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, 2009
[ ] 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.)
El Cangrego, Calle Eusebio A. Morales
Edificio Carpaz #2A, Panama City, Panama
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(Address of Principal Executive Offices) (Zip Code)
011-507-6679-6419
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(Registrant's Telephone Number, Including Area Code)
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, 2010, computed by
reference to the $0.64 per-share price quoted on the OTC-BB was $4,614,400.
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, 2010, the registrant's outstanding common stock consisted
of 32,460,000 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 27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 28
ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES 28
ITEM 10. DIRECTOR, EXECUTIVE OFFICER AND CORPORATE GOVERNANCE 30
ITEM 11. EXECUTIVE COMPENSATION 34
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, 35
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 37
AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 38
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 39
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 of a written request to us
at Monster Offers, El Cangrego, Calle Eusebio A. Morales, Edificio Carpaz #2A,
Panama City, Panama.
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 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 an online advertising agency specializing in digital
production, social media commerce, and online lead generation. We also
provide brand development, marketing services, and software development for
our clients. Potential customers include large advertisers, direct marketers,
lead brokers, and advertising agencies seeking to increase brand impressions,
sales, and customer contact through online marketing initiatives.
Our services include the development of advertising campaigns used to market
products and/or services online. We also design and host direct response
websites.
Our website development and media campaigns are managed by a proprietary
software platform. This technology platform allows us to acquire and track
online leads/sales for our clients in real-time. Comprehensive detailed
reporting on website activity is also displayed which allows us to analyze
the effectiveness of different marketing campaigns, advertisements and
specific promotions. This statistical process helps management to 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/or operates on behalf of clients a variety of
Internet websites. We generate page views to these websites by engaging
third party Internet advertising partners. Our Web properties and marketing
activities are designed to generate real-time response based marketing
results.
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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 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 product and/or service sales.
We utilize a number of online marketing channels to drive sales and customer
databases.
These include but are not limited to:
Email Marketing
- ---------------
Websites that we own or are digitally produced for clients are promoted by
the engagement of opt-in email marketing companies. In other words, opt-in
emails are sent to users who have requested to receive marketing messages
from a particular email partner/website. These partners currently market
to multiple consumer and/or business databases that they own or are managed
by them under a list management agreement.
Search Engine Marketing
- -----------------------
We utilize search engine marketing companies to direct consumers to
websites. Funds are placed in an open account with each provider and are
spent on a Cost-Per-Click auction basis. Google, Yahoo, and FaceBook are
the primary providers of this service.
Affiliate Marketing
- -------------------
We engage affiliate network destinations where online affiliates can
promote various client offers and promotions. These traffic publishers
choose, manage, and execute marketing cost per action client campaigns.
They are also provided with real-time commission tracking.
Sales Strategy
- --------------
We plan to sell our services to a network of participating advertisers,
affiliate networks, lead buyers and advertisers in various categories
utilizing independent sales organizations. Some of these categories
include the finance industry, consumer product industry, 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 engages vendors, creates all new
client accounts, and implements lead delivery options based on customer
needs. He is currently identifying platforms to facilitate additional
feature sets and scalability.
Competition
- -----------
The online advertising and marketing industry is highly competitive.
Management believes that the ability to provide proprietary consumer and
business databases that provide real time data is a competitive advantage.
A number of competitors are active in specific aspects of our business. In
the area of lead data generation, Monster Offer faces competition primarily
from Dun & Bradstreet, Acxiom, Experian, infoUSA , Equifax and Harte-Hanks
Data Technologies. These major competitors offer online data 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. Marshall, 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 currently have sufficient capital to fully develop our business
plan. Management anticipates Monster Offers will be required to raise money
to fully fund and execute its corporate strategies. There is no assurance
that we will have enough revenue in the future or that we will be able to
secure the necessary funding to effectively develop our business model.
Without additional funding, it is most likely that our business initiatives
will not succeed, and we shall be forced to curtail or even cease our
operations.
Future funding could result in potentially dilutive issuance 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, 2009 and 2008, 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.
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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, as a spin off of
Tropical PC, Inc. We have realized $317,422 in total revenues with $67,594
in gross profits and accumulated a net loss of $(39,410) 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 start up 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,
2009 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.
