Unassociated Document

10-Q 1 v166068_10q.htm Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______________ to _____________

Commission file number: 000-52715

GRAND MONARCH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-8023849
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

210 South Orange Grove Blvd., Pasadena, California,		91105
(Address of principal executive offices)		(Zip Code)

866-350-4450

(Registrant’s telephone number, including area code)

9107 Wilshire Blvd., Ste. 450, Beverly Hills, California, 90210; 302-272-7105

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” ion Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨	Smaller reporting company x

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

As of November 13, 2009, there were 10,100,000 shares of $0.001 par value common stock issued and outstanding.

FORM 10-Q

GRAND MONARCH HOLDINGS, INC.

INDEX

		Page
PART I.	Financial Information		1

	Item 1. Financial Statements ( Unaudited)		1

	Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation		6

	Item 3. Quantitative and Qualitative Disclosures about Market Risk		10

	Item 4. Controls and Procedures		10

PART II.	Other Information		11

	Item 1. Legal Proceedings		11

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		11

	Item 3. Defaults Upon Senior Securities		11

	Item 4. Submission of Matters to a Vote of Security Holders.		11

	Item 5. Other Information		11

	Item 6. Exhibits		11

	Signatures		12

(Inapplicable items have been omitted)

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Grand Monarch Holdings, Inc.

Condensed Balance Sheets

September 30, 2009 (Unaudited) and December 31, 2008

	Sept. 30,			Dec. 31,
	2009			2008
Assets
Current assets

Cash and cash equivalents	$	81		$	81

Total current assets		81			81


Total assets	$	81		$	81

Liabilities and Stockholders' Equity

Total liabilities	$	-		$	-

Stockholders' equity
Common stock; par value $.001; 35,000,000 shares authorized;
10,100,000 and 100,000 shares issued and outstanding, respectively		10,100			100
Additional paid-in capital		-			-
Accumulated deficit		(10,019	)		(19	)
Total stockholders' equity		81			81
Total liabilities and stockholders' equity	$	81		$	81

Grand Monarch Holdings, Inc.

Condensed Statements of Income

For the Three Months Ended September 30, 2009 and 2008 (Unaudited)

	Three Months Ended
	September 30,
	2009			2008

Revenues	$	-		$	-

Operating and administrative expenses		10,000			-

Income from operations		(10,000	)		-

Other income (expense)		-			-

Net income	$	(10,000	)	$	-

Basic and diluted earnings per share	$	(0.00	)	$	-
Weighted average shares outstanding		2,926,087			100,000

Grand Monarch Holdings, Inc.

Condensed Statements of Income

For the Nine Months Ended September 30, 2009 and 2008 (Unaudited)

	Nine Months Ended
	September 30,
	2009			2008

Revenues	$	-		$	-

Operating and administrative expenses		10,000			-

Income from operations		(10,000	)		-

Other income (expense)		-			-

Net income	$	(10,000	)	$	-

Basic and diluted earnings per share	$	(0.01	)	$	-
Weighted average shares outstanding		1,052,381			100,000

Grand Monarch Holdings, Inc.

Condensed Statements of Cash Flows

For the Nine Months Ended September 30, 2009 and 2008 (Unaudited)

	Nine Months Ended
	September 30,
	2009			2008

Cash Flows Provided From Operating Activities
Net income	$	(10,000	)	$	-
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Common stock issued for services		10,000			-
Net cash provided (used) by operating activities		-			-

Cash Flows Provided From Investing Activities		-			-

Cash Flows Used By Financing Activities
Net proceeds from stock issuance		-			-
Net cash provided by financing activities		-			-

Net increase (decrease) in cash and cash equivalents		-			-

Cash and cash equivalents, beginning of period		81			81

Cash and cash equivalents, end of period	$	81		$	81

Supplemental disclosure
Interest paid during the period	$	-		$	-

Grand Monarch Holdings, Inc.

Notes to Condensed Financial Statements

September 30, 2009 (unaudited)

1. Description of the Company and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements of Grand Monarch Holdings, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements do not include all information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. It is recommended that these interim unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2008.

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month period ended September 30, 2009 is not necessarily indicative of the results which may be expected for any other interim periods or for the year ending December 31, 2009.

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

Description of the Company

Grand Monarch Holdings, Inc., a Delaware corporation, was formed on December 18, 2006. The Company is currently seeking registration of its common stock in accordance with the Securities Exchange Act of 1934. The Company currently has no operations or significant cash flows.

2. Going Concern

The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Currently, the Company has no operations, significant assets or cash flows. The Company’s continuation as a going concern is dependent on major shareholder funding and/or the Company entering into any share exchange agreement with a company whose has sufficient resources.

