As filed with the Securities and Exchange Commission on January 28, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-1
Registration Statement
Under the Securities Act of 1934
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MONSTER OFFERS
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(Name of small business issuer in its charter)
NEVADA 7389 26-1548306
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(State or other Jurisdiction of (Primary Standard (I.R.S. Employer
Incorporation or Organization) Industrial Identification No.)
Classification
Number)
P.O. Box 1092, Bonsall, CA 92003
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(Address of Principal Executive Offices) (Zip Code)
Paul Gain
4056 Valle Del Sol, Bonsall, CA 92003
Mail Delivery - PO Box 1092, Bonsall, CA 92003
Telephone: (760) 208-4905
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(Name, address and telephone number of agent for service)
Copies to:
Thomas C. Cook, Esq.
Law Offices of Thomas C. Cook
500 N. Rainbow, Suite 300
Las Vegas, NV 89107
Phone: (702) 221-1925
Fax: (702) 221-1963
Approximate date of proposed commencement of sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer," and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.
[ ] Large accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [X] Smaller reporting company
(Do not check if a
smaller reporting Company)
Calculation of Registration Fee
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED RESISTERED SHARE(1) PRICE(1) FEE (3)
Common stock
$0.001 par value 5,000,000 (1) $0.26(2) $1,300,000.00 $ 150.93
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TOTAL 5,000,000 N/A $1,300,000.00 $ 150.93
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(1) This Registration Statement covers the offering of common stock of the
Company according to a Drawdown Equity Financing Agreement and for resale by
the selling stockholder named in this prospectus. In accordance with Rule
416(a), the registrant is also registering hereunder an indeterminate number
of shares that may be issued and resold to prevent dilution resulting from
stock splits, stock dividends, or similar transactions.
(2) The proposed maximum offering price per share and the proposed maximum
aggregate offering price have been estimated solely for the purpose of
calculating the amount of the registration fee in accordance with Rules
457(c) under the Securities Act of 1933 on the basis of the average of the
high and low prices of the Common Stock on the OTC Bulletin Board on
January 21, 2011, a date within five (5) trading days prior to the date of
the filing of this Registration Statement.
(3) Paid
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
ii
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PROSPECTUS
SUBJECT TO COMPLETION, DATED [DATE]
The information in this prospectus is not complete and may be changed. Our
Selling Stockholders may not sell these securities until the Registration
Statement filed with the United States Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
5,000,000 Shares of Common Stock
MONSTER OFFERS
This prospectus relates to the issuance from time to time of 5,000,000 shares
of common stock, par value $0.001 of Monster Offers, a Nevada corporation
("MONT" or the "Company"), being offered for sale pursuant to a Drawdown
Equity Financing Agreement ("Drawdown Agreement") entered in to between the
Company and Auctus Private Equity Fund, LLC ("Auctus" or "Selling
Stockholder"). The total amount of shares of common stock which, may be sold
pursuant to this prospectus would constitute approximately 8% of our issued
and outstanding common stock as of January 20, 2011, if all of the shares had
been sold by that date.
Pursuant to the Drawdown Agreement, which has a total drawdown amount of ten
million dollars ($10,000,000), MONT has the right to sell to Auctus at its
sole discretion and Auctus has the obligation to purchase through advances to
the Company, the Company's common stock through Draw-Down Notices issued by
the Company. The number of shares of common stock that Auctus shall purchase
shall be determined by dividing the amount of the advance by the purchase
price. No fractional shares will be issued.
The Selling Stockholder is selling all of the shares of common stock offered
by this prospectus. It is anticipated that the Selling Stockholder, will sell
these shares of common stock from time to time in one or more transactions,
in negotiated transactions or otherwise, at prevailing market prices or at
prices otherwise negotiated (see "Plan of Distribution"). We will not receive
any proceeds from the sale of shares by the Selling Stockholder. However, we
will receive the sale price of any common stock that we sell to Auctus under
the drawdown line of equity credit facility.
There are no underwriting agreements.
We have agreed to pay all the costs and expenses of this registration.
Our common stock is quoted on the Over-the-Counter Bulletin Board ("OTCBB")
under the symbol "MONT."
We may amend or supplement this prospectus from time to time by filing
amendments or supplements as required. You should read the entire prospectus
and any amendments or supplements carefully before you make your investment
decision.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD
BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 9.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this preliminary prospectus is [date], 2011
2
PROSPECTUS
MONSTER OFFERS
5,000,000 SHARES COMMON STOCK
TABLE OF CONTENTS
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PAGE
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Part I
PROSPECTUS SUMMARY 4
RISK FACTORS 9
USE OF PROCEEDS 25
DETERMINATION OF OFFERING PRICE 25
DILUTION 25
SELLING STOCKHOLDERS 27
PLAN OF DISTRIBUTION 28
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 31
EXECUTIVE COMPENSATION 33
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 35
DESCRIPTION OF SECURITIES 36
INTEREST OF NAMED EXPERTS AND COUNSEL 37
EXPERTS 37
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 38
DESCRIPTION OF OUR BUSINESS 39
DESCRIPTION OF PROPERTIES 42
LEGAL PROCEEDINGS 42
MANAGEMENT'S DISCUSSION AND ANALYSIS and RESULTS OF OPERATIONS 42
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND CORPORATE
GOVERNANCE 52
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 53
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE 54
WHERE YOU CAN FIND MORE INFORMATION 55
FINANCIAL STATEMENTS 56
3
ABOUT THIS PROSPECTUS
This prospectus is part of a Registration statement we filed with the SEC.
You should rely only on the information provided in this prospectus and
incorporated by reference in this prospectus. We have not authorized anyone to
provide you with information different from that contained in or incorporated
by reference into this prospectus. This prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities other than
the common stock offered by this prospectus. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any common
stock in any circumstances in which such offer or solicitation is unlawful. The
selling stockholder is offering to sell, and seeking offers to buy, shares of
common stock only in jurisdictions where offers and sales are permitted.
Neither the delivery of this prospectus nor any sale made in connection with
this prospectus shall, under any circumstances, create any implication that
there has been no change in our affairs since the date of this prospectus or
that the information contained by reference to this prospectus is correct as of
any time after its date. The information in this prospectus is accurate only
as of the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock. The rules of the SEC may require us
to update this prospectus in the future.
SUMMARY
The following summary highlights selected information contained in this
prospectus. This summary does not contain all the information you should
consider before investing in the securities. Before making an investment
decision, you should read the entire prospectus carefully, including the
information set forth under the headings "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
the financial statements and the notes to the financial statements included in
this prospectus.
General
Monster Offers (throughout this prospectus referred to as "we," "us," "the
Company," "Monster Offers" or "MONT") is a development stage company.
Monster Offers was incorporated in the State of Nevada on February 23, 2007,
under the name Tropical PC Acquisition Company. On December 11, 2007, the
Company amended its Articles of Incorporation changing its name to Monster
Offers. The Company was originally incorporated as a wholly owned subsidiary
of Company Tropical PC, Inc., a Nevada corporation. Tropical PC was
incorporated September 22, 2004, and, at the time of spin off was not listed on
any exchange.
4
From our inception through September 30, 2010, we have generated $414,037
in revenues and we have incurred a net loss of $ 160,741. As of September 30,
2010, we had $ 17,993 in cash on hand, total current assets of $83,787, total
assets of $ 91,787, total liabilities of $ 3,125, an accumulated deficit of
$160,741 and a stockholders' equity of $ 88,662. In our auditor's report
included in their audit for fiscal year ended December 31, 2009, the auditors
expressed substantial doubt as to our ability to continue as a going concern.
We are 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.
Drawdown Equity Financing Agreement
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On December 29, 2010, we entered into a drawdown equity financing agreement
and registration rights agreement (collectively the "Agreements") with Auctus
Private Equity Fund, LLC ("Auctus"), the selling stockholder. In accordance
with the Agreements, Auctus has committed, subject to certain conditions, to
purchase up to $10 million of the Company's common stock over a term of up to
two years. Although the Company is not mandated to sell shares under the
Agreements, the Agreements give the Company the option to sell to Auctus
shares of common stock at a per share purchase price equal to 97% of the
lowest closing bid price during the five trading days following the Company's
delivery of notice to Auctus (the "Notice"). At its option, the Company may
set a floor price under which Auctus may not sell the shares which were the
subject of the Notice. The floor shall be 75% of the average closing bid
price of the stock over the preceding ten days prior to the Notice and can be
waived at the discretion of the Company. The maximum amount of Common Stock
that the Company can sell pursuant to any Notice is the greater of: (i) an
amount of shares with an aggregate maximum purchase price of $500,000 or (ii)
200% of the average daily trading volume based on 20 days preceding the
drawdown notice date.
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Auctus is not required to purchase the shares, unless the shares which are
subject to the Notice have been registered for resale and are freely tradable
in accordance with the federal securities, including the Securities Act of
1933, as amended, laws and except for conditions outside of Auctus' control.
The Company is obligated to file with the U.S. Securities and Exchange
Commission (the "SEC") a registration statement on Form S-1, of which this
prospectus forms a part, within 30 days from the date of the Agreements and
to use all commercially reasonable efforts to have such registration
statement declared effective by the SEC within 120 days of filing. The
Company has agreed to pay Auctus an aggregate amount of $7,500 as an
origination fee with respect to the transaction. This is a non-refundable
origination fee equal to Two Thousand Five Hundred ($2,500) Dollars which was
paid upon execution of the Drawdown Equity Financing Facility term sheet and
Five Thousand ($5,000) Dollars in cash which will be taken out of the
proceeds of the first Drawdown.
Summary Financial Information; Going Concern
The table below summarizes our audited financial statements for the fiscal
years ended December 31, 2009 and December 31, 2008, as well as the unaudited
financial statements for the nine months ended September 30, 2010 and 2009
and for the period from our inception to September 30, 2010. In our
auditor's report included in the Company's audited financial statements for
fiscal year ended December 31, 2009, our auditors expressed substantial doubt
as to the Company's ability to continue as a going concern. Our ability to
continue as a going concern is subject to our ability to generate sufficient
revenues to fund our operations and/or our ability to obtain additional
capital, neither of which can be assured. We anticipate that our auditors
will continue to express substantial doubt about our ability to continue as a
going concern for the near future.
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Balance Sheet Summary:
Fiscal Year Ended
--------------------------------- At Sept. 30,
At Dec. 31, 2009 At Dec. 31, 2008 2010
(Audited) (Audited) (Unaudited)
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Balance Sheet
Cash and Cash Equivalents $ 18,190 $ 6,469 $ 17,993
Total Assets $ 20,425 $ 6,469 $ 91,787
Total Liabilities $ 1,350 $ 8,635 $ 3,125
Total Stockholders' Equity
(Deficit) $ 19,075 $ (2,166) $ 88,662
Statement of Operations Summary:
For the Period
February 23,
2007
For the Fiscal Year For the Nine Months (Inception) to
Ended Dec. 31, September 30, Sept. 30,
2009 2008 2010 2009 2010
(Audited) (Audited) (Unaudited) (Unaudited) (Unaudited)
--------- --------- ----------- ----------- -----------
Statement of Operations
Revenue $267,909 $ 49,513 $ 96,616 $ 262,149 $ 414,037
Net Income (Loss) $ 8,741 $(41,556) $ (121,331) $ 5,451 $ (160,741)
Net Earnings (Loss)
Per Share of Common
Stock, basic and
diluted Nil Nil Nil Nil
Organizational History
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.
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On June 2, 2008, the United States Securities and Exchange Commission issued
the Company a Notice of Effectiveness for a Form S-1; Registration under the
Securities Act of 1933. The Company registered 7,710,000 common shares of
the Company. The Company is in the process of raising additional financing,
of which this Registration on Form S-1 is a part.
Executive Offices and Telephone Number
Our principal executive offices are located at P.O. Box 1092, Bonsall, CA
92003, and our phone number is: (760) 208-4905.
6
THE OFFERING
Securities Being 5,000,000 shares of common stock are being registered
Offered: on behalf of Auctus Private Equity Fund, LLC.
Offering Period: Until all shares are sold or until 36 months from the
date that the registration statement becomes effective,
whichever comes first.
Use of Proceeds: We will not receive any proceeds from the sale of the
common stock by Auctus Private Equity Fund, LLC.
Risk Factors: See "Risk Factors" and the other information in this
prospectus for a discussion of the factors you should
consider before deciding to invest in shares of our
common stock.
8
RISK FACTORS
An investment in our common stock involves a high degree of risk. In addition
to the other information in this prospectus, you should carefully consider
the following factors in evaluating us and our business before purchasing the
shares of common stock offered hereby. This prospectus contains, in addition
to historical information, forward-looking statements that involve risks and
uncertainties.
Risks Relating To Our Company
1. WE ARE A DEVELOPMENT STAGE COMPANY AND HAVE HISTORY OF LOSSES SINCE OUR
INCEPTION. IF WE CANNOT REVERSE OUR LOSSES, WE WILL HAVE TO DISCONTINUE
OPERATIONS.
From our inception on February 23, 2007 through September 30, 2010, we have
generated $414,037 in revenues and we have incurred a net loss of $ 160,741.
As of September 30, 2010, we had $ 17,993 in cash on hand, total current
assets of $83,787, total assets of $ 91,787, total liabilities of $ 3,125, an
accumulated deficit of $ 160,741 and a stockholders' equity of $ 88,662. In
our auditor's report for fiscal year ended December 31, 2009, our auditors
expressed substantial doubt as to our ability to continue as a going concern.
