10-K 1 montk.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________
FORM 10-K

 

(Mark one)
   
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2011

OR

 
   
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________to

   
Commission File Number:  000-53266  
   
     

Monster Offers

(Exact name of registrant as specified in its charter)

_________________

Nevada   26-1548306  
(State or Other Jurisdiction   (I.R.S. Employer  
  of Incorporation or Organization)   Identification No.)
             

 

                    P.O. Box 1092, Bonsall, CA      92003  
            (Address of principal executive offices)   (Zip Code)
             

 

(760) 208-4905

(Registrant’s telephone number, including area code)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes o No þ

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o Not Applicable

 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to

this Form 10-K. [X]

 

 

Large accelerated filer o Accelerated filer o  
  Non-accelerated filer o Smaller Reporting Company þ
(Do not check if a smaller reporting company)      
               

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

 

The aggregate market value of the Company's common shares of voting stock held by non-affiliates of the Company at April 13, 2012, computed by reference to the $3.94 per-share price quoted on the OTC-BB was $434,306.

 

As of April 16, 2012, there were 241,507 shares of common stock, par value $0.001 per share, of the registrant outstanding.

 
 

 

 

INDEX

 

  TITLE  
     
ITEM 1. Business   5
     
ITEM 2. Properties  24
     
ITEM 3. Legal Proceedings 24
     
ITEM 4.  Submission of Matters to a Vote of Security Holders 24
     
ITEM 5. Market for Common Equity and Related Stockholder Matters 25
     
ITEM 7. Management’s Discussion and Analysis of Financial Condition 29
     
ITEM 8. Financial Statement and Supplementary Data 29
     
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 30
     
ITEM 9A. Controls and Procedures 30
     
ITEM 10. Directors, Executive Officers and Corporate Governance 34
     
ITEM 11. Executive Compensation 39
     
ITEM 12. Security Ownership of Certain Beneficial Owners Management and Related Stockholder Matters 41
     
ITEM 13. Certain Relationships and Related Transactions and Director Independence 42
     
ITEM 14. Principal Accounting Fees and Services 44
     
ITEM 15. Exhibits, Financial Statement Schedules 44
     

 

2

 

 

 
 

 

FORWARD-LOOKING STATEMENTS

 

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words "may", "could", "estimate", "intend", "continue", "believe", "expect" or "anticipate" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

 

·         inability to raise additional financing for working capital and product development;

 

·         inability to identify internet marketing approaches;

 

·         deterioration in general or regional economic, market and political conditions;

 

·         the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

 

·         adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

 

·         changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

 

·         inability to efficiently manage our operations;

 

·         inability to achieve future operating results;

 

·         our ability to recruit and hire key employees;

 

·         the inability of management to effectively implement our strategies and business plans; and

 

·         the other risks and uncertainties detailed in this report.

 

In this form 10-K references to "Monster Offers", "the Company", "we", "us", and "our" refer to Monster Offers.

 

AVAILABLE INFORMATION

 

We file annual, quarterly and special reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Monster Offers, P.O. Box 1092, Bonsall, CA 92003.

 

 

 
 

 

 

PART I

 

ITEM 1. BUSINESS

 

History and Organization

 

Monster Offers ("the Company") was incorporated in the State of Nevada on February 23, 2007, under the name Tropical PC Acquisition Company. On December 11, 2007, the Company amended its Articles of Incorporation changing its name to Monster Offers. The Company was originally incorporated as a wholly owned subsidiary of Company Tropical PC, Inc., a Nevada corporation. Tropical PC was incorporated September 22, 2004. On December 11, 2007, the Company amended its Articles of Incorporation changing its name from Tropical PC Acquisition Corporation to Monster Offers.

 

Our Business

 

Monster Offers is a daily deal aggregator, collecting daily deals from multiple sites in local communities across the U.S. and Canada. Focused on providing innovation and utility for Daily Deal consumers and providers, the company collects and publishes thousands of daily deals and allows consumers to organize these deals by geography or product categories, or to personalize the results using keyword search.

 

We utilize proprietary technology that we have developed, acquired, and/or licensed to deploy our products and services.

 

Our primary services include the aggregation and promotion of Daily Deals to consumers via our primary website; www.monsteroffers.com which provides search capabilities for users to quickly find Daily Deals based on filtering algorithms, zip code, predictive text search by city, and by user preferences.

 

The Company earns fees from data reporting services, traffic generation, and from our affiliate partners via marketing services including the online promotion of its affiliate partners daily deals through its website www.monsteroffers.com, selling of industry data and analysis reports, and executing internet and social marketing campaigns for customers. Our affiliate program partners are also offered search result placement and other benefits including the ability to participate in early release or beta programs for new innovations that the Company offers.

 

Current and potential customers include media and content publishers, advertisers, direct marketers, and advertising agencies seeking to increase brand impressions, sales, and customer contact through online marketing initiatives. Our customers also utilize our products and services to analyze the competitive landscape within their target markets. All transactional services revenues are recognized on a gross basis.

 

 

 

 

Marketing Strategy

 

The Monster Offers website generates page views from consumers searching the Internet for Daily Deals and other relevant information. As users search through the various deals that are presented via the website, they click on specific partner deals for additional information and are directed to our partner websites whereby they can purchase an advertised deal or offer directly. In these instances, the information about the user and the Monster Offers referral to a partner website is tracked and the affiliate partner then pays Monster Offers a fee, typically a percentage of the total transaction that occurs on the partner website. Monster Offers also earns fees from other content providers and advertisers based on the volume of traffic the Monster Offers site generates and the number of times content is displayed to potential consumers.