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Risk Factors Relating to Our Company
3. WE MAY NOT BE ABLE TO COMPETE WITH OTHER ONLINE ADVERTISING AGENCIES AND
LEAD GENERATION PROVIDERS, ALMOST ALL OF WHOM HAVE GREATER RESOURCES AND
EXPERIENCE THAN WE DO.
The Internet industry is dominated by large, well-financed firms. We do not
have the resources to compete with larger providers of this similar services
at this time. 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, 2009, the Company had $18,190 in working cash and
equivalents. The Company plans to specialize in digital production, social
media commerce, and lead generation. These plans will require additional
capital. Originally, the Company anticipated a need to raise $475,000 to
fully implement its business plan. After careful consideration and a
detailed analysis by new management, the Company now expects it will need
to raise between $2,500,000 and $3,000,000. Management believes it can begin
to partially implement its business plan with its limited funds and resources.
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 the Company does 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.
10
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.
A Going Concern footnote has been included in Note 3 to the Financial
Statements included in this Annual Report. 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, 2009. 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 online 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 strategic 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 programmers,
graphic artists and 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/bookkeeping services and use outsourcing
service companies 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.
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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 ONLINE MEDIA 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 digital production,
marketing services, and lead generation. These services are provided
contractually to advertising clients and website publishers with short-term
insertion order contracts that may be canceled 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 time lines, 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 STOCKHOLDERS.
Our principal stockholders beneficially own approximately, or have the right
to vote approximately 78% of our outstanding common stock. As a result,
these stockholders 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/lead
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/lead 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
19. ALTHOUGH OUR STOCK IS LISTED ON THE OTC-BB, A TRADING MARKET HAS NOT
DEVELOPED, 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 effect 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 El Cangrego, Calle Eusebio A. Morales,
Edificio Carpaz #2A, Panama City, Panama. Our telephone number is
011-507-6679-6419. 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. Such costs are immaterial to the financial statements and,
accordingly have not been reflected therein.
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, 2010, there
has been limited activity 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, 2010, there were approximately fifty-one (51) holders of
record of our Common Stock and 32,460,000 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
On December 21, 2009, Monster Offers (the "Registrant") agreed to issue
13,500,000 shares of its unregistered restricted common stock to three
shareholders in exchange for $13,500 cash. As of December 31, 2009, $12,500
of this amount was received, with $1,000 remaining in subscriptions receivable.
The shares were issued pursuant to the exemption from registration provided
by Section 4(2) of the Securities Act. We believed that Section 4(2) was
available because the offer and sale did not involve a public offering and
there was not general solicitation or general advertising involved in the
offer or sale. The shares of common stock issued will contain a legend
restricting transferability absent registration or applicable exemption.
(f) Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended
December 31, 2009 or 2008.
20
Item 6. Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Overview of Current Operations
- ------------------------------
Monster Offers is an online advertising agency specializing in digital
production, social media commerce and lead generation for businesses.
Results of Operations for the year ended December 31, 2009
- ----------------------------------------------------------
During the twelve month period ended December 31, 2009, the Company generated
$267,909 in total revenues versus $49,513 for the same period last year.
During the twelve month period ended December 31, 2009, the Company generated
$18,081 in gross profits versus $49,513 for the same period last year.
During the year ending December 31, 2009, the Company had a net income of
$8,741 versus a net loss of $(41,556) for the same period last year.
Expenses 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
$(39,410). 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, 2009 reflects cash assets of $18,190,
account receivable-related party of $2,235 and $1,350 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 Monster Offers and subsequently cancelled.
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.
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. As of
December 31, 2009, $12,500 of this amount was received, with $1,000
remaining in subscriptions receivable. The shares were issued pursuant to
the exemption from registration provided by Section 4(2) of the Securities
Act. We believed that Section 4(2) was available because the offer and
sale did not involve a public offering and there was not general
solicitation or general advertising involved in the offer or sale. The
shares of common stock issued will contain a legend restricting
transferability absent registration or applicable exemption.
There have been no other issuance of shares since our inception on February
23, 2007. As of April 13, 2010, we have approximately fifty-one (51)
shareholders.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. Originally, management
anticipated a need to raise $475,000 to fully implement its business plan.
