UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





x
              ANNUAL REPORT
      PURSUANT TO SECTION 13 OR 15(d)OF THE
      SECURITIES EXCHANGE ACT OF
1934




For the
fiscal year ended December 31, 2009





 ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
      SECURITIES EXCHANGE ACT OF
1934




For the
transition period from __________ to __________





Commission
file number   000-52715





GRAND
MONARCH HOLDINGS, INC.


(Exact
name of registrant as specified in its charter)





Delaware
            
            20-8023849State 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)





Registrant’s
telephone number, including area code (866) 350-4450





Securities
registered pursuant to Section 12(b) of the Act:  None




Securities
registered pursuant to section 12(g) of the Act:  Common Stock, $0.001
par value per share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


 ̈ Yes x No





Check
whether the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. x Yes  ̈ No





Check
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 such filing requirements for the past 90
days. x Yes  ̈ No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x





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” in Rule 12b-2 of the Exchange Act.


Large accelerated
      filer o
              Accelerated
      filer o
              Non-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 Act).  x Yes o No





Aggregate
value, as of the last sale (April 4, 2010), of the registrant’s voting stock
held by non-affiliates:  $322,250.




Number of
shares outstanding of each of the registrant’s classes of common stock at April
14, 2010: 11,422,250 shares of common stock, par value $0.001





DOCUMENTS
INCORPORATED BY REFERENCE





None









Table
of Contents




PagePART
      I
            
            
            
            2Item
      1.
            
            Description
      of Business
            
            2Item
      1A.
            
            Risk
      Factors
            
            6Item
      1B.
            
            Unresolved
      Staff Comments
            
            9Item
      2.
            
            Properties
            
            9Item
      3.
            
            Legal
      Proceedings
            
            9Item
      4.
            
            Submission
      of Matters to a Vote of Security Holders
            
            10PART
      II
            
            
            
            10Item
      5.
            
            Market
      for Registrant’s Common Equity and Related Stockholder Matters, and Issuer
      Purchases of Equity Securities
            
            10Item
      6.
            
            Selected
      Financial Data
            
            10Item7.
            
            Management’s
      Discussion and Analysis of Financial Condition and Results  of
      Operation
            
            10Item
      7A.
            
            Quantitative
      and Qualitative Disclosures about Market Risk
            
            14Item
      8.
            
            Financial
      Statements and Supplemental Data
            
            14Item
      9.
            
            Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
            
            14Item9A(T).
            
            Controls
      and Procedures
            
            15Item
      9B.
            
            Other
      Information
            
            15PART
      III
            
            
            
            16Item
      10.
            
            Directors,
      Executive Officers and Corporate Governance
            
            16Item
      11.
            
            Executive
      Compensation
            
            17Item
      12.
            
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            
            18Item
      13.
            
            Certain
      Relationships and Related Transactions and Director
      Independence
            
            18Item
      14.
            
            Principal
      Accountant Fees and Services
            
            19Part
      IV
            
            19Item
      15.
            
            Exhibits;
      Financial Statement Schedules
            
            19SIGNATURES
            
            20FINANCIAL
      STATEMENTS
            
            21




1




PART
I


Item 1.
Description of Business




Grand
Monarch Holdings, Inc. ("the Company") was incorporated on December 18, 2006
under the laws of the State of Delaware.   We were formed for seeking
a merger, acquisition or other business combination transaction with a privately
owned entity seeking to become a publicly owned entity.





We
voluntarily filed a Registration Statement on Form 10-SB to register our common
stock under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act") on July 3, 2007. Our current principal business activity is to seek a
suitable acquisition candidate through acquisition, merger, reverse merger or
other suitable business combination method.





As a
"reporting company",  we may be more attractive to a private
acquisition target because our  common stock is eligible to be quoted on
the OTC Bulletin Board although there is no assurance it will be quoted.
 As a result of filing our Registration Statement, we are obligated to file
with the Securities and Exchange Commission (the "Commission") certain periodic
reports, including an annual report containing audited financial statements.
 We anticipate that we will continue to file such reports as required under
the Exchange Act.





We are a
“shell company” as defined under Rule 12b-2 of the Exchange Act as a registrant,
other than an asset-backed issuer, that has (i) no or nominal operations; and
(ii) either (a) no or nominal assets; (b) assets consisting solely of cash and
cash equivalents; or (c) assets consisting of any amount of cash and cash
equivalents and nominal other assets.  Private companies wishing to become
publicly traded may wish to merge with a shell company through a reverse merger
or reverse acquisition transaction whereby the shareholders of the private
company become the majority of the shareholders of the combined company.
 The private company may purchase for cash all or a portion of the common
shares of the shell corporation from its major stockholders.  Typically,
the Board and officers of the private company become the new Board and officers
of the combined company and often the name of the private company becomes the
name of the combined entity.





We
have very limited capital, and it is unlikely that we will be able to take
advantage of more than one such business opportunity.  We intend to seek
opportunities demonstrating the potential of long-term growth.  Presently,
we have yet to identify a business opportunity that we plan to pursue, and we
have not reached any agreement or definitive understanding with any person
concerning an acquisition.





No
assurance can be given that we will be successful in finding or acquiring a
desirable business opportunity, given the limited funds that are expected to be
available for acquisitions.  Furthermore, no assurance can be given that
any acquisitions which does occur, will be on terms that are favorable to us or
our current stockholders.





Our
search will be directed toward small and medium-sized enterprises, which have a
desire to become public corporations.  In addition these enterprises may
wish to satisfy, either currently or in the reasonably near future, the minimum
tangible asset requirement in order to qualify shares for trading on NASDAQ or
on an exchange such as the American Stock Exchange (See the subsection of this
Item 1 called “Investigation
and Selection of Business Opportunities" ).  We anticipate that
the business opportunities presented to us will either (i) be in the process of
formation, or be recently organized with limited operating history or a history
of losses attributable to under-capitalization or other factors; (ii)
experiencing financial or operating difficulties; (iii) be in need of funds to
develop new products or services or to  expand  into a new
 market,  or  have  plans  for  rapid
 expansion  through acquisition of competing businesses; or (iv) have
other similar characteristics. We intend to concentrate our acquisition efforts
on properties or businesses that we believe to be undervalued or that we believe
may realize a substantial benefit from being publicly owned.  Given the
above factors, investors should expect that any acquisition candidate might have
little or no operating history, or a history of losses or low profitability.





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.





Any
entity which has an interest in being acquired by, or merging into the Company,
is expected to be an entity that desires to become a public company and
establish a public trading market for its securities.  In connection with
such 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 stockholders by the acquiring entity or its
affiliates.  If stock is purchased from the current principal stockholders,
the transaction is likely to result in substantial gains to the current
principal stockholders relative to their purchase price for such stock.  In
our judgment, none of our then officers and directors would thereby become an
underwriter within the meaning of the Section 2(11) of the Securities Act of
1933, as amended, as long as the transaction is a private transaction rather
than a public distribution of securities. The sale of a controlling interest by
certain of our principal stockholders would occur at a time when minority
stockholders are unable to sell their shares because of the lack of a public
market for such shares.





