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 September 30, 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.)
4056 Valle Del Sol, Bonsall, CA 92003
Mail Delivery - PO Box 1092, Bonsall, CA 92003
---------------------------------------------------
(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (760) 208-4905
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 November 22, 2010, the registrant's outstanding common stock consisted
of 31,460,000 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 September 30, 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 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
Item 4T. Controls and Procedures 19
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 24
Item 4 -- Submission of Matters to a Vote of Security Holders 24
Item 5 -- Other Information 24
Item 6. Exhibits 25
Signatures 26
2
Part I. Financial Information
Item 1. Financial Statements
Monster Offers
(A Development Stage Company)
Balance Sheets
September 30, December 31,
2010 2009
(Unaudited) (Audited)
------------- -------------
ASSETS
Current assets
Cash and equivalents $ 17,993 $ 18,190
Accounts receivable 65,794 2,235
------------- -------------
Total current assets 83,787 20,425
------------- -------------
Intangible- software 8,000 -
------------- -------------
TOTAL ASSETS $ 91,787 $ 20,425
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 3,125 1,350
------------- -------------
Total current liabilities 3,125 1,350
Stockholders' equity
Common stock, $0.001 par value, 75,000,000
shares authorized, 31,460,000 and
32,460,000 shares issued and outstanding
as of 9/30/10 and 12/31/09, respectively 31,460 32,460
Additional paid-in capital 27,025 27,025
Stock payable 190,918 -
Subscription receivable - (1,000)
Accumulated deficit during
development stage (160,741) (39,410)
------------- -------------
Total stockholders' equity 88,662 19,075
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 91,787 $ 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 months For the nine months Inception
ending ending (February 23,
---------------------- ---------------------- 2007) to
September 30, September 30, September 30,
2010 2009 2010 2009 2010
---------- ---------- ---------- ---------- ----------
REVENUES
Commission Revenue $ - $ - $ 250 $ - $ 777
Commission Revenue -
Related party 500 12,799 3,102 262,149 319,996
Services 19,014 - 93,264 - 93,264
---------- ---------- ---------- ---------- ----------
Total revenues 19,514 12,799 96,616 262,149 414,037
Cost of goods
Commission paid-
Related party - 10,878 - 249,827 249,828
---------- ---------- ---------- ---------- ----------
Gross Profit 19,514 1,921 96,616 12,322 164,209
EXPENSES
Advertising 200 - 200 - 21,108
Audit fees - 1,000 1,750 4,500 17,000
Expenses of spinoff - - - - 5,610
General &
Administrative 2,216 2,833 25,529 7,981 91,361
Professional fees - - 7,700 - 13,713
Officer compensation - - - - 33,000
Consulting services 182,768 - 182,768 - 182,768
---------- ---------- ---------- ---------- ----------
Total expenses 185,184 3,833 217,947 12,481 364,560
---------- ---------- ---------- ---------- ----------
INCOME (LOSS)
FROM OPERATIONS (165,670) (1,912) (121,331) (159) (200,351)
---------- ---------- ---------- ---------- ----------
OTHER INCOME
Debt forgiveness - - - 5,610 5,610
Refund of expense - - - - 34,000
---------- ---------- ---------- ---------- ----------
Total other income - - - 5,610 39,610
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $(165,670) $ (1,912) $(121,331) $ 5,451 $(160,741)
========== ========== ========== ========== ==========
NET EARNINGS
PER SHARE-basic $ (0.01) $ (0.00) $ (0.00) $ 0.00
& diluted ========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 31,932,527 18,960,000 32,283,529 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 nine For the nine Inception
months ended months ended (February 23, 2007)
September 30, September 30, to September 30,
2010 2009 2010
---------------- ---------------- ----------------
OPERATING ACTIVITIES
Net income (loss) $ (121,331) $ 5,451 $ (160,741)
Adjustments to
reconcile net income
to net cash used
by operating activities:
Consulting
compensation 182,768 - 182,768
(Increase)
in accounts
receivable (63,559) (850) (65,794)
Increase (decrease) in
accounts payable 1,775 (8,635) 3,125
(Increase) in
prepaid expense - (1,000) -
---------------- ---------------- ----------------
Net cash used by
operating activities (347) (5,034) (40,642)
FINANCING ACTIVITIES
Proceeds from
Issuance of common stock - - 57,500
Stock payable 150 - 150
Contributed capital - - 985
---------------- ---------------- ----------------
Net cash provided by
financing activities 150 - 58,635
---------------- ---------------- ----------------
NET CHANGE IN CASH (197) (5,034) 17,993
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 18,190 6,469 -
---------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 17,993 $ 1,435 $ 17,993
================ ================ ================
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash Intangible
Asset $ 8,000 $ - $ 8,000
The accompanying notes are an integral part of these financial statements.
