UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number: 000-53266
Monster Offers
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 26-1548306
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8937 Quintessa Cove Street, Las Vegas, NV 89148
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (702) 575-4816
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
Indicate by checkmark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
Indicate by checkmark 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 [X] Smaller reporting company
(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]
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant's most recently
completed second fiscal quarter:
The aggregate market value of the Company's common shares of voting stock held
by non-affiliates of the Company at April 13, 2009, computed by reference to
the $0.02 Registration Statement per-share price on June 2, 2008 (date of
effectiveness), was $166,200.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date:
As of April 13, 2009, the registrant's outstanding common stock consisted
of 18,960,000 shares, $0.001 Par Value. Authorized - 75,000,000 common
voting shares.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
INDEX
Title Page
ITEM 1. BUSINESS 5
ITEM 2. PROPERTIES 19
ITEM 3. LEGAL PROCEEDINGS 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 19
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 21
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 26
ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES 26
ITEM 10. DIRECTOR, EXECUTIVE OFFICER AND CORPORATE GOVERNANCE 29
ITEM 11. EXECUTIVE COMPENSATION 33
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, 35
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 36
AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 37
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 38
2
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact are "forward-looking statements" for
purposes of federal and state securities laws, including, but not limited to,
any projections of earnings, revenue or other financial items; any statements
of the plans, strategies and objections of management for future operations;
any statements concerning proposed new services or developments; any
statements regarding future economic conditions or performance; any statements
or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may", "could", "estimate",
"intend", "continue", "believe", "expect" or "anticipate" or other similar
words. These forward-looking statements present our estimates and assumptions
only as of the date of this report. Accordingly, readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as of the
dates on which they are made. We do not undertake to update forward-looking
statements to reflect the impact of circumstances or events that arise after
the dates they are made. You should, however, consult further disclosures we
make in future filings of our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.
Although we believe that the expectations reflected in any of our forward-
looking statements are reasonable, actual results could differ materially from
those projected or assumed in any of our forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and uncertainties. The
factors impacting these risks and uncertainties include, but are not limited
to:
o inability to raise additional financing for working capital and product
development;
o inability to identify internet marketing approaches;
o deterioration in general or regional economic, market and political
conditions;
o the fact that our accounting policies and methods are fundamental to how we
report our financial condition and results of operations, and they may
require management to make estimates about matters that are inherently
uncertain;
o adverse state or federal legislation or regulation that increases the costs
of compliance, or adverse findings by a regulator with respect to existing
operations;
o changes in U.S. GAAP or in the legal, regulatory and legislative
environments in the markets in which we operate;
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o inability to efficiently manage our operations;
o inability to achieve future operating results;
o our ability to recruit and hire key employees;
o the inability of management to effectively implement our strategies and
business plans; and
o the other risks and uncertainties detailed in this report.
In this form 10-K references to "Monster Offers", "the Company", "we", "us",
and "our" refer to Monster Offers.
AVAILABLE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You can read these SEC filings and reports over the Internet at the SEC's
website at www.sec.gov. You can also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of the SEC at 100 F
Street, NE, Washington, DC 20549 on official business days between the hours of
10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further
information on the operations of the public reference facilities. We will
provide a copy of our annual report to security holders, including audited
financial statements, at no charge upon receipt to of a written request to us
at Monster Offers, 8937 Quintessa Cove Street, Las Vegas, NV 89148.
4
PART I
ITEM 1. BUSINESS
History and Organization
- ------------------------
Monster Offers ("the Company") was incorporated in the State of Nevada on
February 23, 2007, under the name Tropical PC Acquisition Company. On
December 11, 2007, the Company amended its Articles of Incorporation changing
its name to Monster Offers. The Company was originally incorporated as a
wholly owned subsidiary of Company Tropical PC, Inc., a Nevada corporation.
Tropical PC was incorporated September 22, 2004. On December 11, 2007, the
Company amended its Articles of Incorporation changing its name from Tropical
PC Acquisition Corporation to Monster Offers.
Our Business
- ------------
Monster Offers is a technology based Internet media and marketing firm that
specializes in generating online internet leads. We provide internet
marketing services for our clients, which include advertisers, direct
marketers, lead brokers, and agencies, seeking to increase sales and customer
contact through online marketing channels.
Our services include the development of advertising campaigns used to market
products and/or services online. We also design and host customized web
pages.
Our website development is managed by our proprietary Lead Code software
platform. This technology platform allows us to acquire marketing online
leads for our clients in real-time. This platform generates comprehensive
detailed reporting on website activity which allows us to analyze the
effectiveness of different marketing campaigns, advertisements and specific
promotions. This software tool helps us determine which campaigns are
performing at an acceptable level for our clients and which campaigns are
achieving an acceptable profit margin for Monster Offers.
Marketing Strategy
- ------------------
Monster Offers owns and operates a variety of Internet websites. We generate
traffic to our websites both internally and from third party Internet
advertising. Our Web properties and marketing activities are designed to
generate real-time response based marketing results for our clients.
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While visiting one of our online websites, consumers are given the
opportunity to sign up, purchase and/or ask to be contacted about various
product and service offerings. These Web websites generate a variety of
transactional results ranging from: (a) Web traffic; (b) inbound
telemarketing calls; (c) outbound telemarketing leads; (d) marketable
profiled data lists of consumers; (e) targeted response leads; and (f)
completed applications for products and services.
We utilize a number of online marketing channels to build our databases.
These include but are not limited to:
Email Marketing
- ---------------
Our websites are promoted through opt-in email marketing. In other words, we
ask people who search the internet to sign-up to receive marketing messages.
We currently market to multiple consumer and business databases. All data
utilized for email marketing is either owned by us or is managed by us.
Search Engine Marketing
- -----------------------
We utilize search engine marketing to direct consumers to our websites.
Funds generated from the program will be placed in an open account with each
provider and are spent on a Cost-Per-Click auction basis. Google, Yahoo, and
Terra Lycos are the primary 3 search engine providers used.
Affiliate Marketing
- -------------------
We have just completed an affiliate destination where online publishers can
promote Monster Offers exclusive offers and promotions. The new system
allows publishers to choose, and manage a particular campaign. Publishers
are also provided with real-time commission tracking.
Sales Strategy
- --------------
We plan to sell our products and services to a network of participating lead
buyers and advertisers in various categories. Some of these categories
include the wireless industry, insurance industry, travel industry, auto
industry and mortgage industry.
We also plan deliver internet marketing leads to business buyers in a lead
auction format. This format allows clients to bid on qualified leads as they
are created. Monster Offers plans to deliver to the winning bidder leads
generated in real time. Management believes this is the best way to derive
the highest revenue per lead in the marketplace.
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Software Development
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Our sole officer is responsible for all Monster Offers' software development,
management, and upgrades. He creates all new client accounts and implements
lead delivery options based on customer needs. He is currently upgrading the
Lead Code platform to facilitate additional feature sets and scalability.
Competition
- -----------
The internet on-line marketing information industry is highly competitive.
Management believes that the ability to provide proprietary consumer and
business databases that provides real time data is a competitive advantage.
A number of competitors are active in specific aspects of our business. In
the area of business sales lead products, Monster Offer faces competition
primarily from Dun & Bradstreet, Acxiom, Experian, infoUSA , Equifax and
Harte-Hanks Data Technologies. These major competitors offer online leads
directly to the end customer and sell their online leads through reseller
networks.
Government Regulation
- ---------------------
We are subject to federal, state and local laws and regulations affecting our
business. Although the Company plans on obtaining all required federal and
state permits, licenses, and bonds to operate its facilities, there can be no
assurance that the Company's operation and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or
local agencies. New laws and regulations may restrict specific Internet
activities, and existing laws and regulations may be applied to Internet
activities, either of which could increase our costs of doing business over
the Internet and adversely affect the demand for our advertising services.
In the United States, federal and state laws already apply or may be applied
in the future to areas, including children's privacy, copyrights, taxation,
user privacy, search engines, Internet tracking technologies, direct
marketing, data security, pricing, sweepstakes, promotions, intellectual
property ownership and infringement, trade secrets, export of encryption
technology, acceptable content and quality of goods and services.
Employees
- ---------
We have no employees other than Mr. Kaup, our sole officer/director. He
devotes approximately 20-30 hours per week of his time to our business. All
functions including development, strategy, negotiations and clerical work is
being provided by our sole officer/director on a voluntary basis, without
compensation.