We anticipate incurring losses in the foreseeable future. We do not have an
established source of revenue sufficient to cover our operating costs. Our
ability to continue as a going concern is dependent upon our ability to
successfully compete, operate profitably and/or raise additional capital
through other means. If we are unable to reverse our losses, we will have to
discontinue operations.
2. THE LIMITED PUBLIC TRADING MARKET MAY CAUSE VOLATILITY IN OUR STOCK
PRICE.
The quotation of our common stock on the OTCBB does not assure that a
meaningful, consistent and liquid trading market currently exists, and in
recent years such market has experienced extreme price and volume
fluctuations that have particularly affected the market prices of many
smaller companies like us. Our common stock is thus and will be subject to
significant volatility. Sales of substantial amounts of our common stock, or
the perception that such sales might occur, could adversely affect prevailing
market prices of our common stock.
3. SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET PRICE OF
OUR COMMON STOCK, AS THE FUTURE SALE OF A SUBSTANTIAL AMOUNT OF OUTSTANDING
STOCK IN THE PUBLIC MARKETPLACE COULD REDUCE THE PRICE OF OUR COMMON STOCK.
We cannot predict the effect, if any, that market sales of shares of our
common stock or the availability of shares of common stock for sale will have
on the market price prevailing from time to time. Sales of shares of our
common stock in the public market covered under an effective registration
statement, or the perception that those sales may occur, could cause the
trading price of our common stock to decrease or to be lower than it might be
in the absence of those sales or perceptions.
9
4. WE DO NOT EXPECT TO GENERATE CASH FLOW FROM OPERATIONS FOR THE
FORESEEABLE FUTURE. WE WILL NEED TO RAISE CAPITAL IN THE FUTURE BY SELLING
MORE COMMON STOCK AND IF WE ARE ABLE TO DO SO, YOUR OWNERSHIP OF THE
COMPANY'S COMMON STOCK WILL BE DILUTED.
We do not expect to generate cash flow from operations for the foreseeable
future. Consequently, we will be required to raise additional capital by
selling additional shares of common stock. There can be no assurance that we
will be able to do so but if we are successful in doing so, your ownership of
the Company's common stock will be diluted which might depress the market
price of our common stock, if a market ever develops.
5. OUR HISTORY OF LOSSES IS EXPECTED TO CONTINUE AND WE WILL NEED TO OBTAIN
ADDITIONAL CAPITAL FINANCING IN THE FUTURE.
We have a history of losses and expect to generate losses until such a time
when we can become profitable in the distribution of our planned products. As
of the date of this prospectus, we cannot provide an estimate of the amount
of time it will take to become profitable, if ever; however, we do not
believe we will become profitable within the next 24 months.
We will be required to seek additional financing in the future to respond to
increased expenses or shortfalls in anticipated revenues, accelerate product
development, respond to competitive pressures, develop new or enhanced
products, or take advantage of unanticipated acquisition opportunities. In
order for us to carry out our intended business plan, management believes
that we need to raise approximately $5 million over a three year period.
Management anticipates that the $5 million will go towards regulatory
compliance, product marketing, the development of new software programs and
platforms and the development of our "Deal of Day" programs. The Company
anticipates obtaining the required funding through equity investment in the
company. We cannot be certain we will be able to find such additional
financing on reasonable terms, or at all. If we are unable to obtain
additional financing when needed, we could be required to modify our business
plan in accordance with the extent of available financing made available to
our Company. If we obtain the anticipated amount of financing through the
offering of our equity securities, this will result in substantial dilution
to our existing shareholders, and should be considered a serious risk of
investment.
6. WE EXPECT OUR OPERATING EXPENSES TO INCREASE AND MAY AFFECT PROFIT
MARGINS AND THE MARKET VALUE OF OUR COMMON STOCK.
Upon obtaining additional capital, we expect to significantly increase our
operating expenses to expand our marketing operations, and increase our level
of capital expenditures to further develop and maintain our proprietary
software systems. Such increases in operating expense levels and capital
expenditures may adversely affect operating results and profit margins which
may significantly affect the market value of common stock. There can be no
assurance that we will, one day, achieve profitability or generate sufficient
profits from operations in the future.
10
7. CURRENT ECONOMIC CONDITIONS MAY PREVENT US FROM GENERATING REVENUE.
Generally, consumer purchases of "Deal of the Day" offers are discretionary
and may be particularly affected by adverse trends in the general economy.
Our ability to generate or sustain revenues is dependent on a number of
factors relating to discretionary consumer spending. These include economic
conditions and consumer perceptions of such conditions by consumers,
employment, the rate of change in employment, the level of consumers'
disposable income and income available for discretionary expenditure,
business conditions, interest rates, consumer debt and asset values,
availability of credit and levels of taxation for the economy as a whole and
in regional and local markets where the our Company operates.
The United States is currently recovering from an economic downturn, the
extent and duration of which cannot be currently predicted, and includes
record low levels of consumer confidence due, in part, to job losses. Due to
these factors, consumers are not expected to purchase non-essential goods,
including our products. If the current economic conditions do not improve,
we may not achieve or be able to maintain profitability which may negatively
affect the liquidity and market price of our common stock.
Also due to the economic downturn in the United States, credit and private
financing is becoming difficult to obtain at reasonable rates, if at all.
Until we achieve profitability at sufficient levels, if at all, we will be
required to obtain loans and/or private financings to develop and sustain our
operations. If we are unable to achieve such capital infusions on reasonable
terms, if at all, our operations may be negatively affected.
8. WE MAY NOT BE ABLE TO COMPETE WITH OTHER ONLINE ADVERTISING AGENCIES
ALMOST ALL OF WHOM HAVE GREATER RESOURCES AND EXPERIENCE THAN WE DO.
The Internet industry is dominated by large, well-financed firms. We do not
have the resources to compete with larger providers of these similar services
at this time. With the minimal resources we have available, we may
experience great difficulties in building a customer base. Competition by
existing and future competitors could result in our inability to secure any
new customers. This competition from other entities with greater resources
and reputations may result in our failure to maintain or expand our business
as we may never be able to successfully execute our business plan. Further,
Monster Offers cannot be assured that it will be able to compete successfully
against present or future competitors or that the competitive pressure it may
face will not force it to cease operations.
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9. THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO ENHANCE ITS
PRODUCTS OR SERVICES, OR DEVELOP OTHER PRODUCTS OR SERVICES.
At September 30, 2010, we had $17,993 cash on-hand. There is substantial
doubt as to our ability to continue as a going concern. If we are unable to
achieve profitability in the future, recruit sufficient personnel or raise
money in the future, our ability to develop our services would be adversely
affected. Our inability to develop our services or develop new services, in
view of rapidly changing technology, changing customer demands and
competitive pressures, would have a material adverse affect upon our
business, operating results and financial condition.
10. RAPID TECHNOLOGICAL ADVANCES COULD RENDER OUR EXISTING PROPRIETARY
TECHNOLOGIES OBSOLETE.
The Internet and online commerce industries are characterized by rapid
technological change, changing market conditions and customer demands, and
the emergence of new industry standards and practices that could render our
existing Web site and proprietary technology obsolete. Our future success
will substantially depend on our ability to enhance our existing services,
develop new services and proprietary technology and respond to technological
advances in a timely and cost-effective manner. The development of other
proprietary technology entails significant technical and business risk. There
can be no assurance that we will be successful in developing and using new
technologies or adapt our proprietary technology and systems to meet emerging
industry standards and customer requirements. If we are unable, for
technical, legal, financial, or other reasons, to adapt in a timely manner in
response to changing market conditions or customer requirements, or if our
new products and electronic commerce services do not achieve market
acceptance, our business, prospects, results of operations and financial
condition would be materially adversely affected.
12
11. INTERNET COMMERCE SECURITY THREATS COULD POSE A RISK TO OUR ONLINE SALES
AND OVERALL FINANCIAL PERFORMANCE.
A significant barrier to online commerce is the secure transmission of
confidential information over public networks. We and our partners rely on
encryption and authentication technology to provide the security and
authentication necessary to effect secure transmission of confidential
information. There can be no assurance that advances in computer
capabilities; new discoveries in the field of cryptography or other
developments will not result in a compromise or breach of the algorithms used
by us and our partners to protect consumer's transaction data. If any such
compromise of security were to occur, it could have a materially adverse
effect on our business, prospects, financial condition and results of
operations. A party who is able to circumvent our security measures could
misappropriate proprietary information or cause interruptions in our
operations. We may be required to expend significant capital and other
resources to protect against such security breaches or to alleviate problems
caused by such breaches. Concerns over the security of transactions conducted
on the Internet and the privacy of users may also hinder the growth of online
services generally, especially as a means of conducting commercial
transactions. To the extent that our activities, our partners or third-party
contractors involve the storage and transmission of proprietary information,
such as credit card numbers, security breaches could damage our reputation
and expose us to a risk of loss or litigation and possible liability. There
can be no assurance that our security measures will not prevent security
breaches or that failure to prevent such security breaches will not have a
materially adverse effect on our business, prospects, financial condition and
results of operations.
12. NEW TECHNOLOGIES COULD BLOCK OR FILTER OUR "DEAL OF THE DAY" ADS, WHICH
COULD REDUCE THE EFFECTIVENESS OF OUR SERVICES AND LEAD TO A LOSS OF
CUSTOMERS.
Technologies may be developed that can block the display of our "Deal of the
Day" ads. We expect to derive a portion of our revenues from fees paid to us
by advertisers in connection with the display of ads on web pages. Any ad-
blocking technology effective against our ad placements could severely
restrict the number of advertisements that we are able to place before
consumers resulting in a reduction in the attractiveness of our services to
advertisers. If advertisers determine that our services are not providing
substantial value, we may suffer a loss of clients. As a result, ad-blocking
technology could, in the future, substantially decrease the number of ads we
place resulting in a decrease in our revenues.
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13. RISK OF CAPACITY CONSTRAINTS; RELIANCE ON INTERNALLY DEVELOPED SYSTEMS;
SYSTEM DEVELOPMENT RISKS.
A key element of our strategy is to generate a high volume of traffic on, and
use of, our services across our websites and network infrastructure and
systems. Accordingly, the satisfactory performance, reliability and
availability of our software systems, transaction-processing systems and
network infrastructure are critical to our reputation and our ability to
attract and retain customers, as well as maintain adequate customer service
levels. Our revenues depend on the number of visitors who sign up for our
services. Any systems interruptions that result in the unavailability of our
software systems or network infrastructure, or reduced order placements would
reduce the volume of sign ups and the attractiveness of our product and
service offerings. We may experience periodic systems interruptions from time
to time. Any substantial increase in the volume of traffic on our software
systems or network infrastructure will require us to expand and upgrade
further our technology, transaction-processing systems and network
infrastructure. There can be no assurance that we will be able to accurately
project the rate or timing of increases, if any, in the use of our Web site
or timely expand and upgrade our systems and infrastructure to accommodate
such increases. We will use a combination of industry supplied software and
internally developed software and systems for our search engine, distribution
network, and substantially all aspects of transaction processing, including
order management, cash and credit card processing, and accounting and
financial systems. Any substantial disruptions or delays in any of our
systems would have a materially adverse effect on our business, prospects,
financial condition and results of operations.
14. STORAGE OF PERSONAL INFORMATION ABOUT OUR CUSTOMERS COULD POSE A
SECURITY THREAT.
Our policy is not to willfully disclose any individually identifiable
information about any user to a third party without the user's consent.
Despite this policy, however, if third persons were able to penetrate our
network security or otherwise misappropriate our users' personal information
or credit card information, we could be subject to liability. These could
include claims for unauthorized purchases with credit card information,
impersonation or other similar fraud claims. They could also include claims
for other misuses of personal information, such as for unauthorized marketing
purposes. These claims could result in litigation. In addition, the Federal
Trade Commission and other states have been investigating certain Internet
companies regarding their use of personal information. We could incur
additional expenses if new regulations regarding the use of personal
information are introduced or if they chose to investigate our privacy
practices.
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15. WE HAVE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGE TO CONTINUE OFFERING
OUR "DEAL OF THE DAY" ADVERTISING CLIENTS COMPETITIVE SERVICES OR WE MAY LOSE
CLIENTS AND BE UNABLE TO COMPETE.
Our future success will depend on our ability to continue delivering our
"Deal of the Day" advertising clients competitive results-based Internet
marketing services. In order to do so, we will need to adapt to rapidly
changing technologies, to adapt our services to evolving industry standards
and to improve the performance of our services. Our failure to adapt to such
changes would likely lead to a loss of clients or a substantial reduction in
the fees we would be able to charge versus competitors who have more rapidly
adopted improved technology. Any loss of clients or reduction of fees would
adversely impact our revenue. In addition, the widespread adoption of new
Internet technologies or other technological changes could require
substantial expenditures by us to modify or adapt our services or
infrastructure. If we are unable to pass all or part of these costs on to
our clients, our margins and, therefore, profitability will be reduced.
16. WE MAY NOT BE ABLE TO FIND SUITABLE EMPLOYEES.
The Company currently relies heavily upon the services and expertise of Paul
Gain, our sole officer and director. In order to implement the aggressive
business plan of the Company, management recognizes that additional
programmers, graphic artists and clerical staff will be required. Our sole
officer is the only employed personnel at the outset of operations. Our sole
officer can manage the office functions/bookkeeping services and use
outsourcing service companies until the Company can generate enough revenues
to hire additional staff.
