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 March 31, 2010





o
            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)





__________________________________________________________________


(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
June 11, 2010, there were 11,172,450 shares of $0.001 par value common stock
issued and outstanding.







FORM
10-Q


GRAND
MONARCH HOLDINGS, INC.


INDEX





PagePART
      I.
            Financial
      Information
            
            3Item
      1. Financial Statements (Unaudited)
            
            3Condensed
      Balance Sheets as of  March 31, 2010 (Unaudited) and December
      31, 2009
            
            3Condensed
      Statements of Income and Retained Earnings for the Three Months Ended
      March 31, 2010 and 2009 (Unaudited)
            
            4Condensed
      Statements of Cash Flows for the Three Months Ended March 31, 2010 and
      2009 (Unaudited)
            
            5Notes
      to Condensed Financial Statements as of March 31, 2010
      (Unaudited)
            
            6Item
      2.  Management’s Discussion and Analysis of Financial Condition or
      Plan of Operation
            
            8Item
      3.  Controls and Procedures
            
            11PART
      II.
            Other
      Information
            
            12Item
      1. Legal Proceedings
            
            12Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
            
            12Item
      3.  Defaults Upon Senior Securities
            
            12Item
      4.  Submission of Matters to a Vote of Security
    Holders.
            
            12Item
      5.  Other Information
            
            12Item
      6.  Exhibits
            
            12Signatures
            
            13





(Inapplicable
items have been omitted)





2


PART
I - FINANCIAL INFORMATION




Item
1. Financial Statements (Unaudited)







Grand
      Monarch Holdings, Inc.Condensed
      Balance SheetsMarch
      31, 2010 (Unaudited) and December 31,
2009




March
      31,
            
            
            Dec.
      31,2010
            
            
            2009AssetsCurrent
      assetsCash
      and cash equivalents
            
            $
            38,551
            
            
            $
            203,829Amounts
      due from related party
            
            
            12,250Total
      current assets
            
            
            50,801
            
            
            
            203,829Total
      assets
            
            $
            50,801
            
            
            $
            203,829Liabilities
      and Stockholders' EquityTotal
      liabilities
            
            $
            -
            
            
            $
            -Stockholders'
      equityCommon
      stock; par value $.001; 35,000,000 shares authorized; 11,169,950 and
      100,000 shares issued and outstanding, respectively
            
            
            11,170
            
            
            
            11,100Additional
      paid-in capital
            
            
            318,880
            
            
            
            249,000Accumulated
      deficit
            
            
            (279,249)
            
            
            
            (56,271
            )Total
      stockholders' equity
            
            
            50,801
            
            
            
            203,829Total
      liabilities and stockholders' equity
            
            $
            50,801
            
            
            $
            203,829







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





3




Grand
      Monarch Holdings, Inc.Condensed
      Statements of IncomeFor
      the Three Months Ended March 31, 2010 and 2009
  (Unaudited)




Three
      Months EndedMarch
      31,2010
            
            
            2009Revenues
            
            $
            -
            
            
            $
            -Operating
      and administrative expenses
            
            
            223,982
            
            
            
            -Income
      (loss) from operations
            
            
            (223,982)
            
            
            
            -Other
      income (expense)
            
            
            1,004
            
            
            
            -Net
      income (loss)
            
            $
            (222,978)
            
            
            $
            -Basic
      and diluted earnings per share
            
            $
            (0.02)
            
            
            $
            -Weighted
      average shares outstanding
            
            
            11,123,317
            
            
            
            100,000







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





4




Grand
      Monarch Holdings, Inc.Condensed
      Statements of Cash FlowsFor the Three Months Ended
      March 31, 2010 and 2009 (Unaudited)




Three
      Months EndedMarch
      31,2010
            
            
            2009Cash
      Flows Provided From Operating ActivitiesNet
      income
            
            $
            (222,978)
            
            
            $
            -Adjustments
      to reconcile net income to net cash provided (used) by operating
      activities:
              Increase
      in amounts due from related parties
            
            
            (12,250)
            
            
            
            -Net
      cash provided (used) by operating activities
            
            
            (235,228)
            
            
            
            -Cash
      Flows Provided From Investing Activities
            
            
            -
            
            
            
            -Cash
      Flows Used By Financing ActivitiesNet
      proceeds from stock issuance
            
            
            69,950
            
            
            
            -Net
      cash provided by financing activities
            
            
            69,950
            
            
            
            -Net
      increase (decrease) in cash and cash equivalents
            
            
            (165,278)
            
            
            
            -Cash
      and cash equivalents, beginning of period
            
            
            203,829
            
            
            
            81Cash
      and cash equivalents, end of period
            
            $
            38,551
            
            
            $
            81Supplemental
      disclosureInterest
      paid during the period
            
            $
            -
            
            
            $
            -







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





5


Grand
Monarch Holdings, Inc.


