Financing Activities:Proceeds from Sale of Stock
        
        
        62,700
        
        
        388,970
        
        
        1,496,422Decrease (Increase) of shareholder receivable
        
        
        
        
        
        
        
        
        (1,000
        )Proceeds from Notes Payable - Stockholder
        
        
        60,472
        
        
        300,000
        
        
        360,472Proceeds from Convertible Note Payable - Related Party
        
        
        131,500
        
        
        (30,000
        )
        
        583,000Repayment of Notes Payable - Related Party
        
        
        
        
        
        
        
        
        (211,000
        )Repayment of Notes Payable
        
        
        
        
        
        
        
        
        (40,000
        )Net Cash Provided by Financing Activities
        
        
        254,673
        
        
        658,970
        
        
        2,187,894Net Increase (Decrease) in Cash
        
        
        2,856
        
        
        23
        
        
        3,814Cash at Beginning of Period
        
        
        958
        
        
        1,526
        
        
        Cash at End of Period
        
        $
        3,814
        
        $
        1,548
        
        $
        3,814Supplemental disclosure of cash flow information:Cash paid for interest
        
        
        
        
        
        
        
        
        550Cash paid for taxes
        
        
        
        
        
        
        
        
        



Supplementary disclosure of non-cash items:



During 2007, $175,000 of loans payable were converted to common stock.



During 2008, an $80,000 note was exchanged for a website with $5,157 of deferred revenue.



Also in 2008, $157,500 of deferred compensation was settled through the issuance of options.



During 2009, $220,242 of accrued interest for a note payable to shareholder was converted to common stock as part of loan modification agreement



Also in 2009, $100,000 of accrued interest for a note payable to shareholder was converted to debt as part of a loan modification agreement



Also in 2009, $74,413 of accounts payable were paid with issuance of common stock



Also in 2009, $126,000 of deferred compensation was settled through the issuance of common stock



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



3

HOME SCHOOL HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2009



NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements
have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for the presentation of
interim financial information, but do not include all the information and footnotes required by generally accepted accounting
principles for complete financial statements. The audited financial statements for the period October 17, 2005 (Inception) through
December 31, 2008 are contained in the Report on Form 8-K for the fiscal year ended December 31, 2008 filed on May 11, 2009 with the
Securities and Exchange Commission and on Form 10-K/A filed on January 13, 2010 and are hereby referenced. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended September 30, 2009 and for the cumulative period from October 17, 2005
(Inception) through September 30, 2009 are not necessarily indicative of the results that may be expected for the year ended
December 31, 2009.

NOTE 2 - ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

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

Pursuant to the Share Exchange Agreement, the Company issued 289,959,665 shares of its common stock to shareholders of HSI and the Company reserved for future issuance 73,949,760 shares of common stock subject to HSIs outstanding stock options and warrants and 22,402,121 shares of common stock subject to HSIs outstanding convertible debt (the Share Exchange).

Recent Accounting Literature - FASB Accounting Standards Codification

(Accounting Standards Update (ASU) 2009-01)

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

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

4

Subsequent Events

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

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

Determination of the Useful Life of Intangible Assets

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

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

Noncontrolling Interests

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

SFAS No. 160 changed the accounting and reporting
for minority interests such that they will be recharacterized as noncontrolling interests and classified as a component of equity.
SFAS No. 160 became effective for fiscal years beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer records an intangible asset when the purchase price
of a noncontrolling interest exceeds the book value at the time of buyout. The adoption of SFAS No. 160 did not have any other
material impact on the Companys financial statements.

Consolidation of Variable Interest Entities  Amended

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

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

Development Stage Risk

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

5

Cash and Cash Equivalents

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

Use of Estimates

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

Revenue Recognition

(Included in Accounting Standards Codification (ASC) 650 Revenue Recognition

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

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

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

Shipping and Handling Costs

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

Equipment

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

Website

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

Prepaid Expenses

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

Advertising Costs

Advertising costs are expensed as incurred.

Inventories

The Companys inventories consist of finished
goods. Inventories are stated at lower of cost or market. Cost is determined on the first-in, first-out basis.

6

Stock Compensation

(Included in Accounting Standards Codification (ASC) 718 Compensation - Stock Compensation

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

Fair Value of Financial Instruments

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

Loss Per Share

Basic loss per share is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by Accounting Standards Codification (ASC)  260 Earnings Per Share which was previously Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Shares.

Stock Splits

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

NOTE 3 - STOCKHOLDERS DEFICIT

During the months of January to March, 2009, the company issued 404,460 shares of common stock for board compensation with a fair market value of $13,500.

During the months of January to March, 2009, the company issued 360,000 shares of common stock as a gift for employee services.

During the months of April to June, 2009, the company issued 4,027,500 shares of common stock for cash in the amount of $122,700.

During the months of April to June, 2009, the company issued 314,820 shares of common stock for board compensation with a fair market value of $13,500.

During the months of April to June, 2009, the company issued 100,000 shares of common stock with a fair market value of $5,000 as a gift for services.

During the months of July to September, 2009, the company issued 230,000 shares of common stock for board compensation with a fair market value of $11,500.

During the months of July to September, 2009, the company issued 6,931,740 shares of common stock for cash in the amount of $301,742.

During the months of July to September, 2009, the company issued 1,860,328 shares of common stock for the payment of corporate expenses with a fair market value of $74,413.

During the months of July to September, 2009, the company issued 3,150,000 shares of common stock for employee services with a fair market value of $126,000.

7

NOTE 4 - CONVERTIBLE NOTES PAYABLE - STOCKHOLDER

On February 6, 2009, the Company entered into short-term lending arrangements with its shareholders. The loan provides $50,000 for six months. The loan pays an APR of 10% and provides for convertibility at $0.05 per share. On June 5, 2009, this loan was converted to 1,000,000 shares common stock at $0.05 per share.