No assurances can be given that the Company will be able to find suitable
employees that can support the above needs of the Company or that these
employees can be hired on terms favorable to the Company.
17. THERE EXISTS UNCERTAINTY WITH REGARDS TO OUR ABILITY TO PROTECT OUR
INTELLECTUAL PROPERTY.
Our prospects for success may depend, in part, on our ability to obtain
commercially valuable patents, trademarks and copyrights to protect our
intellectual property, specifically our software programs. The degree of
future protection for our technologies or potential products is uncertain.
There are numerous costs, risks and uncertainties that the Company faces with
respect to obtaining and maintaining patents and other proprietary rights.
The Company may not be able to obtain meaningful patent protection for its
future developments. To date, the Company does not have any pending patent or
trademark applications with the U.S. Patent and Trademark Office or any
agency with regard to the above-referenced intellectual property assets.
15
In connection with the trademarks, there can be no assurance that such
trademarks will provide the Company with significant competitive advantages,
or that challenges will not be instituted against the validity or
enforceability of any trademarks sublicensed to the Company or, if
instituted, that such challenges will not be successful. To date, there have
been no interruptions in our business as the result of any claim of
infringement. However, no assurance can be given that the Company will not
be adversely affected by the assertion of intellectual property rights
belonging to others. The cost of litigation to uphold the validity of a
trademark and prevent infringement can be very substantial and may prove to
be beyond our financial means even if the Company could otherwise prevail in
such litigation. Furthermore, there can be no assurance that others will not
independently develop similar designs or technologies, duplicate our designs
and technologies or design around aspects of our technology, or that the
designs and technologies will not be found to infringe on the patents,
trademarks or other rights owned by third parties. The effects of any such
assertions could include requiring the Company to alter existing trademarks
or products, withdraw existing products, including the products delaying or
preventing the introduction of products or forcing the Company to pay damages
if the products have been introduced.
18. INTELLECTUAL PROPERTY LITIGATION MAY BE NECESSARY AND AN UNFAVORABLE
OUTCOME COULD HURT THE COMPANY.
We may become party to patent litigation or proceedings at the U.S. Patent
and Trademark Office or at a foreign patent office to determine whether it
can market its future products without infringing patent rights of others.
Interference proceedings in the U.S. Patent Office or opposition proceedings
in a foreign patent office may be necessary to establish which party was the
first to design such intellectual property. The cost of any patent
litigation or similar proceeding could be substantial and may absorb
significant management time and effort. If an infringement suit against us is
resolved unfavorably, we may be enjoined from manufacturing or selling
certain of its products or services without a license from an adverse third
party. We may not be able to obtain such a license on commercially acceptable
terms, or at all.
16
19. WE MAY BE LIABLE FOR CONTENT IN THE ADVERTISEMENTS WE DELIVER FOR OUR
CLIENTS RESULTING IN UNANTICIPATED LEGAL COSTS.
We may be liable to third parties for content in the advertising we deliver
if the artwork, text or other content involved violates copyrights,
trademarks or other third-party intellectual property rights or if the
content is defamatory. Although substantially all of our contracts include
both warranties from our advertisers that they have the right to use and
license any copyrights, trademarks or other intellectual property included
in an advertisement and indemnities from our advertisers in the event of a
breach of such warranties, a third party may still file a claim against us.
Any claims by third parties against us could be time-consuming, could result
in costly litigation and adverse judgments. Such expenses would increase
our costs of doing business and reduce our net income per share. In
addition, we may find it necessary to limit our exposure to such risks by
accepting fewer or more restricted advertisements leading to loss of revenue.
20. BECAUSE OUR ONLINE DEAL OF THE DAY PROGRAMS GENERALLY CAN BE CANCELLED
BY THE CLIENT WITH LITTLE OR NO NOTICE OR PENALTY, THE TERMINATION OF ONE OR
MORE PROGRAM COULD RESULT IN AN IMMEDIATE DECLINE IN OUR REVENUES.
We expect to derive the majority of our revenues from "Deal of the Day",
marketing services. These services are provided to advertise clients
services on a short-term basis. They may be canceled upon thirty (30) days
or less notice. In addition, these arrangements to advertise for clients
generally do not contain penalty provisions for early cancellation. The
short term advertising agreements in general reflect the limited time lines,
budgets and customer acquisition goals of specific advertising campaigns and
are consistent with industry practice. The non-renewal, re-negotiation,
cancellation or deferral of large contracts or a number of contracts that in
the aggregate account for a significant amount of revenues, could cause an
immediate and significant decline in our revenues and harm our business.
21. IF WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND
DIFFICULTY ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED
COMPANIES, WHICH COULD THREATEN OUR FUTURE GROWTH.
If we make any acquisitions, we could have difficulty assimilating the
operations, technologies and products acquired or integrating or retaining
personnel of acquired companies. In addition, acquisitions may involve
entering markets in which we have no or limited direct prior experience. The
occurrence of any one or more of these factors could disrupt our ongoing
business, distract our management and employees and increase our expenses.
In addition, pursuing acquisition opportunities could divert our management's
attention from our ongoing business operations and result in decreased
operating performance. Moreover, our profitability may suffer because of
acquisition-related costs or amortization of acquired goodwill and other
intangible assets. Furthermore, we may have to incur debt or issue equity
securities in future acquisitions. The issuance of equity securities would
dilute our existing stockholders.
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22. BECAUSE WE ARE NOT SUBJECT TO COMPLIANCE WITH RULES REQUIRING THE
ADOPTION OF CERTAIN CORPORATE GOVERNANCE MEASURES, OUR STOCKHOLDERS HAVE
LIMITED PROTECTION AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF
INTEREST AND SIMILAR MATTERS.
We do not currently have independent audit or compensation committees. As a
result, our director(s) have the ability, among other things, to determine
their own level of compensation. Until we comply with such corporate
governance measures, regardless of whether such compliance is required, the
absence of such standards of corporate governance may leave our stockholders
without protections against interested director transactions, conflicts of
interest, if any, and similar matters and investors may be reluctant to
provide us with funds necessary to expand our operations.
We intend to comply with all corporate governance measures relating to
director independence as and when required. However, we may find it very
difficult or be unable to attract and retain qualified officers, directors
and members of board committees required to provide for our effective
management as a result of Sarbanes-Oxley Act of 2002. The enactment of the
Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations
by the SEC that increase responsibilities and liabilities of directors and
executive officers. The perceived increased personal risk associated with
these recent changes may make it more costly or deter qualified individuals
from accepting these roles.
23. COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC
DISCLOSURE, AND OUR MANAGEMENT'S INEXPERIENCE WITH SUCH REGULATIONS WILL
RESULT IN ADDITIONAL EXPENSES AND CREATES A RISK OF NON-COMPLIANCE.
Changing laws, regulations and standards relating to corporate governance and
public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC
regulations, have created uncertainty for public companies and significantly
increased the costs and risks associated with accessing the public markets
and public reporting. Our management team will need to invest significant
management time and financial resources to comply with both existing and
evolving standards for public companies, which will lead to increased general
and administrative expenses and a diversion of management time and attention
from revenue generating activities to compliance activities. Management's
inexperience may cause us to fall out of compliance with applicable
regulatory requirements, which could lead to enforcement action against us
and a negative impact on our stock price.
18
Additional Risks Relating to Our Common Stock
24. THE MARKET PRICE FOR OUR STOCK MAY BE VOLATILE.
The market price for our stock may be volatile and subject to wide
fluctuations in response to factors including the following:
o liquidity of the market for the shares;
o actual or anticipated fluctuations in our quarterly operating results;
o changes in financial estimates by securities research analysts;
o conditions in the markets in which we compete;
o changes in the economic performance or market valuations of other
"Deal of the Day" companies;
o announcements by us or our competitors of new products, acquisitions,
strategic partnerships, joint ventures or capital commitments;
o addition or departure of key personnel;
o intellectual property litigation;
o our dividend policy; and
o general economic conditions.
In addition, the securities market has from time to time experienced
significant price and volume fluctuations that are not related to the
operating performance of particular companies. These market fluctuations may
also materially and adversely affect the market price of our stock.
25. SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET PRICE OF
OUR COMMON STOCK, AS THE FUTURE SALE OF A SUBSTANTIAL AMOUNT OF OUTSTANDING
STOCK IN THE PUBLIC MARKETPLACE COULD REDUCE THE PRICE OF OUR COMMON STOCK.
We cannot predict the effect, if any, that market sales of shares of our
common stock or the availability of shares of common stock for sale will have
on the market price prevailing from time to time. Sales of shares of our
common stock in the public market covered under an effective registration
statement, or the perception that those sales may occur, could cause the
trading price of our common stock to decrease or to be lower than it might be
in the absence of those sales or perceptions.
19
26. WE MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE
INVESTORS' PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of
common stock and no preferred shares. The future issuance of common stock
may result in substantial dilution in the percentage of our common stock held
by our then existing shareholders. We may value any common stock issued in
the future on an arbitrary basis. The issuance of common stock for future
services or acquisitions or other corporate actions may have the effect of
diluting the value of the shares held by our investors, and might have an
adverse effect on any trading market for our common stock.
27. OUR COMMON STOCK MAY BE CONSIDERED A "PENNY STOCK," AND THEREBY BE
SUBJECT TO ADDITIONAL SALE AND TRADING REGULATIONS THAT MAY MAKE IT MORE
DIFFICULT TO SELL.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules
require:
(a) that a broker or dealer approve a person's account for transactions
in penny stocks; and
(b) the broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quantity of the penny
stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for investors to dispose of our Common shares and cause a
decline in the market value of our stock.
20
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
28. WE DO NOT FORESEE PAYING CASH DIVIDENDS IN THE FORESEEABLE FUTURE AND,
AS A RESULT, OUR INVESTORS' SOLE SOURCE OF GAIN, IF ANY, WILL DEPEND ON
CAPITAL APPRECIATION, IF ANY.
We have never paid cash dividends on our common stock and we do not plan to
declare or pay any cash dividends on our shares of common stock in the
foreseeable future and currently intend to retain any future earnings for
funding growth. As a result, investors should not rely on an investment in
our securities if they require the investment to produce dividend income.
Capital appreciation, if any, of our shares may be investors' sole source of
gain for the foreseeable future. Moreover, investors may not be able to
resell their shares of the Company at or above the price they paid for them.
29. AUCTUS PRIVATE EQUITY FUND LLC WILL PAY LESS THAN THE THEN-PREVAILING
MARKET PRICE OF OUR COMMON STOCK WHICH COULD CAUSE THE PRICE OF OUR COMMON
STOCK TO DECLINE.
Our common stock to be issued under the Drawdown Equity Facility Agreement
will be purchased at a three (3%) discount or 97% of the lowest closing bid
price during the five trading days immediately following our notice to Auctus
Private Equity Fund LLC of our election to exercise our "put" right.
Auctus Private Equity Fund LLC has a financial incentive to sell our shares
immediately upon receiving the shares to realize the profit between the
discounted price and the market price. If Auctus Private Equity Fund LLC
sells our shares, the price of our common stock may decrease. If our stock
price decreases, Auctus may have a further incentive to sell such shares.
Accordingly, the discounted sales price in the Drawdown Agreement may cause
the price of our common stock to decline.
Risk Factors Related to Our Securities, the Equity Line of Credit and This
Offering
30. WE ARE REGISTERING AN AGGREGATE OF 5,000,000 SHARES OF COMMON STOCK TO
BE ISSUED UNDER THE EQUITY LINE OF CREDIT. THE SALE OF SUCH SHARES COULD
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.
We are registering an aggregate of 5,000,000 shares of common stock under the
registration statement of which this prospectus forms a part for issuance
pursuant to the Equity Line of Credit. The sale of these shares into the
public market by Auctus could depress the market price of our common stock.
21
31. WE MAY NOT HAVE ACCESS TO THE FULL AMOUNT UNDER THE EQUITY LINE.
During the period ended January 20, 2011, the closing price of our common
stock was $0.26 based on low volume. There is no assurance that the market
price of our common stock will increase substantially in the near future.
The entire commitment under the Equity Line of Credit is $10,000,000. The
number of common shares that remains issuable is lower than the number of
common shares we need to issue in order to have access to the full amount
under the Equity Line of Credit. Therefore, we may not have access to the
remaining commitment under the equity line unless we amend our Articles of
Incorporation to increase the number of authorized common shares and/or the
market price of our common stock increase substantially.
32. THERE MAY NOT BE SUFFICIENT TRADING VOLUME IN OUR COMMON STOCK TO PERMIT
US TO GENERATE ADEQUATE FUNDS.
The Drawdown Equity Financing Agreement provides that the dollar value that
we will be permitted to draw from Auctus will be either: (A) 200% of the
average daily volume in the US market of the common stock for the twenty
trading days prior to the Drawdown Notice, or (B) $500,000. If the average
daily trading volume in our common stock is too low, it is possible that we
would only be permitted to draw $500,000, which may not provide adequate
funding for our planned operations.
33. UNLESS AN ACTIVE TRADING MARKET DEVELOPS FOR OUR SECURITIES, YOU MAY NOT
BE ABLE TO SELL YOUR SHARES.