Notes
to Condensed Financial Statements


March
31, 2010 (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, 2009.




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 month period ended March 31, 2010 is not
necessarily indicative of the results which may be expected for any other
interim periods or for the year ending December 31, 2010.




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.





Basis
of Accounting


The
Company’s policy is to prepare its financial statements on the accrual basis of
accounting in accordance with generally accepted accounting principles. Revenues
are recognized when earned.  Expenses are recognized in the period in
which they are incurred.





Cash
and Cash Equivalents


For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with original maturities of three months or less to be cash
equivalents.  Cash and cash equivalents are stated at cost which
approximates fair market value.





Stock-Based
Compensation Plans


The
Company currently does not have any stock-based compensation plans.




Earnings
(Loss) Per Share


The
Company reports both basic earnings per share, which is based on the weighted
average number of common shares outstanding, and diluted earnings per share,
which is based on the weighted average number of common shares as well as all
potentially dilutive common shares outstanding.





6


Grand
Monarch Holdings, Inc.


Notes
to Condensed Financial Statements


Quarter
Ended March 31, 2010 (unaudited)





Income
Taxes


The
Company recognizes income tax expense based on the liability method of
accounting for income taxes.  Deferred tax assets and liabilities are
recognized for the income tax effect of temporary differences between the tax
basis of assets and liabilities and their carrying values for financial
reporting purposes.  Deferred tax expense or benefit is the result of
changes in deferred tax assets and liabilities during the period.





Use
of Estimates


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





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 March 31, 2010 and December 31, 2009, the
Company had 11,169,950 and 11,100,000 shares of common stock issued and
outstanding, respectively.





Between
January 1 and March 31, 2010, the Company sold 69,950 Units, consisting of one
share of its common stock and a warrant to purchase one share of its common
stock at a 10% discount from the market price, at $1.00 per Unit to twenty-six
“accredited investors” for an aggregate amount of $69,950.  The Units
were sold in a private placement and the share certificates were affixed with a
legend restricting transfers and sales.  We relied upon Section 4(2)
of the Securities Act of 1933, as amended, for an exemption from registration of
these Units and no underwriter was used in this transaction.





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





Basic and
diluted earnings (loss) per share for the three months ended March 31, 2010 and
2009 were computed using 11,123,317 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





From time
to time, the Company will borrow funds and/or advance funds with a related party
entity principally owned by the Company’s CEO.  The borrowings and
advances are unsecured and generally occur with no specific repayment terms or
interest.  Management believes all related party advances are fully
collectible.





7


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.





8


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.




9


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.





10


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.




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.





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.




11


PART
II - OTHER INFORMATION





I tem 1. Legal
Proceedings.





There is
no material legal proceeding pending against us.




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





Between
January 1 and March 31, 2010, the Company sold 69,950 Units, consisting of one
share of its common stock and a warrant to purchase one share of its common
stock at a 10% discount from the market price, at $1.00 per Unit to twenty-six
“accredited investors” for an aggregate amount of $69,950.  The Units
were sold in a private placement and the share certificates were affixed with a
legend restricting transfers and sales.  We relied upon Section 4(2)
of the Securities Act of 1933, as amended, for an exemption from registration of
these Units and no underwriter was used in this transaction.








Item
3.  Defaults Upon Senior Securities





None.




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





None.





Item 5.  Other
Information





Not
applicable.





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 Document1
            
            31.1
            
            Certification
      of the Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 20022.
            
            31.2
            
            Certification
      of the Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 20023
            
            32.1
            
            Certification
      of the Principal Executive Officer and Chief Financial 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.




12


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:
      June 14, 2010/s/
      David Villarreal, Jr.David
      Villarreal, Jr.Chief
      Executive Officer and Chief Financial
              Officer







13