Attached files
file | filename |
---|---|
EX-32 - MANTHEY REDMOND Corp | v202316_ex32.htm |
EX-31 - MANTHEY REDMOND Corp | v202316_ex31.htm |
Form 10-Q
(Mark
One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30, 2010
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 x 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 x
|
|||
(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 x
As
of November 15, 2010, there were 10,250,000 outstanding shares of the
registrant’s common stock, par value $0.01 per share.
MANTHEY
REDMOND CORPORATION.
Quarterly
Report on Form 10-Q
for the
Quarter Ended September 30, 2010
INDEX
PART
I. FINANCIAL INFORMATION
|
||||
Item 1.
Financial Statements
|
3
|
|||
Unaudited
Condensed Consolidated Balance Sheets as of September 30, 2010 and
December 31, 2009
|
F-1
|
|||
Unaudited
Condensed Consolidated Statements of Operations for the Three and Nine
Months Ended September 30, 2010 and 2009
|
F-2
|
|||
Unaudited
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2010 and 2009
|
F-3
|
|||
Notes
to Unaudited Condensed Consolidated 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
|
7
|
|||
Item 6.
Exhibits
|
8
|
|||
SIGNATURES
|
|
|||
EX-31
|
||||
EX-32 |
2
PART
I—FINANCIAL INFORMATION
Item
1. Financial Statements.
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
INDEX
TO UNAUDITED FINANCIAL STATEMENTS
September
30, 2010
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,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 15,292 | $ | 4,455 | ||||
Other
Assets
|
1,050 | 1,050 | ||||||
Total
Assets
|
$ | 16,342 | $ | 5,505 | ||||
Liabilities and
Stockholders' Deficit
|
||||||||
Current
Liabilities
|
||||||||
Accrued
expense
|
$ | 274,277 | $ | 4,278 | ||||
Other
payable - related party
|
38,950 | 38,950 | ||||||
Total
Current Liabilities
|
313,227 | 43,228 | ||||||
Stockholders'
Deficit
|
||||||||
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
|
84,767 | 39,925 | ||||||
Accumulated
deficit
|
(382,678 | ) | (78,672 | ) | ||||
Total
Stockholders' Deficit
|
(296,886 | ) | (37,722 | ) | ||||
Total
Liabilities and Stockholders' Deficit
|
$ | 16,342 | $ | 5,505 |
The
accompanying notes are an integral part of these financial
statements.
F-1
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
(UNAUDITED)
For
The
Three Months Ended September
30,
2010 |
For
The
Three Months Ended September
30,
2009 |
For
The
Nine Months Ended September
30,
2010 |
For
The
Period From April 20, 2009 (Inception) to September 30, 2009 |
For
The
Period From April 20, 2009 (Inception) to September 30, 2010 |
||||||||||||||||
Net
revenue
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating
expenses
|
||||||||||||||||||||
Research
and development expense
|
90,000 | - | 270,000 | - | 311,000 | |||||||||||||||
Professional
services
|
16,194 | 3,500 | 23,543 | 3,500 | 55,046 | |||||||||||||||
Rent
expense
|
4,486 | 3,316 | 10,361 | 3,316 | 15,778 | |||||||||||||||
Other
|
10 | 74 | 102 | 86 | 854 | |||||||||||||||
Total
operating expenses
|
110,690 | 6,890 | 304,006 | 6,902 | 382,678 | |||||||||||||||
Net
loss
|
$ | (110,690 | ) | $ | (6,890 | ) | $ | (304,006 | ) | $ | (6,902 | ) | $ | (382,678 | ) | |||||
Net
loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.00 | ) | $ | (0.04 | ) | |||||
Weighted
average number of common shares outstanding, basic and
diluted
|
10,250,000 | 10,250,000 | 10,250,000 | 7,623,438 | 9,441,827 |
The
accompanying notes are an integral part of these financial
statements.