Although, we are a reporting company and our common shares are quoted on the
OTC Bulletin Board (owned and operated by the Nasdaq Stock Market, Inc.)
under the symbol "MONT", there is not currently an active trading market for
our common stock and an active trading market may never develop or, if it
does develop, may not be maintained. Failure to develop or maintain an
active trading market will have a generally negative effect on the price of
our common stock, and you may be unable to sell your common stock or any
attempted sale of such common stock may have the effect of lowering the
market price and therefore your investment could be a partial or complete
loss.
22
34. SINCE OUR COMMON STOCK IS THINLY TRADED IT IS MORE SUSCEPTIBLE TO
EXTREME RISES OR DECLINES IN PRICE, AND YOU MAY NOT BE ABLE TO SELL YOUR
SHARES AT OR ABOVE THE PRICE PAID.
Since our common stock is thinly traded its trading price is likely to be
highly volatile and could be subject to extreme fluctuations in response to
various factors, many of which are beyond our control, including:
o the trading volume of our shares;
o the number of securities analysts, market-makers and brokers following
our common stock;
o changes in, or failure to achieve, financial estimates by securities
analysts;
o new products or services introduced or announced by us or our
competitors;
o actual or anticipated variations in quarterly operating results;
o conditions or trends in our business industries;
o announcements by us of significant contracts, acquisitions, strategic
partnerships, joint ventures of capital commitments;
o additions or departures of key personnel;
o sales of our common stock; and
o general stock market price and volume fluctuations of publicly-traded
and particularly microcap, companies.
You may have difficulty reselling shares of our common stock, either at or
above the price you paid, or even at fair market value. The stock markets
often experience significant price and volume changes that are not related to
the operating performance of individual companies, and because our common
stock is thinly traded it is particularly susceptible to such changes. These
broad market changes may cause the market price of our common stock to
decline regardless of how well we perform as a company. In addition,
securities class action litigation has often been initiated following periods
of volatility in the market price of a company's securities. A securities
class action suit against us could result in substantial legal fees,
potential liabilities and the diversion of management's attention and
resources from our business. Moreover, and as noted below, our shares are
currently traded on the OTC Bulletin Board and, further, are subject to the
penny stock regulations. Price fluctuations in such shares are particularly
volatile and subject to manipulation by market-makers, short-sellers and
option traders.
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35. TRADING IN OUR COMMON STOCK ON THE OTC BULLETIN BOARD MAY BE LIMITED
THEREBY MAKING IT MORE DIFFICULT FOR YOU TO RESELL ANY SHARES YOU MAY OWN.
Our common stock is quoted on the OTC Bulletin Board (owned and operated by
the Nasdaq Stock Market, Inc.). The OTC Bulletin Board is not an exchange
and, because trading of securities on the OTC Bulletin Board is often more
sporadic than the trading of securities listed on a national exchange or on
the Nasdaq National Market, you may have difficulty reselling any of the
shares of our common stock that you may own.
FORWARD LOOKING STATEMENTS
When used in this Prospectus, the words or phrases "will likely result," "we
expect," "will continue," "anticipate," "estimate," "project," "outlook,"
"could," "would," "may," or similar expressions are intended to identify
forward-looking statements. We wish to caution readers not to place undue
reliance on any such forward-looking statements, each of which speaks only as
of the date made. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Such risks
and uncertainties include, among others, success in reaching target markets
for products in a highly competitive market and the ability to attract future
customers, the size and timing of additional significant orders and their
fulfillment, the success of our business emphasis, the ability to finance and
sustain operations, the ability to raise equity capital in the future, and
the size and timing of additional significant orders and their fulfillment.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common stock by
the selling security holder. However, the Company anticipates receiving up
to $10,000,000 gross proceeds pursuant to the equity facility with Auctus.
If the Company receives $10,000,000, we expect to disburse the proceeds from
this offering in the priority set forth below:
Offering Proceeds: $ 10,000,000
Marketing and Sales Initiatives 3,000,000
Operating Expenses 2,000,000
Software Development 2,000,000
Acquisitions 2,500,000
Working Capital 500,000
------------
Totals: $ 10,000,000
DETERMINATION OF OFFERING PRICE
The Selling Stockholder may sell its shares in the over-the-counter market or
otherwise, at market prices prevailing at the time of sale, at prices related
to the prevailing market price, or at negotiated prices. We will not receive
any proceeds from the sale of shares by the Selling Stockholder.
DILUTION
"Dilution" represents the difference between the offering price of the shares
of common stock and the net book value per share of common stock immediately
after completion of the offering. "Net Book Value" is the amount that results
from subtracting total liabilities from total assets. In this offering, the
level of dilution is increased as a result of the relatively low book value
of MONT's issued and outstanding stock.
On or about November 18, 2010 Monster Offers exchanges its "Lead Generation
Business Segment" to Scott J. Gerardi, the Company's former Director and
President, for 12,000,000 (post split) restricted shares of his common stock
in the Company. This exchange was approved by the Company's Board of
Directors and majority shareholders, who were disinterested parties to this
transaction. The Board based their decision on what was reasonably fair to
the corporation. The Company is registering these shares, which used to be
outstanding. In essence, by registering shares that are already issued does
not contribute to any dilution.
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For the sake of calculation of dilution, had these 12,000,000 shares been
cancelled, please refer to the following table presenting the number of
shares issued and the corresponding price per share paid before this offering
for more information. MONT's net book value on September 30, 2010 was
$(88,662 divided by 48,288,707 shares) or $(0.0018) per share. Assuming all
5,000,000 shares offered are sold, and in effect MONT receives the maximum
estimated proceeds of this offering from shareholders, MONT's net book value
will be $1,588,662 or $0.029 per share. Therefore, any investor will incur
an immediate and substantial dilution of approximately $0.009 while the
MONT present stockholder will receive an increase of $0.028 per share in
the net book value of the shares that he holds. This will result in a 90%
dilution for purchasers of stock in this offering.
The following table presents the dilution of the net book value of common
stock purchased by Auctus in this offering of 5,000,000 shares compared with
those existing shareholders who purchased shares in MONT previously:
Share
Maximum
Offering
--------
Dilution resulting from:
Book Value Per Share Before the Offering $0.0018
Book Value Per Share After the Offering $0.0298
Net Increase to Original Shareholders $0.0280
Decrease in Investment to New Shareholders $0.0090
Dilution to New Shareholders (%) 90.06%
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SELLING STOCKHOLDER
Drawdown Equity Financing Agreement.
On December 29, 2010, we entered into a drawdown equity financing agreement
and registration rights agreement (collectively the "Agreements") with Auctus
Private Equity Fund, LLC ("Auctus", the "Selling Stockholder"). In accordance
with the Agreements, Auctus has committed, subject to certain conditions, to
purchase up to ten million dollars ($10,000,000) of the Company's common
stock over a term of up to two years. Although the Company is not mandated to
sell shares under the Agreements, the Agreements give the Company the option
to sell to Auctus shares of common stock at a per share purchase price of
equal to 97% of the lowest closing bid price during the five trading days
following the Company's delivery of notice to Auctus (the "Notice"). At its
option, the Company may set a floor price under which Auctus may not sell the
shares which were the subject of the Notice. The floor shall be 75% of the
average closing bid price of the stock over the preceding ten days prior to
the Notice and can be waived at the discretion of the Company.
Auctus is not required to purchase the shares, unless the shares which are
subject to the Notice have been registered for resale and are freely tradable
in accordance with the federal securities laws, including the Securities Act
of 1933, as amended. The Company is obligated to file with the U.S.
Securities and Exchange Commission (the "SEC") a registration statement on
Form S-1, of which this prospectus forms a part, within 30 days from the date
of the Agreements and to use all commercially reasonable efforts to have such
registration statement declared effective by the SEC within 120 days of
filing. The Company has agreed to pay Auctus an aggregate amount of $7,500 as
an origination fee with respect to the transaction. This is a non-refundable
origination fee equal to Two Thousand Five Hundred ($2,500) Dollars which was
paid upon execution of the Drawdown Equity Financing Facility term sheet and
Five Thousand ($5,000) Dollars in cash which will be taken out of the
proceeds of the first Drawdown.
During the five trading days following a drawdown request, we will calculate
the amount of shares we will sell to Auctus and the purchase price per share.
The purchase price per share of common stock will be based on the daily
volume weighted average price of our common stock during each of the five
trading days immediately following the drawdown date, less a discount of 5%.
Auctus' obligations under the equity line agreement are not transferrable.
There is no minimum amount we can draw down at any one time. The maximum
amount we can draw down at any one time is the larger of:
o $500,000; or
o 200% of the average daily volume based on the trailing 20 days preceding
the drawdown notice date.
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Lou Posner is the natural person and Managing Director of Auctus Private
Equity Fund, LLC who exercises the voting and dispositive powers with respect
to the shares to be offered by the Company. Lou Posner has had no other
material relationship with the Company and has owned no securities of the
Company prior to the offering.
PLAN OF DISTRIBUTION
The Selling Stockholder and any of its pledgees, donees, assignees and other
successors-in-interest may, from time to time ("selling stockholders") sell
any or all of their shares of common stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling stockholders
may use any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the broker-
dealer solicits the purchaser;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal;
o facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately-negotiated transactions;
o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o through the writing of options on the shares;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act"), if available,
rather than under this prospectus. The selling stockholders shall have the
sole and absolute discretion not to accept any purchase offer or make any
sale of shares if it deems the purchase price to be unsatisfactory at any
particular time.
28
The selling stockholders or their pledgees, donees, transferees or other
successors in interest, may also sell the shares directly to market makers
acting as principals and/or broker-dealers acting as agents for themselves or
their customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and
at their own risk. It is possible that a selling stockholders will attempt to
sell shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then existing market
price. We cannot assure that all or any of the shares offered in this
prospectus will be issued to, or sold by, the selling stockholders. The
selling stockholders and any brokers, dealers or agents, upon effecting the
sale of any of the shares offered in this prospectus, may be deemed to be
"underwriters" as that term is defined under the Securities Act, the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
such acts. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration of
the shares, including fees and disbursements of counsel to the Selling
Stockholder, but excluding brokerage commissions or underwriter discounts.
The selling stockholders, alternatively, may sell all or any part of the
shares offered in this prospectus through an underwriter. The selling
stockholders have not entered into any agreement with a prospective
underwriter and there is no assurance that any such agreement will be
entered into.
The selling stockholders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults
on a margin loan, the broker may, from time to time, offer and sell the
pledged shares. The selling stockholders and any other persons participating
in the sale or distribution of the shares will be subject to applicable
provisions of the Exchange Act, and the rules and regulations under such act,
including, without limitation, Regulation M. These provisions may restrict
certain activities of, and limit the timing of purchases and sales of any of
the shares by, the selling stockholders or any other such person. In the
event that any of the selling stockholders are deemed an affiliated purchaser
or distribution participant within the meaning of Regulation M, then the
selling stockholders will not be permitted to engage in short sales of common
stock. Furthermore, under Regulation M, persons engaged in a distribution of
securities are prohibited from simultaneously engaging in market making and
certain other activities with respect to such securities for a specified
period of time prior to the commencement of such distributions, subject to
specified exceptions or exemptions. In addition, if a short sale is deemed to
be a stabilizing activity, then the selling stockholders will not be
permitted to engage in a short sale of our common stock. All of these
limitations may affect the marketability of the shares.
29
Auctus Private Equity Fund, LLC, the underwriter herein, may offer for sale
up to an estimated 5,000,000 shares of our common stock which it will
originally acquire pursuant to the terms of the equity line of credit
agreement as more fully described under "Selling Stockholder." Auctus will
be offering such shares for their own account. We do not know for certain
how or when Auctus will choose to sell their shares of common stock.
However, they can sell such shares at any time or through any manner set
forth in this plan of distribution at such time as we have "put" the shares
to them. We may request Auctus to purchase shares by delivering a Drawdown
Notice to Auctus. We have acknowledged that Auctus may sell shares
corresponding with a particular Drawdown Notice after the Drawdown Notice is
received by Auctus which allows them to short sell the shares. There shall be
a minimum of five (5) Trading Days between each Drawdown Notice Date.
To permit Auctus to resell the shares of common stock issued to it, we agreed
to file a Registration Statement, of which this prospectus is a part, and all
necessary amendments and supplements with the SEC for the purpose of
registering and maintaining the registration of the shares. We will bear all
costs relating to the registration of the common stock offered by this
prospectus. We will keep the Registration Statement effective until the date
after which all of the shares of common stock held by Auctus that are covered
by the registration statement have been sold by Auctus pursuant to such
registration statement.
30
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the respective names, ages and positions of
our directors and executive officers as well as the year that each of them
commenced serving as a director with MONT. The terms of all of the directors,
as identified below, will run until our annual meeting of stockholders in
2011.
Name Age Position
- ------------- --- ------------------------------
Paul Gain 49 Chairman and Chief
Executive Officer
- ----------------------------------------------------------------------------
Biography of Paul Gain, Director
- --------------------------------
Paul Gain is a software industry and business development veteran.
Prime Mover Global, LLC - Mr. Gain is the Manager of Prime Mover Global, LLC
During the past 20 months, he capitalized and assembled a team to design,
build, and implement an innovative web 2.0 social networking & commerce
portal architecture.
Lydian Technology - Mr. Gain was retained as CEO of Lydian Technology Group.
His primary objective was to integrate the existing business and technology
assets and people from two merged companies into a refined solution set for
the financial services and mortgage industry. This involved the merging of
different technologies, processes, and teams of people from multiple
locations throughout the U.S. and abroad.