 

Monster Offers has also recently entered the mobile money payment market via a strategic alliance and exclusive license to technology developed by SSL5. Monster Offers plans to add significant ease-of-use functionality for the consumer to its website and to expand its affiliate partner network further leveraging this new technology in 2011.

 

 

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 through Daily Deal applications. These traffic publishers choose, manage, and execute marketing cost per action client campaigns. They are also provided with real-time commission tracking.

 

Software Development

 

We utilize the services of outsourced contractors for the development of our software technology. We also utilize the services of technology consultants to assist in the development of our strategic product development roadmap, and the ongoing management of all software development outsourced contractors. As the Company continues to grow, we may hire direct employees to fill various technology management, development, testing and quality control roles as needed.

 

Competition

 

The Daily Deal advertising and marketing industry is highly competitive. Management believes that the ability to provide innovative consumer and business solutions that fulfill unmet industry needs is a competitive advantage. A number of companies are active in specific aspects of our business. As a Daily Deal provider, Monster Offers would face competition from a growing list of other Daily Deal providers including Groupon, Living Social, Travelzoo, and literally hundreds of smaller start-up companies who continue to emerge in the Daily Deal market. These companies all aim to offer online "Daily Deals" directly to the consumer. Rather than compete with all of these companies, the Monster Offers business model is to "aggregate" the Daily Deals that are offered by these companies into a single website making it easier and more convenient for the consumer to search and purchase the deals that they seek.

 

As a Daily Deal aggregator, Monster Offers does face a growing number of other companies with a similar aggregation model including Yipit, thedealmap, 8coupons, and others. Monster Offers plans to leverage its latest innovations in mobile banking and money sharing technology with prospective competitors to turn competitors into partners, therefore reducing any substantial direct competition in the Daily Deal industry.

 

Strategic Alliances and Licensing Agreements

 

SSL5

 

On March 14, 2011, Monster Offers entered into Strategic Alliance and Licensing Agreement with SSL5, a Nevada corporation. SSL5 has developed technology services pertaining to a mobile financial services platform, which provides secure person-to-person mobile money transfer services. Monster Offers and SSL5 formed a strategic alliance with respect to the integration, use and commercialization of Monster Offers and SSL5 Existing Intellectual Property to create new and derivative intellectual property to introduce to various markets. Monster Offers obtained a license of the Existing SSL5 Intellectual Property for the exclusive use of the strategic alliance. As consideration for this license, Monster Offers issued 10,000 (post-split) of its unregistered restricted shares to SSL5. These shares were valued at the market rate of $45 (post-split) per share, for a total of $450,000.

 

At year end, management performed an impairment analysis on the license asset and determined that impairment was necessary due to the decrease in fair value of the common stock that has yet to be issued for the license. An impairment loss of $425,435 was recognized for the year. The remaining book value is $0 as of December 31, 2011.

 

Monster Offers and SSL5 plan to establish a new company as a 100% owned subsidiary of Monster Offers, in the State of Nevada, and to contribute the license of the Existing SSL5 Intellectual Property into the new subsidiary for its use and future development of new and derivative intellectual property. Any new and derivative intellectual property developed in conjunction with this Strategic Alliance and Licensing Agreement shall be owned exclusively by the new subsidiary. As of April 16, 2012, the subsidiary entity had not yet been established.

 

As further consideration, the Company entered into a consulting agreement with SSL5, providing stock options and a seat on the Monster Offers board of directors to develop ongoing product strategy and development services. In accordance with the terms of the agreement, the Consulting Company is entitled to purchase a total of 6,667 (post-split) unregistered restricted shares of the Company over the term of the agreement of two years. Upon the completion of each 6-month period, a total of 1,667 (post-split) shares will become vested and available for purchase by the Consultant. The price of these shares will be at $0.30 (post-split) per share. In the event that the Company is sold or merged with another company, all remaining unvested shares will become fully vested immediately prior to any such transaction.

 

Iconosys

 

On May 16, 2011, the Company entered into a Strategic Alliance and License Agreement with Iconosys, Inc., a California corporation. Iconosys has developed proprietary mobile applications and technology and engaged in the business of mobile communication application design related services. Monster Offers and Iconosys formed a strategic alliance with respect to the integration, use and commercialization of Monster Offers and Iconosys Existing Intellectual Property to create new and derivative intellectual property to introduce to various markets.

 

Iconosys obtained a license of the Existing Monster Offers Tier 1 Zala Merchant license with the ability to promote and sign up Zala account holders and participate in a revenue sharing model with Monster Offers. As consideration for this license, Iconosys issued 3,333 (post-split) of its unregistered restricted shares to Monster Offers. Since Iconosys is not a publicly-traded corporation, these shares were valued at a fair value based upon a fair value of similar shares sold under a private placement memorandum by Iconosys at rate of $30 (post-split) per share, for a total of $100,000. The entire value of the shares was recognized as unearned license revenue and will be recognized over one year, the term of the license. For the year ended December 31, 2011, the Company has recognized $66,667 in license revenue.

 

In accordance with the terms of the agreement, Iconosys will provide services to Monster Offers relating to its Deal Buzzer mobile application and to integrate the Monster Offers existing intellectual property into mobile applications it currently designs and produces. As consideration for the services performed by Iconosys, Monster Offers issued 834 (post-split) shares of unregistered, restricted common stock, an initial cash payment of $500, and future payments as part of a revenue share participation portion of the agreement. The term of the strategic alliance and this agreement commenced on May 6, 2011 and will end on November 5, 2013, unless terminated earlier in accordance with the agreement.