On April 3, 2009, the Company entered into short-term lending arrangements with its shareholders. The loan provides $10,000 for six months. The loan pays an APR of 10% and provides for convertibility at $0.06 per share. On June 5, 2009, this loan was converted to 200,000 shares common stock at $0.05 per share.

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

On September 30, 2009, the Company entered into a loan modification agreement with Mike North and Bebe North to restructure the existing convertible notes payable held by Mr. and Mrs. North which had an outstanding value of $670,242 as of September 30, 2009. The first note dated January 16, 2008 had a face value of $300,000 and accrued interest in the amount of $307,742, as of September 30, 2009. The second note dated April 27, 2009 had a face value of $50,000 and accrued interest in the amount of $12,500, as of September 30, 2009.

The terms of the existing notes were collectively modified to provide a single set of terms as set forth in the Loan Modification Agreement. The new principal loan amount shall be $450,000 at an interest rate of 4% per year with a maturity date of January, 1 2010. At any time prior to the maturity date, the outstanding principal amount of the loan is convertible into shares of Common Stock at a conversion price of $0.05 per share. At any time prior to the maturity date, all of the outstanding accrued interest shall be converted into restricted shares of Common Stock at a conversion price of $0.045 per share.

Accrued interest in the amount of $220,242 from the original notes has been converted into 4,894,265 shares of common stock at a conversion price of $0.045 per share.

NOTE 5 - RELATED PARTY TRANSACTIONS

During the months of January to September, 2009, the Companys three principal stockholders loaned an additional $61,470 to the Company in exchange for a note payable. The note is unsecured, due on demand. The balance outstanding at September 30, 2009 was $181,971.

On September 30, 2009, one of the Companys principal stockholders, Kenneth Lydecker, converted $30,000 of existing notes payable into 750,000 shares of Common Stock at a conversion price of $0.04.

On September 30, 2009, one of the Companys principal stockholders, David Nicholson, converted $25,000 of existing notes payable into 625,000 shares of Common Stock at a conversion price of $0.04.

On September 30, 2009, Thomas Morrow, CEO, converted $26,499 of existing notes payable into 662,475 shares of Common Stock at a conversion price of $0.04.

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

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

NOTE 6 - DEBENTURE

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

8

NOTE 7 - GOING CONCERN

Going Concern

Our financial statements have been prepared on the
basis of accounting principles applicable to a going concern. As a result, they do not include adjustments that would be necessary
if we were unable to continue as a going concern and would therefore be obligated to realize assets and discharge our liabilities
other than in the normal course of operations. As reflected in the accompanying financial statements, the Company is in the
development stage with limited revenues, has used cash flows in operations of $1,430,588 from inception of October 17, 2005 to
September 30, 2009 and has an accumulated deficit of $5,527,923 through September 30, 2009. This raises substantial doubt about its
ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys
ability to raise additional capital and implement its business plan.

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

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

NOTE 8 - SUBSEQUENT EVENTS

During the month of October 2009, the company issued
70,000 shares of common stock for board compensation with a fair value of $13,500.

During the month of November 2009, the company issued
75,000 shares of common stock for cash of $3,000 ($0.04 per share).

NOTE 9 - RESTATEMENTS

On December 15, 2009, while preparing our responses to certain comments raised by the Securities and Exchange Commission pertaining to our pending Registration Statement on Form S-1, we identified errors in the preparation of our financial statements in the recording of revenue, costs of revenue, development expenses, amortization expense, interest expense, and general and administrative expenses. It was determined that a restatement of our unaudited interim financial statements for the three months ended September 30, 2009 and the nine months ended September 30, 2009 was necessary to correct errors in the previously issued financial statements. Corrections to the unaudited interim financial statements have been made in various accounts as follows:

For the nine months ended September 30, 2009 interest
expense was overstated by $142,417. $141,332 of the correction was the result of the error which was improperly made to the form10-Q
for the nine months ended September 30, 2009 and did not apply ASC 250-10-45-22  Correction of an Error in Previously Issued
Financial Statements. As a result, form 10-Q/A Amendment No. 1 for the nine months ended September 30, 2009 was filed to correct
this error within the proper period. The remaining difference of $1,085 was the result of an error in the calculation of interest
expense for the 3 months ended September 30, 2009.

Accrued Interest - Convertible Note Stockholder as of June 30, 2009 has been restated by $141,332 and Interest Expense for the 3 months and 6 months ended June 30, 2009 has been restated by $79,786 and $141,332 respectively to correct errors in the original calculation and recording of interest expense on the Convertible Notes Payable  Stockholder and Loan Payable  Related Party. These errors resulted in interest expense and Accrued Interest- Convertible Note Stockholder being overstated in the previously issued financial statements.

General and Administrative expense has been restated by $501 to correct for transactions which were incorrectly charged against income within this interim period.

The effect of these restatements on the Companys previously issued interim financial statements dated September 30, 2009 and September 30, 2008 is detailed below:

9

Home School Holdings, Inc.