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Monster Offers' Funding Requirements
- ------------------------------------
We do not have sufficient capital to fully develop our business plan.
Management anticipates Monster Offers will require to raise at least $475,000.
There is no assurance that we will have revenue in the future or that we will
be able to secure the necessary funding to develop our business. Without
additional funding, it is most likely that our business model will not
succeed, and we shall be forced to curtail or even cease our operations.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition.
Patent, Trademark, License and Franchise Restrictions and Contractual
Obligations and Concessions
- ---------------------------------------------------------------------
We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts.
We will assess the need for any copyright, trademark or patent applications
on an ongoing basis.
Research and Development Activities and Costs
- ---------------------------------------------
Monster Offers did not incur any research and development costs for the years
ended December 31, 2008 and 2007, and has no plans to undertake any
research and development activities during the next year of operations.
Compliance With Environmental Laws
- ----------------------------------
We are not aware of any environmental laws that have been enacted, nor are we
aware of any such laws being contemplated for the future, that impact issues
specific to our business. In our industry, environmental laws are anticipated
to apply directly to the owners and operators of companies. They do not apply
to companies or individuals providing consulting services, unless they have
been engaged to consult on environmental matters. We are not planning to
provide environmental consulting services.
8
Item 1A. Risk Factors.
Risk Factors Relating to Our Company
------------------------------------
1. SINCE WE ARE A DEVELOPMENT COMPANY, THERE ARE NO ASSURANCES THAT OUR
BUSINESS PLAN WILL EVER BE SUCCESSFUL.
Our company was incorporated on February 23, 2007, we are a spin off of
Tropical PC, Inc. We have realized $49,513 in revenues and lost $(48,151)
since our inception. We have no solid operating history upon which an
evaluation of our future prospects can be made. Based upon current plans, we
expect to incur operating losses in future periods as we incur significant
expenses associated with the initial startup of our business. Further, there
are no assurances that we will be successful in realizing added revenues or in
achieving or sustaining positive cash flows. Any such failure could result in
the possible closure of our business or force us to seek additional capital
through loans or additional sales of our equity securities to continue
business operations, which would dilute the value of any shares you purchase
in this distribution.
2. WE HAVE YET TO ATTAIN PROFITABLE OPERATIONS AND BECAUSE WE WILL NEED
ADDITIONAL FINANCING TO FUND OUR ACTIVITIES, OUR ACCOUNTANTS BELIEVE THERE IS
SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN.
The Company has prepared financial statements for the year-end December 31,
2008 reporting that the Company is in its developmental stages. Its ability
to continue to operate as a going concern is fully dependent upon the Company
obtaining sufficient financing to continue its development and operational
activities. The ability to achieve profitable operations is in direct
correlation to the Company's ability to raise sufficient financing. It is
important to note that even if the appropriate financing is received, there
is no guarantee that the Company will ever be able to operate profitably or
derive any significant revenues from its operation. The Company could be
required to raise additional financing to fully implement its entire business
plan.
It is also important to note that the Company anticipates that it will incur
losses and negative cash flow over the next twelve (12) months. There is no
guarantee that the Company will ever operate profitably or even receive
positive cash flows from full operations.
9
Risk Factors Relating to Our Company
3. WE MAY NOT BE ABLE TO COMPETE WITH OTHER ONLINE LEAD GENERATION PROVIDERS,
ALMOST ALL OF WHOM HAVE GREATER RESOURCES AND EXPERIENCE THAN WE DO.
The online internet lead generation industry is dominated by large, well-
financed firms. We do not have the resources to compete with larger
providers of this service. With the minimal resources we have available, we
may experience great difficulties in building a customer base. Competition
by existing and future competitors could result in our inability to secure
any new customers. This competition from other entities with greater
resources and reputations may result in our failure to maintain or expand our
business as we may never be able to successfully execute our business plan.
Further, Monster Offers cannot be assured that it will be able to compete
successfully against present or future competitors or that the competitive
pressure it may face will not force it to cease operations.
4. WE MAY NOT BE ABLE TO RAISE SUFFICIENT CAPITAL OR GENERATE ADEQUATE
REVENUE TO MEET OUR OBLIGATIONS AND FUND OUR OPERATING EXPENSES.
As of December 31, 2008, the Company had $6,469 in working cash and
equivalents. The Company plans to specialize in utilizing technology based
Internet media and marketing to generate leads for businesses. These plans
will require additional capital. The Company needs to raise at least four
hundred seventy-five dollars ($475,000) in order to fully develop its
business plan. The Company currently has enough funds to partially implement
its business plan. Failure to raise adequate capital and generate adequate
sales revenues to meet our obligations and develop and sustain our operations
could result in reducing or ceasing our operations.
Additionally, even if we do raise sufficient capital and generate revenues to
support our operating expenses, there can be no assurances that the revenue
will be sufficient to enable us to develop business to a level where it will
generate profits and cash flows from operations. These matters raise
substantial doubt about our ability to continue as a going concern. Our
independent auditors currently included an explanatory paragraph in their
report on our financial statements regarding concerns about our ability to
continue as a going concern.
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5. NEW TECHNOLOGIES COULD BLOCK OR FILTER OUR ADS, WHICH COULD REDUCE THE
EFFECTIVENESS OF OUR SERVICES AND LEAD TO A LOSS OF CUSTOMERS.
Technologies may be developed that can block the display of our ads. We
expect to derive a portion our revenues from fees paid to us by advertisers
in connection with the display of ads on web pages. Any ad-blocking
technology effective against our ad placements could severely restrict the
number of advertisements that we are able to place before consumers resulting
in a reduction in the attractiveness of our services to advertisers. If
advertisers determine that our services are not providing substantial value,
we may suffer a loss of clients. As a result, ad-blocking technology could,
in the future, substantially decrease the number of ads we place resulting in
a decrease in our revenues.
6. WE HAVE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGE TO CONTINUE OFFERING
OUR ADVERTISING CLIENTS COMPETITIVE SERVICES OR WE MAY LOSE CLIENTS AND BE
UNABLE TO COMPETE.
Our future success will depend on our ability to continue delivering our
advertising clients competitive results-based Internet marketing services.
In order to do so, we will need to adapt to rapidly changing technologies, to
adapt our services to evolving industry standards and to improve the
performance of our services. Our failure to adapt to such changes would
likely lead to a loss of clients or a substantial reduction in the fees we
would be able to charge versus competitors who have more rapidly adopted
improved technology. Any loss of clients or reduction of fees would
adversely impact our revenue. In addition, the widespread adoption of new
Internet technologies or other technological changes could require
substantial expenditures by us to modify or adapt our services or
infrastructure. If we are unable to pass all or part of these costs on to
our clients, our margins and, therefore, profitability will be reduced.
11
7. IF OUR BUSINESS PLAN IS NOT SUCCESSFUL, WE MAY NOT BE ABLE TO CONTINUE
OPERATIONS AS A GOING CONCERN AND OUR STOCKHOLDERS MAY LOSE THEIR ENTIRE
INVESTMENT IN US.
As discussed in the Footnote 3 to Financial Statements included in this
Annual report, our auditors have given us a Going Concern comment.
This raises substantial doubt that we will be able to continue operations as
a going concern, and our independent auditors included an explanatory
paragraph regarding this uncertainty in their report on our financial
statements for the period February 23, 2007 (inception) to December 31, 2008.
Our ability to continue as a going concern is dependent upon our generating
cash flow sufficient to fund operations and reducing operating expenses. Our
business plans may not be successful in addressing these issues. If we cannot
continue as a going concern, our stockholders may lose their entire
investment in us.
8. WE FACE INTENSE AND GROWING COMPETITION, WHICH COULD RESULT IN PRICE
REDUCTIONS, REDUCED OPERATING MARGINS AND LOSS OF MARKET SHARE.
The market for Internet advertising and related services is highly
competitive. If we fail to compete effectively against other Internet
advertising service companies, we could lose advertising clients and our
revenues would decline. We expect competition to continue to increase
because there are no significant barriers to entry. Our principal
competitors include other on-line companies that provide advertisers with
results-based advertising services, including advertising networks such as
Google, aQuantive, Advertising.com, QuinStreet and ValueClick. In addition,
we compete with large interactive media companies with strong brand
recognition, such as AOL, Microsoft and Yahoo!, that sell advertising
inventory directly to advertisers. We also compete with traditional
advertising media, such as direct mail, television, radio, cable and print,
for a share of advertisers' total advertising budgets.