After careful consideration and a detailed analysis by new management, the
Company now expects it will need to raise between $2,500,000 and $3,000,000
to forward its business plan, and we would have to issue debt or equity or
enter into a strategic arrangement with a third party. Management believes
it can begin to partially implement its business plan with its limited funds
and resources. There can be no assurance that additional capital will be
available to us, especially with the current economic environment. 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 Financing
- -----------------
We anticipate continuing to rely on equity sales of our common shares in
order to continue to fund our business operations. Issuance 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.
22
We hope to raise between $2,500,000 and $3,000,000 in a future offering of
our common stock. In the event we are unable to raise this money, we may
not be able to sustain our operations, which could result in reducing or
ceasing our operations and may consequently force us cease our business
operations altogether. 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.
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, 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.
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.
23
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: In accordance with ASC 605 and SEC Staff Accounting
Bulletin 104, the Company monetizes a portion of its user activities through
transactional based services generated primarily from fees earned, primarily
on a cost per click ("CPC") basis, from search syndication services and
other fees for marketing services including data and list management
services, which can be either periodic or transactional. Fee revenue is
recognized in the period that the Company's advertiser customer generates a
sale or other agreed-upon action on the Company's affiliate marketing
networks or as a result of the Company's services, provided that no
significant Company obligations remain, collection of the resulting
receivable is reasonably assured, and the fees are fixed or determinable.
All transactional services revenues are recognized on a gross basis in
accordance with the provisions of ASC Subtopic 605-45, due to the fact that
the Company is the primary obligor, and bears all credit risk to its
customer, and publisher expenses that are directly related to a revenue-
generating event are recorded as a component of commission paid-related party.
New Accounting Standards
- ------------------------
In February 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to
Various Topics. This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to various topics within
Topic 815. The amendments are effective for the first reporting period
(including interim periods) beginning after issuance (February 2, 2010),
except for certain amendments. The amendments to the guidance on accounting
for income taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required. The clarifications of the guidance on
the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal
years beginning after December 15, 2009, and should be applied to existing
contracts (hybrid instruments) containing embedded derivative features at the
date of adoption. The Company does not expect the provisions of ASU 2010-08
to have a material effect on the financial position, results of operations or
cash flows of the Company.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements
and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures about
fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those fiscal years. Early adoption is permitted. The Company does
not expect the provisions of ASU 2010-06 to have a material effect on the
financial position, results of operations or cash flows of the Company.
24
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-05 (ASU 2010-05), Compensation - Stock
Compensation (Topic 718). This standard codifies EITF Topic D-110 Escrowed
Share Arrangements and the Presumption of Compensation.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various
Topics-Technical Corrections to SEC Paragraphs.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities-Oil
and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. As the
Company does not have any Oil and Gas activity or reserves, the Company does
not expect the provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in
Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does
not change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December
15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU 2010-
01 to have a material effect on the financial position, results of operations
or cash flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
25
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances than
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
26
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 Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity (Deficit) F-4
Statements of Cash Flows F-5
Notes to Financials F-6
27
De Joya Griffith & Company, LLC
------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
To The Board of Directors and Stockholders
Monster Offers
Panama City, Panama
We have audited the accompanying balance sheets of Monster Offers (A
Development Stage Enterprise) as of December 31, 2009 and 2008, and the
related statements of operations, stockholders' equity (deficit), and cash
flows for the years then ended and from inception (February 23, 2007) to
December 31, 2009. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit 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
audit provides 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 (A
Development Stage Enterprise) as of December 31, 2009 and 2008, and the
results of their operations and cash flows for the years then ended and from
inception (February 23, 2007) to December 31, 2009 in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from
operations, which raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to 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.