(a development stage company)

Consolidated Balance Sheet




(Unaudited)
        
        (Unaudited)
        
        (Unaudited)September 30,
        
        September 30,
        
        September 30,2009
        
        2009
        
        2009PreviouslyReported
        
        Adjustment
        
        RESTATEDASSETSCurrent AssetsCash
        
        $
        3,814
        
        $
        
        
        $
        3,814Inventory
        
        
        531
        
        
        
        
        
        531Prepaid Expenses
        
        
        13,099
        
        
        
        
        
        13,099TOTAL CURRENT ASSETS
        
        
        17,444
        
        
        
        
        
        17,444Equipment, net of accumulated depreciation of $4,881
        
        
        4,507
        
        
        
        
        
        4,507Website, net of accumulated amortization of $ 586,300
        
        
        270,508
        
        
        
        
        
        270,508Other AssetsDeposits
        
        
        2,780
        
        
        
        
        
        2,780TOTAL ASSETS
        
        $
        295,238
        
        $
        
        
        $
        295,238LIABILITIES AND STOCKHOLDERS (DEFICIT)CURRENT LIABILITIESAccounts Payable
        
        $
        139,225
        
        $
        
        
        $
        139,225Accounts Payable--Related Party
        
        
        
        
        
        
        
        
        Accrued Payroll
        
        
        236,807
        
        
        
        
        
        236,807Accrued Interest--Convertible Note Stockholder
        
        
        7,693
        
        
        (1,187
        )
        
        6,506Deferred Revenue
        
        
        375
        
        
        
        
        
        375Prepaid Advertising
        
        
        2,239
        
        
        
        
        
        2,239Note Payable
        
        
        100,472
        
        
        
        
        
        100,472Convertible Notes Payable--Stockholder
        
        
        450,000
        
        
        
        
        
        450,000Loans Payable - Related Party
        
        
        
        
        
        
        
        
        TOTAL CURRENT LIABILITIES
        
        
        936,811
        
        
        (1,187
        )
        
        935,625STOCKHOLDERS EQUITY / (DEFICIT)Common Stock - Par value $0.001;Authorized: 500,000,000Issued and Outstanding:  300,790,382  as of June 30, 2009
        
        
        312,962
        
        
        
        
        
        312,962Additional Paid-In Capital
        
        
        4,574,538
        
        
        1,036
        
        
        4,575,574Shareholder Receivable
        
        
        (1,000
        )
        
        
        
        
        (1,000
        )Deficit accumulated during development stage
        
        
        (5,528,073
        )
        
        150
        
        
        (5,527,923
        )Total Stockholders Equity / (Deficit)
        
        
        (641,573
        )
        
        1,187
        
        
        (640,387
        )TOTAL LIABILITIES AND STOCKHOLDERSEQUITY / (DEFICIT)
        
        $
        295,238
        
        $
        
        
        $
        295,238



10

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)




For the Three Months Ended September 30, 2009PreviouslyReported
        
        Adjustment
        
        As RestatedRevenue - Product Sales, net
        
        $
        17,086
        
        $
        
        
        $
        17,086Revenue - Advertising
        
        
        12,381
        
        
        
        
        
        12,381Total Revenue
        
        
        29,468
        
        
        
        
        
        29,468Cost of Revenue - Product Sales
        
        
        12,539
        
        
        
        
        
        12,539Cost of Revenue - Advertising
        
        
        
        
        
        
        
        
        Total Cost of Revenue
        
        
        12,539
        
        
        
        
        
        12,539Gross Profit
        
        
        16,928
        
        
        
        
        
        16,928Professional Fees
        
        
        23,738
        
        
        
        
        
        23,738Board Compensation
        
        
        11,500
        
        
        
        
        
        11,500Development Expenses
        
        
        
        
        
        
        
        
        Depreciation and Amortization
        
        
        75,509
        
        
        
        
        
        75,509Marketing
        
        
        
        
        
        
        
        
        Employee Compensation
        
        
        163,938
        
        
        
        
        
        163,938General and Administrative
        
        
        15,122
        
        
        (501
        )
        
        14,621Total Operating Expenses
        
        
        289,806
        
        
        (500
        )
        
        289,306Loss from Operations
        
        
        (272,878
        )
        
        500
        
        
        (272,378
        )Extinguishment of DebtInterest Income
        
        
        
        
        
        
        
        
        Interest Expense
        
        
        85,488
        
        
        (142,917
        )
        
        (57,430
        )Total Other Income/Expense
        
        
        85,488
        
        
        (142,917
        )
        
        (57,429
        )Provision for Income Taxes
        
        
        
        
        
        
        
        
        Net Loss
        
        $
        (187,390
        )
        $
        (142,417
        )
        $
        (329,807
        )Net Loss Per Share - basic and diluted
        
        
        **
        
        
        
        
        
        **Weighted average number of shares outstandingduring the period - basic and diluted
        
        
        302,467,154
        
        
        
        
        
        302,467,154



** Less than $0.01



11

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)




For the Three Months Ended September 30, 2008PreviouslyReported
        
        Adjustment
        
        As RestatedRevenue - Product Sales, net
        
        $
        38,087
        
        $
        
        
        $
        38,087Revenue - Advertising
        
        
        6,766
        
        
        
        
        
        6,766Total Revenue
        
        
        44,853
        
        
        
        
        
        44,853Cost of Revenue - Product Sales
        
        
        19,368
        
        
        
        
        
        19,368Cost of Revenue - Advertising
        
        
        
        
        
        
        
        
        Total Cost of Revenue
        
        
        19,368
        
        
        
        
        
        19,368Gross Profit
        
        
        25,485
        
        
        
        
        
        25,485Professional Fees
        
        
        24,853
        
        
        
        
        
        24,853Board Compensation
        
        
        16,500
        
        
        
        
        
        16,500Development Expenses
        
        
        
        
        
        
        
        
        Depreciation and Amortization
        
        
        80,797
        
        
        
        
        
        80,797Marketing
        
        
        15,556
        
        
        
        
        
        15,556Employee Compensation
        
        
        56,687
        
        
        
        
        
        56,687General and Administrative
        
        
        18,717
        
        
        
        
        
        18,717Total Operating Expenses
        
        
        213,110
        
        
        
        
        
