UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
OR
|_| 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
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(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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for 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 check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
As of August 4, 2009, the registrant's outstanding common stock consisted
of 18,960,000 shares, $0.001 par value. Authorized - 75,000,000 shares.
Table of Contents
Monster Offers
Index to Form 10-Q
For the Quarterly Period Ended September 30, 2009
Part I. Financial Information
Page
Item 1. Financial Statements
Condensed Balance Sheets as of September 30, 2009 and
December 31, 2008 3
Condensed Statements of Operations for the three months and
nine months ended September 30, 2009 and 2008 4
Condensed Statements of Cash Flows for the nine months
ended September 30, 2009 and 2008 5
Condensed Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4. Controls and Procedures 17
Part II Other Information
Item 1. Legal Proceedings 20
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3 -- Defaults Upon Senior Securities 20
Item 4 -- Submission of Matters to a Vote of Security Holders 20
Item 5 -- Other Information 20
Item 6. Exhibits 21
Signatures 22
2
Part I. Financial Information
Item 1. Financial Statements
Monster Offers
(A Development Stage Company)
Condensed Balance Sheets
September 30,
2009 December 31,
(Unaudited) 2008
------------- -------------
ASSETS
Current assets
Cash and equivalents $ 1,435 $ 6,469
Accounts receivable 850 -
Prepaid expense 1,000 -
------------- -------------
Total current assets 3,285 6,469
------------- -------------
TOTAL ASSETS $ 3,285 $ 6,469
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts Payable $ - $ 8,635
------------- -------------
Total current liabilities - 8,635
Stockholders' equity
Common stock, $0.001 par value, 75,000,000
shares authorized, 18,960,000, 18,960,000
issued and outstanding as of 9/30/09 and
12/31/08, respectively 18,960 18,960
Additional paid-in capital 27,025 27,025
(Deficit) accumulated during development
stage (42,700) (48,151)
------------- -------------
Total stockholders' equity 3,285 (2,166)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,285 $ 6,469
============= =============
The accompanying notes are an integral part of these financial statements.
3
Monster Offers
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
February 23,
For the three months For the nine months 2007
ending ending (inception)
September 30, September 30, to
---------------------- ---------------------- September 30,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ----------
(Restated) (Restated)
REVENUE $ 12,799 $ 28,889 $ 262,149 $ 49,513 $ 311,662
---------- ---------- ---------- ---------- ----------
EXPENSES:
Advertising - 16,875 - 16,875 20,908
Audit Fees 1,000 1,500 4,500 4,500 13,500
Expenses of spinoff - - - - 5,610
General &
administrative 2,833 18,804 7,981 46,637 65,713
Professional fees 10,878 9,500 249,827 27,500 288,241
---------- ---------- ---------- ---------- ----------
Total expenses 14,711 46,679 262,308 95,512 393,972
---------- ---------- ---------- ---------- ----------
Other income:
Debt forgiveness - - 5,610 - 5,610
Refund of prior
period expense - 34,000 - 34,000 34,000
---------- ---------- ---------- ---------- ----------
Total other income - 34,000 5,610 34,000 39,610
---------- ---------- ---------- ---------- ----------
Net income (loss)
before provision
for income taxes (1,912) 16,210 5,451 (11,999) (42,700)
Income tax expense - - - - -
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (1,912) $ 16,210 $ 5,451 $ (11,999) $ (42,700)
========== ========== ========== ========== ==========
NET EARNINGS (LOSS)
PER SHARE $ (0.00) $ 0.00 $ 0.00 $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING-
BASIC AND DILUTED 18,960,000 18,960,000 18,960,000 18,960,000
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
Monster Offers
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
February 23,
For the nine months 2007
ending (inception)
September 30, to
---------------------- September 30,
2009 2008 2009
---------- ---------- ----------
OPERATING ACTIVITIES:
Net (loss) $ 5,451 $ (11,999) $ (42,700)
Adjustments to reconcile net loss to
net cash used by operating activities:
(Increase) in accounts receivable (850) - (850)
(Decrease) in prepaid expense (1,000) - (1,000)
Increase (decrease) in accounts payable (8,635) -
---------- ---------- ----------
Net cash (used) by operating activities (5,034) (11,999) (44,550)
---------- ---------- ----------
FINANCING ACTIVITIES:
Issuance of common stock - - 45,000
Contributed capital - - 985
---------- ---------- ----------
Net cash provided by financing activities - - 45,985
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (5,034) (11,999) 1,435
CASH - BEGINNING 6,469 45,000 -
---------- ---------- ----------
CASH - ENDING $ 1,435 $ 33,001 $ 1,435
========== ========== ==========
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ - $ - $ -
The accompanying notes are an integral part of these financial statements
5
Monster Offers
(A Development Stage Company)
Condensed Notes
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements included herein, presented in accordance
with United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these interim financial statements be read in conjunction with the financial
statements of the Company for the year ended December 31, 2008 and notes
thereto included in the Company's 10-K annual report. The Company follows
the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
NOTE 2 - GOING CONCERN
These condensed financial statements have been prepared in accordance
with generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As of
September 30, 2009, the Company has recognized revenues of $311,662 and has
accumulated operating losses of approximately $(42,700) since inception.