2




Depending
upon the nature of the transaction, our current officer and director may resign
his management and board position in connection with a change of control or
acquisition of a business opportunity (see the subsection of this Item 1 called
"Form of Acquisition"
and Item 1A "Risk
Factors" ).  In the event of such a resignation, our current
management would thereafter have no control over the conduct of our
business.





It is
anticipated that business opportunities will come to our attention from various
sources, including our officer and director, our stockholder, professional
advisors such as attorneys and accountants, securities broker-dealers, venture
capitalists, members of the financial community and others who may present
unsolicited proposals. We have no plans, understandings, agreements, or
commitments with any individual for such person to act as a finder of
opportunities for the Company.





Investigation and Selection
of Business Opportunities





To a
large extent, a decision to participate in a specific business opportunity may
be made upon our analysis of the quality of the other company’s management and
personnel, the anticipated acceptability of new products  or
 marketing  concepts,  the  merit  of
 technological  changes,  the perceived benefit the business
opportunity will derive from becoming a publicly held entity, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. 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.





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.





Certain
types of business acquisition transactions may be completed without any
requirement that we first submit the transaction to the stockholders for their
approval.  In the event the proposed transaction is structured in such a
fashion that stockholder approval is not required, holders of our securities
(other than principal stockholders holding a controlling interest) should not
anticipate that they would be provided with financial statements or any other
documentation prior to the completion of the transaction.  Other types of
transactions may require prior approval of the stockholders.





In the
event a proposed business combination or business acquisition transaction
requires stockholder approval, we will be required to prepare a Proxy or
Information Statement describing the proposed transaction, file it with the
Commission for review and approval, and mail a copy of it to all our
stockholders prior to holding a stockholder meeting for purposes of voting on
the proposal or if no stockholders meeting will be held, prior to consummating
the proposed transaction.  Minority shareholders may have the right, in the
event the transaction is approved by the required number of stockholders, to
exercise statutory dissenter’s rights and elect to be paid the fair value of
their shares.




The
analysis of business opportunities will be undertaken by or under the
supervision  of  our current sole officer  and
 director, who is not a professional   business
 analyst  (See  the  section  of   Item   7
  called "Management" ).  Although
there are no current plans to do so, our management might hire an outside
consultant to assist in the investigation and selection of business
opportunities, and might pay a finder's fee. Since our management has no current
plans to use any outside consultants or advisors to assist in the investigation
and selection of business opportunities, no policies have been adopted regarding
use of such consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of service, or
the total amount of fees that may be paid.  However, due to our limited
resources, it is likely that any such fee we agree to pay would be paid in stock
and not in cash.




Otherwise,
in analyzing potential business opportunities, our management anticipates that
it will consider, among other things, the following factors:




·
            Potential for growth and
      profitability indicated by new technology, anticipated market expansion,
      or new products;




·
            Our perception of how any
      particular business opportunity will be received by the investment
      community and by our
stockholders;




·
            whether, following the business
      combination, the financial condition of the business opportunity would be,
      or would have a significant prospect in the near future of becoming,
      sufficient to enable the securities of the Company to qualify for listing
      on an exchange or on a national automated securities quotation system,
      such as NASDAQ, so as to permit the trading of such securities to be
      exempt from the requirements of Rule 15g-9 adopted by the Commission (See
      the subsection of this Item 1A called"Risk Factors
      - Regulation of Penny Stocks");




3




·
            capital requirements and
      anticipated availability of required funds, to be provided by us or from
      operations, through the sale of additional securities, through joint
      ventures or similar arrangements, or from other
      sources;




·
            the extent to which the business
      opportunity can be advanced;




·
            competitive position as compared
      to other companies of similar size and experience within the industry
      segment as well as within the industry as a
  whole;




·
            strength and diversity of
      existing management or management prospects that are scheduled for
      recruitment;




·
            the cost of participation by the
      Company as compared to the perceived tangible and intangible values and
      potential; and




·
            the accessibility of required
      management expertise, personnel, raw materials, services, professional
      assistance, and other required
items.





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.





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,
or 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, un-audited financial statements, together with
reasonable assurance that audited financial statements would be able to be
produced within a reasonable period not to exceed 60 days following completion
of a merger or acquisition transaction; and the like.





As part
of our investigation, our executive officer and director may meet personally
with management and key personnel, may visit and inspect material facilities,
obtain independent analysis or verification of certain information provided,
check references of management and key personnel, and take other reasonable
investigative measures, to the extent our limited financial resources and
management expertise allow him to do so.





It is
possible that the range of business opportunities that might be available for
consideration by us could be limited by the impact of the Commission regulations
regarding purchase and sale of penny stocks. The regulations would affect, and
possibly impair, any market that might develop in our securities until such time
as they qualify for listing  on  NASDAQ  or on  an
 exchange  which  would  make  them  exempt
 from applicability of the penny stock regulations. (see the subsection of
this Item 1A called "Risk
Factors - Regulation of Penny Stocks").





We
believe that various types of potential merger or acquisition candidates might
find a business combination with us 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.





Form of
Acquisition





It is
impossible to predict the manner in which we may participate in a business
opportunity.  Specific business opportunities will be reviewed as well as
the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of the review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected.  Such structure may include,
but is not limited to, leases, purchase and sale agreements, licenses, joint
ventures and other contractual arrangements.  We may act directly or
indirectly through an interest in a partnership, corporation or other form of
organization.  Implementing such structure may require the merger,
consolidation or reorganization of the Company with other corporations or forms
of business organization.  In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting stock of the Company following a merger or reorganization
transaction. As part of such a transaction, our existing director may resign and
new directors may be appointed without any vote by stockholders.





4




It is
likely that we will acquire a participation in a business opportunity through
the issuance of common stock or other securities of the Company.  Although
the terms of any such transaction cannot be predicted, it should be noted
that in certain circumstances the criteria for determining whether or not an
acquisition is a so-called B tax free reorganization under the Internal Revenue
Code of 1986 as amended, depends upon the issuance to the stockholders of the
acquired company of a controlling interest (i.e., 80% or more) of the common
stock of the combined entities immediately following the reorganization.
 If a transaction were structured to take advantage of these provisions
rather than other tax-free provisions provided under the Internal Revenue Code,
our current stockholder would retain 20% or less of the total issued and
outstanding shares.  This could result in substantial additional dilution
in his equity to such reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or transfer of shares representing
a controlling interest in our by the current officer, director and principal
stockholder.





It is
anticipated that any new securities issued in any reorganization would 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, the Company may agree to register such securities either at the
time the transaction is consummated or under certain conditions at specified
times thereafter.  The issuance of substantial additional securities and
their potential sale into any trading market that might develop in our
securities may have a depressive effect upon such market.