3. Common Stock

The Company is authorized to issue up to 35,000,000 shares of its common stock, par value $0.001 per share. At November 13, 2009 and December 31, 2008, the Company had 10,100,000 shares and 100,000 shares, respectively, of common stock issued and outstanding.

On September 4, 2009, the Company issued 10,000,000 shares of its common stock to its two officers and two consultants for services rendered. The shares were valued by the Company at $.001 per shares for an aggregate value of $10,000. The investors were all “accredited” investors”, represented that they were acquiring the shares for investment purposes and had full knowledge of the business and financial condition of the Company. All of the share certificates were affixed with a legend restricting sales and transfers.

4. Basic and Diluted Earnings (Loss) Per Common Share

Basic and diluted earnings (loss) per share for the three months ended September 30, 2009 and 2008 were computed using 2,926,087 and 100,000 weighted average common shares outstanding, respectively. Basic and diluted earnings (loss) per share for the nine months ended September 30, 2009 and 2008 were computed using 1,052,381 and 100,000 weighted average common shares outstanding, respectively. The Company does not have potentially dilutive shares issued or outstanding.

5. Related Party Transactions and Agreements

On June 8, 2009, Empire Energy Corporation International sold to American Union Financial Services, Inc. (“AUF”) 100,000 shares of common stock of the Company constituting 100% of the Company's issued and outstanding common stock, for a total of $25,000 in cash. In connection with the sale, the Board of Directors of the Company appointed the following individuals as directors and officers of the Company effective August 13, 2009: David Villarreal as a Director and as President, Chief Executive Officer and Chief Financial Officer and David Villarreal III as a director and Secretary. David Villarreal and David Villarreal III are father and son. Tad M. Ballantyne resigned as Chief Executive Officer, Chief Financial Officer and Secretary with the Company, effective immediately after the new directors took office on August 13, 2009.

AUF” has an agreement with the Company whereby AUF will pay the operational costs of the Company (currently only legal and accounting costs related to the Company’s SEC filings). Accordingly, the Company does not record operational expenses it incurs to prepare and file necessary SEC filings, and the Company has no obligation to repay any expenses paid on its behalf by AUF. Mr. David Villarreal, the CEO, CFO and a director of the Company is the CEO, director and principle stockholder of AUF.

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

General

We were originally incorporated on December 18, 2006 under the laws of the State of Delaware. We were initially formed as a "blank check" entity for the purpose of seeking a merger, acquisition or other business combination transaction with a privately owned entity seeking to become a publicly-owned entity.

Our current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method.

It is the intent of management and our significant stockholder to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholder to provide additional future funding. Should this pledge fail to provide financing and we have not identified any alternative sources of funding. There will be substantial doubt about our ability to continue as a going concern.

Our need for capital may change dramatically because of any business acquisition or combination transaction. There can be no assurance that we will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage the business, product, technology or company we acquire.

Plan of Operation

Our current purpose is to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to us by persons or companies who or which desire to seek the perceived advantages of a Securities Exchange Act of 1934 registered corporation. As of the date hereof, we have no particular acquisitions in mind and have not entered into any negotiations regarding such an acquisition, and neither our officer and director nor any promoter has engaged in any negotiations with any representatives of the owners of any business or company regarding the possibility of a merger or acquisition between us and such other company.

Pending negotiation and consummation of a combination, we anticipate that we will have, aside from carrying on our search for a combination partner, no business activities, and, thus, will have no source of revenue. Should we incur any significant liabilities prior to a combination with a private company, we may not be able to satisfy such liabilities as are incurred.

If our management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust our ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, our common stock will become worthless and holders of our common stock will receive a nominal distribution, if any, upon our liquidation and dissolution.

Management

We are in the development stage and currently have no full-time employees. Messrs. Villarreal and Villarreal are our only officers and directors, and through American Union Financial Services, Inc. (which Mr. David Villarreal controls), a controlling shareholder. Both Messrs. Villarreal, have agreed to allocate a limited portion of their time to the activities of the Company without compensation. Potential conflicts may arise with respect to the limited time commitment by them and the potential demands of our activities.

The amount of time spent by Messrs. Villarreal on the activities of the Company is not predictable. Such time may vary widely from an extensive amount when reviewing a target company to an essentially quiet time when activities of management focus elsewhere or some amount in between. It is impossible to predict with any precision the exact amount of time Messrs. Villarreal will actually be required to spend to locate a suitable target company. Messrs. Villarreal estimate that the business plan of the Company can be implemented by devoting less than five hours per month but such figure cannot be stated with precision.

