SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549




FORM 10-Q




xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934




For the quarterly period ended March 31, 2010




oTRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE


SECURITIES EXCHANGE ACT OF 1934




For the transition period from ______________ to ______________




Commission File Number: 000-52754




MONARCH INVESTMENT PROPERTIES, INC.


(Exact name of small business issuer as specified in its charter)




Nevada

84-1251553(State or Other Jurisdiction

(I.R.S. Employer Identificationof Incorporation or Organization)

Number)




1801 North Military Trail, Suite 203


Boca Raton, FL 33431


(Address of Principal Executive Offices)




(561) 391-6117


(Issuer’s Telephone Number, Including Area Code)




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.


Yes x No o




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




Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer oSmaller Reporting Company x




Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).


Yes x No o




The number of shares outstanding of the registrant’s Class A common stock as of April 30, 2010 was 16,168,733.









TABLE OF CONTENTS




PagePART I. FINANCIAL INFORMATIONItem 1.
Financial StatementsBalance Sheets as of March 31, 2010 (Unaudited) and June 30, 2009

3Condensed Statements of Operations for the Three and Nine Months Ended March 31, 2010 and 2009 (Unaudited)

4Condensed Statement of Changes in Stockholders’ Deficiency for the Nine Months Ended March 31, 2010 (Unaudited)

5Condensed Statements of Cash Flows for the Nine Months Ended March 31, 2010 and 2009 (Unaudited)

6Notes to the Condensed Unaudited Financial Statements as of March 31, 2010 and 2009

7Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

11Item 3.
Quantitative and Qualitative Disclosures About Market Risk

16Item 4T.
Controls and Procedures

16PART II. OTHER INFORMATIONItem 1.
Legal Proceedings

19Item 1A.
Risk Factors

19Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

20Item 3.
Defaults Upon Senior Securities

20Item 4.
(Removed and Reserved)

20Item 5.
Other Information

20Item 6.
Exhibit Index

21SIGNATURES

22EX-31.1 Section 302 Certification of Principal Executive OfficerEX-31.2 Section 302 Certification of Principal Financial OfficerEX-32 Section 906 Certification of Officers





2


PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




MONARCH INVESTMENT PROPERTIES, INC.


BALANCE SHEETS




March 31, 2010

(Unaudited)


June 30,2009

(Audited)ASSETSCURRENT ASSETSCash

$
5,137


$
5,179Total Current Assets


5,137



5,179TOTAL ASSETS

$
5,137


$
5,179LIABILITIES AND STOCKHOLDERS’ DEFICIENCYCURRENT LIABILITIESAccrued expenses and other current liabilities

$
66,069


$
80,670Convertible judgment debt payable


221,340



210,354Affiliated party debt


287,648



235,318Total Current Liabilities


575,057



526,342COMMITMENTS AND CONTINGENCESSTOCKHOLDERS’ DEFICIENCYPreferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding


—



—Common stock, $.001 par value, 500,000,000 shares authorized, 16,168,733 shares issued and Outstanding, respectively


16,169



16,169Additional paid-in capital


2,833,241



2,833,241Accumulated deficit


(3,419,330
)


(3,370,573
)Total Stockholders’ Deficiency


(569,920
)


(521,163
)TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIENCY

$
5,137


$
5,179





See accompanying notes to the condensed unaudited financial statements




3


MONARCH INVESTMENT PROPERTIES, INC.
 CONDENSED STATEMENTS OF OPERATIONS
 (Unaudited)


Three Months Ended

March 31,


Nine Months Ended

March 31,2010


2009


2010


2009Revenue

$
—


$
—


$
—


$
—General and administrative expenses


4,875



66,687



14,943



80,881Loss from operations


(4,875
)


(66,687
)


(14,943
)


(80,881
)Other (expense) income:Interest expense


(11,861
)


(9,551
)


(33,814
)


(27,492
)Total Other (expense)


(11,861
)


(9,551
)


(33,814
)


(27,492
)Net Loss

$
(16,736
)

$
(76,238
)

$
(48,757
)

$
(108,373
)Net Loss per common share:Basic and fully diluted

$
(0.001
)

$
(0.005
)

$
(0.003
)

$
(0.007
)Weighted average number of commonshares outstanding:Basic


16,168,733



16,168,733



16,168,733



16,168,733Fully diluted


16,168,733



16,168,733



16,168,733



16,168,733




See accompanying notes to the condensed unaudited financial statements




4




MONARCH INVESTMENT PROPERTIES, INC.


CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY


FOR THE NINE MONTHS ENDED MARCH 31, 2010


(Unaudited)




AdditionalPreferred


Common Stock


Paid-In


AccumulatedShares


Shares


Amount


Capital


Deficit


TotalBalance at June 30, 2009


—



16,168,733


$
16,169


$
2,833,241


$
(3,370,573
)

$
(521,163
)Net Loss


















(48,757
)


(48,757
)Balance at March 31, 2010


—



16,168,733


$
16,169


$
2,833,241


$
(3,419,330
)

$
(569,920
)




See accompanying notes to the condensed unaudited financial statements




5




MONARCH INVESTMENT PROPERTIES, INC.
 CONDENSED STATEMENTS OF CASH FLOWS
 (Unaudited)




Nine Months Ended

March 31,2010


2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(48,757
)

$
(108,373
)Adjustments to reconcile net loss to net cash used in operating activities:Changes in operating assets and liabilities:Increase (decrease) in accrued expenses and other current liabilities


(14,601
)


39,145Increase in convertible judgment debt payable


10,986



10,986Total adjustments


(3,615
)


50,131Net cash used in operating activities


(52,372
)


(58,242
)CASH FLOWS FROM FINANCING ACTIVITIES:Increase in affiliated party debt


52,330



58,006Net cash provided by financing activities


52,330



58,006NET (DECREASE) IN CASH


(42
)


(236
)CASH - BEGINNING OF YEAR


5,179



1,384CASH - END OF PERIOD

$
5,137


$
1,148SUPPLEMENTAL CASH FLOW DATA:Cash paid for interest

$
—


$
—Cash paid for income taxes

$
—


$
—




See accompanying notes to the condensed unaudited financial statements




6




Monarch Investment Properties, Inc.


Notes to Condensed Unaudited Financial Statements


March 31, 2010


(Unaudited)




Note 1 – Condensed Financial Statements




The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flow at March 31, 2010 and for all periods presented have been made.




Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with the audited financial statement for the years ended June 30, 2009 and 2008 (restated) included in the Annual Report filed with the Securities and Exchange Commission on Form 10-K/A.




The results of operations for the period ended March 31, 2010 are not necessarily indicative of the operating results for the full year.




Note 2 – Significant Accounting Policies




The significant accounting policies are summarized as follows:




Use of Estimates




Management of Monarch has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.




Fair Value of Financial Instruments




The carrying amounts reported in the balance sheets for cash, accounts payable and accrued expenses, convertible judgment debt payable and shareholder payable approximate their fair market value based on the short-term maturity of these instruments.




FASB ASC 820 – Fair Value Measurements and Disclosures requires disclosures about the fair value for all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about fair value of financial instruments are based on pertinent information available to management as of March 31, 2010 and June 30, 2009. Accordingly, the estimates presented in these statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. Management has estimated the fair values of cash, accounts payable, and accrued expenses to be approximately their respective carrying values reported on these statements because of their short maturities.




7





Recent Accounting Pronouncements




There were various accounting standards and interpretations issued recently, but not yet effective, none of which are expected to have a material impact on the company’s financial position, operations or cash flows.




