Form 10-Q

(Mark One)

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

For the quarterly period ended ~~March~~June 3130, 2012

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 ¨

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 ¨ No ¨

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 ¨

Accelerated filer ¨

Non-accelerated filer ¨

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 ¨ No x

As of ~~May~~August 14, 2012, 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 ~~March~~June 3130, 2012

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)		3
Consolidated Balance Sheets		F-1
Consolidated Statements of Operations		F-2
Consolidated Statements of Cash Flows		F-3
Notes to Unaudited 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		7
Item 4. Controls and Procedures		7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		78
Item 1A. Risk Factors		78
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		78
Item 3. Defaults Upon Senior Securities		78
Item 4. [Removed and Reserved]		78
Item 5. Other Information		78
Item 6. Exhibits		78
SIGNATURES		89
EX-31.1
EX- 31.2
EX-32.

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited)

MANTHEY REDMOND CORPORATION

(A Development Stage Company)

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~March~~June 3130, 2012

Unaudited Consolidated Financial Statements:

Consolidated Balance Sheets	F-1

Consolidated Statements of Operations	F-2

Consolidated Statements of Cash Flows	F-3

Notes to Unaudited Consolidated Financial Statements	F-4

MANTHEY REDMOND CORPORATION ~~(A Development Stage Company) CONSOLIDATED BALANCE SHEETS~~

Assets	March 31, 2012			December 31, 2011
	(Unaudited)			(Audited)
Current Assets
Cash and cash equivalents	$	4,756		$	9,734
Other Assets		1,050			1,050
Total Assets	$	5,806		$	10,784
Liabilities and Stockholders' Deficit
Current Liabilities
Accrued expense	$	511,227		$	507,727
Other payable - related party		38,950			38,950
Total Current Liabilities		550,177			546,677
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		224,746			208,077
Accumulated deficit		(770,142	)		(744,996	)
Total Stockholders' Deficit		(544,371	)		(535,894	)
Total Liabilities and Stockholders' Deficit	$	5,806		$	10,784

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(Unaudited)			(Audited)
Assets
Current Assets
Cash and cash equivalents	$	2,963		$	9,734

Other Assets		1,050			1,050

Total Assets	$	4,013		$	10,784

Liabilities and Stockholders' Deficit

Current Liabilities
Accrued expense	$	507,727		$	507,727
Other payable - related party		38,950			38,950
Total Current Liabilities		546,677			546,677

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		241,755			208,077
Accumulated deficit		(785,444	)		(744,996	)
Total Stockholders' Deficit		(542,664	)		(535,894	)

Total Liabilities and Stockholders' Deficit	$	4,013		$	10,784

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

F-1

MANTHEY REDMOND CORPORATION

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For The Three Months Ended March 31, 2012			For The Three Months Ended March 31, 2011			From April 20, 2009 (Inception) through March 31, 2012
	For The ThreeMonths Ended June 30, 2012			For The ThreeMonths Ended June 30, 2011			For The Six Months EndedJune 30, 2012			For The Six Months Ended June 30, 2011			From April 20,2009 (Inception)through June 30, 2012
Net revenue	$	-		$	-		$	-		$			$	-
Operating expenses
Professional services		910,~~309~~313			438,~~832~~592			~~168~~19,~~269~~622			52,424			178,582
Advertising and promotion		~~7,500~~-			~~250~~247			87,~~917~~500			497			8,917
Rent expense		42,~~274~~121			3,~~299~~416			356,~~974~~395			6,725			38,095
Other		42,~~064~~868			16,~~378~~317			166,~~982~~932			7,696			19,851
Research and development expense		-			9049,000			~~540,000~~-			139,000			540,000
Total operating expenses		2515,~~147~~302			~~138~~67,~~760~~572			~~770~~40,~~142~~449			206,342			785,445
Net loss	$	(2515,~~147~~302	)	$	(~~138~~67,~~760~~572	)	$	(~~770~~40,~~142~~449	)	$	(206,342	)	$	(785,445	)
Net loss per common share - basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.0800	)	$	(0.02	)	$	(0.08	)
Weighted average number of common shares outstanding, basic and diluted		10,250,000			10,250,000			910,~~853~~250,~~911~~000			10,250,000			9,884,565