De Joya Griffith & Company, LLC
/s/ De Joya Griffith & Company, LLC
- -----------------------------------
Henderson, Nevada
April 13, 2010
2580 Anthem Village Drive, Henderson, NV 89052
Telephone (702) 563-1600 o Facsimile (702) 920-8049
F-1
Monster Offers
(A Development Stage Company)
Balance Sheets
December 31, December 31,
2009 2008
------------- -------------
ASSETS
Current assets
Cash and equivalents $ 18,190 $ 6,469
Accounts receivable - related party 2,235 -
------------- -------------
Total current assets 20,425 6,469
------------- -------------
TOTAL ASSETS $ 20,425 $ 6,469
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable 1,350 8,635
------------- -------------
Total current liabilities 1,350 8,635
Stockholders' equity (deficit)
Common stock, $0.001 par value, 75,000,000
shares authorized, 32,460,000 and
18,960,000 shares issued and outstanding
as of 12/31/09 and 12/31/08, respectively 32,460 18,960
Additional paid-in capital 27,025 27,025
Subscription receivable (1,000) -
Deficit accumulated during development
stage (39,410) (48,151)
------------- -------------
Total stockholders' equity (deficit) 19,075 (2,166)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 20,425 $ 6,469
============= =============
The accompanying notes are an integral part of these financial statements.
F-2
Monster Offers
(A Development Stage Company)
Statements of Operations
Inception
For the years ending (February 23, 2007)
December 31, to December 31,
---------------------------- -------------
2009 2008 2009
------------- ------------- -------------
REVENUES
Commission Revenue $ - $ 527 $ 527
Commission Revenue -
Related party 267,909 48,986 316,895
------------- ------------- -------------
Total Revenues 267,909 49,513 317,422
Cost of goods
Commission paid-
Related party 249,828 - 249,828
------------- ------------- -------------
Gross Profit $ 18,081 $ 49,513 $ 67,594
EXPENSES
Advertising - 20,908 20,908
Audit fees 6,250 9,000 15,250
Expenses of spinoff - - 5,610
General & Administrative 8,100 56,748 65,833
Professional fees 600 5,413 6,013
Officer compensation - 33,000 33,000
------------- ------------- -------------
Total expenses 14,950 125,069 146,614
------------- ------------- -------------
INCOME (LOSS) FROM OPERATIONS 3,131 (75,556) (79,020)
------------- ------------- -------------
OTHER INCOME
Debt forgiveness 5,610 - 5,610
Refund of expense - 34,000 34,000
------------- ------------- -------------
Total other income 5,610 34,000 39,610
------------- ------------- -------------
Net income (loss) before
provision for income taxes 8,741 (41,556) (39,410)
Income tax expense - - -
------------- ------------- -------------
NET INCOME (LOSS) $ 8,741 $ (41,556) $ (39,410)
============= ============= =============
NET EARNINGS (LOSS) PER SHARE $ 0.00 $ (0.00)
============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND FULLY DILUTED 19,330,879 18,960,000
============= =============
The accompanying notes are an integral part of these financial statements.
F-3
Monster Offers
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
(Deficit)
Accumulated Total
During Stock-
Additional Develop- holders'
Common Stock Paid-in Subscription ment Equity
Shares Amount Capital Receivable Stage (Deficit)
------------------ --------- -------- --------- ---------
Contributed Capital,
February 2007 - $ - $ 400 $ - $ - $ 400
Founders' shares issued
for Services,
December 2007 11,250,000 11,250 - - - 11,250
Contributed Capital - - 585 - - 585
Tropical PC Spin Off
Shares 810,000 810 (810) - - -
Shares returned to
Company (600,000) (600) 600 - - -
Shares issued
pursuant to offering 7,500,000 7,500 26,250 - - 33,750
Net loss - - - - (6,595) (6,595)
------------------ ------------------ -------------------
Balance,
December 31, 2007 18,960,000 18,960 27,025 - (6,595) 39,390
------------------ ------------------ -------------------
Net loss - - - - (41,556) (41,556)
------------------ ------------------ -------------------
Balance,
December 31, 2008 18,960,000 18,960 27,025 - (48,151) (2,166)
------------------ ------------------ -------------------
Private placement,
December 2009 13,500,000 13,500 - (1,000) - 12,500
Net loss - - - - 8,741 8,741
------------------ ------------------ -------------------
Balance,
December 31, 2009 32,460,000 $32,460 $ 27,025 $(1,000) $(39,410) $ 19,075
================== ========= ======== ===================
The accompanying notes are an integral part of these financial statements.