In June 2009, the FASB issued SFAS No. 168 (“SFAS 168”). “Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles”. The FASB Accounting Standards CodificationTM (“Codification”) has become the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with GAAP. All existing accounting standard documents are superseded by the Codification and any accounting literature not included in the Codification will not be authoritative. However, rules and interpretive releases of the Securities Exchange Commission (“SEC”) issued under the authority of federal securities laws will continue to be sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual reporting periods ending after September 15, 2009. Therefore, beginning with our quarter ending September 30, 2009, all references made by it to GAAP in its consolidated financial statements now use the new Codification numbering system. The Codification does not change or alter existing GAAP and therefore it is not having an impact on our financial position, results of operations and cash flows.




Note 3 – Going Concern




As reflected in the accompanying financial statements, the Company incurred a net loss of $48,757, negative cash flow from operations of $52,372 for the nine months ended March 31, 2010, has an accumulated deficit of $3,419,330 and a stockholders’ deficiency of $569,920 at March 31, 2010. The ability of the Company to continue as a going concern is dependent upon its ability to obtain financing and achieve profitable operations. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. These matters raise substantial doubt about the company’s ability to continue as a going concern.




Note 4 – Accrued Expenses and Other Current Liabilities
  March 31, 2010


June 30, 2009Legal fees

$
47,282


$
47,567Accounting and Auditing


11,500



16,500Miscellaneous, other


7,287



16,603Total accrued expenses and other current liabilities

$
66,069


$
80,670
  8
 
 Note 5 – Convertible Judgment Debt Payable
  Listed below is a summary of the transactions related to the JJFN Judgment obtained by JJFN Holdings against us in November 2004. Unpaid portions of the JJFN Judgment bear simple interest at the statutory interest rate of 9% per annum:
 
 Original judgment

$
1,100,000Interest 1999 through June 2005


643,500Partial payment made November 2004


(155,000
)Balance, June 30, 2005


1,588,500Interest June 2005 through June 2006


77,902Amount exchanged for Common Stock


(1,500,000
)Balance, June 30, 2006


166,402Interest July 2006 through June 2007


14,657Balance, June 30, 2007


181,059Interest July 2007 through June 2008


14,648Balance, June 30, 2008


195,707Interest July 2008 through June 2009


14,647Balance, June 30, 2009


210,354Interest July 2009 through March 2010


10,986Balance March 31, 2010

$
221,340
  Note 6 – Affiliated Party Debt Transaction
  Nine Months Ended

March 31, 2010


Year Ended

June 30, 2009Due to major shareholder/creditor, beginning of period

$
235,318


$
161,083Additional borrowings


52,330



74,235Repayments


—



—End of period

$
287,648


$
235,318
  Additional borrowings for the nine months ended March 31, 2010 comprised of $25,000 of cash advances, interest on debt of $22,830 and Management Fee of $4,500.
  The $500 per month that is being charged by Strategic Capital Resources, Inc. (“SCRI”) to Monarch is for the ongoing maintenance of its files and records, preparation of work papers for the quarterly reviews, as well as the preparation of work papers for the year end audit for the outside auditors. The $500 per month also includes the preparation of quarterly reports on Form 10-Q, as well as the Annual Report in Form 10-K/A, and the filings of Form 8-K as well as the ongoing efforts to find a suitable merger partner for Monarch.
  9
 