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

F-2

MANTHEY REDMOND CORPORATION ~~(A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)~~

	For The Three Months Ended March 31, 2012			For The Three Months Ended March 31, 2011			For The Period From April 20, 2009 (Inception) to March 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(25,147	)	$	(138,760	)	$	(770,142	)
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease (increase) in assets:
Prepaid expense		-			(10	)		-
Other assets		-			-			(1,050	)
Increase (decrease) in liabilities:
Accrued expense and other liabilities		3,500			88,950			511,227
Net cash used in operating activities		(21,647	)		(49,820	)		(259,965	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from related party		-			-			38,950
Proceeds from issuance of common stock		-			-			1,025
Additional capital contribution		16,669			49,546			224,746
Net cash provided by financing activities		16,669			49,546			264,721
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS		(4,978	)		(274	)		4,756
CASH & CASH EQUIVALENTS, BEGINNING BALANCE		9,734			1,569			-
CASH & CASH EQUIVALENTS, ENDING BALANCE	$	4,756		$	1,295		$	4,756
SUPPLEMENTAL DISCLOSURES:
Interest paid	$	-		$	-		$	-
Income tax paid	$	-		$	-		$	-

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For The Six Months Ended June 30, 2012			For The Six Months Ended June 30, 2011			For The Period From April 20, 2009 (Inception) to June 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(40,449	)	$	(206,342	)	$	(785,444	)
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		-			137,950			507,727
Net cash used in operating activities		(40,449	)		(68,392	)		(278,767	)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from related party		-			-			38,950
Proceeds from issuance of common stock		-			-			1,025
Additonal capital contribution		33,678			69,546			241,755
Net cash provided by financing activities		33,678			69,546			281,730

NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS		(6,771	)		1,154			2,963

CASH & CASH EQUIVALENTS, BEGINNING BALANCE		9,734			1,569			-

CASH & CASH EQUIVALENTS, ENDING BALANCE	$	2,963		$	2,723		$	2,963

SUPPLEMENTAL DISCLOSURES:
Interest paid	$	-		$	-		$	-
Income tax paid	$	-		$	-		$	-

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

F-3

MANTHEY REDMOND CORPORATION

(A Development Stage Company)

NOTES TO UNAUDITED CONSOLIDATED 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).

InOn May 17, ~~2009~~2012, the Company entered into a ~~Development~~Technology License Agreement with Manthey ~~Holdings~~Redmond ~~Pty Limited~~ (~~“Manthey Holdings”~~Aust) ~~for~~Pty ~~the~~Ltd ~~exclusive~~that ~~use~~superseded ~~of Manthey Holdings' engineering facility and employees for research and development of and related to~~ the ~~Technology~~Patent atLicensing aAgreement ~~monthly~~(entered ~~fee of $30,000 up~~into tobetween athe ~~maximum~~parties ~~of $540,000~~ in ~~aggregate.~~April ~~In November,~~ 2009,) ~~the~~so ~~Development~~as ~~Agreement was amended~~ to ~~remove~~grant ~~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~~an isexclusive ~~the~~license ~~sole~~for ~~shareholder~~intellectual ~~and~~property ~~director~~for ~~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~~following ~~Holdings~~territories: ~~Trust~~United ~~and~~States ~~may be deemed the beneficial owner~~ of ~~the 3~~America,~~040,000~~ ~~shares~~Canada, ~~or 29.6% of the Company’s common stock owned by the Manthey Holdings Trust. On November 6~~Mexico, ~~2009,~~China 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 the second quarter of 2011 under the development agreement, $502,227 of which has not been paid. It was recorded as accrued expenses on the consolidated balance sheets as of March, 31, 2012 and ~~December 31, 2011~~India.