 

 

Government Regulation

 

We are subject to federal, state and local laws and regulations affecting our business. Although the Company plans on obtaining all required federal and state permits, licenses, and bonds to operate its facilities, there can be no assurance that the Company's operation and profitability will not be subject to more restrictive regulation or increased taxation by federal, state, or local agencies. New laws and regulations may restrict specific Internet activities, and existing laws and regulations may be applied to Internet activities, either of which could increase our costs of doing business over the Internet and adversely affect the demand for our advertising services. In the United States, federal and state laws already apply or may be applied in the future to areas, including children's privacy, copyrights, taxation, user privacy, search engines, Internet tracking technologies, direct marketing, data security, pricing, sweepstakes, promotions, intellectual property ownership and infringement, trade secrets, export of encryption technology, acceptable content and quality of goods and services.

 

 

Employees

 

Monster Offers currently has no direct employees. Under the direction of Mr. Gain, our sole officer/director who devotes his full time to our business, Monster Offers utilizes the services of independent contractors as needed for functions including software development, business development, marketing, and public relations.

 

 
 

 

Monster Offers' Funding Requirements

 

We do not currently have sufficient capital to fully develop our business plan. Management anticipates Monster Offers will be required to raise $500,000 to fully fund and execute its corporate strategies.

 

On December 29, 2010, the Company entered into a drawdown equity financing agreement and registration rights agreement 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. 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.

 

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.

 

At the assumed offering price of $0.26 per share, we will be able to receive up to $1,950,000 in gross proceeds, assuming the sale of the entire 7,500,000 shares pursuant to the Drawdown Equity Financing Agreement. We would be required to register 30,961,538 additional shares to obtain the balance of $10,000,000 under the Drawdown Equity Financing Agreement at the assumed offering price of $0.26. Management believes the Company will require $500,000 over the next six-months through this Drawdown Equity Financing Agreement or other financing arrangements. There is uncertainty as to whether we will ever receive the full $10 million available under the equity line agreement. It is unlikely, that we will be required to register more shares, unless management identifies a major acquisition or opportunity for the Company.

 

The Company is obligated to file with the U.S. Securities and Exchange Commission, a registration statement on Form S-1 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.

 

Future funding could result in potentially dilutive issuance of equity securities, the incurrence of debt and contingent liabilities which could materially adversely affect the Company's business, results of operations and financial condition. Without additional funding, it is most likely that our business initiatives will not succeed, and we shall be forced to curtail or even cease our operations.

 

 

Patent, Trademark, License and Franchise Restrictions and Contractual Obligations and Concessions

 

With the exception of filing a trademark application for the name “Monster Offers,” in 2012, we have no current plans for any registrations such as patents, other trademarks, copyrights, franchises, concessions, royalty agreements or labor contracts. We will assess the need for any copyright, trademark or patent applications on an ongoing basis.

 

 

Research and Development Activities and Costs

 

Monster Offers did not incur any research and development costs for the years ended December 31, 2011 and 2010, and does however, have plans to undertake research and development activities during the next year of operations.

 

 

Compliance With Environmental Laws

 

We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business. In our industry, environmental laws are anticipated to apply directly to the owners and operators of companies. They do not apply to companies or individuals providing consulting services, unless they have been engaged to consult on environmental matters. We are not planning to provide environmental consulting services.

 

 
 

 

Item 1A. Risk Factors.

 

Risk Factors Relating to Our Company

 

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 December 31, 2011, we have generated $623,500 in total revenues and we have incurred a net loss of $1,532,481. As of December 31, 2011, we had $3,817 in cash on hand, $9,423 in accounts receivable and $26,272 in prepaid expenses, for total current assets of $39,512, total other assets of $102,421, total liabilities of $277,233, an accumulated deficit of $(1,532,481) and a stockholders' deficit of $(135,300). In our auditor's report for fiscal year ended December 31, 2011 & 2010, 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 OTC-BB 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.

 

 

 

 

4. WE DO NOT EXPECT TO GENERATE SIGNIFICANT 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 MAY BE DILUTED.

 

Although we have started to generate revenues from customer activities, we do not expect to generate significant 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 may be diluted which might depress the market price of our common stock.

 

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 filing, we cannot provide an estimate of the amount of time it will take to become profitable.

 

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 $500,000 over a three year period. Management anticipates that the $500,000 will go towards regulatory compliance, product marketing, the development of new software programs and platforms and the development of our "Daily Deal" technology and 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.

 

 

 

7. CURRENT ECONOMIC CONDITIONS MAY PREVENT US FROM GENERATING REVENUE.

 

Generally, consumer purchases of "Daily Deal" 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 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 DAILY DEAL COMPANIES, SOME 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.

 

 

 

 

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 December 31, 2011, we had $3,817 cash on-hand. Our auditor's have expressed 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.

 

 

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 "DAILY DEAL" 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 "Daily Deal" 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.

 

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 to our site, number of people who sign up for our services, and the on-going usage of our products. 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, results of operations and cash flows.

 

 

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.

 

15. WE HAVE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGE TO CONTINUE OFFERING OUR "DAILY DEAL" ADVERTISING PARTNERS COMPETITIVE SERVICES OR WE MAY LOSE CLIENTS AND BE UNABLE TO COMPETE.

 

Our future success will depend on our ability to continue delivering our "Daily Deal" advertising partners 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.

 

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.

 

 

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.