Wellfound / Decade Corporation - Mr. Gain held the CEO position of WellFound
technology, an internet era systems integration services company. He
re-focused the team towards the development of a "service-oriented
architecture" technology integration platform, restructured the development
resources to leverage a global development team process, and successfully
launched the resulting platform and company into the financial services
industry as a complete newcomer.
VelociGen / Blue Titan Corporation - Mr. Gain was hired by the outside
investors of VelociGen as Senior VP of Business Development to help shape the
company's business model and strategy for a new web services product line.
The company had developed a set of tools and needed to package these tools
into a product suite that could provide value to its target clients. Blue
Titan was then eventually sold to SOA Software.
31
CMstat Corporation - Mr. Gain founded and served as President and CEO of
CMstat Corporation, a Configuration and Product Data Management enterprise
software company focused primarily in the aerospace, telecommunications, and
government markets. While at CMstat, he was recognized worldwide as a
leading authority and speaker in Configuration and Product Data Management,
and eventually led the CMstat team to a acquisition by VSE Corporation
(NASDAQ: VSEC).
Other Experience - Mr. Gain has also provided consulting services to top-tier
commercial and government organizations, financial services, mortgage
banking, telecom, major aerospace, automotive and manufacturing companies
worldwide.
Education:
- ----------
Mr. Gain is a graduate of Ferris State University in Michigan, with degrees
in Business Management, Automotive Technology, and Mechanical Engineering.
Involvement in Certain Legal Proceedings
None of the executive officers of the Company (i) has been involved as a
general partner or executive officer of any business which has filed a
bankruptcy petition; (ii) has been convicted in any criminal proceeding nor
is subject to any pending criminal proceeding; (iii) has been subjected to
any order, judgment or decree of any court permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any
type of business, securities or banking activities; and (iv) has been found
by a court, the United States Securities and Exchange Commission or the
Commodities Futures Trading Commission to have violated a federal or state
securities or commodities law.
Information Concerning Non-Director Executive Officers
We currently have no executive officers serving who are non-directors.
32
DIRECTOR AND OFFICER COMPENSATION
Summary Compensation Table
The following table sets forth certain compensation information for: (i) each
person who served as the chief executive officer of our company at any time
during the year ended December 31, 2010, regardless of compensation level,
and (ii) each of our other executive officers, other than the chief executive
officer, serving as an executive officer at any time during 2008. The
foregoing persons are collectively referred to herein as the "Named Executive
Officers." Compensation information is shown for fiscal years 2010, 2009,
2008 and 2007.
SUMMARY COMPENSATION TABLES
----------------------------------------------------
Annual Compensation
----------------------------------------------------
Name and Year Stock Option
Principal Position End Salary ($) Bonus ($) Awards ($) Awards($)
- -----------------------------------------------------------------------------
Paul Gain
Chairman/CEO 2010 $ -0- -0- -0- -0-
Jonathan W. Marshall
Director/President/
CFO/Secretary 2009 $ -0- -0- -0- -0-
Nate Kaup
Former Director/
President/
CFO/Secretary 2008 33,000 -0- -0- -0-
2007 -0- -0- -0- -0-
- -----------------------------------------------------------------------------
Non-equity Nonqualified All
Incentive Deferred Other
Name and Principal Year Plan($) Compensation Compens-
Position End Compensation ($) Earnings($) ation ($) Total($)
- -----------------------------------------------------------------------------
Paul Gain
Chairman/CEO 2010 $-0- -0- -0- -0-
Jonathan W. Marshall
Director/President/
CFO/Secretary 2009 $-0- -0- -0- -0-
Nate Kaup
Director/President/
CFO/Secretary 2008 $-0- -0- -0- $33,000
2007 $-0- -0- -0- -0-
- -----------------------------------------------------------------------------
33
No stock options have been granted to the Company's officers and directors
and none are issued or outstanding.
We do not maintain key-man life insurance for our executive officer/director.
We do not have any long-term compensation plans, stock option plans or
employment agreements with our executive officer/director.
Significant Employees
We have no significant employees other than our executive officers and
directors named in this prospectus. We conduct our business through
agreements with consultants and arms-length third parties.
Committees of the Board of Directors
Our audit committee presently consists of our director. Our board does not
have compensation, governance, nominating or executive committees or any
other committees. Our entire board serves in such capacities until their
respective successors are elected and qualified.
Code of Ethics
We have not adopted a Code of Business Conduct and Ethics.
34
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our common stock As of the date of this prospectus by (i) each
Named Executive Officer, (ii) each member of our Board of Directors, (iii)
each person deemed to be the beneficial owner of more than five percent (5%)
of any class of our common stock, and (iv) all of our executive officers and
directors as a group. Unless otherwise indicated, each person named in the
following table is assumed to have sole voting power and investment power
with respect to all shares of our common stock listed as owned by such
person.
AMOUNT AND
NATURE OF
TITLE OF NAME OF BENEFICIAL BENEFICIAL PERCENT OF
CLASS OWNER AND POSITION OWNERSHIP CLASS(1)
- -----------------------------------------------------------------------------
Common Paul Gain (1) 14,700,000 30.4%
President
Common Powerhouse Development (4) 16,875,000 34.9%
Shareholder
- -----------------------------------------------------------------------------
DIRECTORS AND OFFICERS AS A GROUP
(1 person) 14,700,000 30.4%
(1) Percent of Class based on 48,288,707 shares
(2) Paul Gain, P.O. Box 1092, Bonsall, CA 92003
(3) Powerhouse Development, a Panamanian Corporation, Box 832-0816, World
Trade Center, Panama City Panama. Marisela Simmons has the voting and
dispositive power over the shares owned by this entity.
35
DESCRIPTION OF SECURITIES
General
Under our Certificate of Incorporation, we are authorized to issue an
aggregate of 75,000,000 shares of common stock, par value $0.001 per share,
and no shares of preferred stock. As of the date hereof, 48,288,707 shares
of our common stock are issued and outstanding, and there are approximately
2,120 holders of record of our Common Stock.
Common Stock
Pursuant to our bylaws, our common stock is entitled to one vote per share on
all matters submitted to a vote of the stockholders, including the election
of directors. Except as otherwise required by law, the holders of our common
stock possess all voting power. Generally, all matters to be voted on by
stockholders must be approved by a majority (or, in the case of election of
directors, by a plurality) of the votes entitled to be cast by all shares of
our common stock that are present in person or represented by proxy. Holders
of our common stock representing a majority of our capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of our stockholders, pursuant
to Nevada Corporate Law NRS 78.320. Our Certificate of Incorporation does
not provide for cumulative voting in the election of directors.
The holders of shares of our common stock will be entitled to such cash
dividends as may be declared from time to time by our board of directors from
funds available therefore.
Upon liquidation, dissolution or winding up of our company, the holders of
shares of our common stock will be entitled to receive, on a pro rata basis,
all assets of our company available for distribution to such holders.
In the event of any merger or consolidation of our company with or into
another company in connection with which shares of our common stock are
converted into or exchangeable for shares of stock, other securities or
property (including cash), all holders of our common stock will be entitled
to receive the same kind and amount of shares of stock and other securities
and property (including cash), on a pro rata basis.
Holders of our common stock have no pre-emptive rights, no conversion rights
and there are no redemption provisions applicable to our common stock.
Market for Common Stock
Our common stock is quoted on the OTC Bulletin Board under the symbol,
"MONT." The market for our common stock has been sporadic.
36
Dividend Policy
We currently anticipate that no cash dividends will be paid on our common
stock in the foreseeable future. Our Board periodically will reevaluate this
dividend policy taking into account our operating results, capital needs, and
the terms of our existing financing arrangements and other factors.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase
shares of our common stock.
Options
We do not have a stock option plan in place nor are there any outstanding
exercisable for shares of our common stock.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of
the securities being registered or upon other legal matters in connection
with the registration or offering of the common stock was employed on a
contingency basis, or had, or is to receive, in connection with the offering,
a substantial interest, direct or indirect, in our company or any of its
parents or subsidiaries. Nor was any such person connected with our company
or any of its parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
EXPERTS
The Law Offices of Thomas C. Cook, LTD has assisted us in the preparation of
this prospectus and Registration Statement and will provide counsel with
respect to other legal matters concerning the registration and offering of
the common stock. The Law Offices of Thomas C. Cook, LTD have consented to
being named as an expert in our Registration Statement, of which this
prospectus forms a part. The consent has been filed as an exhibit to the
Registration Statement.
De Joya Griffith & Company, LLC, our certified public accountants, have
audited our financial statements included in this prospectus and registration
statement to the extent and for the periods set forth in their audit reports.
De Joya Griffith & Company, LLC has presented its report with respect to our
audited financial statements. The report of De Joya Griffith & Company, LLC
is included in reliance upon their authority as experts in accounting and
auditing. Their consent to being named as Experts is filed as Exhibit 23.1
to the Registration Statement of which this Prospectus is a part.
37
DISCLOSURE OF COMMISSION POSITION OF
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation and Bylaws provide no director shall be liable
to the corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) liability which may be specifically defined by
law or (4) a transaction from which the director derived an improper personal
benefit, it being the intention of the foregoing provision to eliminate the
liability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by law. The corporation shall
indemnify to the fullest extent permitted by law each person that such law
grants the corporation the power to indemnify.
We have been advised that, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities is asserted
by one of our directors, officers, or controlling persons in connection with
the securities being registered, we will, unless in the opinion of our legal
counsel, submit the question of whether such indemnification is against
public policy to a court of appropriate jurisdiction.
38
DESCRIPTION OF OUR BUSINESS
Monster Offers is an emerging online technology company specializing in
social media commerce and advertising solutions for large Companies and Non
Profit Organizations incorporated in the State of Nevada on February 23,
2007. Monster Offers is an online "Deal of the Day" advertising agency. We
also provide brand development, marketing services, and software development
for our clients. Potential customers include large advertisers, direct
marketers, 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. Our website is: www.monsteroffers.com.
At this website, we offer customers an opportunity to find the "Deal of the
Day" in their local area. The website provides the input of a zip code in
the U.S. and the customer can find a local retailer offering a discount on
services/products.
Our website development and media campaigns are managed by a proprietary
software platform. This technology platform allows us to acquire and track
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
www.monsteroffers.com and drhealthshare.com. 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.
While visiting one of our online websites, consumers are given the
opportunity to 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) marketable
profiled data lists of consumers; (c) targeted response leads; and (d)
completed applications for product and/or service sales.
39
Email Marketing
- ---------------
Websites that we own or are digitally produced for clients are promoted by
the engagement of opt-in email marketing companies. In other words, opt-in
emails are sent to users who have requested to receive marketing messages
from a particular email partner/website. These partners currently market
to multiple consumer and/or business databases that they own or are managed
by them under a list management agreement.
Search Engine Marketing
- -----------------------
We utilize search engine marketing companies to direct consumers to
websites. Funds are placed in an open account with each provider and are
spent on a Cost-Per-Click auction basis. Google, Yahoo, and FaceBook are
the primary providers of this service.
Affiliate Marketing
- -------------------
We engage affiliate network destinations where online affiliates can
promote various client offers and promotions. These traffic publishers
choose, manage, and execute marketing cost per action client campaigns.
They are also provided with real-time commission tracking.
Sales Strategy
- --------------
We plan to sell our services to a network of participating advertisers,
affiliate networks, lead buyers and advertisers in various categories
utilizing independent sales organizations. Some of these categories
include the finance industry, consumer product industry, wireless industry,
insurance industry, travel industry, auto industry and mortgage industry.
We also plan to 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.
40
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 Groupon, Living Social, and Travelzoo. These major competitors offer
online "Deal of the Day" directly to the end customer and sell their online
leads through reseller networks.
Government Regulation
- ---------------------
We are subject to federal, state and local laws and regulations affecting our
business. Although the Company plans on obtaining all required federal and
state permits, licenses, and bonds to operate its facilities, there can be no
assurance that the Company's operation and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or
local agencies. New laws and regulations may restrict specific Internet
activities, and existing laws and regulations may be applied to Internet
activities, either of which could increase our costs of doing business over
the Internet and adversely affect the demand for our advertising services.
In the United States, federal and state laws already apply or may be applied
in the future to areas, including children's privacy, copyrights, taxation,
user privacy, search engines, Internet tracking technologies, direct
marketing, data security, pricing, sweepstakes, promotions, intellectual
property ownership and infringement, trade secrets, export of encryption
technology, acceptable content and quality of goods and services.
Government Approval
There are currently no regulations governing our products or services.
Employees
Aside from the Officers and Director as described in this prospectus, the
Company does not have any other employees. The Company does utilize the
services of independent contractors and independent consultants.
41
DESCRIPTION OF PROPERTIES
Our offices are currently located at 4056 Valle Del Sol, Bonsall, CA 92003.
Our telephone number is (760) 208-4905. Management believes that its current
facilities are adequate for its needs through the next twelve months, and
that, should it be needed, suitable additional space will be available to
accommodate expansion of the Company's operations on commercially reasonable
terms, although there can be no assurance in this regard. Our office space
is provided to us at no charge by our sole officer, who will not seek
reimbursement.