Search for Business Opportunity

Our search will be directed toward small and medium-sized enterprises, which have a desire to become reporting corporations and which are able to provide audited financial statements. We do not propose to restrict our search for investment opportunities to any particular geographical area or industry, and may, therefore, engage in essentially any business, to the extent of our limited resources. Our discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors. No assurance can be given that we will be successful in finding or acquiring a desirable business opportunity, and no assurance can be given that any acquisition, which does occur, will be on terms that are favorable to us or our current stockholder.

We may merge with a company that has retained one or more consultants or outside advisors. In that situation, we expect that the business opportunity will compensate the consultant or outside advisor. As of the date of this filing, there have been no discussions, agreements or understandings with any party regarding the possibility of a merger or acquisition between the Company and such other company. Consequently, we are unable to predict how the amount of such compensation would be calculated at this time. It is anticipated that any finder that the target company retains would be a registered broker-dealer.

We will not restrict our search to any specific kind of firm, but may acquire a venture, which is in its preliminary or development stage, one which is already in operation or in a more mature stage of its corporate existence. The acquired business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. We do not intend to obtain funds to finance the operation of any acquired business opportunity until such time as we have successfully consummated the merger or acquisition transaction. There are no loan arrangements or arrangements for any financing whatsoever relating to any business opportunities.

Evaluation of Business Opportunities

The analysis of business opportunities will be under the supervision of our sole officer and director, who is not a professional business analyst. In analyzing prospective business opportunities, management will consider such matters as available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable, but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or alternatively, acceptance of products, services, or trades; name identification; and other relevant factors. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of a variety of factors, including, but not limited to, the possible need to expand substantially, shift marketing approaches, change product emphasis, change or substantially augment management, raise capital and the like. Management intends to meet personally with management and key personnel of the target business entity as part of its investigation. To the extent possible, we intend to utilize written reports and personal investigation to evaluate the above factors. Prior to making a decision to participate in a business opportunity, we will generally request that we be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, such items as a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, alternatively, service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during the relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available at that time, un-audited financial statements, together with reasonable assurance that audited financial statements would be able to be produced within a required period of time; and the like.

In the event we successfully complete the acquisition of or merger with an operating business entity, that business entity must provide audited financial statements for at least two most recent fiscal years or, in the event the business entity has been in business for less than two years, audited financial statements will be required from the period of inception. Acquisition candidates that do not have or are unable to obtain the required audited statements may not be considered appropriate for acquisition. We will not acquire or merge with any entity which cannot provide audited financial statements at or within a required period after closing of the proposed transaction. The audited financial statements of the acquired company must be furnished within 15 days following the effective date of a business combination.

When a non-reporting company becomes the successor of a reporting company by merger, consolidation, exchange of securities, and acquisition of assets or otherwise, the successor company is required to provide in a Current Report on Form 8-K the same kind of information that would appear in a Registration Statement or an Annual Report on Form 10-K, including audited and pro forma financial statements. The Commission treats these Form 8-K filings in the same way it treats the Registration Statements on Form 10 filings. The Commission subjects them to its standards of review selection, and the Commission may issue substantive comments on the sufficiency of the disclosures represented. If we enter into a business combination with a non-reporting company, such non-reporting company will not receive reporting status until the Commission has determined that it will not review the 8-K filing or all of the comments have been cleared by the Commission.

We believe that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current stockholders, acquisition candidates, which have long-term plans for raising capital through public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates, who have a need for an immediate cash infusion, are not likely to find a potential business combination with us to be an attractive alternative. Nevertheless, we have not conducted market research and are not aware of statistical data that would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. We are unable to predict when we may participate in a business opportunity. We expect, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more. There can also be no assurances that we are able to successfully pursue a business opportunity. In that event, there is a substantial risk to us that failure to complete a business combination will significantly restrict our business operation and force management to cease operations and liquidate the Company.

Acquisition of Business Opportunity

In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, and reorganization, joint venture or licensing agreement with another entity. We may also acquire stock or assets of an existing business. In connection with a merger or acquisition, it is highly likely that an amount of stock constituting control of the Company would either be issued by us or be purchased from our current principal stockholder by the acquiring entity or its affiliates, and accordingly, the shareholders of the target company, typically, become the majority of the shareholders of the combined company, the board of directors and officers of the target company become the new board and officers of the combined company and often the name of the target company becomes the name of the combined company.

There are currently no arrangements that would result in a change of control of the Company. It is anticipated that any securities issued as a result of consummation of a business combination will be issued in reliance upon one or more exemptions from registration under applicable federal and state securities laws to the extent that such exemptions are available. In some circumstances, however, as a negotiated element of the transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance; it will be undertaken by the surviving entity after the Company has entered into an agreement for a business combination or has consummated a business combination and we are no longer considered a dormant shell company. Until this occurs, we will not attempt to register any additional securities.