 

 

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 SOME OF OUR SERVICES 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 "Daily Deal", 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.

 

 

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.

 

 

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:

 

·         liquidity of the market for the shares;

 

·         actual or anticipated fluctuations in our quarterly operating results;

 

·         changes in financial estimates by securities research analysts;

 

·         conditions in the markets in which we compete;

 

·         changes in the economic performance or market valuations of other "Daily Deal" companies;

 

·         announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;

 

·         addition or departure of key personnel;

 

·         intellectual property litigation;

 

·         our dividend policy; and

 

·         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.

 

 

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.

 

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. 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.) and on the OTC MARKETS Exchange under the symbol "MONT", the trading market for our common stock can vary significantly from day-to-day, and a more 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.

 

30. 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:

 

·         the trading volume of our shares;

·         the number of securities analysts, market-makers and brokers following our stock;

·         changes in, or failure to achieve, financial estimates by securities analysts;

·         new products or services introduced or announced by us or our competitors;

·         actual or anticipated variations in quarterly operating results;

·         conditions or trends in our business industries;

·         announcements by us of significant contracts, acquisitions, strategic

·         partnerships, joint ventures of capital commitments;

·         additions or departures of key personnel;

·         sales of our common stock; and

·         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.

 

 

 

31. 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.

 

 

 

 

 

 

 
 

 

Item 1B. Unresolved Staff Comments.

 

Not applicable.

 

Item 2. 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.

 

 

Item 3. Legal Proceedings.

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

 

 

Item 4. Submission of Matters to a Vote of Security Holders.

 

We did not submit any matters to a vote of our security holders during the past fiscal year ending December 31, 2011.

 

 
 

 

PART II

 

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

(a) Market Information

 

Monster Offers Common Stock, $0.001 par value, is traded on the OTC-Bulletin Board under the symbol: MONTD. 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 OTCMarkets. 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, 2011 $7.51 $1.50

Third Quarter Ended September 30, 2011 $15.01 $4.50

Second Quarter Ended June 30, 2011 $114.11 $10.51

First Quarter Ended March 31, 2011 $180.18 $36.03

 

Fourth Quarter Ended December 31, 2010 $360.36 $87.09

Third Quarter Ended September 30, 2010 $174.17 $170.17

Second Quarter Ended June 30, 2010 $210.21 $140.14

First Quarter Ended March 31, 2010 $140.14 $120.12

 

Price adjusted for the 300:1 reverse stock split that took place on April 9, 2011.

 

 

(b) Holders of Common Stock

 

As of December 31, 2011, there were approximately 2,120 holders of record of our Common Stock and 220,568 shares issued and outstanding. As of April 16, 2012, we had 215,540 issued and outstanding following our 300:1 reverse stock split that took place on April 9, 2011.

 

(c) Dividends

 

In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects

and other factors deemed relevant.

 

(d) Securities Authorized for Issuance under Equity Compensation Plans

 

There are no outstanding grants or rights or any equity compensation plan in place.

 

(e) Recent Sales of Unregistered Securities

 

On January 21, 2011, the Company issued 1,333 (post-split) unregistered shares in exchange for public relations and communications consulting services in accordance with an agreement dated January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $104,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On January 21, 2011, the Company also issued 667 (post-split) free-trading shares in exchange for consulting services in accordance with an agreement entered into on January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $52,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On February 7, 2011, the Company entered into an agreement for business strategy and planning, market analysis, and marketing consulting services. In accordance with the terms of the agreement, 167 (post-split) unregistered restricted shares of common stock will be exchanged for the services provided by the consultant. As of December 31, 2011, the Company determined the shares to be fully earned and were valued at a market value of $4.50 per share (post-split), totaling $750, and an expense was recognized. As of December 31, 2011 the shares have not yet been issued and thus have been recorded as stock payable.

 

On March 14, 2011, the Company entered into a Strategic Alliance and Licensing agreement with SSL5. As part of the agreement, the Company agreed to issue 10,000 (post-split) unregistered restricted shares as consideration for an exclusive license of SSL5 existing intellectual property. The transaction was valued at the market value of $45 per share (post-split) for a total of $450,000, and recorded as stock payable. See Note 7 for further details of the agreement.

 

During the quarter ended June 30, 2011, the Company issued a total of 6,541 (post-split) shares of common stock to Asher Enterprises for the conversion of two convertible notes payable. See Note 6 for further details of these conversions.

 

On May 6, 2011, the Company entered into a Strategic Alliance and License agreement with Iconosys, Inc. In accordance with the terms of the agreement, the Company agreed to issue 834 (post-split) shares of common stock to Iconosys as part of consideration for services to be performed in conjunction with the alliance and license agreement. These shares were valued at the market value of $43 per share (post-split) for a total of $35,825, and recorded as stock payable. See Note 7 for further details of the agreement.

 

On July 8, 2011, the Company sold 617 (post-split) shares of free-trading common stock for a total of $6,988 (of which $700 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On July 19, 2011, the Company sold 255 (post-split) shares of free-trading common stock for a total of $2,680 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On July 28, 2011, the Company sold 92 (post-split) shares of free-trading common stock for a total of $1,014 (of which $447 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On August 9, 2011, the Company issued 1,594 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable. See Note 7 for further details of these conversions.

 

On August 19, 2011, the Company sold 345 (post-split) shares of free-trading common stock for a total of $2,511 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On September 2, 2011, the Company issued 3,134 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable. See Note 6 for further details of these conversions.