We will
participate in a business opportunity only after the negotiation and execution
of a written agreement.  Although the terms of such agreement cannot be
predicted, generally such an agreement would require specific representations
and warranties by all of the parties thereto, specify certain events of default,
detail the terms of closing and the conditions which must be satisfied by each
of the parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default, and
include miscellaneous other terms.





As
a general matter, we anticipate that we, and/or our principal stockholder(s)
will enter into a letter of intent with the management, principals or owners of
a prospective business opportunity prior to signing a binding agreement.
 Such a letter of intent will set forth the terms of the proposed
acquisition but will not bind any of the parties to consummate the transaction.
Execution of a letter of intent will by no means indicate that consummation of
an acquisition is probable.  Neither we nor any of the other parties to the
letter of intent will be bound to consummate the acquisition unless and until a
definitive agreement is executed.  Even after a definitive agreement is
executed, it is possible that the acquisition would not be consummated should
any party elect to exercise any right provided in the agreement to terminate it
on specific grounds.





It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial costs for accountants, attorneys and others.  If a decision is
made not to participate in a specific business opportunity, the costs incurred
in the related investigation would not be recoverable.  Moreover, because
many providers of goods and services require compensation at the time or soon
after the goods and services are provided, our inability to pay until an
indeterminate future time may make it impossible to produce goods and
services.





Competition





We
expect to encounter substantial competition in our efforts to locate attractive
business combination opportunities.  The competition may in part come from
business development companies, venture capital partnerships and corporations,
small investment companies, brokerage firms, and the like. Some of these types
of organizations are likely to be in a  better position than us to obtain
access to attractive business acquisition candidates either because they have
greater experience, resources and managerial capabilities than us, because they
are able to offer immediate access to limited amounts of cash, or for a variety
of other reasons.  We also will experience competition from other public
companies with similar business purposes, some of which may also have funds
available for use by an acquisition candidate.





Employees





We
currently have no employees.   We expect to use consultants, attorneys
and accountants as necessary, and do not anticipate a need to engage any
full-time employees so long as we are seeking and evaluating business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to acquire or participate in
specific business opportunities.





5




Item
1A. Risk Factors




Our
business and plan of operation is subject to numerous risk factors, including,
but not limited to, the following:





Our
limited operating history makes our potential difficult to assess.





We
have no assets or financial resources.  We will, in all likelihood,
continue to sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination.  This will most likely
result in the Company incurring a net operating loss, which will increase
continuously until we can consummate a business combination with a target
company.  There is no assurance that we can identify such a target company
and consummate such a business combination.





We
have no agreement for a business combination and no minimum
requirements for a business combination.





We
have no current arrangement, agreement or understanding with respect to engaging
in a business combination with a specific entity. There can be no assurance that
we will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination.  No particular
industry or specific business within an industry has been selected for a target
company.  We have not established a specific length of operating history or
a specified level of earnings, assets, net worth or other criteria which we will
require a target company to have achieved, or without which, we would not
consider a business combination with such business entity. Accordingly, we may
enter into a business combination with a business entity having no significant
operating history, losses, limited or no potential for immediate earnings,
limited assets, negative net worth or other negative characteristics.
 There is no assurance that we will be able to negotiate a business
combination on terms favorable to us.





There
is no assurance of success or profitability of the Company.





There is
no assurance that we will acquire a favorable business opportunity.
  Even if we should become involved in a business opportunity, there
is no assurance that we will generate revenues or profits, or that the market
price of our outstanding shares will be increased thereby.  The type of
business to be acquired may be one that desires to avoid effecting  its
 own  public  offering  and  the  accompanying
 expense,  delays, uncertainties and federal and state requirements
which purport to protect investors.  Because of our limited capital, it is
more likely than not that any acquisition by us will involve other parties whose
primary interest is the acquisition of control of a publicly traded company.
 Moreover, any business opportunity acquired may be currently unprofitable
or present other negative factors.





We may not be
able to diversify our business.





Because
of our limited financial resources, it is unlikely that we will be able to
diversify our acquisitions or operations. Our probable inability to diversify
our activities into more than one area will subject us to economic fluctuations
within a particular business or industry and therefore increase the risks
associated with our operations.





We
have only two directors and officers.





Because
management consists of only two people, while seeking a business combination,
David Villarreal, Jr., our President, will be the only person responsible in
conducting our day-to-day operations.   We do not benefit from having
access to multiple judgments that a greater number of directors or officers
would provide, and we will rely completely on the judgment of our President and
two directors when selecting a target company.  Mr. Villarreal, Jr.
anticipates devoting only a limited amount of time per month to the business of
the Company.  Mr. Villarreal, Jr. has not entered into a written employment
agreement with the Company and he is not expected to do so. We do not anticipate
obtaining key man life insurance on Mr. Villarreal, Jr. The loss of the services
of Mr. Villarreal, Jr. would adversely affect development of our business and
likelihood of our continuing operations.





We
depend on management and management's participation is limited.





We will
be entirely dependent upon the experience of our President and director in
seeking, investigating, and acquiring a business and in making decisions
regarding our operations.  It is possible that, from time to time, the
inability of Mr. Villarreal, Jr. to devote his full time attention to the
Company will cause us to lose an opportunity.





Conflicts
of interest exist between the Company and its management.





Certain
conflicts of interest exist between the Company and its President and director.
 He has other business interests to which he currently devotes attention,
and is expected to continue to do so. As a result, conflicts of interest may
arise that can be resolved only through his exercise of judgment in a manner
that is consistent with his fiduciary duties to the Company.




6




It
is anticipated that our principal stockholder, American Union Financial
Services, Inc. (whose principal shareholder, director and officer is Mr. David
Villarreal, Jr., who is also our principal shareholder and President and
director), may actively negotiate or otherwise consent to the purchase of a
portion of its common stock as a condition to, or in connection with, a proposed
merger or acquisition transaction.  In this process, our principal
stockholder may consider its own personal pecuniary benefit rather than the best
interest of the Company.




We
may need additional financing.





We have
very limited funds, and such funds, may not be adequate to take advantage of any
available business opportunities.  Even if our currently available funds
prove to be sufficient to pay for our operations until we are able to acquire an
interest in, or complete a transaction with, a business opportunity, such funds
will clearly not be sufficient to enable us to exploit the opportunity. Thus,
our ultimate success will depend, in part, upon our availability to raise
additional capital. In the event that we require modest amounts of additional
capital to fund our operations until we are able to complete a business
acquisition or transaction, such funds, are expected to be provided by the
principal shareholder.  However, we have not investigated the availability,
  source, or terms that might govern the acquisition of the additional
capital, which is expected to be required in order to exploit a business
opportunity, and will not do so until we have determined the level of need for
such additional financing.  There is no assurance that additional capital
will be available from any source or, if available, that it can be obtained on
terms acceptable to us.  If not available, our operations will be limited
to those that can be financed with our modest capital.





We
may need to depend upon outside advisors.