Many current and potential competitors have advantages over us, such as
longer operating histories, greater name recognition, larger client bases,
greater access to advertising space on high-traffic web sites, and
significantly greater financial, technical, marketing and human resources.
These companies can use their experience and resources against us in a
variety of competitive ways, including by making acquisitions, investing more
aggressively in research and development and competing more aggressively for
advertisers and publishers through increased marketing or other promotions.
In addition, existing or future competitors may develop or offer services
that provide significant performance, price, creative or other advantages
over those offered by us.
If we fail to compete successfully, we could have difficulties attracting and
retaining advertising clients, which may decrease revenues and adversely
affect our operating results. Increased competition may also result in price
reductions that cannot be offset by cost reductions resulting in substantial
decreases in operating income.
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9. WE MAY NOT BE ABLE TO FIND SUITABLE EMPLOYEES.
The Company currently relies heavily upon the services and expertise of our
sole officer and director. In order to implement the aggressive business
plan of the Company, management recognizes that additional clerical staff
will be required. Our sole officer is the only employed personnel at the
outset of operations. Our sole officer can manage the office functions and
bookkeeping services until the Company can generate enough revenues to hire
additional staff.
No assurances can be given that the Company will be able to find suitable
employees that can support the above needs of the Company or that these
employees can be hired on terms favorable to the Company.
10. WE MAY NOT EVER PAY CASH DIVIDENDS.
The Company has not paid any cash dividends on the Common Shares to date, and
there can be no guarantee that the Company will be able to pay cash dividends
on the Common Shares in the foreseeable future. Initial earnings that the
Company may realize, if any, will be retained to finance the growth of the
Company. Any future dividends, of which there can be no guarantee, will be
directly dependent upon earnings of the Company, its financial requirements
and other factors that are not determined. (See "CAPITALIZATION")
11. WE ARE SUBJECT TO GOVERNMENT REGULATION.
Our business is subject to existing laws and regulations that have been
applied to Internet communications, commerce and advertising. New laws and
regulations may restrict specific Internet activities, and existing laws and
regulations may be applied to Internet activities, either of which could
increase our costs of doing business over the Internet and adversely affect
the demand for our advertising services. In the United States, federal and
state laws already apply or may be applied in the future to areas, including
children's privacy, copyrights, taxation, user privacy, search engines,
Internet tracking technologies, direct marketing, data security, pricing,
sweepstakes, promotions, intellectual property ownership and infringement,
trade secrets, export of encryption technology, acceptable content and
quality of goods and services.
In addition to government regulation, privacy advocacy groups and the
technology and direct marketing industries may consider various new,
additional or different self-regulatory standards applicable to the Internet.
Governments, trade associations and industry self-regulatory groups may enact
more burdensome laws, regulations and guidelines, including consumer privacy
laws, affecting our clients, publishers and us, which could harm our business
by increasing compliance costs or limiting the scope of our business.
13
12. WE MAY BE LIABLE FOR CONTENT IN THE ADVERTISEMENTS WE DELIVER FOR OUR
CLIENTS RESULTING IN UNANTICIPATED LEGAL COSTS.
We may be liable to third parties for content in the advertising we deliver
if the artwork, text or other content involved violates copyrights,
trademarks or other third-party intellectual property rights or if the
content is defamatory. Although substantially all of our contracts include
both warranties from our advertisers that they have the right to use and
license any copyrights, trademarks or other intellectual property included in
an advertisement and indemnities from our advertisers in the event of a
breach of such warranties, a third party may still file a claim against us.
Any claims by third parties against us could be time-consuming, could result
in costly litigation and adverse judgments. Such expenses would increase our
costs of doing business and reduce our net income per share. In addition, we
may find it necessary to limit our exposure to such risks by accepting fewer
or more restricted advertisements leading to loss of revenue.
13. BECAUSE OUR AFFILIATE PROGRAMS GENERALLY CAN BE CANCELLED BY THE CLIENT
WITH LITTLE OR NO NOTICE OR PENALTY, THE TERMINATION OF ONE OR MORE PROGRAM
COULD RESULT IN AN IMMEDIATE DECLINE IN OUR REVENUES.
We expect to derive the majority of our revenues from marketing services under
short-term insertion order contracts with advertising clients and web site
publishers, which may be cancelled upon thirty (30) days or less notice. In
addition, the client contracts generally do not contain penalty provisions
for cancellation before the end of the contract term. The short contract
terms in general reflect the limited timelines, budgets and customer
acquisition goals of specific advertising campaigns and are consistent with
industry practice. The non-renewal, re-negotiation, cancellation or deferral
of large contracts or a number of contracts that in the aggregate account for
a significant amount of revenues, could cause an immediate and significant
decline in our revenues and harm our business.
14. OUR PRINCIPAL STOCKHOLDERS, AND SOLE OFFICER AND DIRECTOR OWN A
CONTROLLING INTEREST IN OUR VOTING STOCK AND INVESTORS WILL NOT HAVE ANY
VOICE IN OUR MANAGEMENT, WHICH COULD RESULT IN DECISIONS ADVERSE TO OUR
GENERAL SHAREHOLDERS.
Our principal stockholders beneficially owns approximately, or has the right
to vote approximately 57% of our outstanding common stock. As a result, this
stockholder, acting alone, will have the ability to control substantially all
matters submitted to our stockholders for approval including:
a) election of our board of directors;
b) removal of any of our directors;
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
14
15. SECURITY AND PRIVACY BREACHES COULD SUBJECT US TO LITIGATION AND
LIABILITY AND DETER CONSUMERS FROM USING OUR NETWORK.
While we plan to employ security measures typical of our industry, including
encryption technology, we could be subject to litigation and liability if
third parties penetrate our network security or otherwise misappropriate our
users' personal or credit card information. This liability could include
claims for unauthorized purchases with credit card information, impersonation
or other similar fraud claims. It could also include claims for other
misuses of personal information, such as for unauthorized marketing purposes.
In addition, the Federal Trade Commission and other federal and state
agencies have investigated various Internet companies in connection with
their use of personal information. We could be subject to investigations and
enforcement actions by these or other agencies. In addition, we license on a
very limited basis customer names and street addresses to third parties.
Although we provide an opportunity for our customers to remove their names
from our user list, we nevertheless may receive complaints from customers for
these license arrangements.
The need to transmit confidential information securely has been a significant
barrier to electronic commerce and communications over the Internet. Any
compromise of security could deter people from using the Internet in general
or, specifically, from using the Internet to conduct transactions that
involve transmitting confidential information, such as purchases of goods or
services. Many marketers seek to offer their products and services on our
distribution network because they want to encourage people to use the
Internet to purchase their goods or services. Internet security concerns
could frustrate these efforts. Also, our relationships with consumers may be
adversely affected if the security measures we use to protect their personal
information prove to be ineffective. We cannot predict whether events or
developments will result in a compromise or breach of the technology we use
to protect customers' personal information. We have no insurance coverage
for these types of claims. In addition to direct losses from claims, if
consumers are leery of using our system, we may not be able to attract
advertisers to our network leading to a decline in revenues.
Furthermore, our computer servers or those of our third-party service
providers, if any, may be vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions. We may need to expend
significant additional capital and other resources to protect against a
security breach or to alleviate problems caused by any such breaches. We may
be unable to prevent or remedy all security breaches. If any of these
breaches occur, we could lose marketing clients, distribution publishers and
visitors to our distribution network resulting in a decline in revenues and,
ultimately, profitability.
15
16. IF THE ACCEPTANCE OF ONLINE ADVERTISING AND ONLINE DIRECT MARKETING DOES
NOT INCREASE, OUR BUSINESS WILL SUFFER.
The demand for online marketing may not develop to a level sufficient to
support our continued operations or may develop more slowly than we expect.
We expect to derive our revenues from contracts with advertiser clients under
which we provide online marketing services through our offer distribution
network. The Internet has not existed long enough as a marketing medium to
demonstrate its effectiveness relative to traditional marketing methods.
