**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, 2008





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.)




**5118
                Hunt Club Road, Racine, Wisconsin**
            
            **53402**(Address
                of principal executive offices)
            
            (Zip
                Code)





**262-652-3662**


(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
o





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 o
            Accelerated
                filer oNon-accelerated
                filer o
            Smaller
                reporting company x





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










**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 o    No o





**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 11, 2008, there are 100,000 shares of $0.001 par value common stock
      issued and outstanding.











FORM
      10-Q


GRAND
      MONARCH HOLDINGS, INC.


INDEX





PagePART
                I.
            Financial
                Information
            1Item
                1. Financial Statements ( Unaudited)
            1Condensed
                Balance Sheets as of September 30, 2008 (Unaudited) and December
                31,
                2007
            3Condensed
                Statements of Income and Retained Earnings for the Three Months Ended
                September 30, 2008 and 2007 (Unaudited)
            4Condensed
                Statements of Income and Retained Earnings for the Nine Months Ended
                September 30, 2008 and 2007 (Unaudited)
            5Condensed
                Statements of Cash Flows for the Nine Months Ended September 30,
                2008 and
                2007 (Unaudited)
            6Notes
                to Condensed Financial Statements as of September 30, 2008
                (Unaudited)
            7Item
                2.  Management’s Discussion and Analysis of Financial Condition or
                Plan of Operation
            9Item
                3.  Controls and Procedures
            13PART
                II.
            Other
                Information
            14Item
                1. Legal Proceedings
            14Item
                2.  Unregistered Sales of Equity Securities and Use of
                Proceeds
            14Item
                3.  Defaults Upon Senior Securities
            14Item
                4.  Submission of Matters to a Vote of Security
                Holders.
            14Item
                5.  Other Information
            14Item
                6.  Exhibits
            14Signatures
            15





(Inapplicable
      items have been omitted)








**PART
      I - FINANCIAL INFORMATION**




**Item
      1. Financial Statements (Unaudited)**





**Grand
      Monarch Holdings, Inc.**


**Condensed
      Financial Statements**


**For
      the Three and Nine Months Ended**


**September
      30, 2008**





**PS
      Stephenson & Co., P.C.**





**Certified
      Public Accountants**


**Wharton,
      Texas**


1




**Grand
        Monarch Holdings, Inc.**
 **Index
        to Condensed Financial Statements**
 **September
        30, 2008 and December 31, 2007**
 
 **Page****Number**Financial
                  Statements:Balance
                  Sheets as of September 30, 2008 (Unaudited) and December 31,
                  2007
              3Condensed
                  Statements of Income and Retained Earnings for the three months
                  ended
                  September 30, 2008 and 2007 (Unaudited)
              4Condensed
                  Statements of Income and Retained Earnings for the nine months
                  ended
                  September 30, 2008 and 2007 (Unaudited)
              5Condensed
                  Statements of Cash Flows for the nine months ended September 30,
                  2008 and
                  2007 (Unaudited)
              6Notes
                  to Condensed Financial Statements
              7
  2
 
 **Grand
        Monarch Holdings, Inc.**
 **Condensed
        Balance Sheets**
 **September
        30, 2008 (Unaudited) and December 31, 2007**
 
 **Sept. 30,**
              
              **Dec. 31,****2008**
              
              **2007****Assets**Current
                  assetsCash
                  and cash equivalents
              
              $
              81
              
              $
              81Total
                  current assets
              
              
              81
              
              
              81Total
                  assets
              
              $
              81
              
              $
              81**Liabilities
                  and Stockholders' Equity**Total
                  liabilities
              
              $
              -
              
              $
              -Stockholders'
                equityCommon
                  stock; par value $.001; 35,000,000 shares authorized;100,000
                  shares issued and outstanding
              
              
              100
              
              
              100Additional
                  paid-in capital
              
              
              -
              
              
              -Retained
                  earnings
              
              
              (19
              )
              
              (19
              )Total
                  stockholders' equity
              
              
              81
              
              
              81Total
                  liabilities and stockholders' equity
              
              $
              81
              
              $
              81
  The
          accompanying notes are an integral part of these condensed financial
          statements.
  3
  **Grand
        Monarch Holdings, Inc.**
 **Condensed
        Statement of Income and Retained Earnings**
 **For
        the Three Months Ended September 30, 2008 and 2007
        (Unaudited)**
 
 **Three Months Ended****September 30,****2008**
              
              **2007**Revenues
              
              $
              -
              
              $
              -Operating
                  and administrative expenses
              
              
              -
              
              
              -Income
                  from operations
              
              
              -
              
              
              -Other
                  income (expense)
              
              
              -
              
              
              -Net
                  income
              
              
              -
              
              
              -Retained
                  Earnings, Beginning of period
              
              
              (19
              )
              
              -Retained
                  Earnings, End of period
              
              $
              (19
              )
              $
              -Basic
                  and diluted earnings per share
              
              $
              -
              
              $
              -Weighted
                  average shares outstanding
              
              
              100,000
              
              
              100,000
 The
          accompanying notes are an integral part of these condensed financial
          statements.
  4
  **Grand
        Monarch Holdings, Inc.**
 **Condensed
        Statement of Income and Retained Earnings**
 **For
        the Nine Months Ended September 30, 2008 and 2007
        (Unaudited)**
 
 **Nine Months Ended****September 30,****2008**
              
              **2007**Revenues
              
              $
              -
              
              $
              -Operating
                  and administrative expenses
              
              
              -
              
              
              19Income
                  from operations
              
              
              -
              
              
              (19
              )Other
                  income (expense)
              