        213,110Loss from Operations
        
        
        (187,625
        )
        
        
        
        
        (187,625
        )Extinguishment of DebtInterest Income
        
        
        
        
        
        
        
        
        Interest Expense
        
        
        (81,857
        )
        
        16,861
        
        
        (64,996
        )Total Other Income/Expense
        
        
        (81,857
        )
        
        16,861
        
        
        (64,996
        )Provision for Income Taxes
        
        
        
        
        
        
        
        
        Net Loss
        
        $
        (269,482
        )
        $
        16,861
        
        $
        (252,621
        )Net Loss Per Share - basic and diluted
        
        
        **
        
        
        
        
        
        **Weighted average number of shares outstandingduring the period - basic and diluted
        
        
        284,989,708
        
        
        
        
        
        284,989,708



** Less than $0.01



12

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)




For the Nine Months Ended September 30, 2009PreviouslyReported
        
        Adjustment
        
        As RestatedRevenue - Product Sales, net
        
        $
        31,841
        
        $
        
        
        $
        31,841Revenue - Advertising
        
        
        25,062
        
        
        
        
        
        25,062Total Revenue
        
        
        56,904
        
        
        
        
        
        56,904Cost of Revenue - Product Sales
        
        
        27,867
        
        
        
        
        
        27,867Cost of Revenue - Advertising
        
        
        
        
        
        
        
        
        Total Cost of Revenue
        
        
        27,867
        
        
        
        
        
        27,867Gross Profit
        
        
        29,036
        
        
        
        
        
        29,036Professional Fees
        
        
        175,804
        
        
        
        
        
        175,804Board Compensation
        
        
        10,778
        
        
        
        
        
        10,778Development Expenses
        
        
        
        
        
        
        
        
        Depreciation and Amortization
        
        
        237,940
        
        
        
        
        
        237,940Marketing
        
        
        34,411
        
        
        
        
        
        34,411Employee Compensation
        
        
        496,458
        
        
        
        
        
        496,458General and Administrative
        
        
        56,818
        
        
        
        
        
        56,819Total Operating Expenses
        
        
        1,012,210
        
        
        
        
        
        1,012,210Loss from Operations
        
        
        (983,174
        )
        
        
        
        
        (983,174
        )Extinguishment of DebtInterest Income
        
        
        
        
        
        
        
        
        Interest Expense
        
        
        (109,233
        )
        
        (53,036
        )
        
        (162,270
        )Total Other Income/Expense
        
        
        (109,233
        )
        
        (53,036
        )
        
        (162,269
        )Provision for Income Taxes
        
        
        
        
        
        
        
        
        Net Loss
        
        $
        (1,092,406
        )
        $
        (53,037
        )
        $
        (1,145,443
        )Net Loss Per Share - basic and diluted
        
        
        **
        
        
        
        
        
        **Weighted average number of shares outstandingduring the period - basic and diluted
        
        
        298,500,579
        
        
        
        
        
        298,500,579



** Less than $0.01



13

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Operations

(Unaudited)




For the Nine Months Ended September 30, 2008PreviouslyReported
        
        Adjustment
        
        As RestatedRevenue - Product Sales, net
        
        $
        51,446
        
        $
        
        
        $
        51,446Revenue - Advertising
        
        
        11,455
        
        
        
        
        
        11,455Total Revenue
        
        
        62,901
        
        
        
        
        
        62,901Cost of Revenue - Product Sales
        
        
        29,874
        
        
        
        
        
        29,874Cost of Revenue - Advertising
        
        
        
        
        
        
        
        
        Total Cost of Revenue
        
        
        29,874
        
        
        
        
        
        29,874Gross Profit
        
        
        33,027
        
        
        
        
        
        33,027Professional Fees
        
        
        84,677
        
        
        
        
        
        84,677Board Compensation
        
        
        559,500
        
        
        
        
        
        559,500Development Expenses
        
        
        
        
        
        
        
        
        Depreciation and Amortization
        
        
        240,473
        
        
        
        
        
        240,473Marketing
        
        
        75,828
        
        
        
        
        
        75,828Employee Compensation
        
        
        304,074
        
        
        
        
        
        304,074General and Administrative
        
        
        73,601
        
        
        
        
        
        73,601Total Operating Expenses
        
        
        1,338,153
        
        
        
        
        
        1,338,152Loss from Operations
        
        
        (1,305,126
        )
        
        
        
        
        (1,305,126
        )Extinguishment of DebtInterest Income
        
        
        153
        
        
        
        
        
        153Interest Expense
        
        
        (211,510
        )
        
        26,576
        
        
        (184,935
        )Total Other Income/Expense
        
        
        (211,357
        )
        
        26,576
        
        
        (184,781
        )Provision for Income Taxes
        
        
        
        
        
        
        
        
        Net Loss
        
        $
        (1,516,483
        )
        $
        26,576
        
        $
        (1,489,907
        )Net Loss Per Share - basic and diluted
        
        
        **
        
        
        
        
        
        **Weighted average number of shares outstandingduring the period - basic and diluted
        
        
        282,810,751
        
        
        
        
        
        282,810,751



** Less than $0.01



14

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Cash Flows

(Unaudited)




For the Nine Months Ended September 30, 2009As PreviouslyReported
        
        Adjustment
        
        RestatedCash Flows Used in Operating Activities:Net Loss
        
        $
        (1,092,406
        )
        $
        (53,037
        )
        $
        (1,145,443
        )Adjustments to reconcile net loss to net cash used in operationsDepreciation/Amortization
        
        
        237,940
        
        
        
        
        
        237,940Commons Stock issued to pay interest expense and accrued interest
        
        
        220,242
        
        
        
        
        