F-4
Monster Offers
(A Development Stage Company)
Statements of Cash Flows
Inception
For the years ending (February 23, 2007)
December 31, to December 31,
---------------------------- -------------
2009 2008 2009
------------- ------------- -------------
OPERATING ACTIVITIES
Net income (loss) $ 8,741 $ (41,556) $ (39,410)
Adjustments to reconcile net income
(loss) to net cash used by
operating activities:
(Increase) in accounts
receivable (2,235) - (2,235)
Increase(decrease) in
accounts payable (7,285) 3,025 1,350
------------- ------------- -------------
Net cash used by operating
activities (779) (38,531) (40,295)
FINANCING ACTIVITIES
Proceeds from
Issuance of common stock 12,500 - 57,500
Contributed capital - - 985
------------- ------------- -------------
Net cash provided by financing
activities 12,500 - 58,485
------------- ------------- -------------
NET CHANGE IN CASH 11,721 (38,531) 18,190
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 6,469 45,000 -
------------- ------------- -------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 18,190 $ 6,469 $ 18,190
============= ============= =============
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
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Organization
- ------------
Monster Offers (a development stage company) (the "Company") was
incorporated under the laws of the State of Nevada, as Tropical PC
Acquisition Corporation on February 23, 2007 ("Inception"). The Company
was incorporated to conduct any legal business and is an agent for internet
advertisers. Using technology owned by a principal, the Company recruits
subcontractors who work over the internet to promote specialty internet
advertising. The company recognizes as commission revenue the difference
between fees paid to it by a principal, and the payments remitted to the
subcontractors it has recruited. Often, shareholders of the Company and/or
its' principals act as subcontractors to the Company, resulting in most of
the Company's commission revenue being classified as related party (see
our Related Party footnote).
The Company was incorporated as a wholly-owned subsidiary of 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. On December 11,
2007, Tropical PC, Inc. amended its Articles of Incorporation to change its
subsidiary's name to Monster Offers.
The directors of Tropical PC approved a spin off its 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 spinoff.
Monster Offers is no longer a subsidiary of Tropical PC, Inc.
The Company had cash assets of $18,190 and $6,469 and current liabilities
of $1,350 and $8,635 as of December 31, 2009 and 2008, respectively.
The relevant accounting policies are listed below.
F-6
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Use of Estimates
- ----------------
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported period.
Actual results could differ from those estimates.
Advertising
- -----------
Advertising costs are expensed when incurred. The Company incurred
advertising expenses of $0 and $20,908 for the years ended December 31, 2009
and 2008, respectively. For the period since inception on February 23, 2007
through the year ended December 31, 2009, the Company has incurred
advertising expenses of $20,908.
Earnings per Share
- ------------------
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of securities or other contracts to issue common
stock that were exercised or converted into common stock or resulted in
the issuance of common stock that shared in the earnings of the entity. As
of December 31, 2009 and 2008, the Company had no potential common
stock equivalents which were determined to be antidilutive.
Calculation of net income (loss) per share is as follows:
For the year ended For the year ended
December 31, 2009 December 31, 2008
------------------ ------------------
Net income (loss) (numerator) $ 8,741 $ (41,556)
================== ==================
Weighted average common
shares outstanding 19,330,879 18,960,000
================== ==================
Basic income (loss) per share $ 0.00 $ (0.00)
================== ==================
F-7
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
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's fiscal year-end is December 31.
Revenue Recognition
- -------------------
In accordance with ASC 605 and SEC Staff Accounting Bulletin 104, the
Company monetizes a portion of its user activities through transactional
based services generated primarily from fees earned via marketing services
including data and list management, lead generation, and online marketing
campaigns, which can be either periodic or transactional. Fee revenue is
recognized in the period that the Company's advertiser customer generates
a sale or other agreed-upon action on the Company's affiliate marketing
networks or as a result of the Company's services, provided that no
significant Company obligations remain, collection of the resulting
receivable is reasonably assured, and the fees are fixed or determinable.
All transactional services revenues are recognized on a gross basis in
accordance with the provisions of ASC Subtopic 605-45, due to the fact
that the Company is the primary obligor, and bears all credit risk to
its customer, and publisher expenses that are directly related to a
revenue-generating event are recorded as a component of commission
paid-related party.
