UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
----------------------
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 000-53266
MONSTER OFFERS
------------------------------------------------------
(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
---------------------------------------------------
(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: 011-507-6679-6419
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
As of May 17, 2010, the registrant's outstanding common stock consisted
of 32,460,000 shares, $0.001 par value. Authorized - 75,000,000 shares.
1
Table of Contents
Monster Offers
Index to Form 10-Q
For the Quarterly Period Ended March 31, 2010
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
Item 4T. Controls and Procedures 20
Part II Other Information
Item 1. Legal Proceedings 23
Item 1A. Risk Factors 23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
Item 3 -- Defaults Upon Senior Securities 23
Item 4 -- Submission of Matters to a Vote of Security Holders 23
Item 5 -- Other Information 23
Item 6. Exhibits 24
Signatures 25
2
Part I. Financial Information
Item 1. Financial Statements
Monster Offers
(A Development Stage Company)
Balance Sheets
March 31, December 31,
2010 2009
(Unaudited) (Audited)
------------- -------------
ASSETS
Current assets
Cash and equivalents $ 2,976 $ 18,190
Accounts receivable 64,178 2,235
------------- -------------
Total current assets 67,154 20,425
------------- -------------
TOTAL ASSETS $ 67,154 $ 20,425
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 1,375 1,350
------------- -------------
Total current liabilities 1,375 1,350
Stockholders' equity
Common stock, $0.001 par value, 75,000,000
shares authorized, 32,460,000 and
32,460,000 shares issued and outstanding
as of 3/31/10 and 12/31/09, respectively 32,460 32,460
Additional paid-in capital 27,025 27,025
Subscription receivable - (1,000)
Retained earnings (deficit) accumulated during
development stage 6,294 (39,410)
------------- -------------
Total stockholders' equity 65,779 19,075
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 67,154 $ 20,425
============= =============
The accompanying notes are an integral part of these financial statements.
3
Monster Offers
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the three For the three February 23, 2007,
months ended months ended (inception) to
March 31, March 31, March 31,
2010 2009 2010
---------------- ---------------- ----------------
REVENUES
Commission Revenue $ - $ - $ 527
Commission Revenue -
Related party - 150,600 316,895
Services 65,000 - 65,000
---------------- ---------------- ----------------
Total Revenues 65,000 150,600 382,422
Cost of goods
Commission paid-
Related party - 125,120 249,828
---------------- ---------------- ----------------
Gross Profit $ 65,000 $ 25,480 $ 132,594
EXPENSES
Advertising - - 20,908
Audit fees - - 15,250
Expenses of spinoff - - 5,610
General & Administrative 19,271 2,695 85,104
Professional fees 25 - 6,038
Officer compensation - - 33,000
---------------- ---------------- ----------------
Total expenses 19,296 2,695 165,910
---------------- ---------------- ----------------
INCOME (LOSS)
FROM OPERATIONS 45,704 22,785 (33,316)
---------------- ---------------- ----------------
OTHER INCOME
Debt forgiveness - - 5,610
Refund of expense - - 34,000
---------------- ---------------- ----------------
Total other income - - 39,610
---------------- ---------------- ----------------
NET INCOME $ 45,704 $ 22,785 $ 6,294
================ ================ ================
NET EARNINGS
PER SHARE-basic $ 0.00 $ 0.00
& diluted ================ ================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 32,460,000 18,960,000
================ ================
The accompanying notes are an integral part of these financial statements.
4
Monster Offers
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the three For the three February 23, 2007,
months ended months ended (inception) to
March 31, March 31, March 31,
2010 2009 2010
---------------- ---------------- ----------------
OPERATING ACTIVITIES
Net income $ 45,704 $ 22,785 $ 6,294
Adjustments to
reconcile net income
to net cash used
by operating activities:
Increase
in accounts
receivable (61,943) - (64,178)
Increase in
accounts payable 25 - 1,375
(Increase) in
prepaid expense - (5,500) -
---------------- ---------------- ----------------
Net cash used by
operating activities (16,214) 17,285 (56,509)
FINANCING ACTIVITIES
Proceeds from
Issuance of common stock 1,000 - 58,500
Contributed capital - - 985
---------------- ---------------- ----------------
Net cash provided by
financing activities 1,000 - 59,485
---------------- ---------------- ----------------
NET CHANGE IN CASH (15,214) 17,285 2,976
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 18,190 6,469 -
---------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 2,976 $ 23,754 $ 2,976
================ ================ ================
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
5
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 2010 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
December 31, 2009 audited financial statements. The results of operations
for the periods ended March 31, 2010 are not necessarily
indicative of the operating results for the full year.
NOTE 2 - 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. Although the Company has
recognized total revenues of $382,422 with gross profits of $132,594, the
Company's ability to continue as a going concern is
contingent upon the successful completion of additional financing
arrangements and its ability to achieve and maintain profitable operations.
Management plans to raise equity capital to finance the operating and
capital requirements of the Company. Amounts raised will be used for
further development of the Company's products, to provide financing for
marketing and promotion and for other working capital purposes. While the
Company is putting forth 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.