The issuance of substantial additional securities and their potential sale into any trading market may have a depressive effect on the market value of our securities in the future if such a market develops, of which there is no assurance. There have been no plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities. While the actual terms of a transaction to which we may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a "tax-free” reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended.

In order to obtain tax-free treatment, it may be necessary for the owners of the surviving entity to own 80% or more of the voting stock of the surviving entity. In this event, our current shareholder would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholder. However, treatment as a tax-free reorganization will not be a condition of any future business combination and if it is not the case, we will not obtain an opinion of counsel that the reorganization will be tax-free. With respect to any merger or acquisition, negotiations with target company management are expected to focus on the percentage of the Company which the target company shareholders would acquire in exchange for all of their shareholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, our only shareholder will in all likelihood hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event we acquire a target company with substantial assets.

Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our shareholder at such time. We will participate in a business opportunity only after the negotiation and execution of appropriate agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing, outline the manner of bearing costs, including costs associated with our attorneys and accountants, and will include miscellaneous other terms. It is anticipated that we will not be able to diversify, but will essentially be limited to the acquisition of one business opportunity because of our limited financing. This lack of diversification will not permit us to offset potential losses from one business opportunity against profits from another, and should be considered an adverse factor affecting any decision to purchase our securities. There are no present plans, proposals, arrangements or understandings to offer the shares of the post-merger companies to third parties if any mergers occur, and there is no marketing plan to distribute the shares of the post-merger companies to third parties. Messrs. Villarreal have not had any preliminarily contact, agreements or understandings with anyone to help sell these shares.

We intend to seek to carry out our business plan as discussed herein. In order to do so, we need to pay ongoing expenses, including particularly legal and accounting fees incurred in conjunction with preparation and filing of this registration statement, and in conjunction with future compliance with our on-going reporting obligations.

We do not intend to make any loans to any prospective merger or acquisition candidates or unaffiliated third parties.

Liquidity and Capital Resources

It is the belief of management that sufficient working capital necessary to support and preserve the integrity of the corporate entity will be present. However, there is no legal obligation for either management or our significant stockholder to provide additional future funding. Should this pledge fail to provide financing, we have not identified any alternative sources. Consequently, there is substantial doubt about our ability to continue as a going concern.

We have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that sufficient funds will be available to us to allow us to cover the expenses related to such activities.

Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we might seek to compensate providers of services by issuances of stock in lieu of cash.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There are numerous factors that affect the Company's business and the results of its operations. These factors include general economic and business conditions; our ability to raise such funds as are necessary to maintain our operations; the ability of management to execute its business plan.

Item 4. Controls and Procedures.

Evaluation of our Disclosure Controls

As of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have evaluated the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our management, including the CEO and CFO, does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based upon their controls evaluation, our CEO and CFO have concluded that our Disclosure Controls are effective at a reasonable assurance level.

Changes in internal control over financial reporting

There have been no changes in our internal controls over financial reporting during our first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

There is no material legal proceeding pending against the Company.

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

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

On August 13, 2009, David Villarreal and his son, David Villarreal III, were appointed directors and officers of the Company and Tad Ballantyne the sole director and officer resigned. For further information, please see the Company’s Schedule 14F-1 filed with the Securities and Exchange Commission on August 4, 2009.

The Company has recently reached agreement in principal to acquire its former parent corporation, Pasadena-based American Union Financial Services, Inc. (“AUFS”). Terms of the all-stock transaction which is expected to close within 90 days, are still being negotiated. This acquisition will create the first operating group of GMH as it continues its strategy for growth.

AUFS, established in 2003, is a full service financial services company that offers real estate finance solutions, credit cards, and insurance programs to qualified customers. AUFS, in partnership with Amalgamated Bank of Chicago (“ABOC”), created the AUFS Gold Discover Card with one of the lowest fixed rates in the country. Specific to the overall development strategy for AUF is the creation of a financial services platform for a niche market serving union members and their households across the United States. This structure was designed specifically to compete with the varied non U.S. based financial institutions currently serving American labor. ABOC, a bank that was founded in 1922 has a proven track record of performance and assets, establishing it as a viable and strong institution. The AUFS card has received, among others, the endorsement of the International Brotherhood of Teamsters Joint Council 42, with additional pending union endorsements anticipated in 2010.

Mr. Villarreal, the president and principal shareholder of the Company, is also the principal shareholder of AUFS.

The Company has no definitive agreement signed with AUF and there is no assurance that an acquisition will be completed and if completed that the resulting combination will be successful.

Item 6. Exhibits

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

Exhibit No.	SEC Ref. No.	Title of Document

1	31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2	31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

3	32.1	Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

SIGNATURES

In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GRAND MONARCH HOLDINGS, INC.

Date: November 16, 2009
	/s/ David Villarreal
	David Villarreal
	Chief Executive Officer and Chief Financial Officer