LEGAL PROCEEDINGS
During the past five years no director or executive officer of the company
(i) has been involved as a general partner or executive officer of any
business which has filed a bankruptcy petition; (ii) has been convicted in
any criminal proceeding nor is subject to any pending criminal proceeding;
(iii) has been subjected to any order, judgment or decree of any court
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; and (iv) has been found by a court, the United States Securities
and Exchange Commission or the Commodities Futures Trading Commission to have
violated a federal or state securities or commodities law. The Company nor
its officers or directors are not parties to any legal proceedings and are
not aware of any pending claims.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion together with "Selected Historical
Financial Data" and our consolidated financial statements and the related
notes included elsewhere in this prospectus. This discussion contains
forward-looking statements, which involve risks and uncertainties. Our actual
results may differ materially from those we currently anticipate as a result
of many factors, including the factors we describe under "Risk Factors,"
"Special Note Regarding Forward-Looking Statements" and elsewhere in this
prospectus.
Forward Looking Statements
Some of the information in this section contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You
should read statements that contain these words carefully because they:
o discuss our future expectations;
o contain projections of our future results of operations or of our
financial condition; and
o state other "forward-looking" information.
42
We believe it is important to communicate our expectations. However, there
may be events in the future that we are not able to accurately predict or
over which we have no control. Our actual results and the timing of certain
events could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including those set forth
under "Risk Factors," "Business" and elsewhere in this prospectus. See "Risk
Factors."
Unless stated otherwise, the words "we," "us," "our," "the Company" or "MONT"
in this prospectus collectively refers to the Company.
Business Overview
General
Monster Offers is an emerging online technology company specializing in
social media commerce and advertising solutions for large Companies and Non
Profit Organizations incorporated in the State of Nevada on February 23,
2007. From our inception through September 30, 2010, we have generated
$414,037 in revenues and we have incurred a net loss of $ 160,741. As of
September 30, 2010, we had $ 17,993 in cash on hand, total current assets of
$83,787, total assets of $ 91,787, total liabilities of $3,125, an
accumulated deficit of $ 160,741 and a stockholders' equity of $ 88,662. In
our auditor's report included in their audit for fiscal year ended December
31, 2009, our auditors expressed substantial doubt as to our ability to
continue as a going concern.
The growth and development of our business will require a significant amount
of additional funding. We currently have limited financial resources and
based on our current operating plan, we will need to raise additional capital
in order to continue as a going concern. Upon the obtainment of additional
funds, we plan to enhance our "Deal of the Day" concept.
Strategic Business Plan
Generating Revenue and Financing Plans for the Short-Term
In the short term, the Company plans to generate revenues and operating
capital with three initiatives:
o The sale of equity securities.
o Through the sponsored "Deal of the Day" program in driving consumers to
local retailers
o Marketing our proprietary software programs
43
We intend to conduct financing and raise operating capital for our intended
plans of operations through the sales and issuances of our common stock. We
intend to conduct a series of private offerings to accredited investors only
(as such term is defined in Rule 501 of Regulation D of the Securities Act of
1933) either through our officers or directors, or through the help of one or
more placement agents.
Until we can generate increased revenues and profits, obtaining short term
operating capital through sales of our equity securities is vital for us to
continue as a going concern. Should we fail in our efforts to attract
investment in our Company, we will not be able to execute our business plan,
and our operations will fail. Current obstacles we face to our financing
plans include, but are not limited to, the current global economic crises and
declining market for investment in the United States, the highly competitive
market in which we operate, the lack of popularity and brand awareness of our
products, the fact that we have never generated revenues and our products are
not market tested, the large amount of debt we have incurred since inception,
and the fact that our auditors have issued a going concern opinion in our
last audited financial statements and we anticipate that they will be issuing
a going concern opinion in our upcoming audited financial statements.
November 2010 Securities Purchase Agreement
On November 5, 2010, Monster Offers completed a Securities Purchase Agreement
with Asher Enterprises, Inc., for the sale of an 8% convertible note in the
principal amount of $53,000. The Note bears interest at the rate of 8% per
annum. All interest and principal must be repaid by the maturity date of
July 18, 2011. The Note is convertible into common stock, at Asher's option,
at a 36% discount to the average of the three lowest closing bid prices of
the common stock during the 10 trading day period prior to conversion. This
Note may not be prepaid in whole or in part.
Results of Operations
As of September 30, 2010, our cash on hand was $17,993 and account receivable
of $65,794, compared to $18,190 and $2,235 respectfully as of our fiscal year
end of December 31, 2009.
As of September 30, 2010, our total assets were $91,787, compared to $20,425
as of December 31, 2009. This increase was primarily due to revenues and
acquisition of software.
As of September 30, 2010, our total current liabilities were $3,125 as
compared to $1,350 as of December 31, 2010. This decrease was nominal. Our
current liabilities reflect fees owed for accounting services.
Total Stockholders' Deficit. Our stockholders' deficit was $88,662 as of
September 30, 2010 compared to $19,075 as of December 31, 2009.
44
Three months Ended September 30, 2010 Compared to Three months Ended
September 30, 2009
Revenues. We generated $19,514 in revenues for the three months ended
September 30, 2010 as compared to $12,799 for the same period last year.
Net Loss. We had a net loss of $165,670 for the three months ended September
30, 2010 compared to $1,912 for the three months ended September 30, 2009.
This increase was primarily due to $182,768 in consulting services, whereby
we issued shares of our unregistered restricted common stock to three
consultants. The value of $182,768 was determined by our consultants for
their services.
Operating expenses. Our operating expenses consisted of general and
administrative expenses of $2,216 and $200 in advertising for the three
months ending September 30, 2010, as compared to $2,833 in general and
administrative expenses and no advertising fees for the same period last
year.
Nine months Ended September 30, 2010 Compared to Nine months Ended
September 30, 2009
Revenues. 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 $3,102 and $262,149, 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.
Net Loss. We had a net loss of $121,331 for the nine months ended September,
2010 compared to net income of $5,451 for the nine months ended September,
2009. This increase was primarily due to $182,768 in consulting services,
whereby we issued shares of our unregistered restricted common stock to three
consultants. The value of $182,768 was determined by our consultants for
their services.
Operating expenses. 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.
45
Liquidity and Capital Resources
- -------------------------------
Our balance sheet as of September 30, 2010 reflects cash assets of $17,993,
Accounts receivable of $65,784 and $3,125 in current liabilities. Cash and
cash equivalents from inception to date have been sufficient to provide the
operating capital necessary to operate to date.
On December 11, 2007 we issued 11,250,000 par value $0.001 common shares of
stock to the Company's founder for $11,250 cash. All securities were issued
in reliance upon an exemption from registration under Section 4(2) of the
Securities Act as a transaction not involving a public offering.
Monster Offers was a wholly-owned subsidiary of Tropical PC. The shares of
Monster Offers were issued to each of Tropical PC's shareholders as a spin-
off dividend of Tropical PC, Inc. on a proportional basis. The record
shareholders of Tropical PC received one (1) unregistered common share, par
value $0.001, of Monster Offers Corporation common stock for every share of
Tropical PC common stock owned. The Tropical PC Corporation stock dividend
was based on 810,000 shares of Tropical PC common stock that were issued and
outstanding as of the record date. The Company purchased 600,000 spin-off
shares from Tropical PC's original founder at par value. These 600,000
shares were returned to the Monster Offers treasury to be used as future
officer compensation, contingent on making Monster Offers profitable over the
next two years.
In December, 2007, we conducted a private placement without any general
solicitation or advertisement. The Company issued 7,500,000 shares of its
$0.001 par value common stock to non-affiliated investors for cash of $33,750
pursuant to a Regulation D, Rule 506 of the Securities Exchange Act of 1934.
All securities were issued in reliance upon an exemption from registration
under Section 4(2) of the Securities Act as a transaction not involving a
public offering. Some of the investors were accredited and some were
sophisticated investors with access to information about the Company.
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. The shares
were issued pursuant to the exemption from registration provided by Section
4(2) of the Securities Act. We believed that Section 4(2) was available
because the offer and sale did not involve a public offering and there was
not general solicitation or general advertising involved in the offer or
sale. These non-accredited investors were sophisticated with access to
information about the Company The shares of common stock issued will contain
a legend restricting transferability absent registration or applicable
exemption.
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.
46
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. 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.
On September 1, 2010, Monster Offers issued 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. The shares of common stock issued contained a legend
restricting transferability absent registration or applicable exemption.
On November 5, 2010, Monster Offers completed a Securities Purchase Agreement
with Asher Enterprises, Inc., for the sale of an 8% convertible note in the
principal amount of $53,000. The Note bears interest at the rate of 8% per
annum. All interest and principal must be repaid by the maturity date of
July 18, 2011. The Note is convertible into common stock, at Asher's option,
at a 36% discount to the average of the three lowest closing bid prices of
the common stock during the 10 trading day period prior to conversion. This
Note may not be prepaid in whole or in part.
47
On November 18, 2010, Monster Offers issued 125,000 unregistered restricted
shares to Emerging Growth Research, LLC in accordance with the terms of the
Investor and Public Relations Agreement, dated November 10, 2010, entered
into between us and Emerging Growth Research, LLC. We believe that the
issuance is exempt from registration under Section 4(2) of the Securities Act
of 1933, as amended. 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. Emerging
Growth Research, LLC was provided access to all material information, which
they requested and all information necessary to verify such information and
was afforded access to our management in connection with this transaction.
Emerging Growth Research, LLC acquired these securities for investment and
not with a view toward distribution. The shares of common stock issued will
contain a legend restricting transferability absent registration or
applicable exemption.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. Originally, management
anticipated a need to raise $475,000 to fully implement its business plan.
After careful consideration and a detailed analysis by new management, the
Company now expects it will need to raise $5,000,000 to forward its business
plan, and we would have to issue debt or equity or enter into a strategic
arrangement with a third party. Management believes it can begin to
partially implement its business plan with its limited funds and resources.
There can be no assurance that additional capital will be available to us,
especially with the current economic environment. We currently have no
agreements, arrangements or understandings with any person to obtain funds
through bank loans, lines of credit or any other sources.
Our sole officer/director has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for funds donated. No agreement exists that
our sole officer/director will continue to donate funds to the operations of
the Company for the next twelve months; therefore, there is no guarantee that
he will continue to do so in the future.
Future Financing
- -----------------
We anticipate continuing to rely on equity sales of our common shares in
order to continue to fund our business operations. Issuance of additional
shares will result in dilution to our existing shareholders. There is no
assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.
48
We hope to raise $5,000,000 in a future offering of our common stock. In the
event we are unable to raise this money, we may not be able to sustain our
operations, which could result in reducing or ceasing our operations and may
consequently force us to cease our business operations altogether. There are
no formal or informal agreements to attain such financing and we can not
assure you that any financing can be obtained. Management has been seeking
funding from a number of sources, but has yet to secure any funding,
especially during this current economic downturn. Management continues to
seek different funding sources in order to initiate its business plan. The
downturn in the economy has limited various sources of financing. Management
continues to seek financing with no success. If we are unable to raise these
funds, we will not be able to implement any of our proposed business
activities and may be forced to cease operations.
Off-Balance Sheet Arrangements
We did 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 of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
Critical Accounting Policies & Estimates
The Company's financial statements included herein were prepared in
accordance with United States generally accepted accounting principles.
Significant accounting policies are as follows:
a. 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.
b. Advertising
Advertising costs are expensed when incurred. The Company incurred
advertising expenses of $0 and $20,908 for the years ended December 31, 2009
and 2008, respectively. For the period since inception on February 23, 2007
through the year ended December 31, 2009, the Company has incurred
advertising expenses of $20,908.
c. 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.
49
d. 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.
50
New Accounting Pronouncements
Recently Issued Accounting Pronouncements
- -----------------------------------------
None.
51
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND CORPORATE GOVERNANCE
The company's Director has contributed office space for the Company's use for
all periods presented. There is no charge to Monster Offers for the space.
Management believes that its current facilities are adequate for its needs
through the next twelve months, and that, should it be needed, suitable
additional space will be available to accommodate expansion of the Company's
operations on commercially reasonable terms, although there can be no
assurance in this regard. Our officer will not seek reimbursement for past
office expenses. No written agreement exists that this officer/director will
continue to donate office space to the operations. Therefore, there is no
guarantee that he will not seek reimbursement for the donated office space in
the future.
For the years ended December 31, 2009 and 2008, the Company received $18,081
and $48,986, respectively, from customers in which one of the Company's
shareholders had ownership or was an affiliate, for work performed by
subcontractors who are also related parties. Thus, commissions from related
parties represent most of the Company's revenue.
Through a Board Resolution, the Company hired the professional services of
De Joya Griffith & Company, LLC, Certified Public Accountants & Consultants,
to perform an audit of the financials for the Company. De Joya Griffith &
Company, LLC owns no stock in the Company. The company has no formal
contract with its accountants, and they are paid on a fee for service basis.
52
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for our Common Stock
Our common stock trades on the OTCBB under the symbol "MONT." The stock was
first cleared for quotation on the OTCBB on October 23, 2008. The following
table sets forth the high and low intra-day prices per share of our common
stock for the periods indicated, which information was provided by the OTCBB.
The quotations set forth below reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not represent actual transactions.
High* Low*
---- ----
Fourth Quarter Ended December 31, 2010 $1.20 $0.56
Third Quarter Ended September 30, 2010 $0.60 $0.56
Second Quarter Ended June 30, 2010 $0.70 $0.46
First Quarter Ended March 31, 2010 $0.46 $0.40
*Stock Price adjusted for 3:2 dividend paid on December 2, 2010.
Holders
As of January 20, 2011, there were 48,288,707 shares of our common stock
outstanding held by approximately 2,120 shareholders of record. The number of
our shareholders of record excludes any estimate by us of the number of
beneficial owners of shares held in street name, the accuracy of which cannot
be guaranteed.
