Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - MANTHEY REDMOND CorpFinancial_Report.xls
EX-31.2 - EXHIBIT 31.2 - MANTHEY REDMOND Corpv240261_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - MANTHEY REDMOND Corpv240261_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - MANTHEY REDMOND Corpv240261_ex31-1.htm

Form 10-Q
 
(Mark One)
 
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011
 
or
 
o
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: 333-161600
 
MANTHEY REDMOND CORPORATION.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
 
26-4722406
(I.R.S. Employer
Identification No.)
     
10940 Wilshire Boulevard, Suite 1600
Los Angeles CA
(Address of principal executive offices)
 
90024
(Zip Code)

(310) 443-4116
(Registrant’s telephone number, including area code)
 
     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
 
     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
 
     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company þ
       
(Do not check if a smaller reporting company.)
   

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
    
 As of November 14, 2011, there were 10,250,000 outstanding shares of the registrant’s common stock, par value $0.0001 per share.
 
 
 

 
 
 MANTHEY REDMOND CORPORATION.
 
Quarterly Report on Form 10-Q
for the Quarter Ended September 30, 2011
 
INDEX
 
PART I. FINANCIAL INFORMATION
   
Item 1. Financial Statements (unaudited)
 
3
Balance Sheets
 
F-1
Statements of Operations
 
F-2
Statements of Cash Flows
 
F-3
Notes to Unaudited Financial Statements
 
F-4
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
4
Item 3. Quantitative and Qualitative Disclosures about Market Risk
 
 
Item 4. Controls and Procedures
 
 
     
PART II. OTHER INFORMATION
   
Item 1. Legal Proceedings
 
7
Item 1A. Risk Factors
 
7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
7
Item 3. Defaults Upon Senior Securities
 
7
Item 4. [Removed and Reserved]
 
7
Item 5. Other Information
 
7
Item 6. Exhibits
 
7
     
SIGNATURES
 
8
     
EX-31.1
   
EX- 31.2
   
EX-32.
   
 
 
2

 
 
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

MANTHEY REDMOND CORPORATION
(A Development Stage Company)

INDEX TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2011

Unaudited Financial Statements:
 
   
Balance Sheets
F-1
   
Statements of Operations
F-2
   
Statements of Cash Flows
F-3
   
Notes to Unaudited Financial Statements
F-4
 
 
3

 
 
MANTHEY REDMOND CORPORATION
(A Development Stage Company) BALANCE SHEETS

   
September 30,
   
December 31,
 
   
2011
   
2010
 
   
(Unaudited)
   
(Audited)
 
Assets
           
Current Assets
           
Cash and cash equivalents
  $ 1,750     $ 1,569  
                 
Other Assets
    1,050       1,050  
                 
Total Assets
  $ 2,800     $ 2,619  
                 
Liabilities and Stockholders' Deficit
               
                 
Current Liabilities
               
Accrued expense
  $ -     $ 1,050  
Accrued expense - related party
    507,227       362,177  
Other payable - related party
    38,950       38,950  
Total Current Liabilities
    546,177       402,177  
                 
Stockholders' Equity
               
Preferred stock - $.0001 par value; 20,000,000 shares authorized, 0 shares issued and outstanding
    -       -  
Common stock - $.0001 par value; 100,000,000 shares authorized, 10,250,000 shares issued and outstanding
    1,025       1,025  
Additional paid-in capital
    159,399       84,767  
Accumulated deficit
    (703,802 )     (485,351 )
Total Stockholders' Deficit
    (543,378 )     (399,558 )
                 
Total Liabilities and Stockholders' Deficit
  $ 2,800     $ 2,619  

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

 
F-1

 

MANTHEY REDMOND CORPORATION
(A Development Stage Company) STATEMENT OF OPERATIONS
(UNAUDITED)