F-8
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements
- --------------------------------
Below is a listing of the most recent accounting standards and their effect
on the Company.
In February 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to
Various Topics. This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to various topics within
Topic 815. The amendments are effective for the first reporting period
(including interim periods) beginning after issuance (February 2, 2010),
except for certain amendments. The amendments to the guidance on accounting
for income taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required. The clarifications of the guidance on
the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal
years beginning after December 15, 2009, and should be applied to existing
contracts (hybrid instruments) containing embedded derivative features at the
date of adoption. The Company does not expect the provisions of ASU 2010-08
to have a material effect on the financial position, results of operations or
cash flows of the Company.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements
and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures about
fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those fiscal years. Early adoption is permitted. The Company does
not expect the provisions of ASU 2010-06 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-05 (ASU 2010-05), Compensation - Stock
Compensation (Topic 718). This standard codifies EITF Topic D-110 Escrowed
Share Arrangements and the Presumption of Compensation.
F-9
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various
Topics-Technical Corrections to SEC Paragraphs.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities-Oil
and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. As the
Company does not have any Oil and Gas activity or reserves, the Company does
not expect the provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in
Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does
not change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December
15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU 2010-
01 to have a material effect on the financial position, results of operations
or cash flows of the Company.
F-10
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances than
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
F-11
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)
The Company is authorized to issue 75,000,000 shares of its $0.001 par value
common stock.
On February 23, 2007, a shareholder contributed capital of $400 for
incorporating fees.
On December 11, 2007, the Company issued 11,250,000 shares of its common
stock to its founder for $11,250 in cash. The Founder then transferred these
shares to an outside party for the same price on December 31, 2007.
On December 15, 2007, a shareholder contributed capital of $585 for
registration fees.
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 were returned and cancelled
to the Company.
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.
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. The Company
received $12,500 and has a subscription receivable of $1,000.
As of December 31, 2009 and December 31, 2008, the Company has 32,460,000 and
18,960,000 shares of its common stock issued and outstanding, respectively.
NOTE 3 - GOING CONCERN
These 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. Since inception (February
23, 2007) through December 31, 2009 and 2008, the Company recognized an
accumulated deficit during development stage of approximately $39,410 and
$48,151, respectively. 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.
F-12
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 3 - GOING CONCERN (Continued)
Management plans to raise equity capital to finance the operating and capital
requirements of the Company. Amounts raised will be used for further
development of the Company's services, to provide financing for marketing and
promotion, to secure additional property and equipment, and for other working
capital purposes. While the Company is devoting 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 relating to the recoverability and classification of recorded
asset amounts, or amounts and classification of liabilities that might result
from this uncertainty.
NOTE 4 - PROVISION FOR INCOME TAXES
For the years ended December 31, 2009 and 2008, the Company had a generated
net operating income and had incurred net operating loss, respectively.
Although the Company had net income during 2009, net operating losses have
been reduced and no provision for income taxes has been recorded. In
addition, no benefit for income taxes has been recorded due to the
uncertainty of the realization of any tax assets. At December 31, 2009 and
2008, the Company had approximately $39,410 and $48,151 of federal and state
net operating losses, respectively. The net operating loss carryforwards, if
not utilized, will begin to expire in 2027. The provision for income taxes
consisted of the following components for the year ended December 31:
The components of the Company's deferred tax asset are as follows:
December 31,
2009 2008
------------------------
Deferred tax assets:
Net operating loss carryforwards 13,794 16,853
Valuation allowance (13,794) (16,853)
------------------------
Total deferred tax assets $ -0- $ -0-
========================
F-13
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 4 - PROVISION FOR INCOME TAXES (Continued)
The valuation allowance for deferred tax assets as of December 31, 2009 and
2008 was $13,794 and $16,853, respectively. In assessing the recovery of the
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income in the periods in which those temporary differences
become deductible. Management considers the scheduled reversals of future
deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. As a result, management determined it
was more likely than not the deferred tax assets would not be realized as of
December 31, 2009 and 2008, and recorded a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate is as
follows at December 31:
2009 & 2008
-----------
Federal statutory tax rate (35.0)%
Permanent difference and other 35.0 %
-----------
0.0 %
NOTE 5 - RELATED PARTY TRANSACTIONS
For the years ended December 31, 2009 and 2008, the Company received $18,081
and $48,986, respectively, from customers in which one of the Company's
shareholders had ownership or was an affiliate, for work performed by
subcontractors who are also related parties. Thus, commissions from related
parties represent most of the Company's revenue.