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 the second quarter of 2011 under the development agreement, $502,227 of which has not been paid. It was recorded as accrued expenses on the consolidated balance sheets as of June, 30, 2012 and December 31, 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 consolidated 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 consolidated 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 4), 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 CONSOLIDATED 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 consolidated 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 consolidated financial statements. However, the information included in these interim consolidated 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 consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These interim consolidated 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 ~~March~~June 3130, 2012, the balance did not exceed the federally insured limit. As of ~~March~~June 3130, 2012 and December 31, 2011, cash and cash equivalents amounted to $42,~~756~~963 and $9,734, 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 consolidated 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 consolidated 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 CONSOLIDATED 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 ~~March~~June 3130, 2012 and December 31, 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. As of ~~March~~June 3130, 2012 and December 31, 2011, advances from related party remained at $38,950.

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.

On May 17, 2012, the Company entered into a Technology License Agreement with Manthey Redmond (Aust) Pty Ltd. that superseded the Patent Licensing Agreement (entered into between the parties in April 2009) so as to grant to the Company an exclusive license for intellectual property for the following territories: United States of America, Canada, Mexico, China and India.

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 CONSOLIDATED FINANCIAL STATEMENTS

In November 2009, March 2010, May 2010, January 2011, March 2011, June 2011, August 2011, September 2011, October 2011, December 2011, February 2012, and ~~February~~May 2012, the Company ~~received~~ received $39,925, $955, $43,887, $29,596, $19,950, $20,000, $100 , $4,986, $33,907, $14,771, ~~and~~ $16,669, and $17,009 of capital injection, respectively, or $~~224~~241,~~746~~755 in aggregate 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 three and six months ended ~~March~~June 3130, 2012, the Company incurred $0 of service fees pursuant to the amended agreement with Manthey Holdings and recorded in accrued expense. As As of June 30, 2011, the maximum amount of $540,000 has been reached under the development agreement, $502,227 of which has not ~~been~~ been paid. It was recorded as accrued expenses on the consolidated balance sheet as of ~~March~~June 3130, 2012 and December 31, 2011, respectively.

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:

	March 31,		December 31,
	June 30,		December 31,
	2012		2011
Accrued research and development expense – related party	$	502,227	$	502,227
Accrued professional fees		95,~~000~~500		5,500
Total	$	~~511~~507,~~227~~727	$	507,727

F-7

MANTHEY REDMOND CORPORATION

(A Development Stage Company)

NOTES TO UNAUDITED CONSOLIDATED 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.

In November 2009, March 2010, May 2010, ~~January~~ January 2011, March 2011, June 2011, August 2011, September 2011, October 2011, December 2011, February 2012, and ~~February~~May 2012, the Company received $39,925, $955, $43,887, $29,596, $19,950, $20,000, $100 , $4,986, $33,907, $14,771, ~~and~~ $16,669, and $17,009 of capital injection, respectively, or $~~224~~241,~~746~~755 in aggregate 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 ~~March~~June 3130, 2012 and December 31, 2011.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated events subsequent to the consolidated balance sheet date of ~~March~~June 3130, 2012 through the date of this filing, which is the date the unaudited consolidated 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

This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this report include forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "proposed," "intended," or "continue" or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other "forward-looking" information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our revenues and financial performance; risks associated with product development and technological changes; the acceptance our products in the marketplace by existing and potential future customers; general economic conditions. You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

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 the results of operations for the ~~three~~Three Months ended ~~March~~June 3130, 2012 and 2011:

	For The Three Months Ended March 31, 2012			For The Three Months Ended March 31, 2011			Change in $			Change in %
	For The ThreeMonths EndedJune 30, 2012			For The ThreeMonths EndedJune 30, 2011			Change in $			Change in %
Net revenue	$	-		$	-		$	-			0	%
Operating expenses
Professional services		910,~~309~~313			438,~~832~~592			~~(34~~1,~~523~~721	)		~~-79~~20	%
Advertising and promotion		~~7,500~~-			~~250~~247			~~7,250~~(247	)		~~2900~~-100	%
Rent expense		42,~~274~~121			3,~~299~~416			~~975~~(1,295	)		30-38	%
Other		42,~~064~~868			16,~~378~~317			2(3,~~686~~449	)		~~195~~-55	%
Research and development expense		-			9049,000			(9049,000	)		-100	%
Total operating expenses		2515,~~147~~302			~~138~~67,~~760~~572			(~~113~~52,~~612~~270	)		-8277	%
Net loss	$	(2515,~~147~~302	)	$	(~~138~~67,~~760~~572	)	$	~~113~~52,~~612~~270			-8277	%

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 ~~March~~June 3130, 2012 and 2011, the Company had not generated any revenue.

The Company intends to continue research and development of the Manthey Redmond Eco-Engine during 2012. The Company is currently testing the latest prototype of the Eco-engine with field testing planned to commence in 2012. The Company is not incurring research and development cost for the ~~second~~three ~~quarter~~months ofended June 30, 2012 as the facilities was funded directly by the licensor. The Company incurred $2515,~~147 operating~~302 operating expenses for the three months ended ~~March~~June 3130, 2012 compared to $~~138~~67,~~760~~572 operating expenses incurred for the three months ~~ended~~ ~~March~~ended 31June 30, 2011. The total operating expenses for the three months ended ~~March~~June 3130, 2012 primarily consisted of professional services of $910,~~309,~~313 ~~advertising~~ and ~~promotion~~rent expense of ~~7,500, and rent expense of~~ $42,~~274~~121. The research and development expenses of $9049,000 for the three months ended ~~March~~June 3130, 2011 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. As of June 30, 2011, the maximum amount of $540,000 has been reached under the development agreement, $502,227 of which has not been paid. It was recorded as accrued expenses on the consolidated balance sheet as of ~~March~~June 3130, 2012, and December 31, 2011, respectively. As a result, no research and development expense was recorded during the three months ended ~~March 31~~June 30, 2012.

Comparison of the results of operations for the Six Months ended June 30, 2012 and 2011:

	For The Six Months Ended June 30, 2012			For The Six Months Ended June 30, 2011			Change in $			Change in %

Net revenue	$			$	-		$	-			0	%

Operating expenses
Professional services		19,622			52,424			(32,802	)		-63	%
Advertising and promotion		7,500			497			7,003			1409	%
Rent expense		6,395			6,725			(330	)		-5	%
Other		6,932			7,696			(764	)		-10	%
Research and development expense		-			139,000			(139,000	)		-100	%
Total operating expenses		40,449			206,342			(165,893	)		-80	%

Net loss	$	(40,449	)	$	(206,342	)	$	165,893			-80	%

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 six months ended June 30, 2012 and 2011, the Company had not generated any revenue.

The Company intends to continue research and development of the Manthey Redmond Eco-Engine during 2012. The Company is currently testing the latest prototype of the Eco-engine with field testing planned to commence in 2012. The Company is not incurring research and development cost for the six months ended June 30, 2012 as the facilities was funded directly by the licensor. The Company incurred $40,449 operating expenses for the six months ended June 30, 2012 compared to $206,342 operating expenses incurred for the six months ended June 30, 2011. The total operating expenses for the six months ended June 30, 2012 primarily consisted of professional services of $19,622, advertising and promotion expense of $7,500, and rent expense of $6,395. The research and development expenses of $139,000 for the six months ended June 30, 2011 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. As of June 30, 2011, the maximum amount of $540,000 has been reached under the development agreement, $502,227 of which has not been paid. It was recorded as accrued expenses on the consolidated balance sheet as of June 30, 2012, and December 31, 2011, respectively. As a result, no research and development expense was recorded during the six months ended June 30, 2012.