F-2
MANTHEY
REDMOND CORPORATION
(A Development Stage Company)(UNAUDITED)
For
The
Nine Months Ended September 30, 2010 |
For
The
Period From April 20, 2009 (Inception) to September 30, 2009 |
For
The
Period From April 20, 2009 (Inception) to September 30, 2010 |
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (304,006 | ) | $ | (6,902 | ) | $ | (382,678 | ) | |||
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
|
270,000 | - | 274,277 | |||||||||
Net
cash used in operating activities
|
(34,006 | ) | (6,902 | ) | (109,450 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Borrowings
from related party
|
- | 38,950 | 38,950 | |||||||||
Proceeds
from issuance of common stock
|
- | 1,025 | 1,025 | |||||||||
Capital
contribution
|
44,842 | - | 84,767 | |||||||||
Net
cash provided by financing activities
|
44,842 | 39,975 | 124,742 | |||||||||
NET
INCREASE IN CASH & CASH EQUIVALENTS
|
10,837 | 33,073 | 15,292 | |||||||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
4,455 | - | - | |||||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 15,292 | $ | 33,073 | $ | 15,292 | ||||||
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.
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
accompanying unaudited financial statements of the Company have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the interim periods are not
necessarily indicative of the results for any future period. These
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the fiscal year ended December 31,
2009. The results of the nine-month period ended September 30, 2010
are not necessarily indicative of the results to be expected for the full fiscal
year ending December 31, 2010.
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, 2010,
the balance did not exceed the federally insured limit. As of September 30, 2010
and December 31, 2009, cash and cash equivalent amounted to $15,292 and $4,455,
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, 2010, 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.
In
November 2009, March 2010 and May 2010, the Company received $39,925, $955 and
$43,887 of capital injection, respectively from Manthey Redmond (Aust) pursuant
to the Investment Agreement, which was recorded as additional paid-in
capital.
F-6
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
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 months
ended September 30, 2010, the Company incurred $270,000 of service fees pursuant
to the amended agreement with Manthey Holdings and recorded in accrued
expense.
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,
2010
|
December
31,
2009
|
|||||||
Accrued
research and development expense – related party
|
$
|
273,227
|
$
|
3,228
|
||||
Accrued
rent
|
1,050
|
1,050
|
||||||
Total
|
$
|
274,277
|
$
|
4,278
|
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.
F-7
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
In November 2009, March 2010 and May 2010, the Company received $39,925, $955 and $43,887 of capital injection, respectively from Manthey Redmond (Aust) pursuant to the Investment Agreement (see Note 4), 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, 2010 and December 31,
2009.
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 three
prototypes of the Manthey Redmond Eco-Engine which will be tested for
performance validation by government agencies and academic
institutions. After validation of the tests, the Company will market
the Eco-Engine to manufacturers in the United States and Australia.
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.
4
Results
of Operations
Results
of Operations for the Three Months and Nine Months ended September 30,
2010:
For
The Three
Months
Ended
September
30,
2010
|
For
The Nine
Months
Ended
September
30,
2010
|
For
The
Period
From
April
20, 2009
(Inception)
to
September
30,
2009
|
For
The
Period
From
April
20, 2009
(Inception)
to
September
30,
2010
|
For
The
Period From April 20 (Inception) to December 31, 2009 |
||||||||||||||||
Net
revenue
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating
expenses
|
||||||||||||||||||||
Research
and development expense
|
90,000 | 270,000 | - | 311,000 | 41,000 | |||||||||||||||
Professional
services
|
16,194 | 23,543 | 3,500 | 55,046 | 31,503 | |||||||||||||||
Rent
expense
|
3,435 | 9,310 | 3,316 | 14,727 | 5,417 | |||||||||||||||
Other
|
10 | 102 | 86 | 854 | 752 | |||||||||||||||
Total
operating expenses
|
109,639 | 302,955 | 6,902 | 381,627 | 78,672 | |||||||||||||||
Net
loss
|
$ | (109,639 | ) | $ | (302,955 | ) | $ | (6,902 | ) | $ | (381,627 | ) | $ | (78,672 | ) | |||||
Net
loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.01 | ) | |||||
Weighted
average number of common shares outstanding, basic and
diluted
|
10,250,000 | 10,250,000 | 691,279 | 9,272,674 | 9,017,595 |
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 and nine months ended September
30, 2010 and for the period from April 20, 2009 (inception) to June 30, 2010,
the Company had not generated any revenue.