To
supplement the business experience of our officer and director, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. The selection of any such advisors will be made
by our officer. Furthermore, it is anticipated that such persons may be engaged
on an as needed basis without a continuing fiduciary or other obligation to the
Company. In the event the officers of the Company consider it necessary to
hire outside advisors, they may elect to hire persons who are affiliates, if
those affiliates are able to provide the required services.




We
may have significant competition for business opportunities and combinations and
may be at a competitive disadvantage in completing a business
combination.





We are
and will continue to be an insignificant participant in the business of seeking
mergers with and acquisitions of business entities.  A large number of
established and well-financed entities, including venture capital firms are
active in mergers and acquisitions of companies, which may be merged
alternatively, acquisition target candidates for us.  Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than us and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination.  Moreover, we will also compete in
seeking merger or acquisition candidates with other public shell companies, some
of which may also have funds available for use by an acquisition
candidate.





The
reporting requirements imposed upon us may delay or preclude our ability to
enter into a business combination.





Pursuant
to the requirements of Section 13 of the Exchange Act, we are required to
provide certain information about significant acquisitions including audited
financial statements of the acquired company.  Because we are a shell
company these audited financial statements must be furnished within four
business days   following the effective   date of a business
combination.   Obtaining audited financial statements are the economic
responsibility of the target company.  The additional time and costs that
may be incurred by some potential target companies to prepare such financial
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by us.  Acquisition prospects that do not
have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.  Notwithstanding a target company’s agreement
to obtain audited financial statements within the required time frame, such
audited financials may not be available to us at the time of effecting a
business combination. In cases where audited financials are unavailable, we will
have to rely upon un-audited information that has not been verified by outside
auditors in making our decision to engage in a transaction with the business
entity.  This risk increases the prospect that a business combination with
such a business entity might prove to be an unfavorable one for us.





We
lack market research and a marketing organization.





We
have neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by us.  In
the event demand exists for a transaction of the type contemplated by us, there
is no assurance we will be successful in completing any such business
combination.




7




It
is probable that there will be a change in control of the Company and/or
management.





In
conjunction with completion of a business acquisition, it is anticipated that we
will issue an amount of our authorized, but un-issued common stock that
represents the greater majority of the voting power and equity of the Company,
which will, in all likelihood, result in stockholders of a target company
obtaining a controlling interest in the Company.  As a condition of the
business combination agreement, the current stockholder of the Company may agree
to sell or transfer all or a portion of our common stock it owns so to provide
the target company with all or majority control.  The resulting change in
control of the Company will likely result in removal of the present officer and
director of the Company and a corresponding reduction in or elimination of his
participation in the future affairs of the Company.




Stockholders will
likely suffer a dilution of the value of their shares upon a business
combination.





A
business combination normally will involve the issuance of a significant number
of additional shares.  Depending upon the value of the assets acquired in
such business combination, the per-share value of the Company's common stock may
increase or decrease, perhaps significantly.





No
public market exists and no public market may develop for our common
stock.





There is
currently no public market for our common stock, and no assurance can be given
that a market will develop or that a shareholder ever will be able to liquidate
its investment without considerable delay, if at all. If a market should
develop, the price may be highly volatile.  Factors such as those discussed
in this "Risk Factors” section may have a significant impact upon the market
price of the securities.  Owing to the low price of  the
 securities,   many  brokerage  firms  may
 not  be  willing  to  effect transactions in the
securities.  Even if a purchaser finds a broker willing to effect a
transaction in these securities,   the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the sales proceeds.





Registration
of shares of our common stock may be required for resale.





It is the
Commission’s position that securities issued by a "shell" company such as Grand
Monarch Holdings, Inc., cannot be sold under the exemption from registration
provided by Rule 144 promulgated under the Securities Act of 1933 (the "Act"),
but must be registered under the Act.  Accordingly, the securities sold to
our affiliates may have to be registered under the Act prior to resale.
 Any other securities issued to individuals in the capacity of management,
affiliates, control persons and promoters may also have to be registered prior
to resale and shall be issued with appropriate restricted legend to reflect the
registration requirements.





There
may be restrictions imposed by states on the sale of common stock by
investors.





Because
our securities have not been registered for resale under the Blue Sky laws of
any state, the holders of such shares and persons who desire to purchase them in
any trading market that might develop in the future, should be aware, that there
may be significant state Blue Sky law restrictions upon the ability of investors
to sell the securities and of purchasers to purchase the securities.
 Accordingly, investors should consider the secondary market for our
securities to be a limited one.





We
may be subject to additional risks because of doing business in a foreign
country.





We may
effectuate a business combination with a merger target whose business operations
or even headquarters, place of formation or primary place of business are
located outside the United States of America.  In such event, we may face
the significant additional risks associated with doing business in that country.
In addition to the language barriers, different presentations of financial
information, different business practices, and other cultural differences and
barriers that may make it difficult to evaluate such a merger target, ongoing
business risks result from the international political situation, uncertain
legal systems and applications of law, prejudice against foreigners,
  corrupt practices, uncertain economic policies and potential
political and economic instability that may be exacerbated in various foreign
countries.





The
consummation of a business combination may subject the Company and our
stockholders to federal and state taxes.





Federal
and state tax consequences will, in all likelihood, be major considerations in
any business combination that we may undertake. Currently, such transactions may
be structured to result in tax-free treatment to both companies, pursuant to
various federal and state tax provisions.  We intend to structure any
business combination so as to minimize the federal and state tax consequences to
both the Company and the target entity; however, there can be no assurance that
such business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could result
in the imposition of both federal and state taxes, which may have an adverse
effect on both parties to the transaction.




8




REGULATION OF
PENNY STOCKS





The
Commission has adopted a number of rules to regulate “penny stocks." Such rules
include Rule 3a51-1 and Rules 15g-1 through 15g-9 under the Securities Exchange
Act of 1934, as amended. Because our securities may constitute “penny stocks"
within the meaning of the rules (as any equity security that has a market price
of less than $5.00 per share or with an exercise price of less than $5.00 per
share, largely traded in the National Association of Securities Dealers’ (NASD)
OTC Bulletin Board or the "Pink Sheets", the rules would apply to us and to our
securities.





The
Commission has adopted Rule 15g-9 that established sales practice requirements
for low price securities. Unless the transaction is exempt, it shall be unlawful
for a broker or dealer to sell a penny stock to, or to effect the purchase of a
penny stock by any person unless prior to the transaction:  (i) the broker
or dealer has approved the person’s account for transactions in penny stock
pursuant to this rule and (ii) the broker or dealer has received from the person
a written agreement to the transaction setting forth the identity and quantity
of the penny stock to be purchased.