 See Note 7 to the audited financial statements in Form 10-K for the years ended June 30, 2009 and 2008, and Amendments 1, 2 and 3 to Form 10-K/A for the fiscal year ended June 30, 2009.
  Note 7 – Income Taxes
  FASB ASC 740 – “Income Taxes” provides for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. A valuation allowance must be established to reduce deferred income tax benefits if it is more likely than not that, a portion of the deferred income tax benefits will not be realized. Therefore, a valuation allowance equal to the potential deferred tax benefit has been established in full, resulting in no deferred tax benefit as of the balance sheet dates.
  Note 8 – Earnings (Loss) Per Share
  Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed assuming the exercise or conversion of common stock equivalent shares, if dilutive, consisting of unissued shares under options and warrants. Since the 1,100,000 shares under outstanding warrants and the potential conversion of the $221,340 convertible debt into 2,213,400 shares are both anti-dilutive due to the Company’s net loss, no diluted per share amounts are presented.
  Note 9 – Subsequent Events
  The Company has evaluated subsequent events through April 30, 2010, and has determined that there were no subsequent events to recognize or disclose in these financial statements.
  The remainder of this page intentionally left blank
  10
 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  The following discussion and analysis presents a review of the operating results of Monarch Investment Properties, Inc. (the “Company”) for the three and nine months ended March 31, 2010 and 2009, respectively, and the financial condition of the Company at March 31, 2010. The discussion and analysis should be read in conjunction with the condensed financial statements and accompanying notes included herein, as well as the Company’s audited financial statements for the years ended June 30, 2009 and 2008 on Form 10-K/A filed with the Securities Exchange Commission.
  Forward-looking Statements
  Statements included in the Quarterly Report filed on Form 10-Q that do not relate to present or historical conditions are “forward-looking statements.” Forward-looking statements may include, without limitation, statements relating to our plans, strategies, objectives, expectations and intentions and are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “forecasts,” “intends,” “possible,” “estimates,” “anticipates,” and “plans” and similar expressions are intended to identify forward-looking statements. Our ability to predict projected results or the effect of events on our operating results is inherently uncertain. Forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those discussed in this document. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that could cause actual performance or results to differ materially from those expressed in or implied by, forward-looking statements include, but are not limited to: (i) industry competition, conditions, performance and consolidation, (ii) legislative and/or regulatory developments, (iii) our ability to find an acceptable merger candidate, (iv) the effects of adverse general economic conditions, both within the United States and globally, and (v) other factors described under “Risk Factors” contained in the Company’s Form 10-K filed for the fiscal year ended June 30, 2009.
  Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligations to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking statements.
  11
 
 Overview
  We have virtually no operating history and due to the uncertain nature of the markets we address or intend to address, it is difficult to predict our future results of operations.
  Our Business Strategy
  Our current business plan is to serve as a vehicle for the acquisition of or merger or consolidation with a target business. We intend to effect a business combination with a target business which we believe has significant growth potential. The business combination may be with a financially stable, mature company or a company that is in its early stages of development or growth.
  Financial Condition and Changes
  Cash
  We have minimal cash and are dependent in the short term on affiliated parties to continue to infuse capital to meet our obligations. There is no assurance that this funding will continue.
  Accrued Expenses and Other Liabilities
  Accrued expenses at March 31, 2010 and June 30, 2009 consisted primarily of professional fees. Listed below is a summary of the transactions related to accrued expenses and other liabilities:
  March 31,2010


June 30, 2009


Increase (Decrease)Legal fees

$
47,282


$
47,567


$
(285
)Accounting fees


11,500



16,500



(5,000
)Miscellaneous, other


7,287



16,603



(9,316
)Total Accrued Expenses and Other Liabilities

$
66,069


$
80,670


$
(14,601
)
  The remainder of this page intentionally left blank
  12
 
 Convertible Judgment Debt Payable
  Listed below is a summary of the transactions related to the JJFN Judgment obtained by JJFN Holdings against us in November 2004. Unpaid portions of the JJFN Judgment bear simple interest at the rate of 9% per annum:
  Original judgment

$
1,100,000Interest 1999 through June 2005


643,500Partial payment made November 2004


(155,000
)Balance, June 30, 2005


1,588,500Interest June 2005 through June 2006


77,902Amount exchanged for Common Stock


(1,500,000
)Balance, June 30, 2006


166,402Interest July 2006 through June 2007

14,657Balance, June 30, 2007


181,059Interest July 27 through June 2008

14,648Balance, June 30, 2008


195,707Interest July 2008 through June 2009


14,647Balance, June 30, 2009


210,354Interest July 2009 through March 2010


10,986Balance, March 31, 2010

$
221,340
  Affiliated Party Debt
  To date, our operations have been funded by Strategic Capital Resources, Inc. (“Strategic”) which is controlled by one of our executive officers and our majority shareholder. Listed below is a summary of the transactions related to the debt we owe to Strategic:
  Balance, June 30, 2009