Advertisers that have historically relied on traditional marketing methods
may be reluctant or slow to adopt online marketing. Many advertisers have
limited or no experience using the Internet as a marketing medium. In
addition, advertisers that have invested substantial resources in traditional
methods of marketing may be reluctant to reallocate these resources to online
marketing. Those companies that have invested a significant portion of their
marketing budgets in online marketing may decide after a time to return to
more traditional methods if they find that online marketing is a less
effective method of promoting their products and services than traditional
marketing methods. Moreover, the Internet-based companies that have adopted
online marketing methods may themselves develop more slowly than anticipated
or not at all. This, in turn, may result in slower growth in demand for the
online direct marketing services of the type we provide.
We do not know if accepted industry standards for measuring the effectiveness
of online marketing, particularly of the cost per action model most commonly
used by us, will develop. An absence of accepted standards for measuring
effectiveness could discourage companies from committing significant
resources to online marketing. Moreover, advertisers may determine that the
cost per action pricing model is less effective in achieving, or entirely
fails to achieve, their marketing objectives. If the market for Internet
advertising fails to continue to develop, develops more slowly than we
expect, or rejects our primary cost per action pricing model, our ability to
place offers and generate revenues could be harmed.
Other Risks Factors
17. WE MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE
INVESTORS' PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of
common stock and no preferred shares. The future issuance of common stock
may result in substantial dilution in the percentage of our common stock held
by our then existing shareholders. We may value any common stock issued in
the future on an arbitrary basis. The issuance of common stock for future
services or acquisitions or other corporate actions may have the effect of
diluting the value of the shares held by our investors, and might have an
adverse effect on any trading market for our common stock.
16
18. OUR COMMON SHARES ARE SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND
THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN
OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules
require:
(a) that a broker or dealer approve a person's account for transactions
in penny stocks; and
(b) the broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quantity of the penny
stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for investors to dispose of our Common shares and cause a
decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
17
29. ALTHOUGH OUR STOCK IS LISTED ON THE OTC-BB, A TRADING MARKET HAS NOT
DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.
There is currently no active trading market in our securities and there are no
assurances that a market may develop or, if developed, may not be sustained.
If no market is ever developed for our common stock, it will be difficult for
an investor to sell their shares in our Company. In such a case, you may find
that you are unable to achieve any benefit from your investment or liquidate
your shares without considerable delay, if at all.
The Company's common stock could be subject to wide fluctuations in response
to variations in quarterly results of operations, announcements of
technological innovations or new solutions by the Company or its competitors,
general conditions in pharmaceutical industry, and other events or factors,
many of which are beyond the Company's control. In addition, the stock
market has experienced price and volume fluctuations, which have affected the
market price for many companies in industries similar or related to that of
the Company, which have been unrelated to the operating performance of these
companies. These market fluctuations may have a material adverse eject on
the market price of the Company's common stock if it ever becomes tradable.
20. BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK,
OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS
THEY SELL THEM.
We intend to retain any future earnings to finance the development and
expansion of our business. We do not anticipate paying any cash dividends on
our common stock in the foreseeable future. Unless we pay dividends, our
stockholders will not be able to receive a return on their shares unless they
sell them. There is no assurance that stockholders will be able to sell
shares when desired.
18
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties.
Our offices are currently located at 8937 Quintessa Cove Street,
Las Vegas, NV 89148. Our telephone number is (702) 575-4816. Management
believes that its current facilities are adequate for its needs through the
next twelve months, and that, should it be needed, suitable additional space
will be available to accommodate expansion of the Company's operations on
commercially reasonable terms, although there can be no assurance in this
regard. Our office space is provided to us at no charge by our sole officer,
who will not seek reimbursement.
Item 3. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 4. Submission of Matters to a Vote of Security Holders.
We did not submit any matters to a vote of our security holders during the
past fiscal year.
19
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
(a) Market Information
Monster Offers Common Stock, $0.001 par value, is traded on the OTC-Bulletin
Board under the symbol: MONT. The stock was cleared for trading on the OTC-
Bulletin Board on October 23, 2008.
Since the Company has been cleared for trading, through April 13, 2009,
there have been no trades of the Company's stock. There are no assurances that
a market will ever develop for the Company's stock.
(b) Holders of Common Stock
As of April 13, 2009, there were approximately forty-nine (49) holders of
record of our Common Stock and 18,960,000 shares issued and outstanding.
(c) Dividends
In the future we intend to follow a policy of retaining earnings, if any, to
finance the growth of the business and do not anticipate paying any cash
dividends in the foreseeable future. The declaration and payment of future
dividends on the Common Stock will be the sole discretion of board of
directors and will depend on our profitability and financial condition,
capital requirements, statutory and contractual restrictions, future prospects
and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in
place.
(e) Recent Sales of Unregistered Securities
During the fiscal year ending December 31, 2008, there have been no sales of
the Company's securities.
(f) Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended
December 31, 2008 or 2007.
Item 6. Selected Financial Data.
Not applicable.
20
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Overview of Current Operations
- ------------------------------
Monster Offers specializes in utilizing technology based Internet media
and marketing to generate leads for businesses.
Results of Operations for the year ended December 31, 2008
- ----------------------------------------------------------
During the twelve month period ended December 31, 2008, the Company generated
$49,513 in revenues versus no revenues for the same period last year, when
the Company was inactive.
During the year ending December 31, 2008, the Company had a net loss of
$(41,556) versus a net loss of $(6,595) for the same period last year, when
the Company was inactive. This loss represented general and administrative
expenses, accounting, legal and professional fees and general operational
expenses. Since the Company's inception, on February 23, 2007, the Company
experienced a net loss of $(48,151). Management plans to cover the
Company's expenses for the next twelve months, if the Company needs funding
to cover its expenses.
Liquidity and Capital Resources
- -------------------------------
Our balance sheet as of December 31, 2008 reflects cash assets of $6,469 and
$8,635 in current liabilities. Cash and cash equivalents from inception to
date have been sufficient to provide the operating capital necessary to
operate to date.
On December 11, 2007 we issued 11,250,000 par value $0.001 common shares of
stock to the Company's founder for $11,250 cash. All securities were issued
in reliance upon an exemption from registration under Section 4(2) of the
Securities Act as a transaction not involving a public offering.
Monster Offers was a wholly-owned subsidiary of Tropical PC. The shares of
Monster Offers were issued to each of Tropical PC's shareholders as a spin-
off dividend of Tropical PC, Inc. on a proportional basis. The record
shareholders of Tropical PC received one (1) unregistered common share, par
value $0.001, of Monster Offers Corporation common stock for every share of
Tropical PC common stock owned. The Tropical PC Corporation stock dividend
was based on 810,000 shares of Tropical PC common stock that were issued and
outstanding as of the record date. The Company purchased 600,000 spin-off
shares from Tropical PC's original founder at par value. These 600,000
shares were returned to the Monster Offers treasury to be used as future
officer compensation, contingent on making Monster Offers profitable over the
next two years.
21
In December, 2007, we conducted a private placement without any general
solicitation or advertisement. The Company issued 7,500,000 shares of its
$0.001 par value common stock to non-affiliated investors for cash of $33,750
pursuant to a Regulation D, Rule 506 of the Securities Exchange Act of 1934.
All securities were issued in reliance upon an exemption from registration
under Section 4(2) of the Securities Act as a transaction not involving a
public offering.
There have been no other issuance of shares since our inception on February
23, 2007. As of April 13, 2009, we have a total of approximately forty-nine
(49) shareholders.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital up to approximately $475,000 to forward our business plan,
and we would have to issue debt or equity or enter into a strategic
arrangement with a third party. There can be no assurance that additional
capital will be available to us. We currently have no agreements,
arrangements or understandings with any person to obtain funds through bank
loans, lines of credit or any other sources.
Our sole officer/director has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for funds donated. No agreement exists that
our sole officer/director will continue to donate funds to the operations of
the Company for the next twelve months; therefore, there is no guarantee that
he will continue to do so in the future.
Future Financings
- -----------------
We anticipate continuing to rely on equity sales of our common shares in
order to continue to fund our business operations. Issuances of additional
shares will result in dilution to our existing shareholders. There is no
assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.
We plan to raise a $475,000 in a future offering of our common stock. In the
event we are unable to raise $475,000, we may be unable to conduct any
operations and may consequently go out of business. There are no formal or
informal agreements to attain such financing and we can not assure you that
any financing can be obtained. Management has been seeking funding from a
number of sources, but has yet to secure any funding, especially during this
current economic downturn. Management continues to seek different funding
sources in order to initiate its business plan. The downturn in the economy
has limited various sources of financing. Management continues to seek
financing with no success. If we are unable to raise these funds, we will
not be able to implement any of our proposed business activities and may be
forced to cease operations.