   
For the Three Months Ended September 30, 2011
   
For the Three Months Ended September 30, 2010
   
For The Nine Months Ended September 30, 2011
   
For The Nine Months Ended September 30, 2010
   
For The Period From April 20, 2009 (Inception) to September 30, 2011
 
Net revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses
                                       
Research and development expense
    -       90,000       139,000       270,000       540,000  
Professional services
    8,129       16,194       60,553       23,543       125,544  
Rent expense
    3,364       4,486       10,089       10,361       28,102  
Other
    615       10       8,808       102       10,154  
Total operating expenses
    12,109       110,690       218,451       304,006       703,801  
                                         
Net loss
  $ (12,109 )   $ (110,690 )   $ (218,451 )   $ (304,006 )   $ (703,801 )
                                         
Net loss per common share - basic and diluted
  $ (0.00 )   $ (0.01 )   $ (0.02 )   $ (0.03 )   $ (0.07 )
                                         
Weighted average number of common shares outstanding, basic and diluted
    10,250,000       10,250,000       10,250,000       10,250,000       9,772,443  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-2

 
 
MANTHEY REDMOND CORPORATION
(A Development Stage Company) STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
   
For The Nine Months Ended September 30, 2011
   
For The Nine Months Ended September 30, 2010
   
For The Period From April 20, 2009 (Inception) to September 30, 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (218,451 )   $ (304,006 )   $ (703,801 )
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Decrease (increase) in assets:
                       
Other assets
    -       -       (1,050 )
Increase (decrease) in liabilities:
                       
Accrued expense and other liabilities
    144,000       270,000       507,227  
Net cash used in operating activities
    (74,451 )     (34,006 )     (197,624 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Borrowings from related party
    -       -       38,950  
Proceeds from issuance of common stock
    -       -       1,025  
Capital contribution
    74,632       44,842       159,399  
Net cash provided by financing activities
    74,632       44,842       199,374  
                         
NET INCREASE IN CASH & CASH EQUIVALENTS
    181       10,837       1,750  
                         
CASH & CASH EQUIVALENTS, BEGINNING BALANCE
    1,569       4,455       -  
                         
CASH & CASH EQUIVALENTS, ENDING BALANCE
  $ 1,750     $ 15,292     $ 1,750  
                         
SUPPLEMENTAL DISCLOSURES:
                       
Interest paid
  $ -     $ -     $ -  
Income tax paid
  $ -     $ -     $ -  

The accompanying notes are an integral part of these financial statements.
 
 
F-3

 
 
MANTHEY REDMOND CORPORATION
 (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

Manthey Redmond Corporation (the “Company”) is a development stage company incorporated in the State of Delaware in April, 2009 to research, design, manufacture, and market technology now leased and to be developed by the Company.  Manthey Redmond (Aust) Pty Ltd., an Australian corporation ("Manthey Redmond (Aust)"), is the patent owner and developer of the Manthey Redmond Eco-Engine, a fuel-efficient, lightweight, low-emission, multi-fuel engine smaller and less expensive than conventional internal combustion engines initially targeted for marine applications.

In May, 2009, the Company entered into a Patent Licensing Agreements with Manthey Redmond (Aust) for the development, manufacture, use, sale, and sublicense of the Manthey Redmond Eco-Engine and all developed technology and products related to the technology patent (the "Technology") for a royalty payment to Manthey Redmond (Aust) of 5% of annual gross profits.  Pursuant to an Investment Agreement entered into with the Company in May, 2009, Manthey Redmond (Aust) agreed to fund to the Company monthly payments of $40,000 up to a maximum of $4,200,000 in aggregate to assist the Company in commercializing products based on the Technology.  All three of the Company’s directors serve as the directors of Manthey Redmond (Aust).