5
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
September 30, 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 September 30, 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 period ended September 30, 2010 are not necessarily indicative of
the operating results for the full year. The Company is a development stage
company, as defined in FASB ASC 915 "Development Stage Entities."
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. The Company has
an accumulated deficit since inception of $160,741. Although the Company
recognized total revenues of $414,037 with gross profits of $164,209, 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
September 30, 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 $200 and $0 for the nine months ended September 30,
2010 and 2009, respectively. For the period since inception on February 23,
2007 through the period ended September 30, 2010, the Company has incurred
advertising expenses of $21,108.
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
September 30, 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
- --------------------------------
With the exception of those listed below, there have been no recent
accounting pronouncements or changes in accounting pronouncements during
the nine months ended September 30, 2010, as compared to the recent
accounting pronouncements described in our annual report on Form 10-K for
the year ended December 31, 2009, that are of material significance, or have
potential material significance, on our financial position, results of
operations or cash flows.
In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition -
Milestone Method (Topic 605): Milestone Method of Revenue Recognition"
(codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides
guidance on defining a milestone and determining when it may be appropriate
to apply the milestone method of revenue recognition for research or
development transactions. ASU 2010-17 is effective for interim and annual
periods beginning after June 15, 2010. The adoption of ASU 2010-17 is not
expected to have any material impact on our financial position, results of
operations or cash flows.
8
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2010
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements
- --------------------------------
In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-6,
"Improving Disclosures about Fair Value Measurements." This update requires
additional disclosure within the roll forward of activity for assets and
liabilities measured at fair value on a recurring basis, including transfers
of assets and liabilities between Level 1 and Level 2 of the fair value
hierarchy and the separate presentation of purchases, sales, issuances and
settlements of assets and liabilities within Level 3 of the fair value
hierarchy. In addition, the update requires enhanced disclosures of the
valuation techniques and inputs used in the fair value measurements within
Levels 2 and 3. The new disclosure requirements are effective for interim
and annual periods beginning after December 15, 2009, except for the
disclosure of purchases, sales, issuances and settlements of Level 3
measurements. Those disclosures are effective for fiscal years beginning
after December 15, 2010. As ASU 2010-6 only requires enhanced disclosures,
the Company does not expect that the adoption of this update will have a
material effect on its financial statements.
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.
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.
9
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2010
(Unaudited)
NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT)-(continued)
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. $12,500 was
received in December 2009, with a subscription receivable of $1,000 paid in
January 2010.
In August 2010, the Company reached a mutually agreeable understanding with a
non-affiliated shareholder to cancel 1,000,000 unregistered common shares
he owns. These unregistered restricted shares were issued in a private
offering with the understanding that the shareholder would purchase these
shares and provide technical expertise to the company. Since the services
were not delivered to the company's satisfaction, it has been agreed that
these 1,000,000 unregistered common shares will be canceled and returned
to the Company.
On August 30, 2010, the Company authorized the issuance of 8,000,000 shares
of restricted common stock, as per an Asset Exchange Agreement whereby an
officer/director of the Company is to receive these shares of restricted common
stock in exchange for cash of $8,000 and a computer software program called
the Social Network Action Platform (SNAP). This software program was
essential in order to launch the Company's website, www.monsteroffers.com.
Until such time as the company can complete a thorough evaluation of the
intangible acquired, as of September 30, 2010, the Company placed a
nominal value on the software, based at par value $0.001 of the stock
to be issued for this software. This may create an adjustment to the carrying
value. Further, as of September 30, 2010, a stock payable of $8,000
has been recorded.
On September 1, 2010, the Company authorized the sale of 550,000 unregistered
restricted common shares to three shareholders in exchange for entering into
consulting agreements and cash of $550. The services of these consultants
was necessary for the launch of the Company's website by integrating the
recently acquired software into the site. A total fair value of $182,768 was
placed by expensing the normal hourly rate charged by these consultants for
the services rendered during the quarter. A stock payable of $182,768 has
been recorded as of September 30, 2010, and a total of $150 was received from
one consultant and has been reduced from total consulting expense.
As of September 30, 2010 and September 30, 2009, the Company has 31,460,000
and 18,960,000 shares of its common stock issued and outstanding,
respectively.