Liquidity and Capital Resources

The following summarizes and compares the key component of the company’s cash flows for the ~~three~~six months ended ~~March~~June 3130, 2012 and the ~~three~~six months ended ~~March~~June 3130, 2011.

	2012			2011
Net cash used in operating activities	$	(2140,~~647~~449	)	$	(4968,~~820~~392	)
Net cash used in investing activities	$	-		$	-
Net cash provided by financing activities	$	1633,~~669~~678		$	4969,546
Net decrease in cash and cash equivalents	$	(4,978)		$	(274)
Net (decrease)increase in cash and cash equivalents	$	(6,771	)	$	1,154

Net cash used in operating activities was $21,647 and $49,820 for the three months ended March 31, 2012 and 2011, respectively, which were mainly driven by net losses in the amount of $25,147 and $138,760, partially offset by increases in accrued expense and other liabilities in the amount of $3,500 and $88,950, respectively. Increases in accrued expense and other liabilities for the three months ended March 31, 2012 and 2011 were primarily to record professional services and unpaid research and development expenses to Manthey Holdings Pty Ltd pursuant to the Development Agreement, respectively.5

Net cash ~~provided~~used byin operating ~~financing~~ activities was $1640,~~669~~449 and $4968,~~546~~392 for the ~~three~~six months ended ~~March~~June 3130, 2012 and 2011, respectively~~. During its initial organization~~, which ~~the~~were ~~Company~~mainly ~~received~~driven ~~$38,950~~by innet ~~advances~~losses ~~from~~in ~~Manthey Redmond (Aust) not pursuant to~~ the ~~Investment~~amount ~~Agreement~~of $40,449 and ~~is a loan~~$206, ~~interest free~~342, ~~which~~partially ~~must~~offset beby ~~repaid. No~~increases ~~formal~~in ~~loan~~accrued ~~terms~~expense ~~were~~and ~~established,~~other liabilities ~~but~~in the ~~Company~~amount ~~intends~~of to$0 ~~repay~~and ~~the~~$137,950, ~~loan~~respectively. Increases ~~once~~ in a ~~position~~accrued toexpense doand ~~so. In~~other ~~February~~liabilities ~~2012,~~for ~~and~~the six inmonths ~~January~~ended ~~2011~~June ~~and March 2011~~30, ~~the~~2012 ~~Company~~and ~~received~~2011 ~~$16,669,~~were ~~and~~primarily ~~$29,596 and~~to ~~$19,950~~record ofunpaid ~~capital~~research ~~injection,~~and ~~respectively~~development ~~from~~expenses to Manthey ~~Redmond~~Holdings ~~(Aust)~~ Pty Ltd pursuant to the ~~Investment~~Development Agreement, ~~which was recorded as additional paid-in capital~~respectively.

Net cash provided by financing activities was $33,678 and $69,546 for the six months ended June 30, 2012 and 2011, 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 February 2012 and May 2012, and in January 2011, March 2011, and June 2011, the Company received $16,669 and $17,009, and $29,596, $19,950, and $20,000 of capital injection, respectively from Manthey Redmond (Aust) pursuant to the Investment Agreement, which was recorded as additional paid-in capital.

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.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Inflation

We do not believe our business and operations have been materially affected by inflation.

Critical Accounting Policies and Estimates

Our critical accounting policies are as follows:

Revenue Recognition

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.

Recently Issued Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”, we are not required to provide the information under this Item 3.

Item 4. Controls and Procedures.

As a “smaller reporting company”, we are not required to provide the information under this Item 3.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report (the “Evaluation Date”). Based upon the evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective. Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

None

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.

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: May 14, 2012	By:	/s/ Steven Charles Manthey
Date: August 14, 2012	By:	/s/ Steven Charles Manthey
		Steven Charles Manthey
		Director, President and
		Chief Executive Officer

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