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
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.
F-14
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 6 - CONCENTRATION OF CREDIT RISKS
Cash Balances
- -------------
The Company maintains its cash in various financial institutions in the
United States. Balances maintained are 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 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, 2013.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through April 13, 2010, the date
which the financial statements were available to be issued. The Company has
determined that there were no such events that warrant disclosure or
recognition in the financial statements.
F-15
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 committed to maintaining disclosure controls and procedures
that are designed to ensure that information required to be disclosed in its
Exchange Act reports is recorded, processed, summarized, and reported within
the time periods specified in the U.S. Securities and Exchange Commission's
rules and forms, and that such information is accumulated and communicated to
its management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure.
As required by Rule 13a-15(b) of the Exchange Act, we must carry out an
evaluation of the effectiveness of our disclosure controls and procedures as
of the end of each fiscal quarter, under the supervision and with the
participation of its management, including its Chief Executive Officer and
the Chief 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.
Management, including the chief executive officer and chief financial
officer, does not expect that the Company's disclosure controls and internal
controls will prevent all error and all fraud. Because of its inherent
limitations, a system of internal control over financial reporting can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met and may not prevent or detect misstatements. Further,
over time, control may become inadequate because of changes in conditions or
the degree of compliance with the policies or procedures may deteriorate.
With the participation of the chief executive officer and chief financial
officer, our management evaluated the effectiveness of the Company's internal
control over financial reporting as of December 31, 2009 based upon the
framework in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on the
assessment performed using the criteria established by COSO, management has
concluded that the Company maintained ineffective internal control over
financial reporting in the following areas:
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;
3) insufficient written policies and procedures for accounting and financial
reporting with respect to the requirements and application of US GAAP and SEC
disclosure requirements; and
28
The aforementioned material weaknesses were identified by our Chief Executive
Officer in connection with the review of our financial statements as of
December 31, 2009.
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 quarterly report.
(b) 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. 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.
(c) 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.
29
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
- ------------- --- ------------------------------
Jonathan W. Marshall 44 Chairman and President
- ----------------------------------------------------------------------------
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.
Biography of Jonathan W. Marshall
- ---------------------------------
2009-Present VeritasDigitalStudios.com, Founder, a full service digital
advertising agency, based in Panama City, Panama
2007-2008 Speedshape.com, VP Client Services, Detroit/LA. A digital
asset management and 3D production company. Speedshape
provides 3D assets for TV and Print.
2004-2006 EducationConnection.com, VP Marketing, Boca Raton, Fl. An
Online/TV lead generation company for colleges.
2002-2003 Russell Simmons Beverage Company, Executive VP Advertising,
New York. Russell Simmons Beverage Company was a soft drink
and healthy water company. The Company was sold to Interbru of
Belgium.
2001-2001 ClickPath Media, President, Newport each, CA., a full service
digital advertising agency.
1998-2001 PayPro Resources, VP Marketing, Anaheim, CA. PayPro was a
payroll, HR and Benefits company.
30
1988-1998 Haus of Design/Planet Access, President, Costa Mesa, CA.
Founder of these advertising agencies between 1988 and 1995.
They were digital advertising studios that specialized in web
development and multimedia.
EDUCATION
California State University/Communications, Advertising - Bachelors Degree
Fluent in Spanish
Mr. Marshall does not devote all of his time to our operations. He is
involved in other activities. Mr. Marshall 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. Marshall 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. Jonathan W.
Marshall. Our directors serve one-year terms.
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.
31
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 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.
32
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.
33
Item 11. Executive Compensation
The following table sets forth summary compensation information for the
fiscal year ended December 31, 2009 for our President and sole director.
Compensation
- ------------
As a result of the Company's current limited available cash, our officer or
director no longer receives compensation. Our former officer/director
received $33,000 compensation from February 23, 2007 (inception) of the
company through December 31, 2008. Our current officer/director has not
received any compensation. Monster Offers has no intention of paying any
salaries at this time and we intend to pay salaries when cash flow permits.