In order
to approve a person's account for transactions in penny stock, the broker or
dealer must:  (a) obtain from the person information concerning the
person's financial situation, investment experience, and investment objectives;
(b) reasonably determine that transactions in penny stock are suitable for that
person, and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of evaluating
the risks of transactions in penny stock; (c) deliver to the person a written
statement setting forth the basis on which the broker or dealer made the
determination (i) stating in a highlighted format that it is unlawful for the
broker or dealer to affect a transaction in penny stock unless the broker or
dealer has received, prior to the transaction, a written agreement to the
transaction  from  the  person;   and  (ii)
 stating  in  a  highlighted  format immediately
preceding the customer signature line that (iii) the broker or dealer is
required to provide the person with the written statement; and (iv) the person
should not sign and return the written statement to the broker or dealer if it
does not accurately reflect the person’s financial situation, investment
experience, and investment objectives; and (d) receive from the person a
manually signed and dated copy of the written statement.





It is
also required that disclosure be made as to the risks of investing in penny
stock and the commissions payable to the broker-dealer, as well as current price
quotations and the remedies and rights available in cases of fraud in penny
stock transactions.  Statements, on a monthly basis, must be sent to the
investor listing recent prices for the penny stock and information on the
limited market.  Shareholders should be aware that, according to Securities
and Exchange Commission Release No.  34-29093, the market for penny stocks
has suffered in recent years from patterns of fraud and abuse. Such patterns
include (i) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (iii) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differential and markups
by selling broker-dealers; and (v) the wholesale dumping of the same securities
by promoters and broker dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses.  Our management is aware of the abuses that
have occurred historically in the penny stock market. Although we do not expect
to be in a position to dictate the behavior of the market or of broker-dealers
who participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities.





Item
1B. Unresolved Staff Comments




Not
applicable.





Item 2.
Properties




We
currently maintain a mailing address at 210 South Orange Grove Blvd., Pasadena,
CA 91105.  Our telephone number there is (866) 350- 4450. Other than this
mailing address, we do not currently maintain any other office facilities, and
do not anticipate the need for maintaining office facilities at any time in the
near future. We pay no rent or other fees for the use of the mailing address as
these offices are used virtually full-time by other businesses of our
President.





It is
likely that we will not establish an office until we have completed a business
acquisition transaction, but it is not possible to predict that arrangements
will actually be made with respect to future office facilities.





Item
3. Legal Proceedings




We are
not a party to any pending legal proceedings, and no such proceedings are known
to be contemplated.




9





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




No
matters were submitted to a vote of stockholders during the fourth quarter of
the fiscal year ended December 31, 2009.





PART
II




Item 5. Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities




Market
Price





There is
no trading market for our common stock at present and there has been no trading
market to date.  There is no assurance that a trading market will ever
develop or, if such a market does develop, that it will continue.





Options, Warranties and
Other Equity Items





There
 are  no  outstanding  options  or  warrants
 to  purchase,  nor  any securities convertible into, the
our common shares.  Additionally, there are no shares that could be sold
pursuant to Rule 144 under the Securities Act or that we had agreed to register
under the Securities Act for sale by security holders.  Further, there are
no common shares of the Company being, or proposed to be, publicly offered by
the Company.





Holders




As of
April 4, 2010, there were 35 shareholders of our common stock.




Dividends




We have
not paid any dividends to date, and has no plans to do so in the near
future.





Recent Sales of Unregistered
Securities





In December, 2009, the Company sold
1,000,000 shares of its common stock at $.25 per share to one “accredited
investor” for an aggregate amount of $250,000.  The shares 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
shares and no underwriter was used in this transaction.





Item
6. Selected Financial Data




Not
Applicable.





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




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.




10




PLAN
OF OPERATION





GENERAL





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. David Villarreal, Jr., is our President and a director, and, through
American Union Financial Services, Inc. (which he controls), is a controlling
shareholder.  Mr. Villarreal, as President Chief Financial Officer 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. Villarreal and the potential
demands of our activities.  See Item 13. “Certain Relationships and Related
Transactions, and Director Independence.”





The
amount of time spent by Mr. Villarreal, Jr. 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. Villarreal, Jr. will
actually be required to spend to locate a suitable target company. Mr.
Villarreal, Jr. 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.




COSTS AND
RESOURCES




During
the approximately 12 months ending December 31, 2010, we anticipate incurring
costs related to:







(i)
              filing of Exchange Act reports
      (approximately $30,000),
 
 (ii)
              Marketing and general overhead
      costs (approximately
$25,000)
 
 (iii)
              costs relating to consummating an
      acquisition and filing of a registration statement with the SEC
      (approximately
$50,000).




We
believe will be able to meet these costs through current monies in our treasury
($203,829 as of December 31, 2009),   additional amounts loaned to us
by our President, David Villarreal, sales of our common stock in private
placements and deferral of fees by certain service providers, if
necessary.





In
December 2009, the Company sold 1,000,000 shares of its common stock at $.25 per
share to an “accredited” investor for aggregate proceeds of
$203,829.




11




SEARCH FOR BUSINESS
OPPORTUNITIES





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 stockholders.





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.





12




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 A 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.




13




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. Villarreal, Jr. has not had
any preliminary contact, agreements or understandings with anyone to help sell
these shares.





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





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





LIQUIDITY
AND CAPITAL RESOURCES





It is the
belief of management that sufficient working capital necessary to support and
preserve the integrity of the corporate entity will be present. However, there
is no legal obligation for either management or significant stockholders 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 are
currently attempting to raise $1,000,000 through the sale of our common stock
pursuant to a private placement.  As of April 4, 2010, we have raised
$322,250.  There can be no assurance that the proceeds from this private
placement will be sufficient for us to allow us to cover the expenses related to
our proposed 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
7A. Quantitative and Qualitative Disclosures about Market Risk




Not
Applicable.




Item
8. Financial Statements and Supplementary Data




Our
consolidated financial statements for the year ended December 31, 2009,
including the notes thereto, together with the report of independent certified
public accountants thereon, are presented beginning at page F-1.




Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure




None





14




Item
9A (T). Controls and Procedures




Evaluation
of Disclosure Controls and Procedures





The
Company maintains a set of disclosure controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports filed
under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to the Company's management,
including the Company's chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.




Based
upon their evaluation as of the end of the period covered by this report, the
Company's chief executive officer and chief financial officer concluded that,
the Company's disclosure controls and procedures are effective to ensure that
information required to be included in the Company's periodic SEC filings is
recorded, processed, summarized, and reported within the time periods specified
in the SEC rules and forms.





Management’s
Report on Internal Control over Financial Reporting





The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal control system
was designed to provide reasonable assurance to our management and Board of
Directors regarding the preparation and fair presentation of published financial
statements.





The Company’s management assessed the effectiveness of our
internal control over financial reporting as of December 31, 2008. In making
this assessment, it used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated
Framework. Based on its assessment the Company’s management believes
that, as of December 31, 2008, the Company’s internal control over financial
reporting is effective based on those criteria.





This
annual report does not include an attestation report of the Company’s registered
accounting firm regarding internal control over financial reporting. The
management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission.




Changes
in Internal Control over Financial Reporting





No
changes in the Company's internal control over financial reporting have come to
management's attention during the Company's last fiscal quarter that have
materially affected, or are likely to materially affect, the Company's internal
control over financial reporting.