 

On December 22, 2011, the Company issued 5,027 (post-split) shares of common stock to Asher Enterprises for the conversion of $8,000 in principal and $1,200 in accrued interest of outstanding convertible notes payable. See Note 6 for further details of these conversions.

 

As of December 30, 2011 and December 31, 2010, the Company has 220,568 (post-split) and 200,962 (post-split) shares of its common stock issued and outstanding, respectively.

 

Stock Options

 

On March 14, 2011, as part of the Strategic Alliance and Licensing agreement mentioned above, the Company entered into a consulting agreement with SSL5, providing stock options and a seat on the Monster Offers board of directors to develop ongoing product strategy and development services. In accordance with the terms of the agreement, the consulting company is entitled to purchase a total of 6,667 (post-split) unregistered restricted shares of the Company over the term of the agreement of two years. Upon the completion of each 6-month period, a total of 1,667 shares (post-split) will become vested and available for purchase by the Consultant. The price of these shares will be at $0.3 (post-split) per share, or par value. In the event that the Company is sold or merged with another company, all remaining unvested shares will become fully vested immediately prior to any such transaction.

 

As of September 13, 2011, 1,667 (post-split) shares have fully vested in accordance with the agreement and were revalued at $12,192 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.5 years, risk free interest rate of 0.21%, a dividend yield of 0% and a volatility rate of 183%.

 

A pro-rated portion of the unvested stock options for the service period from September 14 to December 31, 2011, totaling 972 (post-split) shares, have been valued at $2,109 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.2 years, risk free interest rate of 0.45%, a dividend yield of 0% and a volatility rate of 216%.

 

The following summarizes pricing and term information for options issued to consultants which are outstanding as of December 31, 2011:

 

    Weighted Average
  Number of Shares Exercise Price
Balance, December 31, 2010                        -                            -  
     
Options granted and assumed                  6,667                      0.30
Options expired                        -                            -  
Options cancelled                        -                            -  
Options exercised                        -                            -  
     
Balance, December 31, 2011                  6,667                      0.30
     

 

 

(f) Issuer Purchases of Equity Securities

 

We did not repurchase any of our equity securities during the years ended December 31, 2010 or 2009.

 

 

Item 6. Selected Financial Data.

 

Not applicable.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

Overview of Current Operations

 

Monster Offers is a social media commerce for businesses.

 

Results of Operations for the year ended December 31, 2011

 

During the twelve month period ended December 31, 2011, the Company generated $223,275 in total revenues versus revenues of $82,803 for the same period last year.

 

During the year ending December 31, 2011, the Company had a net loss of $(998,876) or $(4.78) per share versus a net loss of $(494,195) or $(3.01) per share for the same period last year. Expenses represented general and administrative expenses, accounting, legal and professional fees, consulting services and general operational expenses.

 

Since the Company's inception, on February 23, 2007, the Company experienced a net loss of $(1,532,481). Management plans to cover the Company's expenses for the next twelve months, if the Company needs funding to cover its expenses.

 

As of December 31, 2011, our cash on hand was $3,817 and account receivable of $9,423, compared to $36,531 and $6,352 respectively as of our fiscal year end of December 31, 2010.

 

As of December 31, 2011, our total assets were $141,933, compared to $99,846 as of December 31, 2010.

 

As of December 31, 2011, our total current liabilities were $277,233, which consisted of accounts payable of $58,229, accrued interest of $9,341, unearned revenues of $33,333 and convertible notes payable of $176,330. This compares to $112,530 in total current liabilities as of December 31, 2010, which consisted of accounts payable of $10,800, accrued interest of $1,831 and convertible notes payable of $99,899.

 

Our stockholders' deficit was $135,300 as of December 31, 2011 compared to $12,684 as of December 31, 2010.

 

 

Year Ending December 31, 2011 Compared to Year Ending December 31, 2010.

 

Revenues

We generated $223,275 in total revenues for the year ended December 31, 2011 as compared to $82,803 for the same period last year. For the year ended December 31, 2010, the Company received $9,352 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.

 

Net Loss

We had a net loss of $998,876 or $(4.78) per share for the year ended December 31, 2011 compared to net loss of $(494,195) or $(3.01) per share for the year ended December 31, 2010. This increase in net loss was primarily due to an impairment loss of $425,435 consulting services of $324,560 and increase in officer compensation of $117,200.

 

Operating expenses

Our operating expenses consisted of general and administrative expenses of $113, 544 and $10,123 in advertising for the year ending December 31, 2011, as compared to $102,435 in general and administrative expenses and $4,870 in advertising fees 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 year ending December 31, 2011 were $1,085,269 versus $563,268 for the same period last year.

 

 

 

 

 

 

Liquidity and Capital Resources

 

Our balance sheet as of December 31, 2011 reflects current assets of $39,512 and $277,233 in current liabilities. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date.

 

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 1,215,000 (post-split) common shares issued. Of these 1,215,000 shares, 900,000 were returned and cancelled to the Company.

 

On December 11, 2007, the Company issued 56,250 (post-split) 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 4,050 (post- split) common shares issued. Of these 4,050 shares, 3,000 were returned and cancelled to the Company.

 

On December 31, 2007, the Company issued 37,500 (post-split) 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 67,500 (post-split) 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 5,000 (post-split) 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 5,000 unregistered common shares will be canceled and returned to the Company.

 

On August 30, 2010, the Company authorized the issuance of 40,000 (post-split) 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. A total of $8,000 was recorded as common stock receivable as of September 30, 2011.