10
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2010
(Unaudited)
NOTE 5 - RELATED PARTY TRANSACTIONS
For the nine months ended September 30, 2010 and 2009, the Company received
$2,602 and $249,350, 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.
On August 5, 2010, the Company entered into an Asset Exchange Agreement
whereby an officer/director of the Company received 8,000,000 shares of
restricted common stock in exchange for cash of $8,000 and a computer
software program called the Social Network Action Platform (SNAP). Until
such time as the company can complete a thorough evaluation on this software,
as of September 30, 2010, the Company placed a nominal value on the software,
based at par value $0.001 of the stock to be issued for this software.
Further, as of September 30, 2010, a stock payable of $8,000 has been
recorded.
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.
11
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2010
(Unaudited)
NOTE 7 - SUBSEQUENT EVENT
On or about November 9, 2010, the Company entered into an agreement with
Asher Enterprises, Inc., a Delaware corporation, an accredited investor,
whereby Asher Enterprises loaned the Company the aggregate principal
amount of $53,000.00 together with any interest at the rate of eight
percent (8%) per annum, until the maturity date of July 18, 2011. This
Note may not be prepaid in whole or in part. If the Note is not paid in
full with interest on the maturity date, the note holder has the right to
convert this Note into restricted common shares of the Company. The
conversion price shall equal the "Variable Conversion Price" (subject
to equitable adjustments for stock splits, stock dividends or rights
offerings by the Borrower). The "Variable Conversion Price" shall mean
61% multiplied by the Market Price (representing a discount rate of 39%).
"Market Price" means the average of the lowest three (3) Trading Prices
for the Common Stock during the ten (10) Trading Day period ending one
Trading Day prior to the date the Conversion Notice is sent by the Holder
to the Borrower via facsimile.
12
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.
13
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.
Monster Offers is an emerging online technology company specializing in
social media commerce and advertising solutions for large Companies and Non
Profit Organizations. Monster Offers serves as an online advertising agency
specializing in digital production, social media commerce, and online lead
generation. 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 website is: www.monsteroffers.com
We also provide brand development, marketing services, and software
development for our clients. 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.
On August 5, 2010, the Company entered into an Asset Exchange Agreement
to acquire a one hundred (100%) percent ownership interest in the
Intellectual Property Rights and Software known as the Social Network Action
Platform (SNAP). Whereby an officer/director of the Company received
8,000,000 shares of restricted common stock in exchange for cash of $8,000
and the computer software. The SNAP platform allows the Company to quickly
deploy internally branded social commerce initiatives and market similar
private labeled licensing solutions to Fortune 1000 Companies and
Non-Profit Organizations. Until such time as the company can complete a
thorough evaluation on this software, as of September 30, 2010, the
Company placed a nominal value on the software, based at par value $0.001
of the stock to be issued for this software. Further, as of September 30,
2010, a stock payable of $8,000 has been recorded.
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.
14
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.
15
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.
Recent Event
- ------------
On November 7, 2010, the Company announced that is has executed an agreement
with the National Development Institute to form the WORLD SHARE NONPROFIT
ALLIANCE to better serve the social media networking needs of the charitable
sector, both domestically and abroad.
The purpose of WORLD SHARE is to define, expand, and promote social media
marketing to the nonprofit sector. Business and technology leaders from the
largest and most tenured organizations will provide the nonprofit social
media movement both energy and leadership as members of the WORLD SHARE's
Advisory Council. Nonprofit Marketing Professionals will join WORLD SHARE
to grow their skills set using the most current and highly effective social
media campaign strategies and techniques.
The WORLD SHARE platform will be deployed first quarter 2011 at
http://www.WSNPA.com.
16
Results of Operations for the quarter ended September 30, 2010
- --------------------------------------------------------------
For the three months ending September 30, 2010, the Company experienced
general and administrative expenses of $2,216 as compared to general and
administrative expenses of $2,833 for the same period last year. For the
three months ending September 30, 2010, the Company expensed advertising
fees of $200 as compared to no advertising fees for the same period last
year. For the three months ending September 30, 2010, the Company expensed
consulting compensation of $182,768 as compared to no consulting
compensation for the same period last year. Total expenses for the quarter
ending September 30, 2010 were $185,184 versus $3,833 for the same period
last year.
The increase in expenses for the period ending September 30, 2010 was
primarily due to the issuance of 550,000 unregistered restricted common
shares to three shareholders in exchange for entering into consulting
agreements. The services of these consultants was necessary for the launch
of the Company's website by integrating the recently acquired software into
the site. A valuation of $182,768 was placed on these shares by expensing
the normal hourly rate charged by these consultants for the services
rendered during the quarter as contributed capital.