The Company's ability to continue as a going concern is contingent upon the
successful completion of additional financing arrangements and its ability
to achieve and maintain profitable operations. Management plans to raise
equity capital to finance the operating and capital requirements of the
Company. Amounts raised will be used to further development of the
Company's products, to provide financing for marketing and promotion, to
secure additional property and equipment, and for other working capital
purposes. While the Company is expending its best efforts to achieve the
above plans, there is no assurance that any such activity will generate
funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
6
Monster Offers
(A Development Stage Company)
Condensed Notes
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Recent Accounting Pronouncements
- --------------------------------
In June 2009, the FASB issued ASC 105-10, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles".
ASC 105-10 will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities
and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. On the effective date
of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC
accounting literature not included in the Codification will become non-
authoritative. This statement is effective for financial statements issued for
interim and annual periods ending after September 15, 2009.The Company does
not expect the adoption of ASC 105-10 to have an impact on the Company's
results of operations, financial condition or cash flows.
NOTE 4 - 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.
7
Monster Offers
(A Development Stage Company)
Condensed Notes
NOTE 5 - 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.
NOTE 6 - RESTATEMENT
The Company is restating its statements of operations for the three and nine
months ended September 30, 2008. The Company has separated refunds it
received for charges made in error by a vendor during the three month period
ended September 30, 2009 in the amount of $34,000. This refund was previously
included in the company's general & administrative expenses and is now
classified under "Other income - Refund of prior period expense."
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully
integrate any business which it might acquire, and currency fluctuations. All
forward-looking statements in this report are based upon information available
to the Company on the date of this report. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, or otherwise, except as
required by law.
Critical Accounting Policies
- ----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in
our Annual report for the fiscal year ended December 31, 2008.
9
Results of Operations
- ---------------------
Overview of Current Operations
- ------------------------------
Monster Offers ("the Company") was incorporated in the State of Nevada on
February 23, 2007, under the name Monster Offers 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 Monster Offers, Inc., a Nevada corporation.
Monster Offers was incorporated September 22, 2004, and, at the time of spin
off was not listed on any exchange.
The Company specializes in utilizing technology based Internet media and
marketing to generate leads for businesses.
The Company's services include the development of advertising campaigns used
to market products and/or services online. The Company also designs and
hosts customized web pages.
The Company's website development is managed by its proprietary Lead Code
software platform. This technology platform allows the Company to acquire
marketing online leads in real-time. This platform generates detailed
reporting on website activity which allows management to analyze the
effectiveness of different marketing campaigns, advertisements and specific
promotions. This software tool helps management determine which campaigns
will perform at an acceptable level and which campaigns might achieve an
acceptable profit margin for Monster Offers.
Marketing Strategy
- ------------------
Monster Offers owns and operates a variety of Internet websites. The Company
generates traffic to its websites both internally and from third party Internet
advertising. The Company's Web properties and marketing activities are
designed to generate real-time response based marketing results.
The Company's 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. Management utilizes a number of online marketing
channels to build its databases.
10
Email Marketing
- ---------------
The Company's websites are promoted through opt-in email marketing. In other
words, the emails ask people who search the internet to sign-up to receive
marketing messages. The Company currently markets to multiple consumer and
business databases.
Search Engine Marketing
- -----------------------
The Company utilizes search engine marketing to direct consumers to its
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
- -------------------
The Company has 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
- --------------
The Company plans to sell its 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.
Management also plans 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.
Software Development
- --------------------
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.
11
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.
The Company anticipates that the results of operations of a specific business
venture may not necessarily be indicative of the potential for future earnings,
which may be impacted by a change in marketing strategies, business expansion,
modifying product emphasis, changing or substantially augmenting management,
and other factors. Management will analyze all relevant factors and make a
determination based on a composite of available information, without reliance
on any single factor.
Results of Operations for the quarter ended September 30, 2009
- --------------------------------------------------------------
During the nine months ended September 30, 2009, the Company had a net income
of $5,451 versus a net loss of $(11,999) for the same period last year. For
the three months ended September 30, 2009, the Company had a net loss of
$(1,912) versus a net income of $16,210 for the same period last year. For
the nine months ending September 30, 2009, the Company experienced
professional expenses of $249,827 as compared to professional fees for the
same period of $27,500. Professional fees consists of paying outside
suppliers for their services. Since the Company's inception, on February 23,
2007, the Company experienced a net loss $(42,700).
Revenues
- --------
During the nine month period ended September 30, 2009, the Company generated
$262,149 in revenues as compared to $49,513 for the same period last year,
when the Company was just beginning to develop its business plan. During the
three month period ended September 30, 2009, the Company generated $12,799 in
revenues as compared to $28,889 for the same period last year. Since
inception on February 23, 2007, the Company has generated $311,662 in revenues.