Dividend Policy
We have not paid any cash dividends on our common stock to date, and we have
no intention of paying cash dividends in the foreseeable future. Whether we
will declare and pay dividends in the future will be determined by our board
of directors at their discretion. The timing, amount and form of dividends,
if any, will depend on, among other things, our results of operations,
financial condition, cash requirements and other factors deemed relevant by
our board of directors.
53
SEC "Penny Stock" Rules.
The Securities and Exchange Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks.
Penny stocks are generally equity securities with a price of less than $5.00,
other than securities registered on certain national securities exchanges or
quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by
the exchange or quotation system. The penny stock rules require a broker-
dealer, prior to a transaction in a penny stock, to deliver a standardized
risk disclosure document prepared by the SEC, that: (a) contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of
the broker's or dealer's duties to the customer and of the rights and
remedies available to the customer with respect to a violation to such duties
or other requirements of Securities' laws; (c) contains a brief, clear,
narrative description of a dealer market, including bid and ask prices for
penny stocks and the significance of the spread between the bid and ask
price; (d) contains a toll-free telephone number for inquiries on
disciplinary actions; (e) defines significant terms in the disclosure
document or in the conduct of trading in penny stocks; and (f) contains such
other information and is in such form, including language, type, size and
format, as the Securities and Exchange Commission shall require by rule or
regulation. The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid
and ask prices apply, or other comparable information relating to the depth
and liquidity of the market for such stock; and (d) monthly account
statements showing the market value of each penny stock held in the
customer's account. In addition, the penny stock rules require that prior to
a transaction in a penny stock not otherwise exempt from those rules; the
broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's
written acknowledgment of the receipt of a risk disclosure statement, a
written agreement to transactions involving penny stocks, and a signed and
dated copy of a suitably written statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock if it becomes subject to these
penny stock rules. Therefore, if our common stock becomes subject to the
penny stock rules, stockholders may have difficulty selling those securities.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
None.
54
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 under the Securities Act
with the Securities and Exchange Commission with respect to the shares of our
common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the
information contained in the registration statement and exhibits. Statements
made in the registration statement are summaries of the material terms of the
referenced contracts, agreements or documents of our company. We refer you to
our registration statement and each exhibit attached to it for a more
detailed description of matters involving our company and the statements we
have made in this prospectus are qualified in their entirety by reference to
these additional materials. You may inspect the registration statement,
exhibits and schedules filed with the Securities and Exchange Commission at
the SEC's principal office in Washington, D.C. Copies of all or any part of
the registration statement may be obtained from the Public Reference Section
of the SEC, Room 1580, 100 F Street NE, Washington D.C. 20549. Please call
the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The Securities
and Exchange Commission also maintains a website at http://www.sec.gov that
contains reports, proxy statements and information regarding registrants that
file electronically with the SEC. Our registration statement and the
referenced exhibits can also be found on this site.
55
FINANCIAL INFORMATION
MONSTER OFFERS
Table of Contents
Financial Statement
-------------------
PAGE
Year end December 31, 2009 Financials (audited):
- ------------------------------------------------
Independent Auditors' Report F-1a
Balance Sheets F-2a
Statements of Operations F-3a
Statements of Stockholders' Equity (Deficit) F-4a
Statements of Cash Flows F-5a
Notes to Financials F-6a
Quarter end September 30, 2010 Financials (unaudited):
- ------------------------------------------------------
Balance Sheets F-1b
Statements of Operations F-2b
Statements of Cash Flows F-3b
Notes to Financials F-4b
56
De Joya Griffith & Company, LLC
------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
To The Board of Directors and Stockholders
Monster Offers
Panama City, Panama
We have audited the accompanying balance sheets of Monster Offers (A
Development Stage Enterprise) as of December 31, 2009 and 2008, and the
related statements of operations, stockholders' equity (deficit), and cash
flows for the years then ended and from inception (February 23, 2007) to
December 31, 2009. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Monster Offers (A
Development Stage Enterprise) as of December 31, 2009 and 2008, and the
results of their operations and cash flows for the years then ended and from
inception (February 23, 2007) to December 31, 2009 in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from
operations, which raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
De Joya Griffith & Company, LLC
/s/ De Joya Griffith & Company, LLC
- ------------------------------------
Henderson, Nevada
April 13, 2010
2580 Anthem Village Drive, Henderson, NV 89052
Telephone (702) 563-1600 o Facsimile (702) 920-8049
F-1a
Monster Offers
(A Development Stage Company)
Balance Sheets
December 31, December 31,
2009 2008
------------- -------------
ASSETS
Current assets
Cash and equivalents $ 18,190 $ 6,469
Accounts receivable - related party 2,235 -
------------- -------------
Total current assets 20,425 6,469
------------- -------------
TOTAL ASSETS $ 20,425 $ 6,469
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable 1,350 8,635
------------- -------------
Total current liabilities 1,350 8,635
Stockholders' equity (deficit)
Common stock, $0.001 par value, 75,000,000
shares authorized, 32,460,000 and
18,960,000 shares issued and outstanding
as of 12/31/09 and 12/31/08, respectively 32,460 18,960
Additional paid-in capital 27,025 27,025
Subscription receivable (1,000) -
Deficit accumulated during development
stage (39,410) (48,151)
------------- -------------
Total stockholders' equity (deficit) 19,075 (2,166)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 20,425 $ 6,469
============= =============
The accompanying notes are an integral part of these financial statements.
F-2a
Monster Offers
(A Development Stage Company)
Statements of Operations
Inception
For the years ending (February 23, 2007)
December 31, to December 31,
---------------------------- -------------
2009 2008 2009
------------- ------------- -------------
REVENUES
Commission Revenue $ - $ 527 $ 527
Commission Revenue -
Related party 267,909 48,986 316,895
------------- ------------- -------------
Total Revenues 267,909 49,513 317,422
Cost of goods
Commission paid-
Related party 249,828 - 249,828
------------- ------------- -------------
Gross Profit $ 18,081 $ 49,513 $ 67,594
EXPENSES
Advertising - 20,908 20,908
Audit fees 6,250 9,000 15,250
Expenses of spinoff - - 5,610
General & Administrative 8,100 56,748 65,833
Professional fees 600 5,413 6,013
Officer compensation - 33,000 33,000
------------- ------------- -------------
Total expenses 14,950 125,069 146,614
------------- ------------- -------------
INCOME (LOSS) FROM OPERATIONS 3,131 (75,556) (79,020)
------------- ------------- -------------
OTHER INCOME
Debt forgiveness 5,610 - 5,610
Refund of expense - 34,000 34,000
------------- ------------- -------------
Total other income 5,610 34,000 39,610
------------- ------------- -------------
Net income (loss) before
provision for income taxes 8,741 (41,556) (39,410)
Income tax expense - - -
------------- ------------- -------------
NET INCOME (LOSS) $ 8,741 $ (41,556) $ (39,410)
============= ============= =============
NET EARNINGS (LOSS) PER SHARE $ 0.00 $ (0.00)
============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND FULLY DILUTED 19,330,879 18,960,000
============= =============
The accompanying notes are an integral part of these financial statements.
F-3a
Monster Offers
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
(Deficit)
Accumulated Total
During Stock-
Additional Develop- holders'
Common Stock Paid-in Subscription ment Equity
Shares Amount Capital Receivable Stage (Deficit)
-----------------------------------------------------
Contributed Capital,
February 2007 - $ - $ 400 $ - $ - $ 400
Founders' shares issued
for Services,
December 2007 11,250,000 11,250 - - - 11,250
Contributed Capital - - 585 - - 585
Tropical PC Spin Off
Shares 810,000 810 (810) - - -
Shares returned to
Company (600,000) (600) 600 - - -
Shares issued
pursuant to offering 7,500,000 7,500 26,250 - - 33,750
Net loss - - - - (6,595) (6,595)
-------------------------------------------------------
Balance,
December 31, 2007 18,960,000 18,960 27,025 - (6,595) 39,390
-------------------------------------------------------
Net loss - - - - (41,556) (41,556)
-------------------------------------------------------
Balance,
December 31, 2008 18,960,000 18,960 27,025 - (48,151) (2,166)
-------------------------------------------------------
Private placement,
December 2009 13,500,000 13,500 - (1,000) - 12,500
Net loss - - - - 8,741 8,741
-------------------------------------------------------
Balance,
December 31, 2009 32,460,000 $32,460 $ 27,025 $(1,000) $(39,410) $ 19,075
================== ========= ======== ===================
The accompanying notes are an integral part of these financial statements.
F-4a
Monster Offers
(A Development Stage Company)
Statements of Cash Flows
Inception
For the years ending (February 23, 2007)
December 31, to December 31,
---------------------------- -------------
2009 2008 2009
------------- ------------- -------------
OPERATING ACTIVITIES
Net income (loss) $ 8,741 $ (41,556) $ (39,410)
Adjustments to reconcile net income
(loss) to net cash used by
operating activities:
(Increase) in accounts
receivable (2,235) - (2,235)
Increase(decrease) in
accounts payable (7,285) 3,025 1,350
------------- ------------- -------------
Net cash used by operating
activities (779) (38,531) (40,295)
FINANCING ACTIVITIES
Proceeds from
Issuance of common stock 12,500 - 57,500
Contributed capital - - 985
------------- ------------- -------------
Net cash provided by financing
activities 12,500 - 58,485
------------- ------------- -------------
NET CHANGE IN CASH 11,721 (38,531) 18,190
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 6,469 45,000 -
------------- ------------- -------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 18,190 $ 6,469 $ 18,190
============= ============= =============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
F-5a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Organization
- -------------
Monster Offers (a development stage company) (the "Company") was
incorporated under the laws of the State of Nevada, as Tropical PC
Acquisition Corporation on February 23, 2007 ("Inception"). The Company
was incorporated to conduct any legal business and is an agent for internet
advertisers. Using technology owned by a principal, the Company recruits
subcontractors who work over the internet to promote specialty internet
advertising. The Company earns fees via marketing services including
the selling of internet data/customer lists, generating sales leads for
customers by advertising on the internet, and executing internet marketing
campaigns for customers. All transactional services revenues are recognized
on a gross basis. Often, shareholders of the Company and/or its' principals
act as subcontractors to the Company, resulting in most of
the Company's commission revenue being classified as related party (see
our Related Party footnote).
The Company was incorporated as a wholly-owned subsidiary of Tropical PC,
Inc., a Nevada corporation. Tropical PC was incorporated September 22, 2004,
and, at the time of spin-off was not listed on any exchange. On December 11,
2007, Tropical PC, Inc. amended its Articles of Incorporation to change its
subsidiary's name to Monster Offers.
The directors of Tropical PC approved a spin off its subsidiary in the form
of a stock dividend as of December 31, 2007 (the "Record Date"). The record
shareholders of Tropical PC received one (1) unregistered common share, par
value $0.001, of Monster Offers Corporation common stock for every share of
Tropical PC common stock owned. The Tropical PC Corporation stock dividend
was based on 810,000 shares of Tropical PC common stock that were issued and
outstanding as of the record date.
Tropical PC spun off its wholly owned Monster Offers subsidiary in exchange
for $5,000. The spin-off transaction was accomplished by the exchange of
$5,000 for a subsidiary which included the same shareholder base as Tropical
PC. It did not include the transfer of any hard assets or liabilities. This
spin off was valued at par value since the company holds no assets, is
uncertain as to future benefit, the stock is not trading, and the company has
not even received a stock symbol.
Tropical PC retained no ownership in Monster Offers following the spinoff.
Monster Offers is no longer a subsidiary of Tropical PC, Inc.
The Company had cash assets of $18,190 and $6,469 and current liabilities
of $1,350 and $8,635 as of December 31, 2009 and 2008, respectively.
The relevant accounting policies are listed below.
F-6a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Use of Estimates
- -----------------
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.
Advertising
- ------------
Advertising costs are expensed when incurred. The Company incurred
advertising expenses of $0 and $20,908 for the years ended December 31, 2009
and 2008, respectively. For the period since inception on February 23, 2007
through the year ended December 31, 2009, the Company has incurred
advertising expenses of $20,908.
Earnings per Share
- -------------------
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of securities or other contracts to issue common
stock that were exercised or converted into common stock or resulted in
the issuance of common stock that shared in the earnings of the entity. As
of December 31, 2009 and 2008, the Company had no potential common
stock equivalents which were determined to be antidilutive.
Calculation of net income (loss) per share is as follows:
For the year ended For the year ended
December 31, 2009 December 31, 2008
------------------ ------------------
Net income (loss) (numerator) $ 8,741 $ (41,556)
================== ==================
Weighted average common
shares outstanding 19,330,879 18,960,000
================== ==================
Basic income (loss) per share $ 0.00 $ (0.00)
================== ==================
F-7a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Income Taxes
- -------------
The provision for income taxes is the total of the current taxes payable
and the net of the change in the deferred income taxes. Provision is made
for the deferred income taxes where differences exist between the period
in which transactions affect current taxable income and the period in
which they enter into the determination of net income in the
financial statements.
Year end
- ---------
The Company's fiscal year-end is December 31.