For the nine months ending September 30, 2010, the Company experienced
general and administrative expenses of $25,529 as compared to general and
administrative expenses of $7,981 for the same period last year. The
increased general and administrative expenses represented the additional
expenses as the company shifted its focus from affiliate marketing to
social media commerce. Total expenses for the nine months ending
September 30, 2010 were $217,947 versus $12,481 for the same period last year.
For the three months ended September 30, 2010, the Company had $(165,670)
in loss from operations as compared to a loss from operations of $(1,912)
for the same period last year. For the nine months ended September 30, 2010,
the Company had a loss of $(121,331) from operations as compared to a loss
from operations of $(159) for the same period last year.
Since the Company's inception, on February 23, 2007, the Company had a net
loss of $(160,741).
Revenues
- --------
During the three month period ended September 30, 2010, the Company generated
$19,514 in revenues as compared to $12,799 for the same period last year.
During the nine month period ended September 30, 2010, the Company generated
$96,616 in revenues as compared to $262,149 for the same period last year.
For the nine months ended September 30, 2010 and 2009, the Company received
$2,602 and $249,350, 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. Management does
not expect to receive any significant related party revenues through the end
of its fiscal year. Additionally, the drop of revenues was accounted by
management's decision to shift its business focus from affiliate marketing
to building a 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.
17
Plan of Operation
- -----------------
Management does not believe that the Company will be able to generate
any significant profit during the coming year. Management believes
that general and administrative costs and well as building its infrastructure
will most likely curtail any significant profits.
Management believes the Company can sustain itself for the next twelve
months. Management has agreed to keep the Company funded at its own expense,
without seeking reimbursement for expenses paid. The Company's need for
capital may change dramatically if it can generate additional revenues from
its operations. In the event the Company requires additional funds, the
Company will have to seek loans or equity placements to cover such cash
needs. There are no assurances additional capital will be available to the
Company on acceptable terms.
Going Concern
- -------------
Going Concern - The Company has recognized an accumulated deficit since
inception of $160,741. Although the Company has recognized total revenues of
$414,037 with gross profits of $164,209, 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. 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.
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.
18
Significant changes in the number of employees
- ----------------------------------------------
As of September 30, 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 of September 30, 2010, our current assets were $83,787 and our current
liabilities were $3,125, resulting in a working capital of $80,662. As of
September 31, 2010, our total assets were $91,787 compared to total assets
of $20,425 as of December 31, 2009. Total assets as of September 30, 2010
consisted of $17,993 in cash, $65,794 in accounts receivable and $8,000 in
intangible asset. As of September 30, 2010, our current liabilities were
$3,125 compared to current liabilities of $1,350 as of December 31, 2009.
Our current liabilities consisted of $3,125 in accounts payable.
Stockholders' equity increased from $19,075 as of December 31, 2009 to
$88,662 as of September 30, 2010.
We have not generated positive cash flows from operating activities. For
the nine months ended September 30, 2010, net cash flow used in operating
activities was $347 compared to net cash flow used in operating activities
of $5,034for the nine months ended September 30, 2009. Net cash flow used
in operating activities during the nine month period ended September 30,
2010 consisted primarily of net loss of ($121,331) adjusted by $182,768
in consulting compensation, $63,559 increase in accounts receivable and
$1,755 increase in accounts payable.
During the nine month periods ended September 30, 2010 and September 30,
2009, net cash flow provided from investing activities was $-0-.
During the nine month periods ended September 30, 2010 and September 30,
2009, net cash flow provided from financing activities was $150 and $0,
respectively.
As a result of our Company's current limited available cash, no officer
or director received compensation through the nine months ended September 30,
2010. No officer or director received stock options or other non-cash
compensation since the Company's inception through September 30, 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.
On or about November 9, 2010, the Company entered into an agreement with
Asher Enterprises, Inc., a Delaware corporation, an accredited investor,
whereby Asher Enterprises loaned the Company the aggregate principal
amount of $53,000 together with any interest at the rate of eight
percent (8%) per annum, until the maturity date of July 18, 2011. This
Note may not be prepaid in whole or in part. If the Note is not paid in
full with interest on the maturity date, the note holder has the right to
convert this Note into restricted common shares of the Company. The
conversion price shall equal the "Variable Conversion Price" (subject
to equitable adjustments for stock splits, stock dividends or rights
offerings by the Borrower). The "Variable Conversion Price" shall mean
61% multiplied by the Market Price (representing a discount rate of 39%).