 

On September 1, 2010, the Company authorized the sale of 2,750 (post-split) 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 $351,550 was placed by expensing the normal hourly rate charged by these consultants for the services rendered during the quarter. A total of $150 was received from one consultant and has been reduced from total consulting expense. A total of $400 had been recorded as common stock receivable as of December 31, 2010.

 

On November 3, 2010, the Company issued 287 (post-split) shares of its common stock as part of an S-8 registration with the SEC for legal and administrative services. These shares were issued for services, and expensed at the market stock price of $114 per share, for a total expense of $32,948.

 

On November 18, 2010, Monster Offers issued 625 (post-split) unregistered restricted shares in exchange for Investor and Public Relations services as part of a service agreement dated November 10, 2010. The shares were issued at a market value of $125 per share (post-split) for a total consulting expense of $78,338.

 

On November 18, 2010, the Company's Board of Directors approved a one-half-for-one (0.5:1) common stock dividend (the "dividend"), of the Company's issued and outstanding common stock, par value $0.001, with a record date of December 1, 2010 and a payment date of December 2, 2010. Each shareholder received a dividend of one (1) common share for every two (2) shares owned on the record date. As of the date the dividend was declared, there were 40,192,470 shares issued and outstanding. After the dividend, 60,288,707 shares were issued and outstanding. All shares contained herein are calculated post-split.

 

On November 18, 2010, the Company received 40,000 (post-split) shares of its common stock in exchange for its "Lead Generation Business Segment" in a transaction with the Company's former officer, Scott J. Gerardi. These shares have no value and been returned to treasury stock as of December 31, 2010.

 

On January 21, 2011, the Company issued 1,333 (post-split) unregistered shares in exchange for public relations and communications consulting services in accordance with an agreement dated January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $104,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On January 21, 2011, the Company also issued 667 (post-split) free-trading shares in exchange for consulting services in accordance with an agreement entered into on January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $52,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On February 7, 2011, the Company entered into an agreement for business strategy and planning, market analysis, and marketing consulting services. In accordance with the terms of the agreement, 167 (post-split) unregistered restricted shares of common stock will be exchanged for the services provided by the consultant. The shares will be earned in proportion to the pro-rated amount of time of the services performed over the term of the agreement and, in accordance with ASC 505-50, will be revalued and expensed at each interim financial statement date. The pro-rated number of shares, totaling 152 shares, were valued at a market value of $2.40 per share (post-split) as of December 31, 2011, totaling $365, and an expense was recognized. As of December 31, 2011 the shares have not yet been issued and thus have been recorded as stock payable.

 

On March 14, 2011, the Company entered into a Strategic Alliance and Licensing agreement with SSL5. As part of the agreement, the Company agreed to issue 10,000 (post-split) unregistered restricted shares as consideration for an exclusive license of SSL5 existing intellectual property. The transaction was valued at the market value of $45 per share (post-split) for a total of $450,000, and recorded as stock payable.

 

During the quarter ended June 30, 2011, the Company issued a total of 6,541 (post-split) shares of common stock to Asher Enterprises for the conversion of two convertible notes payable.

 

On May 6, 2011, the Company entered into a Strategic Alliance and License agreement with Iconosys, Inc. In accordance with the terms of the agreement, the Company agreed to issue 834 (post-split) shares of common stock to Iconosys as part of consideration for services to be performed in conjunction with the alliance and license agreement. These shares were valued at the market value of $43 per share (post-split) for a total of $35,825, and recorded as stock payable.

 

On July 8, 2011, the Company sold 617 (post-split) shares of free-trading common stock for a total of $6,988 (of which $700 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010.

 

On July 19, 2011, the Company sold 255 (post-split) shares of free-trading common stock for a total of $2,680 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010.

 

On July 28, 2011, the Company sold 92 (post-split) shares of free-trading common stock for a total of $1,014 (of which $447 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010.

 

On August 9, 2011, the Company issued 1,594 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable.

 

On August 19, 2011, the Company sold 345 (post-split) shares of free-trading common stock for a total of $2,511 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010.

 

On September 2, 2011, the Company issued 3,134 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable.

 

On December 22, 2011, the Company issued 5,027 (post-split) shares of common stock to Asher Enterprises for the conversion of $8,000 in principal and $1,200 in accrued interest of outstanding convertible notes payable.

 

As of December 30, 2011 and December 31, 2010, the Company has 220,568 (post-split) and 200,962 (post-split) shares of its common stock issued and outstanding, respectively.

 

 

Stock Options

 

On March 14, 2011, as part of the Strategic Alliance and Licensing agreement mentioned above, the Company entered into a consulting agreement with SSL5, providing stock options and a seat on the Monster Offers board of directors to develop ongoing product strategy and development services. In accordance with the terms of the agreement, the consulting company is entitled to purchase a total of 6,667 (post-split) unregistered restricted shares of the Company over the term of the agreement of two years. Upon the completion of each 6-month period, a total of 1,667 shares (post-split) will become vested and available for purchase by the Consultant. The price of these shares will be at $0.3 (post-split) per share, or par value. In the event that the Company is sold or merged with another company, all remaining unvested shares will become fully vested immediately prior to any such transaction.

 

As of September 13, 2011, 1,667 (post-split) shares have fully vested in accordance with the agreement and were revalued at $12,192 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.5 years, risk free interest rate of 0.21%, a dividend yield of 0% and a volatility rate of 183%.

 

A pro-rated portion of the unvested stock options for the service period from September 14 to December 31, 2011, totaling 972 (post-split) shares, have been valued at $2,109 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.2 years, risk free interest rate of 0.45%, a dividend yield of 0% and a volatility rate of 216%.