Revenue Recognition
- --------------------
In accordance with ASC 605 and SEC Staff Accounting Bulletin 104, the
Company monetizes a portion of its user activities through transactional
based services generated primarily from fees earned via marketing services
including data and list management, lead generation, and online marketing
campaigns, which can be either periodic or transactional. Fee revenue is
recognized in the period that the Company's advertiser customer generates
a sale or other agreed-upon action on the Company's affiliate marketing
networks or as a result of the Company's services, provided that no
significant Company obligations remain, collection of the resulting
receivable is reasonably assured, and the fees are fixed or determinable.
All transactional services revenues are recognized on a gross basis in
accordance with the provisions of ASC Subtopic 605-45, due to the fact
that the Company is the primary obligor, and bears all credit risk to
its customer, and publisher expenses that are directly related to a
revenue-generating event are recorded as a component of commission
paid-related party.
F-8a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements
- ---------------------------------
Below is a listing of the most recent accounting standards and their effect
on the Company.
In February 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to
Various Topics. This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to various topics within
Topic 815. The amendments are effective for the first reporting period
(including interim periods) beginning after issuance (February 2, 2010),
except for certain amendments. The amendments to the guidance on accounting
for income taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required. The clarifications of the guidance on
the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal
years beginning after December 15, 2009, and should be applied to existing
contracts (hybrid instruments) containing embedded derivative features at the
date of adoption. The Company does not expect the provisions of ASU 2010-08
to have a material effect on the financial position, results of operations or
cash flows of the Company.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements
and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures about
fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those fiscal years. Early adoption is permitted. The Company does
not expect the provisions of ASU 2010-06 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-05 (ASU 2010-05), Compensation - Stock
Compensation (Topic 718). This standard codifies EITF Topic D-110 Escrowed
Share Arrangements and the Presumption of Compensation.
F-9a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements (Continued)
- ---------------------------------------------
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various
Topics-Technical Corrections to SEC Paragraphs.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities-Oil
and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. As the
Company does not have any Oil and Gas activity or reserves, the Company does
not expect the provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in
Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does
not change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December
15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU 2010-
01 to have a material effect on the financial position, results of operations
or cash flows of the Company.
F-10a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(Continued)
Recent Accounting Pronouncements (Continued)
- ---------------------------------------------
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances than
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
F-11a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)
The Company is authorized to issue 75,000,000 shares of its $0.001 par value
common stock.
On February 23, 2007, a shareholder contributed capital of $400 for
incorporating fees.
On December 11, 2007, the Company issued 11,250,000 shares of its common
stock to its founder for $11,250 in cash. The Founder then transferred these
shares to an outside party for the same price on December 31, 2007.
On December 15, 2007, a shareholder contributed capital of $585 for
registration fees.
The Company was a subsidiary of Tropical PC, Inc. On December 31, 2007, the
record shareholders of Tropical PC, Inc. received a spin off dividend of one
(1) common share, par value $0.001, of Monster Offers common stock for every
share of Tropical PC, Inc. common stock owned for a total 810,000 common
shares issued. Of these 810,000 shares, 600,000 were returned and cancelled
to the Company.
On December 31, 2007, the Company issued 7,500,000 shares of its common
stock pursuant to a Regulation D 506 offering for $33,750 in cash.
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. The Company
received $12,500 and has a subscription receivable of $1,000.
As of December 31, 2009 and December 31, 2008, the Company has 32,460,000 and
18,960,000 shares of its common stock issued and outstanding, respectively.
NOTE 3 - GOING CONCERN
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. Since inception (February
23, 2007) through December 31, 2009 and 2008, the Company recognized an
accumulated deficit during development stage of approximately $39,410 and
$48,151, respectively. The Company's ability to continue as a going concern
is contingent upon the successful completion of additional financing
arrangements and its ability to achieve and maintain profitable operations.
F-12a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 3 - GOING CONCERN (Continued)
Management plans to raise equity capital to finance the operating and capital
requirements of the Company. Amounts raised will be used for further
development of the Company's services, to provide financing for marketing and
promotion, to secure additional property and equipment, and for other working
capital purposes. While the Company is devoting its best efforts to achieve
the above plans, there is no assurance that any such activity will generate
funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset amounts, or amounts and classification of liabilities that might result
from this uncertainty.
NOTE 4 - PROVISION FOR INCOME TAXES
For the years ended December 31, 2009 and 2008, the Company had a generated
net operating income and had incurred net operating loss, respectively.
Although the Company had net income during 2009, net operating losses have
been reduced and no provision for income taxes has been recorded. In
addition, no benefit for income taxes has been recorded due to the
uncertainty of the realization of any tax assets. At December 31, 2009 and
2008, the Company had approximately $39,410 and $48,151 of federal and state
net operating losses, respectively. The net operating loss carryforwards, if
not utilized, will begin to expire in 2027. The provision for income taxes
consisted of the following components for the year ended December 31:
The components of the Company's deferred tax asset are as follows:
December 31,
2009 2008
------------------------
Deferred tax assets:
Net operating loss carryforwards 13,794 16,853
Valuation allowance (13,794) (16,853)
------------------------
Total deferred tax assets $ -0- $ -0-
========================
F-13a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 4 - PROVISION FOR INCOME TAXES (Continued)
The valuation allowance for deferred tax assets as of December 31, 2009 and
2008 was $13,794 and $16,853, respectively. In assessing the recovery of the
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income in the periods in which those temporary differences
become deductible. Management considers the scheduled reversals of future
deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. As a result, management determined it
was more likely than not the deferred tax assets would not be realized as of
December 31, 2009 and 2008, and recorded a full valuation allowance.
Reconciliation between the statutory rate and the effective tax rate is as
follows at December 31:
2009 & 2008
-----------
Federal statutory tax rate (35.0)%
Permanent difference and other 35.0 %
-----------
0.0 %
NOTE 5 - RELATED PARTY TRANSACTIONS
For the years ended December 31, 2009 and 2008, the Company received $18,081
and $48,986, respectively, from customers in which one of the Company's
shareholders had ownership or was an affiliate, for work performed by
subcontractors who are also related parties. Thus, commissions from related
parties represent most of the Company's revenue.
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
and may, in the future, become involved in other business opportunities.
If a specific business opportunity becomes available, such persons may face
a conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution of
such conflicts.
F-14a
Monster Offers
(A Development Stage Company)
Notes to the Financial Statements
NOTE 6 - CONCENTRATION OF CREDIT RISKS
Cash Balances
- --------------
The Company maintains its cash in various financial institutions in the
United States. Balances maintained are insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances
up to $100,000 through October 13, 2008. As of October 14, 2008 all non-
interest bearing transaction deposit accounts at an FDIC-insured institution,
including all business checking deposit accounts that do not earn interest,
are fully insured for the entire amount in the deposit account. This
unlimited insurance coverage is temporary and will remain in effect for
participating institutions until December 31, 2009. All other deposit
accounts at FDIC-insured institutions are insured up to at least $250,000
per depositor until December 31, 2013.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through April 13, 2010, the date
which the financial statements were available to be issued. The Company has
determined that there were no such events that warrant disclosure or
recognition in the financial statements.
F-15a
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.
F-1b
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.
F-2b
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.
F-3b
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.
F-4b
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.
F-5b
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.
F-6b
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.
F-7b
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.
F-8b
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.
F-9b
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.
F-10b
[OUTSIDE BACK COVER OF PROSPECTUS]
_____________________________________________________________________________
MONSTER OFFERS
5,000,000 SHARES of COMMON STOCK
Until ninety days after the date this registration statement is declared
effective, all dealers that effect transactions in these securities whether
or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
_____________________________________________________________________________
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Nature of Expenses:
Amount
------
U. S. Securities and Exchange Commission registration fee $ 174
Legal fees and miscellaneous expenses* $ 7,500
Audit Fees* $ 2,500
Transfer Agent Fees* $ 2,000
Printing* $ 326
-------
Total $12,500
=======
*Estimated Expenses.
We are paying all expenses of the offering listed above. No portion of these
expenses will be paid by the Selling Stockholders. The Selling Stockholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation provide for indemnification to the full extent
permitted by the laws of the State of Nevada for each person who becomes a
party to any civil or criminal action or proceeding by reason of the fact
that he, or his testator, or intestate, is or was a director or officer of
the corporation or served any other corporation of any type or kind, domestic
or foreign in any capacity at the request of the corporation. We have been
advised that, in the opinion of the SEC, indemnification for liabilities
arising under the Securities Act is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the securities
being registered, we will, unless in the opinion of our legal counsel, submit
the question of whether such indemnification is against public policy to a
court of appropriate jurisdiction.
We have no other indemnification provisions in our Certificate of
Incorporation, Bylaws or otherwise specifically providing for indemnification
of directors, officers and controlling persons against liability under the
Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On December 11, 2007 we issued 11,250,000 par value $0.001 common shares of
stock to the Company's founder for $11,250 cash. All securities were issued
in reliance upon an exemption from registration under Section 4(2) of the
Securities Act as a transaction not involving a public offering.
Monster Offers was a wholly-owned subsidiary of Tropical PC. The shares of
Monster Offers were issued to each of Tropical PC's shareholders as a spin-
off dividend of Tropical PC, Inc. on a proportional basis. The record
shareholders of Tropical PC received one (1) unregistered common share, par
value $0.001, of Monster Offers Corporation common stock for every share of
Tropical PC common stock owned. The Tropical PC Corporation stock dividend
was based on 810,000 shares of Tropical PC common stock that were issued and
outstanding as of the record date. The Company purchased 600,000 spin-off
shares from Tropical PC's original founder at par value. These 600,000
shares were returned to the Monster Offers treasury to be used as future
officer compensation, contingent on making Monster Offers profitable over the
next two years.
In December, 2007, we conducted a private placement without any general
solicitation or advertisement. The Company issued 7,500,000 shares of its
$0.001 par value common stock to non-affiliated investors for cash of $33,750
pursuant to a Regulation D, Rule 506 of the Securities Exchange Act of 1934.
All securities were issued in reliance upon an exemption from registration
under Section 4(2) of the Securities Act as a transaction not involving a
public offering. Some of the investors were accredited and some were
sophisticated investors with access to information about the Company.
On December 21, 2009, the Company authorized the sale of 13,500,000
unregistered restricted common shares in exchange for $13,500. The shares
were issued pursuant to the exemption from registration provided by Section
4(2) of the Securities Act. We believed that Section 4(2) was available
because the offer and sale did not involve a public offering and there was
not general solicitation or general advertising involved in the offer or
sale. These non-accredited investors were sophisticated with access to
information about the Company The shares of common stock issued will contain
a legend restricting transferability absent registration or applicable
exemption.
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. 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.
On September 1, 2010, Monster Offers issued 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. The shares of common stock issued contained a legend
restricting transferability absent registration or applicable exemption.
On November 18, 2010, Monster Offers issued 125,000 unregistered restricted
shares to Emerging Growth Research, LLC in accordance with the terms of the
Investor and Public Relations Agreement, dated November 10, 2010, entered
into between us and Emerging Growth Research, LLC. We believe that the
issuance is exempt from registration under Section 4(2) of the Securities Act
of 1933, as amended. 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. Emerging
Growth Research, LLC was provided access to all material information, which
they requested and all information necessary to verify such information and
was afforded access to our management in connection with this transaction.
Emerging Growth Research, LLC acquired these securities for investment and
not with a view toward distribution. The shares of common stock issued will
contain a legend restricting transferability absent registration or
applicable exemption.
ITEM 16. EXHIBITS
Incorporated by Reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, SB-2 3.1 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.2 Bylaws SB-2 3.2 01/15/2008
as currently in effect
- -------------------------------------------------------------------------------
3.3 Amended Articles of SB-2 3.3 01/15/2008
Incorporation as currently
in effect.
- -------------------------------------------------------------------------------
5.1 Opinion of Thomas C. Cook, Esq. X
regarding the legality of the
securities being registered
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
10.6 Drawdown Equity Financing 8-K 10.6 01/03/2011
Agreement between Monster Offers
and Auctus Private Equity Fund,
LLC dated December 23, 2010.
- -------------------------------------------------------------------------------
10.7 Registration Rights Agreement 8-K 10.6 01/03/2011
between Monster Offers and
Auctus Private Equity Fund, LLC
dated December 23, 2010.
- -------------------------------------------------------------------------------
23.1 Consent of De Joya Griffith X
& Company, LLC
- ------------------------------------------------------------------------------
23.2 Consent of Thomas C. Cook, Esq. X
(included in Exhibit 5.1).
- ------------------------------------------------------------------------------
ITEM 17. UNDERTAKINGS
The Registrant undertakes:
1. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant is registering securities under Rule 415 of the Securities Act
and hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
4. That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule
424;
ii. Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
49
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
5. Since the small business issuer is subject to Rule 430C, each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule
430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the
date it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that
is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of
the registration statement or made in any such document immediately prior to
such date of first use.
6. Request for Acceleration of Effective Date. If the small business
issuer (Registrant) requests acceleration of the effective date of this
registration statement under Rule 461 under the Securities Act, it shall
include the following:
"Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant
to the provisions above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. "
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action,
suit or proceeding, is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification is against public policy as expressed
in the Securities Act, and we will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Bonsall,
California on January 26, 2011.
MONSTER OFFERS
By: /s/ Paul Gain
-----------------------------------------------
Paul Gain
Chief Executive Officer, President,
Chairman (Principal Executive Officer,
Principal Financial Officer, and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ---------------------------------- ----------------
/s/ Paul Gain Chief Executive Officer, President, January 26, 2011
------------- Chairman (Principal Executive Officer,
Paul Gain Principal Financial Officer, and
Principal Accounting Officer)