$
235,318Advances


25,000Interest


22,830Management Fee


4,500Balance, March 31, 2010

$
287,648
  The $500 per month that is being charged by Strategic Capital Resources, Inc. (“SCRI”) to Monarch is for the ongoing maintenance of its files and records, preparation of work papers for the quarterly reviews, as well as the preparation of work papers for the year end audit for the outside auditors.
  The $500 per month also includes the preparation of quarterly reports of Form 10-Q, as well as the Annual Report on Form 10-K and the filings of Form 8-K as well as the ongoing efforts to find a suitable merger partner for Monarch.
  Results of Operations
  We have generated no revenues since our fiscal year ended 1998 and will not generate revenues until, at the earliest, the completion of a business combination. There can be no assurance that we will be able to consummate a business combination on terms acceptable to us and our stockholders.
  13
 
 Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009
  General and administrative expenses were $4,875 for the three months ended March 31, 2010, as compared to $66,687 for the three months ended March 31, 2009, a decrease of $61,812. As seen in the chart below, substantial effort was expended in the three months ended March 31, 2009 related to the 14C filing of the proposed merger, which was not consummated. Please refer to “Business Strategies” in our filed 10-K/A for the year ended June 30, 2009.
  2010


2009Accounting Fees

$
2,000


$
32,000Legal Fees


—



9,276Management Fees


1,500



1,500Stock Transfer Fees


275



449Edgarized Fees


407



4,215Statement Fees for 14C Filing


—



17,500Other


693



1,747TOTAL

$
4,875


$
66,687
  Nine months ended March 31, 2010 compared to the nine months ended March 31, 2009.
  General and administrative expenses were $14,943 for the nine months ended March 31, 2010, as compared to $80,881 for the nine months ended March 31, 2009, a decrease of $65,938. As noted above, substantial effort and costs were expended in the nine months ended March 31, 2009 related to the proposed merger noted above.
  Listed below is a summary of these expenses:
  2010


2009Accounting Fees

$
6,000


$
36,000Legal Fees


517



12,954Management Fees


4,500



4,500Edgarization Costs


1,654



5,316Stock Transfer Fees


1,230



1,415Statement Fees for 14C Filing


—



17,500Miscellaneous


1,042



3,196TOTAL

$
14,943


$
80,881
  Liquidity and Capital Resources
  At March 31, 2010, our cash balance was $5,137 and we had a working capital deficit of $569,920.
  The lawsuit filed in June 1999 by JJFN Holdings against us and our subsidiaries resulted in a JJFN Judgment against us for $1,100,000 as well as interest computed at the simple rate of 9% per annum. In November 2004, the former principals of the Company made a partial payment in the amount of $155,000. In December 2005, Strategic agreed to convert $1,500,000 of the then $1,638,000 balance owed to it under the JJFN Judgment into 15,000,000 shares of our Common Stock.
  14
 
 To date, our operations have been funded by Strategic Capital Resources, Inc. (“SCRI”), which is controlled by our President. This funding included paying professional fees, interest on the affiliated debt, as well as accruing $500 per month for management fees and $17,500 related to the merger filing fees. The $500 per month that is being charged to us by SCRI for the maintenance of our files and records, preparation of workpapers for the quarterly reviews, as well as the preparation of work papers for the year end audit for the outside auditors. The $500 per month also includes the preparation of quarterly reports on Form 10-Q, as well as the Annual Report on Form 10-K and the filings of Form 8-K, as well as the ongoing efforts to find a suitable merger partner for us.
  A $15,000 fee was charged by SCRI, in March of 2009, was in connection with the AAHP/Monarch Merger represents time and costs associated with the negotiation of the merger and the principals of AAHP and their attorneys, as well as their investment bankers. It further includes the review of AAHP’s financial statements and operations on an on-going basis, as well as meetings with their outside auditors. Additionally, it includes assistance in the preparation and review of the proposed Form 8-K 12(g)(3)(a) to be filed pursuant to the Merger Agreements.
  For the nine months ended March 31, 2010, we had negative cash flows from operating activities of $52,372 compared to negative cash flows of $58,242 for the nine months ended March 31, 2009. We have been dependent upon proceeds of loans from Strategic to fund continuing activities. For the nine months ended March 31, 2010, our loans from Strategic increased by $52,330.
  We currently do not have sufficient cash to meet any of our current or anticipated obligations for the next twelve months and there can be no assurance we will ultimately obtain the necessary financing. In addition to any third-party financing that may be obtained, we currently expect that loans from our stockholders may be a continuing source of liquidity to meet our obligations. Accordingly, we will need to seek funding in the near future. Our independent auditors have issued a going concern paragraph in their opinion on the financial statements for the fiscal year ended June 30, 2009 that states there is substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent on our ability to access capital through debt and equity funding.
  Critical Accounting Policies
  The significant accounting policies are summarized as follows:
  Use of Estimates
  Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
  15
 