6
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
Cash and Cash Equivalents
- -------------------------
The Company considers all short-term investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
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 $0 for the months ended March 31, 2010 and
2009, respectively. For the period since inception on February 23, 2007
through the period ended March 31, 2010, the Company has incurred
advertising expenses of $20,908.
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.
7
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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.
8
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
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.
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.
9
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
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. This update is 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.
10
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 4 - 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.
11
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
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 to the Company
and cancelled.
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.
As of March 31, 2010 and March 31, 2009, the Company has 32,460,000 and
18,960,000 shares of its common stock issued and outstanding, respectively.
NOTE 5 - RELATED PARTY TRANSACTIONS
For the three months ended March 31, 2010 and 2009, the Company received
$0 and $150,600, 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.
12
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2010
(Unaudited)
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.
13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully
integrate any business which it might acquire, and currency fluctuations. All
forward-looking statements in this report are based upon information available
to the Company on the date of this report. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, or otherwise, except as
required by law.
Critical Accounting Policies
- ----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in
our Annual report for the fiscal year ended December 31, 2009.
14
Results of Operations
- ---------------------
Overview of Current Operations
- ------------------------------
Monster Offers ("the Company") was incorporated in the State of Nevada on
February 23, 2007, under the name 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.
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.
15
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.
16
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.
Software Development
- --------------------
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.
Results of Operations for the quarter ended March 31, 2010
- ----------------------------------------------------------
During the three months ended March 31, 2010, the Company had total revenues
of $65,000 versus total revenues of $150,600 for the same period last year.
The drop in revenues was accounted by management's decision to shift its
business focus from online lead generation to building a base to offer social
media commerce. For the three months ended March 31, 2010, the Company had a
net income of $45,704 versus a net income of $22,785 for the same period last
year. For the three months ending March 31, 2010, the Company experienced
general and administrative expenses of $19,271 as compared to general and
administrative expenses of $2,695 for the same period last year. Since the
Company's inception, on February 23, 2007, the Company had net income of
$6,294.
17
Revenues
- --------
During the three month period ended March 31, 2010, the Company generated
$65,000 in service revenues as compared to $150,600 in commission revenue
from a related party for the same period last year. The drop in revenues was
accounted by management's decision to shift its business focus from affiliate
marketing to building it's social media commerce division. Management
believes this decision will benefit the Company in the long-term. There can
be no assurances that the Company can be profitable or that the Company will
not incur operating losses in the future.
Plan of Operation
- -----------------
Management does not believe that the Company will be able to generate
any significant profit during the coming year. Management believes
that general and administrative costs and well as building its infrastructure
will most likely curtail any significant profits.
Management believes the Company can sustain itself for the next twelve months.
Management has agreed to keep the Company funded at its own expense, without
seeking reimbursement for expenses paid. The Company's need for capital may
change dramatically if it can generate additional revenues from its operations.
In the event the Company requires additional funds, the Company will have to
seek loans or equity placements to cover such cash needs. There are no
assurances additional capital will be available to the Company on acceptable
terms.
Going Concern
- -------------
Going Concern - Although the Company has recognized total revenues of $382,422
with gross profits of $132,594, the Company's ability to continue as a going
concern is contingent upon the successful completion of additional financing
arrangement and its ability to achieve and maintain profitable operations.
The financial statements have been prepared assuming the Company will continue
to operate as a going concern which contemplates the realization of assets and
the settlement of liabilities in the normal course of business. No adjustment
has been made to the recorded amount of assets or the recorded amount or
classification of liabilities which would be required if the Company were
unable to continue its operations. (See Financial Footnote 2)
Summary of any product research and development that we will perform for the
term of our plan of operation.
- ----------------------------------------------------------------------------
We do not anticipate performing any additional significant product research
and development under our current plan of operation.
18
Expected purchase or sale of plant and significant equipment
- ------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
- ----------------------------------------------
As of March 31, 2010, we did not have any employees. We are dependent upon
our sole officer and director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Liquidity and Capital Resources
- -------------------------------
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
As a result of our the Company's current limited available cash, no officer
or director received compensation through the three months ended March 31,
2010. No officer or director received stock options or other non-cash
compensation since the Company's inception through March 31, 2010. The
Company has no employment agreements in place with its officers. Nor does
the Company owe its officers any accrued compensation, as the Officers agreed
to work for the company at no cost, until the company can become profitable on
a consistent Quarter-to-Quarter basis.
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.
19
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonably assured.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
(a) Evaluation of Internal 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 preparation 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.
20
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 March 31, 2010 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
4) Ineffective controls over period end financial disclosure and reporting
processes.
The aforementioned material weaknesses were identified by our Chief Executive
Officer in connection with the review of our financial statements as of
March 31, 2010.
Management believes that the material weaknesses set forth in items (2),
(3) and (4) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
21
(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.
22
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2009 and the discussion
in Item 1, above, under "Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
23
Item 6 -- Exhibits
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, SB-2 3.1 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.2 Bylaws SB-2 3.2 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.3 Amended Articles of SB-2 3.3 01/15/2008
Incorporation as currently
in effect.
- -------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Monster Offers
------------------------
Registrant
By: /s/ Jonathan W. Marshall
------------------------------
Name: Jonathan W. Marshall
Title: President/CFO/Director
Dated: May 17, 2010
------------
25