Limitations
on Controls





Management
does not expect that our disclosure controls and procedures or our internal
control over financial reporting will prevent or detect all error and fraud. Any
control system, no matter how well designed and operated, is based upon certain
assumptions and can provide only reasonable, not absolute, assurance that its
objectives will be met. Further, no evaluation of controls can provide absolute
assurance that misstatements due to error or fraud will not occur or that all
control issues and instances of fraud, if any, within the Company have been
detected.




Item
9B. Other Information




None




15




PART
III




Item
10. Directors, Executive Officers and Corporate Governance





Set forth
below is the name of our sole director and officer.





Name
            
            Age
            
            Position
        HeldDavid
      Villarreal, Jr.
            
            
            
            President,
      Chief Executive Officer, Chief Financial Officer and a
      directorDavid
      Villarreal, III
            
            
            
            Secretary
      and a director





Mr.
Villarreal, Jr. and Mr. David Villarreal, III, serve as President, Chief
Executive Officer, and Chief Financial Officer and Secretary, respectively, at
the pleasure of the board of directors.





Messrs.
Villarreal, Jr. and Villarreal, III shall serve as our directors until the next
annual meeting of stockholders or until their prior death, resignation or
removal and until any successors are duly elected and have
qualified.





Directors will be elected for one-year terms at the annual
stockholders meeting.  Officers will hold their positions at the pleasure
of the board of directors, absent any employment agreement, of which none
currently exists or is contemplated.  There is no arrangement or
understanding between Mr. Villarreal, Jr. and any other person pursuant to which
he was or is to be selected as a director or officer, and there is no
arrangement, plan or understanding as to whether non-management shareholders
will exercise their voting rights to continue to elect the current director to
our board. There are also no arrangements, agreements or understandings between
non-management shareholders that may directly or indirectly participate in
or influence the management of our affairs.





Messrs.
Villarreal, Jr. and Villarreal, III and any other directors and officers
hereafter appointed or elected will devote their time to our affairs on an as
needed basis, this, depending on the circumstances, could amount to as little as
two hours per month, or more than forty hours per month, but more than likely
will encompass less than five (5) hours per month.  There are no agreements
or understandings for any officer or director to resign at the request
of another person, and none of the officers or directors is acting on
behalf of, or will act at the direction of, any other person.




Audit Committee and
Financial Expert





We do not
have an Audit Committee.  Mr. Villarreal, Jr., one of our two directors,
performs some of the same functions of an Audit Committee, such as: recommending
a firm of independent certified public accountants to audit the annual financial
statements; reviewing the independent auditor’s independence, the financial
statements and their audit report; and reviewing management's administration of
the system of internal accounting controls.  We do not currently have a
written audit committee charter or similar document.





We have
no financial expert.  We believe the cost related to retaining a financial
expert at this time is prohibitive.  Further, because we have no business
operations, management believes the services of a financial expert are not
warranted.





Code of
Ethics





A
code of ethics relates to written standards that are reasonably designed to
deter wrongdoing and to promote:


1.
                Honest
      and ethical conduct, including the ethical handling of actual or apparent
       conflicts of     interest between personal and
      professional relationships;
 
 2.
                Full,
       fair,  accurate,  timely  and  understandable
       disclosure  in reports and  documents  that are filed
      with,  or  submitted  to, the Commission and in other
      public communications made by an
issuer;
 
 3.
                Compliance
      with applicable governmental laws, rules and
  regulations;
 
 4.
                The
      prompt internal  reporting  of  violations  of the
       code to an appropriate person or persons
         identified in the code;
and
 
 5.
                Accountability
      for adherence to the code.




16




We
have not adopted a corporate code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  The decision to
not adopt such a code of ethics resulted from the Company having only two
officers and directors, thus eliminating the need for such a code.





Nominating
Committee





We do not
have a Nominating Committee or Nominating Committee Charter.  Mr.
Villarreal, Jr., one of our two directors, performs some of the functions
associated with a Nominating Committee.  We have elected not to have a
Nominating Committee in that we are a development stage company with limited
operations and resources.





Indemnification of Officers
and Directors





Our
By-Laws provide for the indemnification of our directors, officers, employees,
and agents, under certain circumstances, against attorneys fees and other
expenses incurred by them in any litigation to which they become a party arising
from their association with or activities on behalf of the Company.  We
will also bear the expenses of such litigation for any of our directors,
officers, employees, or agents, upon such persons promise to repay us therefore
if it is ultimately determined that any such person shall not have been entitled
to indemnification.  This indemnification policy could result in
substantial expenditures by the Company, which we may be unable to
recoup.





Conflicts of
Interest





Messrs.
Villarreal, Jr. and Villarreal, III will only devote a small portion of their
time to affairs of the Company.  There will be occasions when the time
requirements of our business conflict with the demands of their other
business and investment activities.  Such conflicts may require that
we attempt to employ additional personnel.  There is no assurance that the
services of such persons will be available or that they can be obtained upon
terms favorable to us.





The
officers, directors and principal shareholders of the Company may actively
negotiate for the purchase of a portion of their common stock as a condition to,
or in connection with, a proposed merger or acquisition transaction.  It is
anticipated that a substantial premium may be paid by the purchaser in
conjunction with any sale of shares by our officers, directors and principal
shareholders made as a condition to, or in connection with, a proposed merger or
acquisition transaction.  The fact that a substantial premium may be paid
to members of our management to acquire their shares creates a conflict of
interest for them and may compromise their state law a fiduciary duty to our
other shareholders.  In making any such sale, members of our management may
consider their own personal pecuniary benefit rather  than  the
 best  interests  of  the  Company  and  our
other shareholders, and the other shareholders are not expected to be afforded
the opportunity  to  approve  or  consent  to  any
 particular  buy-out  transaction involving shares held by
members of our management.





It is not
currently anticipated that any salary, consulting fee, or finders fee shall be
paid to any of our directors or executive officers, or to any  other
 affiliate  of  the  Company  except  as
 described  under  Executive Compensation below. Although
management has no current plans to cause the Company to do so, it is possible
 that we will enter into an agreement with an  acquisition
 candidate  requiring  the sale of all or a portion of the common
stock held by our current stockholder to the acquisition candidate or principals
 thereof, or to other individuals or business entities, or requiring some
other form of payment to our current  stockholder, or requiring the future
employment of specified officers and payment of salaries to them. It is
more likely than not that any sale of securities by our current stockholder
to an acquisition candidate would be at a price substantially higher than that
originally paid by such stockholders. Any payment to our current stockholder in
the context of an acquisition involving the Company would be determined entirely
by the largely unforeseeable terms of a future agreement with an unidentified
business entity.