22
Going Concern
- -------------
The financial conditions evidenced by the accompanying financial statements
raise substantial doubt as to our ability to continue as a going concern. Our
plans include obtaining additional capital through debt or equity financing.
The financial statements do not include any adjustments that might be
necessary if we are unable to continue as a going concern.
Summary of any product research and development that we will perform for the
term of our plan of operation.
- ----------------------------------------------------------------------------
We do not anticipate performing any product research and development under our
current plan of operation.
Expected purchase or sale of property and significant equipment
- ---------------------------------------------------------------
We do not anticipate the purchase or sale of any property or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
- ----------------------------------------------
As of December 31, 2008, we did not have any employees. We are dependent upon
our sole officer and director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Off-Balance Sheet Arrangements
- ------------------------------
We do not have any 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 or operations,
liquidity, capital expenditures or capital resources that is material
to investors.
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: The Company recognizes revenue on an accrual basis as
it invoices for services. Revenue is generally realized or realizable and
earned when all of the following criteria are met: 1) persuasive evidence
of an arrangement exists between the Company and our customer(s); 2) services
have been rendered; 3) our price to our customer is fixed or determinable;
and 4) collectability is reasonably assured.
23
New Accounting Standards
- ------------------------
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included
in the computation of earnings per share under the two-class method as
described in FASB Statement of Financial Accounting Standards No. 128,
"Earnings per Share." FSP EITF 03-6-1 is effective for financial statements
issued for fiscal years beginning on or after December 15, 2008 and earlier
adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither
do we believe that FSP EITF 03-6-1 would have material effect on our
consolidated financial position and results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 163, "Accounting for Financial Guarantee Insurance Contracts-and
interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how
Statement 60 applies to financial guarantee insurance contracts, including
the recognition and measurement of premium revenue and claims liabilities.
This statement also requires expanded disclosures about financial guarantee
insurance contracts. SFAS No. 163 is effective for fiscal years beginning on
or after December 15, 2008, and interim periods within those years. SFAS No.
163 has no effect on the Company's financial position, statements of
operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS
No. 162 sets forth the level of authority to a given accounting pronouncement
or document by category. Where there might be conflicting guidance between
two categories, the more authoritative category will prevail. SFAS No. 162
will become effective 60 days after the SEC approves the PCAOB's amendments
to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no
effect on the Company's financial position, statements of operations, or cash
flows at this time.
In April 2008, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities-an
amendment of FASB Statement No. 133. This standard requires companies to
provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. This Statement is
effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The Company has not yet adopted the provisions of SFAS No. 161, but does not
expect it to have a material impact on its consolidated financial position,
results of operations or cash flows.
24
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Financial Statement
-------------------
PAGE
----
Independent Auditors' Report F-1
Balance Sheet F-2
Statements of Operations F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financials F-6
25
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
Monster Offers (formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
We have audited the accompanying balance sheets of Monster Offers (formerly
Tropical PC Acquisition Corporation (A Development Stage Company) as of
December 31, 2008 and December 31, 2007, and the related statements of
operations, stockholders' equity and cash flows for the years ended December
31, 2008 and the period since inception February 23, 2007 through December
31, 2007 and since inception on February 23, 2007 through December 31, 2008.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Monster Offers (formerly
Tropical PC Acquisition Corporation (A Development Stage Company) as of
December 31, 2008 and December 31, 2007, and the related statements of
operations, stockholders' equity and cash flows for the years ended December
31, 2008 and the period since inception February 23, 2007 through December
31, 2007 and since inception on February 23, 2007 through December 31, 2008,
in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has only recently commenced its planned
principal operations and it has only generated limited revenues, without
sufficient financing, this raises substantial doubt as to the Company's
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates, Chartered
Las Vegas, Nevada
April 10, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-1
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Balance Sheets
December 31, December 31,
2008 2007
------------- -------------
ASSETS
Current assets:
Cash and equivalents $ 6,469 $ -
Funds in escrow - 45,000
------------- -------------
Total current assets 6,469 45,000
------------- -------------
TOTAL ASSETS $ 6,469 $ 45,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts Payable 8,635 5,610
------------- -------------
Total current liabilities 8,635 5,610
Stockholders' equity:
Common stock, $0.001 par value, 75,000,000
shares authorized, 18,960,000, 18,960,000
issued and outstanding as of 12/31/08 and
12/31/07, respectively 18,960 18,960
Additional paid-in capital 27,025 27,025
(Deficit) accumulated during development
stage (48,151) (6,595)
------------- -------------
Total stockholders' equity (2,166) 39,390
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,469 $ 45,000
============= =============
The accompanying notes are an integral part of these financial statements.
F-2
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Statements of Operations
February 23, February 23,
For the 2007 2007
year ended (inception) to (inception) to
December 31, December 31, December 31,
2008 2007 2008
------------- ------------- -------------
Revenue $ 49,513 $ - $ 49,513
------------- ------------- -------------
Expenses:
Organizational costs - 985 985
Expenses of spin-off - 5,610 5,610
General & administrative 2,845 - 2,845
Advertising 20,908 - 20,908
Computer and internet expenses 19,903 - 19,903
Professional fees 47,413 - 47,413
------------- ------------- -------------
Total expenses 91,069 6,595 97,664
------------- ------------- -------------
Net income (loss) before
income taxes (41,556) (6,595) (48,151)
Income tax expense - - -
------------- ------------- -------------
Net income (loss) $ (41,556) $ (6,595) $ (48,151)
============= ============= =============
Net (loss) per share -
basic and diluted $ (0.00) $ (0.00)
============= =============
Weighted average number of
common shares outstanding -
basic and diluted 18,960,000 18,960,000
============= =============
The accompanying notes are an integral part of these financial statements.
F-3
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Statements of Stockholders' Equity
(Deficit)
Accumulated
Common Stock Additional During Total
------------------ Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
---------- ------- -------- ---------- --------------
February 2007
Donated Capital - - 400 400
December 2007
Donated Capital 585 585
December 11, 2007
Founder's shares
Issued 11,250,000 11,250 - - 11,250
December 31, 2007
Tropical PC
Spin off shares 810,000 810 (810) - -
December 31, 2007
Shares returned
to treasury for
future officer
compensation (600,000) (600) 600 - -
December 31, 2007
Shares issued
pursuant
to a 506 offering 7,500,000 7,500 26,250 - 33,750
Net loss for the
period ended
December 31, 2007 (6,595) (6,595)
----------- ------- -------- ---------- --------------
Balance,
December 31, 2007 18,960,000 $18,960 $27,025 $ (6,595) $ 39,390
Net loss for the
year ended
December 31, 2008 (41,556) (41,556)
----------- ------- -------- ---------- --------------
Balance,
December 31, 2008 18,960,000 $18,960 $27,025 $ (48,151) $ (2,166)
=========== ======= ======== ========== ==============
The accompanying notes are an integral part of these financial statements.
F-4
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Statements of Cash Flows
February 23, February 23,
For the 2007 2007
year ended (inception) to (inception) to
December 31, December 31, December 31,
2008 2007 2008
------------- ------------- -------------
Operating activities:
Net income (loss) $ (41,556) $ (6,595) $ (48,151)
Adjustments to reconcile
net loss to net cash
Used by operating
activities
Increase (decrease) in
accounts payable 3,025 5,610 8,635
------------- ------------- -------------
Net cash (used) by operating
activities (38,531) (985) (39,516)
------------- ------------- -------------
Financing activities:
Issuance of common stock - 45,000 45,000
Contributed capital - 985 985
------------- ------------- -------------
Net cash provided by financing
activities - 45,985 45,985
------------- ------------- -------------
Net increase (decrease) in cash (38,531) 45,000 6,469
Cash - beginning 45,000 - -
------------- ------------- -------------
Cash - ending $ 6,469 $ 45,000 $ 6,469
============= ============= =============
Supplemental disclosures:
Interest paid $ - $ - $ -
============= ============= =============
Income taxes paid $ - $ - $ -
============= ============= =============
Non-cash transactions $ - $ - $ -
============= ============= =============
The accompanying notes are an integral part of these financial statements.