In May, 2009, the Company entered into a Development Agreement with Manthey Holdings Pty Limited (“Manthey Holdings”) for the exclusive use of Manthey Holdings' engineering facility and employees for research and development of and related to the Technology at a monthly fee of $30,000 up to a maximum of $540,000 in aggregate.  In November, 2009, the Development Agreement was amended to remove the exclusivity of the use of Manthey Holdings’ engineering facility and employees, and to defer the commencement date of the agreement and first payment to November 20, 2009.  The Company’s president/director is the sole shareholder and director of Manthey Holdings which serves as the trustee of the Manthey Holdings Trust.  The Company’s president/director is also the beneficiary of the Manthey Holdings Trust and may be deemed the beneficial owner of the 3,040,000 shares, or 29.6% of the Company’s common stock owned by the Manthey Holdings Trust.  On November 6, 2009, the agreement was amended to revise the commencement date of payment from July 1, 2009 to November 20, 2009. The maximum amount of $540,000 has been reached in June 2011 under the development agreement, $502,227 of which has not been paid and was recorded as accrued expenses on the balance sheet as of September 30, 2011.

On June 23, 2011, the Company set up a wholly owned subsidiary MRC Global Limited in Hong Kong.

NOTE 2 – GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management’s Plan to Continue as a Going Concern

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its securities, (2) the sublicensing and sale of the Manthey Redmond Eco-Engine, (3) additional capital injection from Manthey Redmond (Aust) pertaining to the Investment Agreement (see Note 3), and (3) short-term borrowings from shareholders or related party when needed.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 
F-4

 
 
MANTHEY REDMOND CORPORATION
 (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial statements of Manthey Redmond Corporation have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q.  Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.  However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations.  Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year.  The balance sheet information as of December 31, 2010 was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K.  These interim financial statements should be read in conjunction with that report.  Certain comparative amounts have been reclassified to conform to the current period's presentation.

Fiscal Year

The fiscal year of the Company is January 1 to December 31.

Cash and Cash Equivalents

Cash and cash equivalents include unrestricted deposits and short-term investments with an original maturity of three months or less.  The Company minimizes its risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution.  The balance at times may exceed federally insured limits.  At September 30, 2011, the balance did not exceed the federally insured limit. As of September 30, 2011 and December 31, 2010, cash and cash equivalent amounted to $1,750 and $1,569, respectively.

Revenue Recognition

We recognize product revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) our price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is reasonably assured.  We recognize revenue for product sales upon transfer of title to the customer.  Customer purchase orders and/or contracts are generally used to determine the existence of an arrangement.  Shipping documents and the completion of any customer acceptance requirements, when applicable, are used to verify product delivery or that services have been rendered.  We assess whether a price is fixed or determinable based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.  We will record reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded.  These estimates will be based on historical sales returns when available, analysis of credit memo data, and other factors known at the time.

Use of Estimates

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

 
F-5

 
 
MANTHEY REDMOND CORPORATION
 (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
 
Net Loss per Common Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period.  Diluted net loss per share reflects the potential dilution of securities by including common stock equivalents, such as stock options, stock warrants and convertible preferred stock, in the weighted average number of common shares outstanding for a period, if dilutive.  At September 30, 2011, there were no potentially dilutive securities.

Recently Issued Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
 
NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from Related Party

On June 3, 2009, the Company received $38,950 of advances from Manthey Redmond (Aust), all directors of which are also directors of the Company.  The advances were non-interest bearing loan to be repaid at the discretion of the Board of Directors of the Company.

Patent Licensing Agreement

On May 1, 2009, the Company entered into a Patent Licensing Agreement with Manthey Redmond (Aust).  Manthey Redmond is the owner, developer and patent applicant of the Eco-Engine and all related technology (the "Technology") developed and to be developed.  Pursuant to the agreement, Manthey Redmond (Aust) has granted to the Company, a license to develop, manufacture, have manufactured, use and sell or supply the Technology in return for a royalty fee equal to 5% of the Company's gross profits earned as a result of the license agreement.  The Company has the right to sublicense its rights under the agreement and is entitled to information and use of any inventions or improvements on the Technology made by Manthey Redmond (Aust) without additional charge.  Manthey Redmond (Aust) will apply for valid patents pursuant to each invention or improvements on the Technology.  The agreement may be terminated at the option of Manthey Redmond (Aust) in the event that the Company becomes insolvent, or seeks protection from its creditors under any United States federal or state bankruptcy act or if an outside administrator or controller is voluntary or involuntarily appointed to control the Company.  The agreement is subject to and governed by the law of Queensland, Australia.