        220,242Debt issued to pay interest expense and accrued interest
        
        
        100,000
        
        
        
        
        
        100,000Shares issued for payment of accounts payable
        
        
        74,413
        
        
        
        
        
        74,413In-kind contribution of interest
        
        
        2,462
        
        
        
        
        
        2,462Start-up expenses
        
        
        
        
        
        
        
        
        Shares issued for services
        
        
        137,880
        
        
        
        
        
        137,880Shares issued for interest
        
        
        
        
        
        
        
        
        Stock options issued for services
        
        
        137,800
        
        
        1,036
        
        
        138,836Shares issued for board comp
        
        
        38,500
        
        
        
        
        
        38,500(Increase) Decrease in:Prepaid Expenses
        
        
        (7,758
        )
        
        
        
        
        (7,758
        )Inventory
        
        
        (58
        )
        
        
        
        
        (58
        )Deferred Revenue
        
        
        
        
        
        
        
        
        Deposits
        
        
        
        
        
        
        
        
        Accrued interest
        
        
        (218,236
        )
        
        52,000
        
        
        (166,236
        )Accrued payroll
        
        
        149,836
        
        
        
        
        
        149,836Accounts Payable
        
        
        7,552
        
        
        
        
        
        7,552Accounts Payable--Related Party
        
        
        (39,984
        )
        
        
        
        
        (39,984
        )Net Cash Used In Operating Activities
        
        
        (251,816
        )
        
        
        
        
        (251,817
        )Cash Flows From Investing Activities:Payments for Equipment & Website Development
        
        
        
        
        
        
        
        
        Net Cash Used In Investing Activities
        
        
        
        
        
        
        
        
        Cash Flows From Financing Activities:Proceeds from Sale of Stock
        
        
        62,700
        
        
        
        
        
        62,700Decrease (Increase) of shareholder receivable
        
        
        
        
        
        
        
        
        Proceeds from Notes Payable - Stockholder
        
        
        60,472
        
        
        
        
        
        60,472Proceeds from Convertible Note Payable - Related Party
        
        
        131,500
        
        
        
        
        
        131,500Repayment of Notes Payable - Related Party
        
        
        
        
        
        
        
        
        Repayment of Notes Payable
        
        
        
        
        
        
        
        
        Net Cash Provided by Financing Activities
        
        
        254,672
        
        
        
        
        
        254,673Net Increase (Decrease) in Cash
        
        
        2,856
        
        
        
        
        
        2,856Cash at Beginning of Period
        
        
        958
        
        
        
        
        
        958Cash at End of Period
        
        $
        3,814
        
        $
        
        
        $
        3,814



15

Home School Holdings, Inc.

(a development stage company)

Consolidated Statement of Cash Flows

(Unaudited)




For the Nine Months Ended September 30, 2008As PreviouslyReported
        
        Adjustment
        
        RestatedCash Flows Used in Operating Activities:Net Loss
        
        $
        (1,516,483
        )
        $
        (26,576
        )
        $
        (1,489,907
        )Adjustments to reconcile net loss to net cash used in operationsDepreciation/Amortization
        
        
        240,473
        
        
        
        
        
        240,473Commons Stock issued to pay interest expense and accrued interest
        
        
        
        
        
        
        
        
        Debt issued to pay interest expense and accrued interest
        
        
        
        
        
        Shares issued for payment of accounts payable
        
        
        
        
        
        In-kind contribution of interest
        
        
        
        
        
        
        
        
        Start-up expenses
        
        
        
        
        
        
        
        
        Shares issued for services
        
        
        54,000
        
        
        
        
        
        54,000Shares issued for interest
        
        
        
        
        
        
        
        
        Stock options issued for services
        
        
        730,831
        
        
        
        
        
        730,831Shares issued for board comp
        
        
        55,500
        
        
        
        
        
        55,500(Increase) Decrease in:Prepaid Expenses
        
        
        (2,949
        )
        
        
        
        
        (2,949
        )Inventory
        
        
        (1,531
        )
        
        
        
        
        (1,531
        )Deferred Revenue
        
        
        375
        
        
        
        
        
        375Deposits
        
        
        
        
        
        
        
        
        Accrued interest
        
        
        
        
        
        26,576
        
        
        (26,576
        )Accrued payroll
        
        
        (178,714
        )
        
        
        
        
        (178,714
        )Accounts Payable
        
        
        60,294
        
        
        
        
        
        60,294Accounts Payable--Related Party
        
        
        24,913
        
        
        
        
        
        24,913Net Cash Used In Operating Activities
        
        
        (533,292
        )
        
        
        
        
        (533,292
        )Cash Flows From Investing Activities:Payments for Equipment & Website Development
        
        
        (125,657
        )
        
        
        
        
        (125,657
        )Net Cash Used In Investing Activities
        
        
        (125,657
        )
        
        
        
        
        (125,657
        )Cash Flows From Financing Activities:Proceeds from Sale of Stock
        
        
        388,970
        
        
        
        
        
        388,970Decrease (Increase) of shareholder receivable
        
        
        
        
        
        
        
        
        Proceeds from Notes Payable - Stockholder
        
        
        300,000
        
        
        
        
        
        300,000Proceeds from Convertible Note Payable - Related Party
        
        
        (30,000
        )
        
        
        
        
        (30,000
        )Repayment of Notes Payable - Related Party
        
        
        
        
        
        
        
        
        Repayment of Notes Payable
        
        
        
        
        
        
        
        
        Net Cash Provided by Financing Activities
        
        
        658,970
        
        
        
        
        
        658,970Net Increase (Decrease) in Cash
        
        
        22
        
        
        
        
        
        22Cash at Beginning of Period
        
        
        1,526
        
        
        
        
        
        1,526Cash at End of Period
        
        $
        1,548
        
        $
        
        
        $
        1,548



16

Item2.
        Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in
conjunction with our consolidated financial statements, including the notes thereto, appearing in this Form 10-Q and in our Report
on Form 8-K/A for the fiscal year ended December 31, 2008 filed on January XX, 2010 with the Securities and Exchange Commission and
are hereby referenced.