The
Company intends to continue research and development of the Manthey Redmond
Eco-Engine during 2010. The Company expects to receive the updated
prototype of the Eco-Engine in the fourth quarter of 2010 once testing is
completed. Upon receipt of the prototype, the Company intends to
begin selective and proprietary marketing of the engine to potential end users
and manufacturers and to possible interested joint venture
partners. The Company incurred $109639 and $302955 operating expenses
for the three months and nine months ended September 30, 2010, respectively,
which primarily consisted of research and development expense of $90,000 and
$270,000, professional services of $16,194 and $23,543 and rent expense of $3435
and $9310, respectively. 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 $90,000 and $270,000 incurred pursuant to the Development
Agreement was not paid during the three months and nine months ended September
30, 2010, which was recorded as accrued expense as of September 30,
2010.
5
The
Company believes that the current trends in the market are increasing the demand
for greater fuel efficient engines with better environmental
performance. The Eco-Engine converts thermal energy to kinetic energy
more efficiently than other engines currently available in the global market
which provides better fuel efficiency and less negative environmental
impact. The Company anticipates that the market trend for such type
engines will increase thereby increasing the demand for the
Eco-Energy.
Liquidity
and Capital Resources
The following summarizes the key
component of the company’s cash flows for the nine months ended
September 30, 2010 and the period from April 20, 2009 (inception) to September
30, 2009:
For The Nine Months Ended
September 30, 2010
|
For The Period From April 20, 2009 (Inception) to
September 30, 2009
|
For The Period From April 20, 2009
(Inception) to September 30, 2010
|
||||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
||||||||||||
Net loss
|
$ | (302,955 | ) | $ | (6,902 | ) | $ | (381,627 | ) | |||
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
|
268,950 | - | 273,227 | |||||||||
Net cash used in operating
activities
|
(34,006 | ) | (6,902 | ) | (109,450 | ) | ||||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
||||||||||||
Borrowings from related
party
|
- | 38,950 | 38,950 | |||||||||
Proceeds from issuance of common
stock
|
- | 1,025 | 1,025 | |||||||||
Capital
contribution
|
44,842 | - | 84,767 | |||||||||
Net cash provided by financing
activities
|
44,842 | 39,975 | 124,742 |
Net cash used in operating activities
was $34,006 and $109,450
for the nine months ended September 30, 2010 and for the period from April 20,
2009 (inception) to September 30, 2010, respectively, which were mainly driven
by net losses in the amount of $302,955 and $381,627, partially offset by
increases in accrued expense and other liabilities in the
amount of $268,950 and $273,227. Increases in accrued expense and
other liabilities were primarily to record unpaid research and development
expenses to Manthey Redmond (Aust) pursuant to the Development
Agreement.
Net cash provided by financing activities
was $44,842 and $124,742 for the nine months ended September 30, 2010 and for
the period from April 20, 2009 (inception) to September 30, 2010,
respectively. 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. In
November 2009, March 2010 and May 2010, the
Company received $39,925, $955 and $43,887 of capital injection, respectively
from Manthey Redmond (Aust) pursuant to the Investment Agreement, which was
recorded as additional paid-in capital.
6
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.
PART
II. OTHER INFORMATION
Item 6.
Exhibits
(a) Exhibits
Exhibit
|
||
Number
|
Description
|
|
EX.
31
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) under the
Exchange Act.
|
|
EX.
32
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350
|
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 9, 2010
|
By:
|
/s/
Steven Charles Manthey
|
|
Steven
Charles Manthey
|
|||
Director,
President and
|
|||
Chief
Executive Officer
|
8