12
Plan of Operation
- -----------------
Management does not believe that the Company will be able to generate
any significant profit during the coming year. Management believes
that general and administrative costs and well as building its infrastructure
will most likely curtail any significant profits.
Management believes the Company can sustain itself for the next twelve months.
Management has agreed to keep the Company funded at its own expense, without
seeking reimbursement for expenses paid. The Company's need for capital may
change dramatically if it can generate additional revenues from its operations.
In the event the Company requires additional funds, the Company will have to
seek loans or equity placements to cover such cash needs. There are no
assurances additional capital will be available to the Company on acceptable
terms.
Going Concern
- -------------
Going Concern - The Company experienced operating losses, of $(42,700) since
its inception on February 23, 2007 through the period ended September 30, 2009.
The financial statements have been prepared assuming the Company will continue
to operate as a going concern which contemplates the realization of assets and
the settlement of liabilities in the normal course of business. No adjustment
has been made to the recorded amount of assets or the recorded amount or
classification of liabilities which would be required if the Company were
unable to continue its operations. (See Financial Footnote 2)
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 additional significant product research
and development under our current plan of operation.
13
Expected purchase or sale of plant and significant equipment
- ------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
- ----------------------------------------------
As of September 30, 2009, 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.
Liquidity and Capital Resources
- -------------------------------
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
As a result of our the Company's current limited available cash, no officer
or director received compensation through the nine months ended September 30,
2009. No officer or director received stock options or other non-cash
compensation since the Company's inception through September 30, 2009. The
Company has no employment agreements in place with its officers. Nor does
the Company owe its officers any accrued compensation, as the Officers agreed
to work for company at no cost, until the company can become profitable on
a consistent Quarter-to-Quarter basis.
14
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: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
- ------------------------
In June 2009, the FASB issued ASC 105-10, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles".
ASC 105-10 will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities
and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. On the effective date
of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC
accounting literature not included in the Codification will become non-
authoritative. This statement is effective for financial statements issued for
interim and annual periods ending after September 15, 2009.The Company does
not expect the adoption of ASC 105-10 to have an impact on the Company's
results of operations, financial condition or cash flows.
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4").
FSP FAS 157-4 provides guidance on estimating fair value when market activity
has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods
the inputs and valuation techniques used to measure fair value. This FSP is
effective for interim and annual periods ending after June 15, 2009. The
Company does not expect the adoption of FSP FAS 157-4 will have a material
impact on its financial condition or results of operation.
15
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities." This disclosure-only FSP
improves the transparency of transfers of financial assets and an enterprise's
involvement with variable interest entities, including qualifying special-
purpose entities. This FSP is effective for the first reporting period
(interim or annual) ending after December 15, 2008, with earlier application
encouraged. The Company adopted this FSP effective January 1, 2009. The
adoption of the FSP had no impact on the Company's results of operations,
financial condition or cash flows.
In December 2008, the FASB issued FSP No. FAS 132(R)-1, "Employers'
Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1").
FSP FAS 132(R)-1 requires additional fair value disclosures about employers'
pension and postretirement benefit plan assets consistent with guidance
contained in SFAS 157. Specifically, employers will be required to disclose
information about how investment allocation decisions are made, the fair value
of each major category of plan assets and information about the inputs and
valuation techniques used to develop the fair value measurements of plan
assets. This FSP is effective for fiscal years ending after December 15, 2009.
The Company does not expect the adoption of FSP FAS 132(R)-1 will have a
material impact on its financial condition or results of operation.
In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair
Value of a Financial Asset When the Market for That Asset is Not Active,"
("FSP FAS 157-3"), which clarifies application of SFAS 157 in a market that
is not active. FSP FAS 157-3 was effective upon issuance, including prior
periods for which financial statements have not been issued. The adoption of
FSP FAS 157-3 had no impact on the Company's results of operations, financial
condition or cash flows.
In September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," and FASB Interpretation 46 (revised December 2003),
"Consolidation of Variable Interest Entities ? an interpretation of ARB No.
51," as well as other modifications. While the proposed revised
pronouncements have not been finalized and the proposals are subject to
further public comment, the Company anticipates the changes will not have a
significant impact on the Company's financial statements. The changes would
be effective March 1, 2010, on a prospective basis.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
16
Item 4T. 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;
17
- - 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 September 30, 2009 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 September 30, 2009.
18
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 quarterly 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 quarterly 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.
19
PART II. OTHER INFORMATION
Item 1 -- 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 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2008 and the discussion
in Item 1, above, under "Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
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Item 6 -- Exhibits
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.
- -------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Monster Offers
------------------------
Registrant
By: /s/ Nate Kaup
------------------------------
Name: Nate Kaup
Title: President/CFO/Director
Dated: November 23, 2009
-----------------
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