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

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

Overview

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

Going Concern

Our financial statements have been prepared on the
basis of accounting principles applicable to a going concern. As a result, they do not include adjustments that would be necessary
if we were unable to continue as a going concern and would therefore be obligated to realize assets and discharge our liabilities
other than in the normal course of operations. As reflected in the accompanying financial statements, the Company is in the
development stage with limited revenues, has used cash flows in operations of $1,430,588 from inception of October 17, 2005 to
September 30, 2009 and has an accumulated deficit of $5,527,923 through September 30, 2009. This raises substantial doubt about its
ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys
ability to raise additional capital and implement its business plan.

17

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

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

Critical Accounting Policies

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

Stock Compensation

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

Revenue Recognition

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

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

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

18

Outlook

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

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

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

Revenues

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

General and Administrative Expenses

We expect that general and administrative expenses associated with executive compensation will increase in the future. Although the current executives have foregone full salary payment during the initial stages of the business, during 2007 the team began to receive compensation. In addition, we believe over the next fiscal year that the compensation packages required to attract the senior executives the Company requires to execute against its business plan will increase our total general and administrative expenses.

Research and Development

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

Summary of Consolidated Condensed Results of Operations

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

19

Results for the Nine Months Ended September30, 2009 Compared to September30, 2008

Revenues. Sales revenues for
the nine months ended September 30, 2009 were $56,904. This is a $5,997 decrease from the Companys revenues generated for
the nine months ended September 30, 2008 of $62,901 . Our revenues for the nine months ended September 30, 2009 were
generated primarily from the sales of curriculum and other educational materials which resulted in revenues of $31,841 and
secondarily from the sale of advertising which resulted in revenues of $25,062. No change in revenues occurred as a result of any
price increase in the Companys products. The Company experienced a decrease in its volume of product sales of approximately
38%. Advertising sales revenue experienced an increase of 119% compared to the nine months ended September 30, 2008. Management
believes revenue growth will return in during the remainder of fiscal year 2009 and into 2010 as capital is applied to improving the
functionality of the online store and with additional advertising sales headcount.

Cost of Revenues.Cost of revenues for the nine months ended September 30, 2009 decreased to $27,867 as compared to $29,874 for the nine months ended September 30, 2008. This decrease in cost of revenues is related to lower sales volume in the third quarter.

Gross Profit/Loss.For the nine months ended September 30, 2009, we experienced a gross profit from operations of $29,036 after continuous operation. Management believes this gross profit will increase with sales and as a percentage of sales as new, proprietary products and services come on line. Management believes that it will experience an increase in gross profits during the fiscal year 2010 as it continues to establish a market for its products and services. The expectation for 2009 gross profit margin runs from 32% to 40%, depending on the mix of advertising to product sales.

Executive, Board, Payroll, Marketing and Promotion
Expenses. For the nine months ended September 30, 2009, the Company had incurred expenses of $717,451
related to marketing and promotions, board compensation and payroll and development. Marketing and promotional expenses consist
primarily of salaries, commissions, participation in our customers marketing efforts and related personnel expenses for those
engaged in the sale and marketing of our products, travel, as well as related trade shows and promotional and public relations
expenses. Our sales and marketing team is expected to grow in the future as we expand our sales and marketing activities nationally.
We expect our selling and marketing expenses to increase in the future due to an increase in direct expenses related to sales and
marketing, including increases to salaries to personnel in marketing and business development, as well as increased bonus payments
and sales commissions on our revenues. In addition, as our customer base grows, we will need to participate in additional marketing
efforts. We expect our Board Compensation to decline in second half of the fiscal year 2009 as compared to second half of the fiscal
year 2008 because many fewer options are likely to be granted. The Board is currently compensated entirely with shares of common
stock, with the Chairman receiving $4,500 worth of stock each quarter and each director receiving $3,000 worth of stock.
Additionally, most of our Chief Executive Officers compensation is paid in stock options.

General and Administrative Expenses. General and administrative expenses for the nine months ended September 30, 2009 were $56,819 compared to $73,601 for the
nine months ended September 30, 2008. General and administrative expenses consisted mainly of rent, utilities and other costs
associated with the operation of the Companys corporate operations. Management believes these expenses will increase as
business continues to grow and as more personnel and larger facilities are required for the operation of the business.

Amortization/Depreciation expense for the continuing operation was $237,940 for the nine months ended September 30, 2009 as compared to $240,473 for the nine months ended September 30, 2008.

Net Loss. Net loss for the
nine months ended September 30, 2009 was $1,145,443 as compared to $1,489,907 for the nine months ended September 30, 2008. The net
loss for the nine months ended September 30, 2009 was primarily related to personnel costs, of which employee salary was the single
largest contributor, amortization expense and professional fees. The net loss for the nine months ended September 30, 2008 was
mainly due to the cost of developing the Companys online services. Management believes it can reduce these losses going
forward as the Company begins to generate more revenue. As we continue to expand our user base and our sales of products and
services we will reduce these losses.

As of nine months ended September 30, 2009, we had
an accumulated deficit of $5,527,923.