 Fair Value of Financial Instruments
  The carrying amounts reported in the balance sheet for cash, accounts payable and accrued expenses, convertible judgment debt payable and stockholder payable approximate their fair market value based on the short-term maturity of these instruments. FASB ASC 820 requires disclosures about the fair value for all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about fair value of financial instruments are based on pertinent information available to management as of March 31, 2010. Accordingly, the estimates presented in these statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.
  Management has estimated the fair values of cash, accounts payable and accrued expenses to be approximately their respective carrying values reported on these statements because of their short maturities.
  Our accounting policies and recent accounting pronouncements are described in Note 5 to our audited financial statements for the fiscal years ended June 30, 2009 and 2008 on Form 10-K filed with the Securities Exchange Commission.
  Off-Balance Sheet Arrangements
  We do not have any off-balance sheet arrangements, investments in special purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOURES ABOUT MARKET RISK
  The Company does not have exposure to many market risks, such as potential loss arising from adverse change in market rates and prices, such as foreign currency exchange and interest rates. We do not hold any derivatives or other financial instruments for trading or speculative purposes.
  ITEM 4T. CONTROLS AND PROCEDURES
  Evaluation of disclosure controls and procedures
  The Company’s management, with the participation of its principal executive officer and principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this evaluation, the principal executive officer and principal financial officer concluded that, as of March 31, 2010, the Company’s disclosure controls and procedures were effective, at the reasonable assurance level, to ensure that (i) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms and (ii) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
  16
 