Compliance with Section
16(a) of the Securities Exchange Act of 1934





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors, and persons who beneficially own more than 10% of our
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission.  Officers, directors and greater
than 10% shareholders are required by Commission regulation to furnish us with
copies of all Section 16(a) forms they file.  Based on our review of the
copies of such forms we received, we believe that during the fiscal year ended
December 31, 2009 such filing requirements applicable to our two officers and
directors were complied with.





Item
11. Executive Compensation




On August
13, 2009, we appointed Mr. David Villarreal, Jr. as our new President, Chief
Financial Officer and a director, and Mr. David Villarreal, III, as Secretary
and a director, pursuant to a written consent of directors. Also on August 13,
2009, Mr. Tad Ballantyne resigned as our President, Vice President, Secretary,
Treasurer and director.




17




No
officer or director has received any compensation from the Company since our
inception, and we are not accruing any compensation.  Until we acquire
additional capital, it is not anticipated that any officer or director will
receive compensation from the Company other than reimbursement for out-of-pocket
expenses incurred on our behalf.





We have
no stock option, retirement, pension, insurance program or profit sharing
programs or other similar programs for the benefit of directors, officers or
other employees, but the board of directors may recommend adoption of one or
more such programs in the future.





Employment
Agreements





We have
not entered into any employment agreements with executive officers or other
employees to date.





Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters




The
 following  table  sets  forth  each  person
 known  by the Company to be the beneficial  owner of five
 percent or more of the  common  stock of the Company and the
sole  director  and officer of the Company.  Each such person has
sole voting and investment power with respect to the shares shown. Percentages
are based on 11,422,250 shares of common stock outstanding as of April 4,
2010.




Name and Address of Beneficial Owner
      (1)
              
              Amount of
                Beneficial
                Ownership
              
              
              Percentage
                of ClassAmerican
      Union Financial Services, Inc. (1)
              
              
              100,000
              (2)
              
              
              .9
              %David
      Villarreal, Jr.
              
              
              8,500,000
              (2)
              
              
              74.4
              %David
      Villarreal, III (1)
              
              
              750,000
              
              
              
              6.6
              %William
      Blake(3)
              
              
              1,000,000
              
              
              
              8.8
              %All
      executive officers and directors as a group (2)
              
              
              9,250,000
              
              
              
              81.0
              %







(1)
              Address
      for AUFS, Messrs; Villarreal, Jr. and Villarreal, III is 210 South Orange
      grove Blvd., Pasadena, CA 91105
  (2)
              Mr. David Villarreal, Jr. is a
      director, officer and principal shareholder of American Union Financial
      Services, Inc. (“AUFS”)and as such, may be deemed to directly or
      indirectly control the voting power and investment of the shares of common
      stock of the Company held by AUFS and hence the beneficial owner of the
      same.
  (3)
              Address
      for Mr. Blake is PO Box 1447, Lake Charles,
  LA70602





Item 13. Certain Relationships and Related
Transactions, and Director Independence




On March
13, 2007, we sold 100,000 shares of restricted common stock at $0.001 per share
(the “Shares”) for gross proceeds of $100.00, pursuant to a subscription
agreement, to Belmont Partners, LLC. We relied upon Section 4(2) of the
Securities Act of 1933, as amended, for an exemption from registration of these
shares and no underwriter was used in this transaction. Because of this
transaction, Joseph Meuse, Managing Director of Belmont Partners, LLC, became
our controlling shareholder, owning 100,000 shares of the 100,000 issued and
outstanding shares of our common stock, or approximately 100.00%, at the close
of business on March 13, 2007.





On
January 13, 2008, Ballantyne Acquisition Corp. entered into a stock purchase
agreement to purchase the Shares from Belmont Partners, LLC for a purchase
consideration of $14,000.  The transaction closed on February 18, 2008.
 We relied upon Section 4(2) of the Securities Act of 1933, as amended, for
an exemption from registration of these shares and no underwriter was used in
this transaction. Because of this transaction, Ballantyne Acquisition Corp. (of
which Mr. Tad Ballantyne is the sole shareholder, director and officer of)
became our controlling shareholder, owning 100,000 shares of the 100,000 issued
and outstanding shares of our common stock, or approximately 100.00%, at the
close of business on February 18, 2008.  Additionally, Mr. Ballantyne was
also appointed our sole director and President and Secretary.





On August
13, 2009, Ballantyne Acquisition Corp. pursuant to a stock purchase agreement
the Shares were sold to American Union Financial Services, Inc. (“AUFS”) for
consideration of $25,000.   We relied upon Section 4(2) of the Securities
Act of 1933, as amended, for an exemption from registration of these shares and
no underwriter was used in this transaction. Because of this transaction, AUFS
(of which Mr. David Villarreal, Jr. is the principal shareholder, director and
officer) became our controlling shareholder, owning 100,000 shares of the
100,000 issued and outstanding shares of our common stock, or approximately
100.00%, at the close of business on August 13, 2009.  Additionally, Mr.
Villarreal, Jr. was also appointed a director and President and Chief Financial
Officer and Mr. Villarreal, III was appointed a director and Secretary and Mr.
Ballantyne resigned as a director and officer of the Company.




18





It is the
Commission’s position that securities issued by a "shell" company such as Grand
Monarch Holdings, Inc. cannot be sold under the exemption from registration
 provided by Rule 144 promulgated  under the Securities Act of 1933
(the "Act"), but must be registered under the Securities Act of 1933.
Accordingly, the securities sold to AUFS will be registered under the Act
prior to resale.  Any other securities issued to individuals in the
capacity of management, affiliates, control persons and promoters will also be
registered with the Commission prior to resale and shall be issued with
appropriate restricted legend to reflect the registration
requirements.





Independent
Directors





Our board
of directors is currently comprised of two directors, namely Mr. David
Villarreal, Jr. and Mr. David Villarreal, III, who are not independent
directors, as such term is defined under the rules of the NASDAQ
Market.





Item
14. Principal Accounting Fees and Services




Audit and
Non-Audit Fees





The
following table sets forth the fees billed to us for the fiscal years ended
December 31, 2009 and 2008 by our outside auditor:





Fiscal Year
              Ended
              December 31,
              2009
            
            
            Fiscal Year
              Ended
              December 31,
              2008Audit
      Fees
            
            $
            2,500
            
            
            $
            2,500Audit
      Related Taxes
            
            $
            -
            
            
            $
            -Tax
      Fees
            
            $
            -
            
            
            $
            -Other
      Fees
            
            $
            -





Under
the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by
our independent accountants must now be approved in advance by our Audit
Committee to assure that such services do not impair our accountants'
independence. Since we do not have an Audit Committee, the function of the Audit
Committee is carried out by our board of directors, which presently comprises
Messrs. Villarreal, Jr. and Villarreal, III.





PART IV




Item
15. Exhibits, Financial Statement Schedules.




Exhibit No.
            