              
              -
              
              
              -Net
                  income
              
              
              -
              
              
              (19
              )Retained
                  Earnings, Beginning of period
              
              
              (19
              )
              
              -Retained
                  Earnings, End of period
              
              $
              (19
              )
              $
              (19
              )Basic
                  and diluted earnings per share
              
              $
              -
              
              $
              (0.00
              )Weighted
                  average shares outstanding
              
              
              100,000
              
              
              73,600
 The
          accompanying notes are an integral part of these condensed financial
          statements.
 5
 
 **Grand
        Monarch Holdings, Inc.**
 **Condensed
        Statement of Cash Flows**
 **For
        the Nine Months Ended September 30, 2008 and 2007
        (Unaudited)**
 
 **Nine Months Ended****September 30,****2008**
              
              **2007****Cash
                  Flows Provided From Operating Activities**Net
                  income
              
              $
              -
              
              $
              (19
              )Adjustments
                  to reconcile net income to net cash provided (used) by operating
                  activities:
              
              
              -
              
              
              -Net
                  cash provided (used) by operating activities
              
              
              -
              
              
              (19
              )**Cash
                  Flows Provided From Investing Activities**
              
              
              -
              
              
              -**Cash
                  Flows Used By Financing Activities**Net
                  proceeds from stock issuance
              
              
              -
              
              
              100Net
                  cash provided by financing activities
              
              
              -
              
              
              100**Net
                  increase (decrease) in cash and cash equivalents**
              
              
              -
              
              
              81**Cash
                  and cash equivalents, beginning of period**
              
              
              81
              
              
              -**Cash
                  and cash equivalents, end of period**
              
              $
              81
              
              $
              81**Supplemental
                  disclosure**Interest
                  paid during the period
              
              $
              -
              
              $
              -
 The
          accompanying notes are an integral part of these condensed financial
          statements.
  6
  **Grand
        Monarch Holdings, Inc.**
 **Notes
        to Condensed Financial Statements**
 **September
        30, 2008 (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, 2007.
  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 periods ended September 30,
        2008
        are not necessarily indicative of the results which may be expected for any
        other interim periods or for the year ending December 31, 2008.
  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.
  7
  **Grand
        Monarch Holdings, Inc.**
 **Notes
        to Condensed Financial Statements**
 **Quarter
        Ended March 31, 2008 (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.
 
 **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. On March 13, 2007, the Company issued 100,000 common
        shares to Belmont Partners, LLC at $0.001 per share, or $100. These shares
        were
        subsequently sold under a common stock purchase agreement (see Note 4). At
        September 30, 2008 and December 31, 2007, the Company had 100,000 shares
        of
        common stock issued and outstanding. The Company had no common stock issued
        and
        outstanding at December 31, 2006.
 
 **4.**
              **Common
                  Stock Purchase Agreement**
 
 On
        or
        around January 31, 2008, the company entered into a Common Stock Purchase
        Agreement (the “Agreement”) with Ballantyne Acquisition Corp. and Belmont
        Partners, LP, whereby Belmont Partners, LP, as sole shareholder, would sell
        100,000 shares of common stock of the Company for $14,000. Concurrent with
        the
        Agreement, the sole Director, President and Secretary, who is also the managing
        partner of Belmont Partners, LP, resigned as Director, President and Secretary
        of the Company, and Ted Ballantyne was appointed as Director, President and
        Secretary of the Company. The closing of the Agreement occurred on or around
        February 4, 2008.
  **5.**
              **Basic
                  and Diluted Earnings (Loss) Per Common
                  Share**
 
 Basic
        and
        diluted earnings (loss) per share for the three months ended September 30,
        2008
        and 2007 were computed using 100,000 and 100,000 weighted average common
        shares
        outstanding, respectively. Basic
        and diluted earnings (loss) per share for the nine months ended September
        30,
        2008 and 2007 were computed using 100,000 and 73,600 weighted average common
        shares outstanding, respectively.The
        Company does not have potentially dilutive shares issued or outstanding.At
        September 30, 2008, the Company had an aggregate 100,000 shares of common
        stock
        issued. The Company is authorized to issue up to 35,000,000 shares of common
        stock.
  8
 
  **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.
 Mr. Tad Ballantyne is our sole officer and director, and through
      Ballantyne Acquisition Corp. (which he controls), a controlling shareholder.
       Mr. Ballantyne, as President and Secretary of the Company, has agreed to
      allocate a limited portion of his time to the activities of the Company without
      compensation.  Potential conflicts may arise with respect to the limited
      time commitment by Mr. Ballantyne and the potential   demands of our
      activities.


9





The
      amount of time spent by Mr. Ballantyne 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 Mr. Ballantyne will actually
      be required to spend to locate a suitable target company. Mr. Ballantyne
      estimates 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.


10





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.


11




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.  Mr. Ballantyne has 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.


12





**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.


13





**Changes
      in internal control over financial reporting**





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




**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**





None.





**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 Document**1
            
            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 pursuant to U.S.C. Section 1350 as
                adopted pursuant  to Section 906 of the Sarbanes-Oxley Act of
                2002*4
            
            32.2
            
            Certification
                of the Principal 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.


14




**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 11, 2008*/s/
                Tad M. Ballantyne*Tad
                M. BallantyneChief
                Executive Officer and Chief Financial
              Officer




15