Investment Agreement

On May 1, 2009, the Company entered into an Investment Agreement with Manthey Redmond (Aust) by which Manthey Redmond (Aust) has agreed to invest a non-refundable amount of $40,000 per month beginning July 1, 2009, aggregating $4,200,000 to assist the Company in commercializing products based on the Technology.  Manthey Redmond (Aust) may terminate this agreement in the event that the Patent Licensing Agreement is terminated.  The agreement is subject to and governed by the law of Queensland, Australia.

 
F-6

 
 
MANTHEY REDMOND CORPORATION
 (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
 
From November 2009 through September 2011, the Company received multiple capital injections totaled $159,399 from Manthey Redmond (Aust) pursuant to the Investment Agreement, which was recorded as additional paid-in capital.

Development Agreement

On May 1, 2009 the Company entered into a Development Agreement with Manthey Holdings by which, commencing July 1, 2009, Manthey Holdings will provide exclusive use of its engineering facility and employees for the purpose of research and development related to the Technology for which the Company will pay Manthey Holdings $30,000 per month beginning July 1, 2009 up to a maximum of $540,000 at which time the agreement shall terminate. On November 6, 2009 the Company entered into an amended Development Agreement dated May 1, 2009 with Manthey Holdings.  The amended agreement removed the exclusivity of the use of Manthey Holdings’ engineering facility and employees, and deferred the commencement date of the agreement and first payment to November 20, 2009.  Our president/director is the sole shareholder and director of Manthey Holdings which serves as the trustee of the Manthey Holdings Trust.  Our president/director is also the beneficiary of the Manthey Holdings Trust and may be deemed the beneficial owner of the 3,040,000 shares, or 29.6% of the Company’s common stock owned by the Manthey Holdings Trust.

On November 6, 2009, the agreement was amended to revise the commencement date of payment from July 1, 2009 to November 20, 2009. For the nine month ended September 30, 2011, the Company incurred $139,000 of service fees pursuant to the amended agreement with Manthey Holdings and recorded in accrued expense. The maximum amount of $540,000 has been reached in June 2011 under the development agreement, $502,227 of which has not been paid and was recorded as accrued expenses on the balance sheet as of September 30, 2011.

The agreement will also terminate in the event that the Patent Licensing Agreement is terminated.  Manthey Holdings has agreed to build and test prototypes based on the Technology at its research facility.  The agreement is subject to and governed by the law of Queensland, Australia.
 
NOTE 5 - ACCRUED EXPENSES

Accrued expenses consisted of the following:

   
September 30,
2011
   
December 31,
2010
 
Accrued research and development expense – related party
 
$
502,227
   
$
362,177
 
Accrued rent
   
-
     
1,050
 
Accrued professional fee
   
        5,000
     
               -
 
Total
 
$
507,227
   
$
363,227
 
 
 
F-7

 
 
MANTHEY REDMOND CORPORATION
 (A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
 
NOTE 6 – STOCKHOLDERS’ DEFICIT

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $.0001 and 20,000,000 shares of preferred stock with a par value of $.0001.  On June 1, 2009, the Company issued 10,250,000 shares of common stock at par value to its sixty-six (66) initial stockholders.

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders.  Holders of common stock do not have cumulative voting rights.  Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from funds legally available therefore.  In the event of a liquidation, dissolution or winding up, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities.  Holders of common stock have no preemptive rights to purchase the Company’s common stock.  There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.

From November 2009 through September 2011, the Company received multiple capital injections totaled $159,399 from Manthey Redmond (Aust) pursuant to the Investment Agreement, which was recorded as additional paid-in capital.
 
NOTE 7 – OPERATING LEASES

On July 10, 2009, the Company entered into a lease agreement with Premier Business Centers, under which the Company will lease approximately 165 square feet of office space located at 10940 Wilshire Boulevard, Suite 1600, Los Angeles, California 90024 at a monthly rate of $1,050.  The lease term is month-to-month commencing August 3, 2009 with security deposit of one-month rent of $1,050 recorded as Other Assets as of September 30, 2011 and December 31, 2010.
 
NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated events subsequent to the balance sheet date of September 30, 2011 through November 14, 2011, which is the date the financial statements were available to be issued.

 
F-8

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

Forward-Looking Statements
 
Statements in this Quarterly Report on Form 10-Q that are not historical facts, so-called “forward-looking statements,” are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission.

Current Operations

The Company was formed on April 20, 2009 and is a development stage company with no operating revenues or profits.  The Company has developed prototypes of the Manthey Redmond Eco-Engine which will be tested for performance validation by government agencies, potential joint venture partners and academic institutions.  After validation of the tests, the Company will market the Eco-Engine to manufacturers in the United States and overseas.

Expenses and Capital Expenditures

Other than the development agreement for use of the testing facilities at Manthey Holdings, the Company has not incurred any large expenses nor made or planned any large capital expenditures.

Results of Operations

Comparison of Results of Operations for the Three Months ended September 30, 2011 and the Three Months ended September 30, 2010:

   
For the Three
   
For the Three
             
   
Months Ended
   
Months Ended
             
   
September 30,
   
September 30,
             
   
2011
   
2010
   
Change in $
   
Change in %
 
Net revenue
  $ -     $ -     $ -       0 %
                                 
Operating expenses
                               
Research and development expense
    -       90,000       (90,000 )     -100 %
Professional services
    8,129       16,194       (8,065 )     -50 %
Rent expense
    3,364       4,486       (1,122 )     -25 %
Other
    615       10       605       6055 %
Total operating expenses
    12,109       110,690       (98,581 )     -89 %
                                 
Net loss
  $ (12,109 )   $ (110,690 )   $ 98,581       -89 %
 
The Company was incorporated in April 2009 to primarily engage business in the development and commercialization of the Manthey Redmond Eco-Engine and related Technologies.  For the three months ended September 30, 2011 and 2010, the Company had not generated any revenue.

The Company intends to continue research and development of the Manthey Redmond Eco-Engine during 2011.  The Company is currently testing the latest prototype of the Eco-engine with field testing planned to commence in the second quarter of 2012.  The Company incurred $12,109 operating expenses for the three months ended September 30, 2011 compared to $110,690 operating expenses incurred for the three months ended September 30, 2010.  The total operating expenses for the three months ended September 30, 2011 primarily consisted of professional services of $8,129 and rent expense of $3,364.  The research and development expenses of $90,000 for the three months ended September 30, 2010 were incurred pursuant to the amended Development Agreement with Manthey Holdings on November 6, 2009, which revises the commencement date of development service fee payment from July 1, 2009 to November 20, 2009.  The maximum amount of $540,000 has been reached in June 2011 under the development agreement, $502,227 of which has not been paid and was recorded as accrued expenses on the balance sheet as of September 30, 2011.  As a result, no research and development expense was recorded during the three months ended September 30, 2011.

 
4

 

Comparison of Results of Operations for the Nine Months ended September 30, 2011 and the Nine Months ended September 30, 2010:
 
   
For The Nine Months Ended September 30, 2011
   
For The Nine Months Ended September 30, 2010
   
Change in $
   
Change in%
 
                         
Net revenue
  $ -     $ -     $ -       0 %
                                 
Operating expenses
                               
Research and development expense
    139,000       270,000       (131,000 )     -49 %
Professional services
    60,553       23,543       37,010       157 %
Rent expense
    10,089       10,361       (272 )     -3 %
Other
    8,808       102       8,706       8536 %
Total operating expenses
    218,451       304,006       (85,555 )     -28 %
                                 
Net loss
  $ (218,451 )   $ (304,006 )   $ 85,555       -28 %

The Company was incorporated in April 2009 to primarily engage business in the development and commercialization of the Manthey Redmond Eco-Engine and related Technologies.  For the nine months ended September 30, 2011 and 2010, the Company had not generated any revenue.