20

Results for the Quarter Ended September30, 2009 Compared to September30, 2008

Revenues. Sales revenues for the three months ended September 30, 2009 were $29,468. This is a $15,385 decrease from the Companys revenues generated for the three months ended September 30, 2008 of $44,853. Our revenues for the three months ended September 30, 2009 were generated primarily from the sales of curriculum and other educational materials which resulted in revenues of $17,086 and secondarily from the sale of advertising which resulted in revenues of $12,381. No change  in revenues occurred as a result of any price increase in the Companys products. The Company experienced an decrease in its volume of product sales of more than 55% and advertising sales revenue experienced an increase of 83% compared to the three months ended September 30, 2008.

Cost of Revenues. Cost of revenues for the three months ended September 30, 2009 increased to $12,539 as compared to $19,368 for the three months ended September 30, 2008. This decrease in cost of revenues is related to the Companys sales operations. The Company purchased certain educational materials and incurred shipping and handling fees related to the sale of its products.

Gross Profit/Loss.For the three months ended September 30, 2009, we experienced a gross profit from operations of $16,928 after continuous operation. Management believes this gross profit will increase with sales and as a percentage of sales as new, proprietary products and services come on line.

Executive, Board, Payroll, Marketing and Promotion
Expenses. For the three months ended September 30, 2009, the Company had incurred expenses of $199,176
related to marketing and promotions, board compensation and payroll and development. Marketing and promotional expenses consist
primarily of salaries, commissions, participation in our customers marketing efforts and related personnel expenses for those
engaged in the sale and marketing of our products, travel, as well as related trade shows and promotional and public relations
expenses. Our sales and marketing team is expected to grow in the future as we expand our sales and marketing activities nationally.
We expect our selling and marketing expenses to increase in the future due to an increase in direct expenses related to sales and
marketing, including increases to salaries to personnel in marketing and business development, as well as increased bonus payments
and sales commissions on our revenues. In addition, as our customer base grows, we will need to participate in additional marketing
efforts.

General and Administrative Expenses. General and administrative expenses for the three months ended September 30, 2009 were $14,621 compared to $18,717 for the
three months ended September 30, 2008. General and administrative expenses consisted mainly of rent, utilities and other costs
associated with the operation of the Companys corporate operations. Management believes these expenses will increase as
business continues to grow and as more personnel and larger facilities are required for the operation of the business.

Amortization/Depreciation expense for the continuing operation was $75,509 for the three months ended September 30, 2009 as compared to $80,797 for the three months ended September 30, 2008.

Net Loss. Net loss for the
three months ended September 30, 2009 was $329,807 as compared to $252,621 for the three months ended September 30, 2008.
The net loss for the three months ended September 30, 2009 was primarily related to personnel costs of which option expensing
was the single largest contributor. The net loss for the three months ended September 30, 2008 was mainly due to the cost of
developing the Companys online services. Management believes it can reduce these losses going forward as the Company begins to
generate more revenue. As we continue to expand our user base and our sales of products and services we will reduce these losses.

Impact of Inflation

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

21

Liquidity and Capital Resources

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

As of September 30, 2009, total current assets were $17,444 which consisted of $3,814 of cash, $531 of inventory and $13,099 of prepaid expenses. As of December 31, 2008, total current assets were $7,733 which consisted of $958 of cash, $473 of inventory and $6,302 of prepaid expenses.

As of September 30, 2009, total current liabilities
were $935,625, which consisted of $139,225 of accounts payable expenses, $6,506 of accrued interest expenses, loan payable
obligations of $550,472, accrued payroll of $236,807 and $2,614 of other miscellaneous current liabilities. As of December 31, 2008,
total current liabilities were $844,945, which consisted of $171,657 of accounts payable expenses, $86,972 of accrued payroll
expenses, loan payable obligations of $410,499, accrued interest of $172,742 and $3,075 of other miscellaneous current
liabilities.

We had negative net working capital of $918,181 as of
September 30, 2009, compared to negative net working capital of $831,712 as of December 31, 2008.

During the nine months ended September 30, 2009,
operating activities used cash of $251,817 as compared to the nine months ended September 30, 2008, where we used cash of
$533,292 in operating activities. The cash used by operating activities for the nine months ended September 30, 2009 was due
primarily to compensation expense. The cash used in operating activities for the nine months ended September 30, 2008 was also
primarily related to compensation expense.

We had a net increase in cash of $2,856 for the nine months ended September 30, 2009. Cash flows from financing activities represented the Companys principal source of cash for the nine month period ended September 30, 2009. Cash flows from financing activities during the nine month ended September 30, 2009 were $254,672 consisting of proceeds in the amount of $62,700 from the issuance of stock and $191,972 of proceeds from notes payable. During the nine months ended September 30, 2008, we received $658,970 from financing activities from the issuance of common stock, options and notes payable.

We acquired certain online assets during the nine month
period ended September 30, 2008 of $125,657 and assumed liabilities of $80,000. We paid $40,000 in cash and issued a note
payable of $80,000. Capital expenditures in the past were incurred primarily for computers and software used for the Companys
operations (See note 3 of financial statements).

During 2009, 6 promissory notes totaling $240,000 were
issued. $23,934 in interest expense was accrued during the period. On June 5, 2009 two promissory notes totaling $60,000 were
converted to equity at a rate of $.025 per share. On July 17, 2009 the Company signed a debenture with Tangiers Captial LLC. The
debenture has a principal amount of $15,000, an interest rate of 7% per annum and a maturity date of January 16, 2010.

On September 30, 2009, the Company entered into a loan modification agreement with its shareholders to restructure the existing convertible notes payable which had an outstanding value of $670,242 as of September 30, 2009. The first note dated January 16, 2008 had a face value of $300,000 and accrued interest in the amount of $307,742, as of September 30, 2009. The second note dated April 27, 2009 had a face value of $50,000 and accrued interest in the amount of $12,500, as of September 30, 2009.