 As required by Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered in this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”).
  These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Rules and Forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.
  Based on this evaluation our PEO and PFO concluded, that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Security and Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.
  Inherent Limitations -Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures 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. The design of any system of controls 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. 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 our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
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  Changes in internal controls
  Our Certifying Officers have indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.
  Sarbanes – Oxley Act 404 compliance
  The Company anticipates that it will be fully compliant with Section 404 of the Sarbanes-Oxley Act of 2002 by the required date for smaller reporting companies and it is in the process of reviewing its internal control systems in order to be compliant with Section 404 of the Sarbanes-Oxley Act. However, at this time the Company makes no representation that its systems of internal control comply with Section 404 of the Sarbanes-Oxley Act.
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 PART II. OTHER INFORMATION
  ITEM 1. LEGAL PROCEEDINGS
  None
  ITEM 1A. RISK FACTORS
  You should carefully consider all the risks described as previously discussed on our June 30, 2009 Form 10-K/A, which constitute the material risks facing us. If any of those risks or the following risks actually occur, our business could be harmed. In connection with our preparation of this quarterly report, management has reviewed and considered these risk factors and has determined that the following risk factors should be read in connection with the existing risk factors disclosed in our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2009. Please also refer to the other information about us contained in this Form 10-Q, including our financial statements and related notes.
  Deterioration of economic conditions could negatively impact our Company.
  Our Company may be adversely affected by changes in domestic and/or international economic conditions, including changes in inflation, interest or exchange rates, availability of capital markets and the effects of governmental initiatives to manage economic conditions.
  The recent disruptions in credit and freeze in the current market, as well as deterioration of national and global economic conditions could, among other things:
  ●
Impair our ability to access additional funds,●
Make it more difficult or costly for us to obtain financing in order to execute our business plan,●
Impair our efforts to identify potential investors and business combination opportunities,●
Significantly effect our ability to issue shares or debt securities to complete a business combination.
  We are unsure of the duration and severity of this economic crisis. If the crisis persists or worsens and economic conditions remain weak over a long period, the likelihood of the crisis will have a significant impact on our Company.
  Proposed merger with All American, as filed on Form Pre 14C on February 14, 2008, as well as the definitive information statement, will not be consummated.
  The merger was terminated and the company may be subject to a number of other risks. The Company has expended a substantial amount of time, effort and incurred the expenses associated with attempting to effectuate the merger. The failure to consummate the merger could have an adverse impact on the financial condition of the Company and the value of its equity interests.
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 All American is obligated to reimburse us for costs in connection with the proposed merger. As of March 31, 2010 Management does not believe that we will be reimbursed or that the $315,972 due us will be collectible.
  ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OFPROCEEDS
  None
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
  None
  ITEM 4. Removed and Reserved
  ITEM 5. OTHER INFORMATION
  Our Directors consist of Messrs. David Miller, John H. Roach, Jr. and Ralph Wilson. We are not a listed issuer, as our securities are not publicly traded on any exchange, or otherwise. As such, we have established our own definition for determining whether our Directors are independent. Our definition of an Independent Director is a Director that is not subject to the control or influence of an Officer, other Director’s or shareholder of the Company, as well as not a member of the management team or Officer of the Company. That person is impartial and not given to further interests of any Officer or shareholder of the Company and there is no ability on the part of any Officer or shareholder to exert undue influence to challenge that Directors’ vote.
  We further consider an Independent Director one who receives absolutely no personal benefit, whether monetary or otherwise, that could possibly influence their vote and has complete freedom to evaluate any information that they consider to be relevant to rendering their opinion or vote. Therefore, we believe that Messrs. John H. Roach, Jr. and Ralph Wilson are considered “independent” directors pursuant to the provisions of Item 407(a) of Regulation S-K.
  This definition is not posted on our website, as we do not have a website. This standard was adopted in our Fiscal Year Ended June 30, 2007 but has not been included in any Information Statement or Proxy Statement that we have filed.
  Securities Exchange commission (“SEC”) Comment Letters:
  On March 1st, 2010, the Company received a comment letter from the SEC relating to its Form 10-K for the Fiscal Year Ended June 30, 2009. The Company filed Amendment No. 1 to its Form 10-K for the Fiscal Year Ended June 30, 2009 on March 17th, 2010. The Amendment was filed to amend, restate, clarify and add to certain disclosures.
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 On March 24th, 2010, the Company received a second comment letter from the SEC regarding Amendment No. 1 to its Form 10-K for the Fiscal Year Ended June 30, 2009, requesting additional clarification and disclosures. On April 9th, 2010, the Company filed Amendment No. 2 to amend, restate, clarify and provide additional disclosures as requested in the second comment letter received from the SEC.
  On April 19th, 2010, the Company received a third comment letter from the SEC regarding Amendment No. 2, requesting additional clarification and disclosures. On April 27th, 2010, the Company filed Amendment No. 3 to its Form 10-K for the Fiscal Year Ended June 30, 2009, addressing the remaining comments, revisions, clarifications and additional disclosures requested in the third comment letter received from the SEC.
  ITEM 6. EXHIBITS
  31.1
—
Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 200231.2
—
Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 200232
—
Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
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  SIGNATURES
  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  MONARCH INVESTMENT PROPERTIES, INC.
 (Registrant)
  Date: April 30, 2010
  By: /s/ Philip BloomPhilip BloomTreasurer and Chief FinancialOfficer (Principal Financial andAccounting Officer)Date: April 30, 2010By: /s/ David MillerDavid MillerPresident and Director (PrincipalExecutive Officer)
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