 

The following summarizes pricing and term information for options issued to consultants which are outstanding as of December 31, 2011:

 

    Weighted Average
  Number of Shares Exercise Price
Balance, December 31, 2010                        -                            -  
     
Options granted and assumed                  6,667                      0.30
Options expired                        -                            -  
Options cancelled                        -                            -  
Options exercised                        -                            -  
     
Balance, December 31, 2011                  6,667                      0.30
     

 

 

 

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.

 

 

Going Concern

 

The financial conditions evidenced by the accompanying financial statements raise substantial doubt as to our ability to continue as a going concern. Our plans include obtaining additional capital through debt or equity financing. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 

 

Summary of any product research and development that we will perform for the term of our plan of operation.

 

We do not anticipate performing any product research and development under our current plan of operation.

 

 

Expected purchase or sale of property and significant equipment

 

We do not anticipate the purchase or sale of any property or significant equipment; as such items are not required by us at this time.

 

 

 

Significant changes in the number of employees

 

As of December 31, 2011, we did not have any employees. We are dependent upon our sole officer and director for our future business development. As our operations expand we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Critical Accounting Policies and Estimates

 

Revenue Recognition: In accordance with ASC 605 and SEC Staff Accounting Bulletin 104, 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 Pronouncements

 

ASU 2011-04. In May 2011, the FASB issued Accounting Standards Update 2011-14, “Fair Value Measurement (Topic 820)”. This Update will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with US GAAP and International Financial Reporting Standards (“IFRS”). The amendments in this Update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs and they explain how to measure fair value and they do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. The amendments in this Update apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments in this Update are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption of ASU 2011-04 is not expected to have any material impact on our financial position, results of operations or cash flows.

We have examined all other recent accounting pronouncements and believe that none of them will have a material impact on the financial statements of our company.

 

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable.

 

 
 

 

Item 8. Financial Statements and Supplementary Data.

 

Index to Financial Statements

 

 

  Page
   
   
Financial Statements of Monster Offers:  

 

Report of Independent Registered Public Accounting Firm

 

F-1

Balance Sheets

 

F-2

 

Statements of Operations for the Years ended December 31, 2011 and 2010, and from Inception (February 23, 2007) to December 31, 2011

 

F-3

 

Statement of Stockholders' Deficit for Years ended December 31, 2011 and 2010, and from Inception (February 23, 2007) to December 31, 2011

 

F-4

 

Statement of Cash Flows for the Years ended December 31, 2011 and 2010, and from Inception (February 23, 2007) to December 31, 2011

 

F-5

 

Notes to the Financial Statements

 

F-6

 

 

 

 
 

De Joya Griffith & Company, LLC

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

 

Report of Independent Registered Public Accounting Firm

 

To The Board of Directors and Stockholders of

Monster Offers

 

We have audited the accompanying balance sheets of Monster Offers (A Development Stage Company) (the “Company”) as of December 31, 2011 and 2010, 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, 2011. Monster Offers' management is responsible for these financial statements. Our responsibility is to express an opinion on the financial statements based on our audits.

 

We conducted our audits 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. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended and from inception (February 23, 2007) to December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 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 1. 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, NV

April 16, 2012

 

 

 

F-1

 

 
 

Monster Offers

(A Development Stage Company)

Balance Sheets

 

    December 31, December 31,
    2011 2010
    (Audited) (Audited)
  ASSETS    
       
  Current assets    
  Cash  $             3,817  $          36,531
  Accounts receivable                 9,423                6,352
  Prepaid expense               26,272                     -  
  Prepaid stock compensation                       -                51,667
  Total current assets               39,512              94,550
       
  Other assets    
  Unamortized financing fees                 2,421                5,296
  Investment in Iconosys             100,000                     -  
  Total other assets             102,421                5,296
       
  TOTAL ASSETS  $         141,933  $          99,846
       
       
  LIABILITIES AND STOCKHOLDERS' DEFICIT    
       
  Current Liabilities    
  Accounts payable  $           58,229  $          10,800
  Accrued interest                 9,341                1,831
  Unearned revenue               33,333                     -  
  Convertible notes payable, net of unamortized discount    
  of $37,131 and $44,363, respectively             176,330              99,899
  Total current liabilities             277,233            112,530
       
  Total liabilities             277,233            112,530
       
  Stockholders' deficit    
  Common stock - $0.001 par value,     
  75,000,000 shares authorized, 220,568    
  and 200,962 shares issued and outstanding    
  as of 12/30/2011 and 12/31/2010, respectively                    221                   201
  Additional paid- in capital             910,385            529,120
  Treasury stock 8,731,214 and 12,000,000 shares as of 6/30/11 and    
  12/31/10, respectively                       -                       -  
  Common stock receivable                       -       (8,400)
  Common stock payable             486,575                     -  
  Accumulated deficit during development stage        (1,532,481)           (533,605)
  Total stockholders' deficit           (135,300)            (12,684)
       
  TOTAL LIABILITES AND STOCKHOLDERS' DEFICIT  $         141,933  $          99,846

 

The accompanying notes are an integral part of these financial statements.