The Company intends to continue research and development of the Manthey Redmond Eco-Engine during 2011.  The Company is currently testing the latest prototype of the Eco-engine with field testing planned to commence in the second quarter of 2012.  The Company incurred $218,451 operating expenses for the nine months ended September 30, 2011 compared to $304,006 operating expenses incurred for the nine months ended September 30, 2010.  The total operating expenses for the nine months ended September 30, 2010 primarily consisted of research and development expenses of $139,000 and professional services of $60,553 and rent expense of $10,089.  The research and development expenses were incurred pursuant to the amended Development Agreement with Manthey Holdings on November 6, 2009, which revises the commencement date of development service fee payment from July 1, 2009 to November 20, 2009.  Research and development expense of $139,000 incurred pursuant to the Development Agreement was not paid during the nine months ended September 30, 2011, which was recorded as accrued expense as of September 30, 2011.  Professional expenses for the nine months ended September 30, 2011 mainly consisted of legal service fees of $18,030 for general corporate legal counsel, consulting fees of $11,000 for advisory of capital market operations, $10,000 for accounting fees, $7,223 for stock related handling and filing fees, $5,400 of web service fees for designing a company intranet, and $3,900 agent fee for services to be provided for incorporating a subsidiary in Hong Kong.

Liquidity and Capital Resources

The following summarizes and compares the key component of the company’s cash flows for the nine months ended September 30, 2011 and the nine months ended September 30, 2010.

   
2011
   
2010
 
Net cash used in operating activities
 
$
(74,451
)
 
$
(34,006
)
Net cash used in investing activities
 
$
-
   
$
-
 
Net cash provided by financing activities
 
$
74,632
   
$
44,842
 
Net increase in cash and cash equivalents
 
$
181
   
$
10,837
 

 
5

 
 
Net cash used in operating activities of $74,451 for the nine-month period ending September 30, 2011 was principally consisted of $60,553 professional services compared with $23,543 for the nine-month period ending September 30, 2010.

Net cash provided by financing activities for the nine-month period ending Septmeber 30, 2011 resulted from advances and capital contribution from Manthey Redmond (Aust) $74,632 pursuant to the Investment Agreement, which was recorded as additional paid-in capital as of September 30, 2011.

Net losses in the amount of $218,451 and $304,006 for the nine-month periods ending September 30, 2011 and 2010 was partially offset by increases in accrued expense and other liabilities in the amount of $144,000 and $270,000, respectively.  Increases in accrued expense and other liabilities were primarily recorded as unpaid research and development expenses to Manthey Holdings Pty Ltd pursuant to the Development Agreement.

During its initial organization, the Company received $38,950 in advances from Manthey Redmond (Aust) not pursuant to the Investment Agreement, and is a loan, interest free, which must be repaid.  No formal loan terms were established, but the Company intends to repay the loan once in a position to do so.  From November 2009 through September 2011, the Company received multiple capital injections totaled $159,399 from Manthey Redmond (Aust) pursuant to the Investment Agreement, which was recorded as additional paid-in capital.
 
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management’s Plan to Continue as a Going Concern

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its securities, (2) the sublicensing and sale of the Manthey Redmond Eco-Engine, (3) additional capital injection from Manthey Redmond (Aust) pertaining to the Investment Agreement, and (3) short-term borrowings from shareholders or related party when needed.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.
 
 
6

 
 
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A.  Risk Factors

Not applicable

Item 2  Unregistered Sales of Equity Securities and use of proceeds

None

Item 3  Defaults upon senior securities

None

Item 4.  [removed and reserved]

Item 5. Other Information not applicable

Item 6. Exhibits
 
     (a) Exhibits
 
Exhibit
Number
 
Description
31.1*
 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2*
 
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32*
 
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith.
 
 
7

 
 
SIGNATURES
 
     Pursuant to the requirements 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.

 
MANTHEY REDMOND CORPORATION.
 
 
(Registrant)
 
       
Date: November 14, 2011
By:
/s/ Steven Charles Manthey 
 
   
Steven Charles Manthey
 
   
Director, President and
 
   
Chief Executive Officer 
 
 
 
8