F-5
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 1. General Organization and Business
The Company was organized February 23, 2007 (Date of Inception) under the
laws of the State of Nevada, as Tropical PC Acquisition Corporation. The
Company was incorporated to conduct any legal business. The Company plans to
specialize in utilizing technology based Internet media and marketing to
generate leads for businesses.
On December 11, 2007, the Company amended its Articles of Incorporation
changing its name to Monster Offers. The Company was incorporated as a
wholly owned subsidiary of Company Tropical PC, Inc., a Nevada corporation.
Tropical PC was incorporated September 22, 2004, and, at the time of spin off
was not listed on any exchange.
The directors of Tropical PC approved a spin off its Monster Offers
subsidiary in the form of a stock dividend as of December 31, 2007 (the
"Record Date"). The record shareholders of Tropical PC received one (1)
unregistered common share, par value $0.001, of Monster Offers Corporation
common stock for every share of Tropical PC common stock owned. The Tropical
PC Corporation stock dividend was based on 810,000 shares of Tropical PC
common stock that were issued and outstanding as of the record date.
Tropical PC spun off its wholly owned Monster Offers subsidiary in exchange
for $5,000. The spin-off transaction was accomplished by the exchange of
$5,000 for a subsidiary which included the same shareholder base as Tropical
PC. It did not include the transfer of any hard assets or liabilities. This
spin off was valued at par value since the company holds no assets, is
uncertain as to future benefit, the stock is not trading, and the company has
not even received a stock symbol.
Tropical PC retained no ownership in Monster Offers following the spin off.
Monster Offers is no longer a subsidiary of Tropical PC, Inc.
The Company is a development stage enterprise in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises".
NOTE 2. Summary of Significant Accounting Practices
The Company has cash assets of $6,469 and $8,635 current liabilities as of
December 31, 2008. The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
F-6
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per
share is calculated by dividing the Company's net income (loss) available to
common shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of shares
outstanding is the basic weighted number of shares adjusted as of the first
of the year for any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities
since inception.
Revenue recognition
- -------------------
The Company recognizes revenue on an accrual basis as it invoices for
services.
NOTE 2. Summary of Significant Accounting Practices (Continued)
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends.
No Dividends have been paid during the period shown.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year-end
- --------
The Company has selected December 31 as its year-end.
Advertising
- -----------
Advertising is expensed when incurred. The company has incurred advertising
expenses of $20,908 since its inception on February 23, 2007 through
December 31, 2008.
F-7
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
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 liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 3 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has only recently commenced its planned
principal operations and it has only generated limited revenues. In order
to obtain the necessary capital, the Company is seeking equity and/or debt
financing. There are no assurances that the Company will be successful,
without sufficient financing it would be unlikely for the Company to
continue as a going concern.
NOTE 4 - Stockholders' equity
The Company is authorized to issue 75,000,000 shares of its $0.001 par value
common stock.
On December 11, 2007, the Company issued 11,250,000 shares of its common
stock to its founder for $11,250 in cash. Founder then transferred these
shares to an outside party for the same price on December 31, 2007.
The Company was a subsidiary of Tropical PC, Inc. On December 31, 2007,
the record shareholders of Tropical PC, Inc. received a spin off dividend of
one (1) common share, par value $0.001, of Monster Offers common stock for
every share of Tropical PC, Inc. common stock owned for a total 810,000
common shares issued. Of these 810,000 shares, 600,000 are to be held in
the company's treasury for issuance to Nate Kaup as future officer
compensation, contingent upon making the Company profitable over the next
two years.
On December 31, 2007, the Company issued 7,500,000 shares of its common stock
pursuant to a Regulation D 506 offering for $33,750 in cash.
As of December 31, 2008, Monster Offers has 18,960,000 of its common
stock issued and outstanding.
F-8
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 5. Related Party Transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6. Provision for Income Taxes
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using the
currently enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or
realized.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
------
Total -%
NOTE 7. Operating Leases and Other Commitments
The Company has no lease or other obligations.
F-9
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included
in the computation of earnings per share under the two-class method as
described in FASB Statement of Financial Accounting Standards No. 128,
"Earnings per Share." FSP EITF 03-6-1 is effective for financial statements
issued for fiscal years beginning on or after December 15, 2008 and earlier
adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither
do we believe that FSP EITF 03-6-1 would have material effect on our
consolidated financial position and results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 163, "Accounting for Financial Guarantee Insurance Contracts-and
interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how
Statement 60 applies to financial guarantee insurance contracts, including
the recognition and measurement of premium revenue and claims liabilities.
This statement also requires expanded disclosures about financial guarantee
insurance contracts. SFAS No. 163 is effective for fiscal years beginning on
or after December 15, 2008, and interim periods within those years. SFAS No.
163 has no effect on the Company's financial position, statements of
operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS
No. 162 sets forth the level of authority to a given accounting pronouncement
or document by category. Where there might be conflicting guidance between
two categories, the more authoritative category will prevail. SFAS No. 162
will become effective 60 days after the SEC approves the PCAOB's amendments
to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no
effect on the Company's financial position, statements of operations, or cash
flows at this time.
In April 1308, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities-an
amendment of FASB Statement No. 133. This standard requires companies to
provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. This Statement is
effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The Company has not yet adopted the provisions of SFAS No. 161, but does not
expect it to have a material impact on its consolidated financial position,
results of operations or cash flows.
F-10
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110
regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB
107), in developing an estimate of expected term of "plain vanilla" share
options in accordance with SFAS No. 123 (R), Share-Based Payment. In
particular, the staff indicated in SAB 107 that it will accept a company's
election to use the simplified method, regardless of whether the company has
sufficient information to make more refined estimates of expected term. At
the time SAB 107 was issued, the staff believed that more detailed external
information about employee exercise behavior (e.g., employee exercise
patterns by industry and/or other categories of companies) would, over time,
become readily available to companies. Therefore, the staff stated in SAB 107
that it would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such
detailed information about employee exercise behavior may not be widely
available by December 31, 2007. Accordingly, the staff will continue to
accept, under certain circumstances, the use of the simplified method beyond
December 31, 2007. The Company currently uses the simplified method for
"plain vanilla" share options and warrants, and will assess the impact of SAB
110 for fiscal year 2009. It is not believed that this will have an impact on
the Company's consolidated financial position, results of operations or cash
flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. Before this statement was
issued, limited guidance existed for reporting noncontrolling interests. As a
result, considerable diversity in practice existed. So-called minority
interests were reported in the consolidated statement of financial position
as liabilities or in the mezzanine section between liabilities and equity.
This statement improves comparability by eliminating that diversity. This
statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1,
2009, for entities with calendar year-ends). Earlier adoption is prohibited.
The effective date of this statement is the same as that of the related
Statement 141 (revised 2007). The Company will adopt this Statement beginning
March 1, 2009. It is not believed that this will have an impact on the
Company's consolidated financial position, results of operations or cash
flows.
F-11
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations'. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141.
This Statement establishes principles and requirements for how the acquirer:
(a) recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in
the acquiree; (b) recognizes and measures the goodwill acquired in the
business combination or a gain from a bargain purchase; and (c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. This
statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. The effective date of this statement is the same as that of
the related FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements. The Company will adopt this statement beginning March
1, 2009. It is not believed that this will have an impact on the Company's
consolidated financial position, results of operations or cash flows.
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many financial
instruments and certain other items at fair value. This option is available
to all entities. Most of the provisions in FAS 159 are elective; however, an
amendment to FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not
report net income. SFAS No. 159 is effective as of the beginning of an
entity's first fiscal year that begins after November 15, 2007. Early
adoption is permitted as of the beginning of the previous fiscal year
provided that the entity makes that choice in the first 120 days of that
fiscal year and also elects to apply the provisions of SFAS No. 157 Fair
Value Measurements. The Company will adopt SFAS No. 159 beginning March 1,
2008 and is currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
F-12
Monster Offers
(Formerly Tropical PC Acquisition Corporation)
(A Development Stage Company)
Notes to Financial Statements
NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.
This statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. This statement applies under other
accounting pronouncements that require or permit fair value measurements, the
Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this statement
does not require any new fair value measurements. However, for some entities,
the application of this statement will change current practice. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. Earlier application is encouraged, provided that the reporting entity
has not yet issued financial statements for that fiscal year, including
financial statements for an interim period within that fiscal year. The
Company will adopt this statement March 1, 2008, and it is not believed that
this will have an impact on the Company's consolidated financial position,
results of operations or cash flows.