            Description3.1
            
            Certificate
      of Incorporation3.2
            
            Bylaws31.1
            
            Certification
      of the Principal Executive Officer  pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200231.2
            
            Certification
      of the Principal Financial Officer  pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200232.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant
      to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002*





19




SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




GRAND
      MONARCH HOLDINGS, INC.Date:
      April 15 , 2010
              
              /s/
      David VillarrealDavid
      VillarrealChief
      Executive Officer and Chief Financial Officer




20




Grand
Monarch Holdings, Inc.


Financial
Statements


December
31, 2009 and 2008





PS
Stephenson & Co., P.C.


Certified
Public Accountants


Wharton,
Texas




21


Grand Monarch Holdings,
Inc.


Index
to Financial Statements


December 31, 2009 and
2008




PageNumberReport
      of Independent Registered Public Accounting Firm
            
            
            23Financial
      Statements:Balance
      Sheets
            
            
            24Statements
      of Operations
            
            
            25Statement
      of Changes in Stockholders' Equity
            
            
            26Statements
      of Cash Flows
            
            
            27Notes
      to Financial Statements
            
            
            28




22





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors


Grand
Monarch Holdings, Inc.





We have
audited the accompanying balance sheets of Grand Monarch Holdings, Inc. (a
Delaware corporation) as of December 31, 2009 and 2008, and the related
statements of income, changes in stockholders’ equity, and cash flows for the
years then ended.  These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Grand Monarch Holdings, Inc. as of
December 31, 2009 and 2008, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has no operations, significant assets or cash flows
since inception that raise substantial doubt about its ability to continue as a
going concern. Management’s plans regarding these matters are described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.





Wharton,
Texas


April 15,
2010





23





Grand Monarch Holdings,
Inc.


Balance
Sheets


December
31, 2009 and 2008





2009
            
            
            2008AssetsCurrent
      assetsCash
      and cash equivalents
            
            $
            203,829
            
            
            $
            81Total
      current assets
            
            
            203,829
            
            
            
            81Total
      assets
            
            $
            203,829
            
            
            $
            81Liabilities
      and Stockholders' EquityTotal
      liabilities
            
            $
            -
            
            
            $
            -Stockholders'
      equityCommon
      stock; par value $.001; 35,000,000 shares authorized;11,100,000
      and 100,000 shares issued and outstanding, respectively
            
            
            11,100
            
            
            
            100Additional
      paid-in capital
            
            
            249,000
            
            
            
            -Retained
      earnings
            
            
            (56,271
            )
            
            
            (19
            )Total
      stockholders' equity
            
            
            203,829
            
            
            
            81Total
      liabilities and stockholders' equity
            
            $
            203,829
            
            
            $
            81





The
accompanying notes are an integral part of these financial
statements.
  24





Grand Monarch Holdings,
Inc.


Statement
of Income


For
the Years Ended December 31, 2009 and 2008





2009
            
            
            2008Revenues
            
            $
            -
            
            
            $
            -Operating
      and administrative expenses
            
            
            56,347
            
            
            
            -Income
      from operations
            
            
            (56,347
            )
            
            
            -Other
      income (expense)
            
            
            95
            
            
            
            -Net
      income
            
            $
            (56,252
            )
            
            $
            -Basic
      and diluted earnings per share
            
            $
            (0.02
            )
            
            $
            -Weighted
      average shares outstanding
            
            
            3,516,666
            
            
            
            100,000





The
accompanying notes are an integral part of these financial
statements.
  25




Grand Monarch Holdings,
Inc.


Statement
of Changes in Stockholders' Deficit


For
the Years Ended December 31, 2009 and 2008








AdditionalCommon
      Stock
            
            
            Paid
      In
            
            
            AccumulatedShares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance,
      December 31, 2007
            
            
            100,000
            
            
            $
            100
            
            
            $
            -
            
            
            $
            (19
            )
            
            $
            81Net
      income (loss)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Balance,
      December 31, 2008
            
            
            100,000
            
            
            
            100
            
            
            
            -
            
            
            
            (19
            )
            
            
            81Common
      stock issued:For
      services
            
            
            10,000,000
            
            
            
            10,000
            
            
            
            -
            
            
            
            
            
            
            
            10,000For
      cash
            
            
            1,000,000
            
            
            
            1,000
            
            
            
            249,000
            
            
            
            
            
            
            
            250,000Net
      income (loss)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (56,252
            )
            
            
            (56,252
            )Balance,
      December 31, 2009
            
            
            11,100,000
            
            
            $
            11,100
            
            
            $
            249,000
            
            
            $
            (56,271
            )
            
            $
            203,829





The
accompanying notes are an integral part of these financial
statements.
  26




Grand Monarch Holdings,
Inc.


Statement
of Cash Flows


For
the Years Ended December 31, 2009 and 2008





2009
            
            
            2008Cash
      Flows Provided From Operating ActivitiesNet
      income
            
            $
            (56,252
            )
            
            $
            -Adjustments
      to reconcile net income to net cashprovided
      (used) by operating activities:Common
      stock issued for services
            
            
            10,000
            
            
            
            -Net
      cash provided (used) by operating activities
            
            
            (46,252
            )
            
            
            -Cash
      Flows Provided From Investing Activities
            
            
            -
            
            
            
            -Cash
      Flows Used By Financing ActivitiesNet
      proceeds from stock issuance
            
            
            250,000
            
            
            
            -Net
      cash provided by financing activities
            
            
            250,000
            
            
            
            -Net
      increase (decrease) in cash and cash equivalents
            
            
            203,748
            
            
            
            -Cash
      and cash equivalents, beginning of year
            
            
            81
            
            
            
            81Cash
      and cash equivalents, end of year
            
            $
            203,829
            
            
            $
            81Supplemental
      disclosureInterest
      paid during the period
            
            $
            -
            
            
            $
            -





The
accompanying notes are an integral part of these financial
statements.
  27





Grand
Monarch Holdings, Inc.


Notes
to Financial Statements


December
31, 2009 and 2008





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





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.





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.





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.  For the year ended
December 31, 2008 and 2007, the Company did not have potentially dilutive shares
issued or outstanding.





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.





28




Grand
Monarch Holdings, Inc.


Notes
to Financial Statements


December
31, 2009 and 2008





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 December 31, 2009 and 2008, the Company had
10,100,000 shares and 100,000 shares, respectively, of common stock issued and
outstanding.





On or
around January 31, 2008, the company entered into a Common Stock Purchase
Agreement (the “Agreement”) with Ballantyne Acquisition Corp. and Belmont
Partners, LLC, whereby Belmont Partners, LLC, 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, LLC, 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.





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





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





In
December, 2009, the Company sold 1,000,000 shares of its common stock at $.25
per share to one “accredited investor” for an aggregate amount of
$250,000.  The shares 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 shares 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 year ended December 31, 2009 and 2008
were computed using 3,516,666 and 100,000 weighted average common shares
outstanding, respectively.  The Company does not have potentially
dilutive shares issued or outstanding.





29




Grand
Monarch Holdings, Inc.


Notes
to Financial Statements


December
31, 2009 and 2008





5.
            Related
      Party Transactions and Agreements




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





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




30