The terms of the existing notes were collectively modified to provide a single set of terms as set forth in the Loan Modification Agreement. The new principal loan amount shall be $450,000 at an interest rate of 4% per year with a maturity date of January 1, 2010. At any time prior to the maturity date, the outstanding principal amount of the loan is convertible into shares of Common Stock at a conversion price of $0.05 per share. At any time prior to the maturity date, all of the outstanding accrued interest shall be converted into restricted shares of Common Stock at a conversion price of $0.045 per share. The remaining amount of $220,242 of the original notes has been converted into 4,894,265 shares of common stock at a conversion price of $0.045.

At September 30, 2009, $130,000 was owed on the
three remaining notes and $9,697 had been recorded in interest expense on these notes.

22

Off-Balance Sheet Arrangements

None

Recent Accounting Pronouncements

Recent Accounting Literature - FASB Accounting Standards Codification

(Accounting Standards Update (ASU) 2009-01)

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

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

Subsequent Events

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

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

Determination of the Useful Life of Intangible Assets

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

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

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Noncontrolling Interests

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

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

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

Consolidation of Variable Interest Entities  Amended

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

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

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

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

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

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

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


Item3.
        Quantitative and Qualitative Disclosures About Market Risk

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


Item4.
        Controls and Procedures

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

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our first fiscal quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Managements Report on Internal Control over Financial Reporting

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

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
        Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
        Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
        Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements.

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

The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of September 30, 2009. In making this assessment, the Companys management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

Based on the assessment performed, management has concluded that the Companys internal control over financial reporting is effective and provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements as of September 30, 2009 in accordance with generally accepted accounting principles. Further, management has not identified any material weaknesses in internal control over financial reporting as of September 30, 2009.

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


/s/ Thomas Morrow
        
        /s/ Tony LangfordChairman and Chief Executive Officer
        
        Chief Financial Officer



PART II OTHER INFORMATION


Item2.
        Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

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

During the quarter ended June 30, 2009, we issued 4,027,500 shares of common stock to investors for cash in the amount of $122,700.

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During the quarter ended June 30, 2009, we issued 314,820 shares of common stock for board compensation with a fair market value of $13,500.

During the quarter ended June 30, 2009, we issued 100,000 shares of common stock as a gift for employee services with a fair market value of $5,000.

On February 6, 2009, the Company entered into short-term lending arrangements with certain of its shareholders. The loan provided for $50,000 for six months. The loan paid an APR of 10% and provided for convertibility at $0.05 per share. On June 5, 2009, this loan was converted to 1,000,000 shares common stock at $0.05 per share with a fair market value of $50,000.

On April 3, 2009, the Company entered into short-term lending arrangements with certain of its shareholders. The loan provided for $10,000 for six months. The loan paid an APR of 10% and provided for convertibility at $0.06 per share. On June 5, 2009, this loan was converted to 200,000 shares common stock at $0.05 per share with a fair market value of $10,000.

On May 8, 2009, we consummated a Share Exchange Agreement with Home School, Inc. a Delaware corporation (HSI), that was dated as of April 29, 2009. As a result of the transactions contemplated by the Share Exchange Agreement, on May 8, 2009, we acquired 100% of the outstanding shares of capital stock of HSI and HSI became a wholly-owned subsidiary of the Company, and the Company changed its name to Home School Holdings, Inc. Pursuant to the Share Exchange Agreement, the Company issued 289,959,665 shares of its common stock to shareholders of HSI and the Company reserved for future issuance 73,949,760 shares of common stock subject to HSIs outstanding stock options and warrants and 22,402,121 shares of common stock subject to HSIs outstanding convertible debt (the Share Exchange). HSI also paid $50,000 to the Companys two existing shareholders as
purchase price consideration for the Share Exchange and such shareholders shall own an aggregate of 5,882,917 shares, or 1.5% of the outstanding shares of Common Stock of the Company on a fully diluted basis upon the consummation of the Share Exchange.

During May 2009, the Company issued 2,594,625 and 288,292 shares of its common stock to Tangiers Investors, LP and Willowhuasca Wellness, Inc., respectively, as purchase price consideration pursuant to the Share Exchange.

During the quarter ended September 30, 2009, we issued 230,000 shares of common stock for board compensation with a fair market value of $11,500.

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

On September 30, 2009, one of the Companys principal stockholders, Kenneth Lydecker, converted $30,000 of existing notes payable into 750,000 shares of Common Stock at a conversion price of $0.04.

On September 30, 2009, one of the Companys principal stockholders, David Nicholson, converted $25,000 of existing notes payable into 625,000 shares of Common Stock at a conversion price of $0.04.

On September 30, 2009, Thomas Morrow, CEO, converted $26,499 of existing notes payable into 662,475 shares of Common Stock at a conversion price of $0.04.

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

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

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Item 6.
Exhibits

(a)
Exhibits

Exhibit 31.1

302 Certification  Thomas MorrowExhibit 31.2

302 Certification  Tony LangfordExhibit 32.1

906 Certification  Thomas MorrowExhibit 32.2

906 Certification  Tony Langford






SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.



HOME SCHOOL HOLDINGS, INC.DATE: January 26, 2010

By:

/s/ Thomas MorrowThomas MorrowChairman and Chief Executive Officer(Principal Authorized Officer)DATE: January 26, 2010

By:

/s/ Tony LangfordTony LangfordChief Financial Officer(Principal Accounting Officer)





Home School Holdings, Inc.

Index to Exhibits



ExhibitNumber

DescriptionExhibit 31.1

302 Certification  Thomas MorrowExhibit 31.2

302 Certification  Tony LangfordExhibit 32.1

906 Certification  Thomas MorrowExhibit 32.2

906 Certification  Tony Langford

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