NOTE 9. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances
up to $100,000 through October 13, 2008. As of October 14, 2008 all non-
interest bearing transaction deposit accounts at an FDIC-insured institution,
including all personal and business checking deposit accounts that do not
earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010,
FDIC deposit insurance for all deposit accounts, except for certain
retirement accounts, will return to at least $100,000 per depositor.
Insurance coverage for certain retirement accounts, which include all IRA
deposit accounts, will remain at $250,000 per depositor.
F-13
Item 9. Changes in and Disagreements With Accountants On Accounting and
Financial Disclosure.
None.
Item 9A(T). Controls and Procedures.
Evaluation of disclosure controls and procedures
- ------------------------------------------------
Management is responsible for establishing and maintaining adequate internal
control over financial reporting and for the assessment of the effectiveness
of those internal controls. As defined by the SEC, internal control over
financial reporting is a process designed by our principal executive
officer/principal financial officer, who is also the sole member of our Board
of Directors, to provide reasonable assurance regarding the reliability of
financial reporting and the reparation of the financial statements in
accordance with U. S. generally accepted accounting principles.
As of the end of the period covered by this report, we initially carried out
an evaluation, under the supervision and with the participation of our chief
executive officer (who is also our principal financial and accounting
officer), of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our chief executive
officer and chief financial officer initially concluded that our disclosure
controls and procedures were not effective.
Management's Report On Internal Control Over Financial Reporting
- ----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company's principal executive and principal financial
officers and effected by the company's board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures that:
- - Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
26
- - Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and
- - Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. All internal
control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Because of the inherent limitations of internal control, there
is a risk that material misstatements may not be prevented or detected on a
timely basis by internal control over financial reporting. However, these
inherent limitations are known features of the financial reporting process.
Therefore, it is possible to design into the process safeguards to reduce,
though not eliminate, this risk.
As of December 31, 2008 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based
on that evaluation, they concluded that, during the period covered by this
report, such internal controls and procedures were not effective to detect
the inappropriate application of US GAAP rules as more fully described below.
This was due to deficiencies that existed in the design or operation of our
internal controls over financial reporting that adversely affected our
internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public
Company Accounting Oversight Board were: (1) lack of a functioning audit
committee due to a lack of a majority of independent members and a lack of a
majority of outside directors on our board of directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures; (2) inadequate segregation of duties consistent with
control objectives; and (3) ineffective controls over period end financial
disclosure and reporting processes. The aforementioned material weaknesses
were identified by our Chief Executive Officer in connection with the review
of our financial statements as of December 31, 2008.
27
Management believes that the material weaknesses set forth in items (2) and
(3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures, which could result in a material misstatement in our
financial statements in future periods.
This annual report does not include an attestation report of the Corporation's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this annual report.
Management's Remediation Initiatives
- ------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us. And,
we plan to appoint one or more outside directors to our board of directors who
shall be appointed to an audit committee resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and
monitoring of required internal controls and procedures such as reviewing
and approving estimates and assumptions made by management when funds are
available to us.
Management believes that the appointment of one or more outside directors,
who shall be appointed to a fully functioning audit committee, will remedy the
lack of a functioning audit committee and a lack of a majority of outside
directors on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2009.
Changes in internal controls over financial reporting
- -----------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
Item 9B. Other Information.
None.
28
PART III
Item 10. Director, Executive Officer and Corporate Governance.
The following table sets forth certain information regarding our current
director and executive officer. Our executive officers serve one-year terms.
Set forth below are the names, ages and present principal occupations or
employment, and material occupations, positions, offices or employments for
the past five years of our current director and executive officer.
Name Age Position
- ------------------------------------------------------------------
Nate Kaup 31 Director/President/CFO/Secretary
All directors hold office until the next annual meeting of stockholders of
the Company and until their successors have been elected and qualified.
Directors currently receive no fees for services provided in that capacity.
The officers of the Company are elected annually and serve at the discretion
of the Board of Directors.
Set forth below is a brief description of the background and business
experience of our sole officer/director.
Nate Kaup - Director/President/CFO/Secretary
- --------------------------------------------
Kaup and Crowder Enterprises
Las Vegas, NV
2006 - 2007
President
Western Residential Mortgage
2005 - 2006
Sales/Marketing
Las Vegas Review Journal Newspaper
Las Vegas, NV
2003 - 2005
Advertising Executive
JW Marriott Hotel
Las Vegas, NV
2002 - 2003
Front Desk Manager
29
Professional Baseball Player
Tampa Bay Devil Rays
2000 - 2002
2002 forced retirement due to injury
Education:
Attended Oklahoma State University
1996 to 1998
International Business/Marketing
UNLV - 1999 to 2002 (GRADUATED)
Las Vegas, NV
Major - Criminal Justice
Minor - Sociology
Mr. Kaup does not devote all of his time to our operations. He is involved
in other activities. Mr. Kaup currently devotes approximately 20-30 hours
per week to company matters. We have not formulated a plan to resolve any
possible conflict of interest with his other business activities. Mr. Kaup
intends to limit his role in his other activities and devote more of his time
to the Company after we attain a sufficient level of revenues to support him
full time.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our executive officer and director, and persons who
beneficially own more than ten percent of our common stock, to file initial
reports of ownership and reports of changes in ownership with the SEC.
Executive officers, directors and greater than ten percent beneficial owners
are required by SEC regulations to furnish us with copies of all Section 16(a)
forms they file. Based upon a review of the copies of such forms furnished to
us and written representations from our executive officer and director, we
believe that as of the date of this report they were not current in his 16(a)
reports.
Board of Directors
- ------------------
Our board of directors currently consists of one member, Mr. Nate Kaup.
Our directors serve one-year terms.
30
Audit Committee
- ---------------
The company does not presently have an Audit Committee. The sole member of the
Board sits as the Audit Committee. No qualified financial expert has been
hired because the company is too small to afford such expense.
Committees and Procedures
- -------------------------
(1) The registrant has no standing audit, nominating and compensation
committees of the Board of Directors, or committees performing
similar functions. The Board acts itself in lieu of committees due
to its small size.
(2) The view of the board of directors is that it is appropriate for the
registrant not to have such a committee because its directors
participate in the consideration of director nominees and the
board and the company are so small.
(3) The members of the Board who acts as nominating committee is
not independent, pursuant to the definition of independence of a
national securities exchange registered pursuant to section 6(a)
of the Act (15 U.S.C. 78f(a).
(4) The nominating committee has no policy with regard to the
consideration of any director candidates recommended by security
holders, but the committee will consider director candidates
recommended by security holders.
(5) The basis for the view of the board of directors that it is
appropriate for the registrant not to have such a policy is that
there is no need to adopt a policy for a small company.
(6) The nominating committee will consider candidates recommended by
security holders, and by security holders in submitting such
recommendations.
(7) There are no specific, minimum qualifications that the nominating
committee believes must be met by a nominee recommended by security
holders except to find anyone willing to serve with a clean
background.
(8) The nominating committee's process for identifying and evaluation
of nominees for director, including nominees recommended by security
holders, is to find qualified persons willing to serve with a clean
backgrounds. There are no differences in the manner in which the
nominating committee evaluates nominees for director based on
whether the nominee is recommended by a security holder, or found
by the board.
31
Code of Ethics
- --------------
We have not adopted a Code of Ethics for the Board and any salaried employees.
Limitation of Liability of Directors
- ------------------------------------
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation
exclude personal liability for our Directors for monetary damages based upon
any violation of their fiduciary duties as Directors, except as to liability
for any breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, or any
transaction from which a Director receives an improper personal benefit. This
exclusion of liability does not limit any right which a Director may have to
be indemnified and does not affect any Director's liability under federal or
applicable state securities laws. We have agreed to indemnify our directors
against expenses, judgments, and amounts paid in settlement in connection with
any claim against a Director if he acted in good faith and in a manner he
believed to be in our best interests.