"Market Price" means the average of the lowest three (3) Trading Prices
for the Common Stock during the ten (10) Trading Day period ending one
Trading Day prior to the date the Conversion Notice is sent by the Holder
to the Borrower via facsimile.
19
Off-Balance Sheet Arrangements
- ------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonably assured.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in
rules and forms adopted by the SEC, and that such information is accumulated
and communicated to management, including the Chief Executive Officer and
the Chief Financial Officer, to allow timely decisions regarding required
disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, have evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on such evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that, our disclosure controls and procedures were not
effective. Our disclosure controls and procedures were not effective because
of the "material weaknesses" described below under "Management's report on
internal control over financial reporting," which are in the process of
being remediated as described below under "Management Plan to Remediate
Material Weaknesses."
20
Management's Report on Internal Control over Financial Reporting
- ----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our Board of Directors,
management and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
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. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control
over financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are
known features of the financial reporting process, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of September 30, 2010. In making its assessment,
management used the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO"). Based on its assessment, management has
concluded that we had certain control deficiencies described below that
constituted material weaknesses in our internal controls over financial
reporting. As a result, our internal control over financial reporting was
not effective as of September 30, 2010.
21
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of
quarter related to the preparation of management's report on internal
controls over financial reporting required for this quarterly report on
Form 10-Q, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
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.
We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and results
of operations for the quarter ending September 30, 2010. 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.
Management Plan to Remediate Material Weaknesses
- ------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. 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:
22
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.
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
- ----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
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.
(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.
23
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
In August 2010, the Company reached a mutually agreeable understanding with a
non-affiliated shareholder to cancel 1,000,000 unregistered common shares
he owns. These unregistered restricted shares were issued in a private
offering with the understanding that the shareholder would purchase these
shares and provide technical expertise to the company. Since the services
were not delivered to the company's satisfaction, it has been agreed that
these 1,000,000 unregistered common shares will be canceled and returned
to the Company.
On August 30, 2010, Monster Offers issued 8,000,000 shares of its
unregistered common stock to Mr. Paul Gain, manager of Prime Mover Global,
LLC. in exchange for a one hundred (100%) percent ownership interest in the
SNAP Software. The shares will be 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.
24
Mr. Gain, is a financially sophisticated individual. Before he received
these unregistered securities he was known to us and our management, through
pre-existing business relationships, as a long standing business associate.
We did not engage in any form of general solicitation or general advertising
in connection with this transactions. Mr. Gain was provided access to all
material information, which he requested and all information necessary to
verify such information and was afforded access to our management in
connection with this transaction. Mr. Gain acquired these securities for
investment and not with a view toward distribution, acknowledging such
intent to us. He understood the ramifications of his actions. The shares
of common stock issued contained a legend restricting transferability absent
registration or applicable exemption. Additionally, Mr. Gain has agreed to
lock-up these shares for one-year.
On September 1, 2010, Monster Offers agreed to issue 550,000 shares of its
unregistered common stock to Messrs. Stephen Hall (150,000 shares), Scott
Wilcox (200,000 shares) and Paul West (200,000 shares) in exchange for their
consulting services rendered and to be rendered to the Company. The shares
will be 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. Messrs. Hall Wilcox and West was provided access to all
material information, which he requested and all information necessary to
verify such information and was afforded access to our management in
connection with this transaction. They acquired these securities for
investment and not with a view toward distribution, acknowledging such
intent to us. The shares of common stock issued will contain a legend
restricting transferability absent registration or applicable exemption.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
25
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.
- -------------------------------------------------------------------------------
10.1 Asset Exchange Agreement by 8-K 10.1 09/02/2010
and between Monster Offers and
Prime Mover Global, LLC, dated
August 5, 2010.
- -------------------------------------------------------------------------------
10.2 Share Lock-Up Agreement with 8-K 10.2 09/02/2010
Scott J. Gerardi dated,
August 6, 2010.
- -------------------------------------------------------------------------------
10.3 Share Lock-Up Agreement with 8-K 10.3 09/02/2010
Powerhouse Development dated,
August 6, 2010.
- -------------------------------------------------------------------------------
10.4 Share Lock-Up Agreement with 8-K 10.4 09/02/2010
Paul Gain dated, August 6, 2010.
- -------------------------------------------------------------------------------
10.5 Share Lock-Up Agreement with 8-K 10.5 09/02/2010
Jonathan W. Marshall, dated,
August 6, 2010.
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
26
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/ Paul Gain
------------------------------
Name: Paul Gain
Title: Director and CEO
Principal Executive, and
Accounting Officer
Dated: November 22, 2010
-----------------
27