SUMMARY COMPENSATION TABLES
----------------------------------------------------
Annual Compensation
----------------------------------------------------
Name and Year Stock Option
Principal Position End Salary ($) Bonus ($) Awards ($) Awards($)
- -----------------------------------------------------------------------------
Jonathan W. Marshall
Director/President/
CFO/Secretary 2009 $ -0- -0- -0- -0-
Nate Kaup
Former 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($)
- -----------------------------------------------------------------------------
Jonathan W. Marshall
Director/President/
CFO/Secretary 2009 $-0- -0- -0- -0-
Nate Kaup
Director/President/
CFO/Secretary 2008 -0- -0- -0- $33,000
- -----------------------------------------------------------------------------
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.
34
Stock Option Grants
- -------------------
We did not grant any stock options to the executive officer or director from
inception through fiscal year end December 31, 2009.
Outstanding Equity Awards at 2009 Fiscal Year-End
- -------------------------------------------------
We did not have any outstanding equity awards as of December 31, 2009.
Option Exercises for Fiscal 2009
- --------------------------------
There were no options exercised by our named executive officer in fiscal 2009.
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 not paid any compensation during the fiscal year ending
December 31, 2009. Our former director was paid a total of $33,000 in
compensation during fiscal year ending December 31, 2008.
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, 2010 relating to those
persons known to beneficially own more than 5% of our capital stock and by
our named executive officer and sole director.
35
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 AND
NATURE OF
TITLE OF NAME OF BENEFICIAL BENEFICIAL PERCENT OF
CLASS OWNER AND POSITION OWNERSHIP CLASS(1)
- -----------------------------------------------------------------------------
Common Jonathan W. Marshall (2) 7,000,000 21.6%
President
Common Scott J. Gerardi (3) 7,000,000 21.6%
Shareholder
Common Powerhouse Development (4) 11,250,000 35.0%
Shareholder
- -----------------------------------------------------------------------------
DIRECTORS AND OFFICERS AS A GROUP
(1 person) 7,000,000 21.6%
(1) Percent of Class based on 32,460,000 shares
(2) Jonathan W. Marshall, El Cangrego, Calle Eusebio A. Morales, Edificio
Carpaz #2A, Panama City, Panama. On December 19, 2009, Jonathan W
Marshall purchased 1,500,000 shares in a private transaction from three
independent non affiliated shareholders.
(3) Scott J. Gerardi, 6281 Pale Pavilion Ave, Las Vegas, NV 89139
(4) Powerhouse Development, a Panamanian Corporation, Box 832-0816, World
Trade Center, Panama City Panama, these shares are being held by this
corporation for the benefit of the employees and contractors of the
Company.
- -----------------------------------------------------------------------------
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.
36
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
De Joya Griffith & Company, LLC, Certified Public Accountants & Consultants,
to perform an audit of the financials for the Company. De Joya Griffith &
Company, LLC owns no stock in the Company. The company has no formal
contract with its accountants, and they are paid on a fee for service basis.
37
Item 14. Principal Accountant Fees and Services.
De Joya Griffith & Company, LLC served as our principal independent public
accountants for the fiscal year ending December 31, 2009. Aggregate fees
billed to us for the years ended December 31, 2009 and 2008 were as follows:
For the Years Ended
December 31,
-------------------
2009 2008
-------------------
(1) Audit Fees(1) $6,250 $9,000
(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 De Joya Griffith & Company, LLC for the proposed
services. In the fiscal year ending December 31, 2009, all fees paid to
De Joya Griffith & Company, LLC 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.
38
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 30
Report of Independent Registered Public Accounting Firm F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity (Deficit) 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 De Joya X
Griffith & Company, LLC
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
39
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/ Jonathan W. Marshall
---------------------------
Jonathan W. Marshall
Chief Executive Officer
and Director
Date: April 13, 2010
--------------
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.
By: /s/ Jonathan W. Marshall
--------------------------------
Jonathan W. Marshall
President, Secretary,
Treasurer and Director
(Principal Executive,
Principal Financial and
Principal Accounting Officer)
Date: April 13, 2010
--------------
40