Nevada Anti-Takeover Law and Charter and By-law Provisions
- ----------------------------------------------------------
The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada
Corporation Law apply to Monster Offers Section 78.438 of the Nevada law
prohibits the Company from merging with or selling more than 5% of our
assets or stock to any shareholder who owns or owned more than 10% of any
stock or any entity related to a 10% shareholder for three years after the
date on which the shareholder acquired the Monster Offers shares, unless the
transaction is approved by Monster Offers' Board of Directors. The
provisions also prohibit the Company from completing any of the transactions
described in the preceding sentence with a 10% shareholder who has held the
shares more than three years and its related entities unless the transaction
is approved by our Board of Directors or a majority of our shares, other than
shares owned by that 10% shareholder or any related entity. These provisions
could delay, defer or prevent a change in control of Monster Offers
32
Item 11. Executive Compensation
The following table sets forth summary compensation information for the
fiscal year ended December 31, 2008 for our President and sole director.
Compensation
- ------------
As a result of our the Company's current limited available cash, our officer
or director no longer receives compensation. Our officer/director received
$33,000 compensation since February 23, 2007 (inception) of the company
through December 31, 2008. Monster Offers has no intention of paying any
salaries at this time and we intend to pay salaries when cash flow permits.
SUMMARY COMPENSATION TABLES
----------------------------------------------------
Annual Compensation
----------------------------------------------------
Name and Year Stock Option
Principal Position End Salary ($) Bonus ($) Awards ($) Awards($)
- -----------------------------------------------------------------------------
Nate Kaup
Director/President/
CFO/Secretary 2008 $33,000 -0- -0- -0-
2007 -0- -0- -0- -0-
- -----------------------------------------------------------------------------
Non-equity Nonqualified All
Incentive Deferred Other
Name and Principal Year Plan($) Compensation Compens-
Position End Compensation ($) Earnings($) ation ($) Total($)
- -----------------------------------------------------------------------------
Nate Kaup
Director/President/
CFO/Secretary 2008 -0- -0- -0- $33,000
2007 -0- -0- -0- -0-
- -----------------------------------------------------------------------------
We do not maintain key-man life insurance for our executive officer/
director. We do not have any long-term compensation plans or stock option
plans.
33
Stock Option Grants
- -------------------
We did not grant any stock options to the executive officer or director from
inception through fiscal year end December 31, 2008.
Outstanding Equity Awards at 2008 Fiscal Year-End
- -------------------------------------------------
We did not have any outstanding equity awards as of December 31, 2008.
Option Exercises for Fiscal 2008
- --------------------------------
There were no options exercised by our named executive officer in fiscal 2008.
Potential Payments Upon Termination or Change in Control
- --------------------------------------------------------
We have not entered into any compensatory plans or arrangements with respect
to our named executive officer, which would in any way result in payments to
such officer because of her resignation, retirement, or other termination of
employment with us or our subsidiaries, or any change in control of, or a
change in his responsibilities following a change in control.
Director Compensation
- ---------------------
Our director was paid a total of $33,000 in compensation during fiscal year
ending December 31, 2008, as compared to $0 for the fiscal year ending
December 31, 2007.
34
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
The following table presents information, to the best of our knowledge, about
the ownership of our common stock on April 13, 2009 relating to those
persons known to beneficially own more than 5% of our capital stock and by
our named executive officer and sole director.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and does not necessarily indicate
beneficial ownership for any other purpose. Under these rules, beneficial
ownership includes those shares of common stock over which the stockholder has
sole or shared voting or investment power. It also includes shares of common
stock that the stockholder has a right to acquire within 60 days after January
12, 2009 pursuant to options, warrants, conversion privileges or other right.
The percentage ownership of the outstanding common stock, however, is based on
the assumption, expressly required by the rules of the Securities and Exchange
Commission, that only the person or entity whose ownership is being reported
has converted options or warrants into shares of Monster Offers' common stock.
We do not have any outstanding options, warrants or other securities
exercisable for or convertible into shares of our common stock.
AMOUNT OF
SHARES OF PERCENT
TITLE OF NAME OF BENEFICIAL HELD BY OF
CLASS OWNER AND POSITION OWNER CLASS(1)
Common Nate Kaup (2) -0- -0-
Director/President/
CFO/Secretary
Common Moses Luna, Esq. (3) 11,250,000 57.5%
Shareholder
- ----------------------------------------------------------------------------
Common All Executive Officers
Stock and Directors as a
Group (1 persons) -0- -0-
(1) Percent of Class based on 18,960,000 shares.
(2) Nate Kaup , 8937 Quintessa Cove Street, Las Vegas, NV 89148. Contingent
on performance to make the Company profitable in the next two years,
Nate Kaup will be rewarded with 600,000 common shares.
(3) Moses Luna, Esq., 405 N. Broadway, Santa Ana, CA 92701
We are not aware of any arrangements that may result in "changes in control"
as that term is defined by the provisions of Item 403(c) of Regulation S-B.
35
We believe that all persons named have full voting and investment power with
respect to the shares indicated, unless otherwise noted in the table. Under the
rules of the Securities and Exchange Commission, a person (or group of persons)
is deemed to be a "beneficial owner" of a security if he or she, directly or
indirectly, has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of such
security. Accordingly, more than one person may be deemed to be a beneficial
owner of the same security. A person is also deemed to be a beneficial owner of
any security, which that person has the right to acquire within 60 days,
such as options or warrants to purchase our common stock.
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
The company's Director has contributed office space for the Company's use for
all periods presented. There is no charge to Monster Offers for the space.
Management believes that its current facilities are adequate for its needs
through the next twelve months, and that, should it be needed, suitable
additional space will be available to accommodate expansion of the Company's
operations on commercially reasonable terms, although there can be no
assurance in this regard. Our officer will not seek reimbursement for past
office expenses. No written agreement exists that this officer/director will
continue to donate office space to the operations. Therefore, there is no
guarantee that he will not seek reimbursement for the donated office space in
the future.
Through a Board Resolution, the Company hired the professional services of
Moore & Associates, Chartered, Certified Public Accountants, to perform an
audit of the financials for the Company. Moore & Associates, Chartered own no
stock in the Company. The company has no formal contract with its
accountants, they are paid on a fee for service basis.
36
Item 14. Principal Accountant Fees and Services.
Moore & Associates, Chartered served as our principal independent public
accountants for fiscal years ending December 31, 2008 and December 31,
2007. Aggregate fees billed to us for the years ended December 31, 2008 and
2007 by Moore & Associates were as follows:
For the Years Ended
December 31,
-------------------
2008 2007
-------------------
(1) Audit Fees(1) $6,000 $3,000
(2) Audit-Related Fees -0- -0-
(3) Tax Fees -0- -0-
(4) All Other Fees -0- -0-
Total fees paid or accrued to our principal auditor
(1) Audit Fees include fees billed and expected to be billed for services
performed to comply with Generally Accepted Auditing Standards (GAAS),
including the recurring audit of the Company's financial statements for such
period included in this Annual Report on Form 10-K and for the reviews of the
quarterly financial statements included in the Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission.
Audit Committee Policies and Procedures
- ---------------------------------------
We do not have an audit committee; therefore our sole director pre-approves
all services to be provided to us by our independent auditor. This process
involves obtaining (i) a written description of the proposed services, (ii)
the confirmation of our Principal Accounting Officer that the services are
compatible with maintaining specific principles relating to independence, and
(iii) confirmation from our securities counsel that the services are not among
those that our independent auditors have been prohibited from performing under
SEC rules. Our sole director then makes a determination to approve or
disapprove the engagement of Moore & Associates for the proposed services. In
the fiscal year ending December 31, 2008, all fees paid to Moore & Associates
were unanimously pre-approved in accordance with this policy.
Less than 50 percent of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
37
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following information required under this item is filed as part of this
report:
(a) 1. Financial Statements
Page
----
Management's Report on Internal Control Over Financial Reporting 26
Report of Independent Registered Public Accounting Firm F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
(b) 2. Financial Statement Schedules
None.
(c) 3. Exhibit Index
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, SB-2 3.1 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.2 Bylaws SB-2 3.2 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.3 Amended Articles of SB-2 3.3 01/15/2008
Incorporation as currently
in effect.
- -------------------------------------------------------------------------------
23.1 Consent Letter from Moore X
and Associates Chartered
- -------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
31.2 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
38
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Monster Offers
- --------------------------
Registrant
By: /s/ Nate Kaup
---------------------------
Nate Kaup
Chief Executive Officer
and Director
Date: April 13, 2009
--------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated have signed this report below.
Name
By: /s/ Nate Kaup
--------------------------------
Nate Kaup
President, Secretary,
Treasurer and Director
(Principal Executive,
Principal Financial and
Principal Accounting Officer)
Date: April 13, 2009
--------------
39