F-2

 
 

Monster Offers

(A Development Stage Company)

Statements of Operations

(Audited)

      Inception
  For the years ended (February 23, 2007)
  December 31, December 31,
  2011 2010 2011
       
REVENUES      
Commission revenue  $         156,608  $                  250  $                  157,385
Commission revenue - related party                       -                     9,352                      326,247
License revenue               66,667                         -                          66,667
Services - related party                       -                   73,201                        73,201
Total revenues             223,275                 82,803                      623,500
       
Cost of goods      
Commission paid - related party                       -                           -                        249,828
Total cost of goods                       -                           -                        249,828
       
Gross profit             223,275                 82,803                      373,672
       
EXPENSES      
Advertising               10,123                   4,870                        35,901
Amortization               24,565                         -                          24,565
Audit fees               28,474                   3,750                        47,474
Expenses of spinoff                    200                         -                            5,810
General and administrative             113,544               102,435                      281,812
Professional fees                 4,115                 14,595                        24,723
Officer compensation             144,200                 27,000                      204,200
Strategic alliance costs               10,053                         -                          10,053
Impairment loss             425,435                         -                        425,435
Consulting services             324,560               410,618                      735,178
Total operating expenses          1,085,269               563,268                   1,795,151
       
Other expenses      
Interest expense             (17,460)                  (1,831)                      (19,291)
Financing fees           (120,268)                (11,899)                    (132,167)
Debt forgiveness                    846                         -                            6,456
Refund of expense                       -                           -                          34,000
Total other expenses           (136,882)                (13,730)                    (111,002)
       
Net loss  $       (998,876)  $          (494,195)  $             (1,532,481)
       
Net loss per share - basic  $             (4.78)  $                (3.01)  
       
Weighted average number of common       
shares outstanding – basic             208,803               164,039  

 

The accompanying notes are an integral part of these financial statements.

 

F-3

 
 

Monster Offers

(A Development Stage Company)

Statement of Stockholders’ Equity (Deficit)

(Audited)

 

                Deficit  
                Accumulated Total
      Additional         During Stockholders'
  Common Stock Paid-in Common stock Common stock Treasury Stock Development Equity
  Shares Amount Capital Receivable Payable Shares Amount Stage (Deficit)
                   
Contributed capital, February 2007                      -    $                   -    $             400  $                    -    $                    -                        -    $            -    $                 -    $               400
                   
Founders' shares issued for services                  
December 2007               56,250                       56            11,194                        -                          -                          -                  -                       -                11,250
                   
Contributed capital                      -                         -                   585                        -                          -                          -                  -                       -                     585
                   
Tropical PC Spin off shares                 4,050                         4                    (4)                        -                          -                          -                  -                       -                        -  
                   
Shares returned to Company               (3,000)                       (3)                     3                        -                          -                          -                  -                       -                        -  
                   
Shares issued pursuant to offering               37,500                       38            33,713                        -                          -                          -                  -                       -                33,750
                   
Net loss                      -                         -                      -                          -                          -                          -                  -                (6,595)              (6,595)
                   
Balance, December 31, 2007               94,800                       95            45,890                        -                          -                          -                  -                (6,595)              39,390
                   
Net loss                      -                         -                      -                          -                          -                          -                  -              (41,556)            (41,556)
                   
Balance, December 31, 2008               94,800                       95            45,890                        -                          -                          -                  -              (48,151)              (2,166)
                   
Private placement, December 2009               67,500                       68            13,433                (1,000)                        -                          -                  -                       -                12,500
                   
Net income                      -                         -                      -                          -                          -                          -                  -                  8,741                8,741
                   
Balance, December 31, 2009             162,300                     162            59,323                (1,000)                        -                          -                  -              (39,410)              19,075
                   
Cancellation of unearned shares               (5,000)                       (5)                (995)                  1,000                        -                          -                  -                       -                        -  
                   
Shares issued for cash               40,000                       40              7,960                (8,000)                        -                          -                  -                       -                        -  
                   
Shares issued for consulting services                 2,750                         3          351,547                   (400)                        -                          -                  -                       -              351,150
                   
Shares issued for services                    287                         0            32,948                        -                          -                          -                  -                       -                32,948
                   
Shares issued for consulting services                    625                         1            78,337                        -                          -                          -                  -                       -                78,338
                   
Shares returned to Company                  
in exchange for business segment                      -                         -                      -                          -                          -                 (40,000)                -                       -                        -  
                   
Net loss                      -                         -                      -                          -                          -                          -                  -            (494,195)          (494,195)
                   
Balance, December 31, 2010             200,962  $                 201  $      529,120  $            (8,400)  $                    -                 (40,000)  $            -    $      (533,605)  $        (12,684)
                   
Shares issued for consulting services                 2,000                         2          155,998                        -                       750                  -                       -              156,750
                   
Shares issued for license                      -                         -                            -                450,000                        -                  -                       -              450,000
                   
Issuance of stock options for services                      -                         -              14,301                        -                          -                    -                       -                14,301
                   
Shares issued as part of strategic alliance                      -                         -                      -                          -                  35,825                        -                  -                       -                35,825
                   
Shares issued for conversion of convertible                  
notes payable               16,296                       16          202,776                        -                          -                          -                  -                       -              202,792
                   
Sale of stock at a discount of 3%                 1,309                         1            13,190                        -                          -                          -                  -                       -                13,191
                   
Financing fees incurred on sale of stock                      -                         -               (5,000)                        -                          -                          -                  -                       -                (5,000)
                   
Write-off of stock receivable                      -                         -                      -                    8,400                        -                          -                  -                       -                  8,400
                   
Net loss                      -                         -                      -                          -                          -                          -                  -            (998,876)          (998,876)
                   
Balance, December 31, 2011 (audited)             220,568                     221          910,385                        -                486,575               (40,000)                -         (1,532,481)          (135,300)

 

The accompanying notes are an integral part of these financial statements.

 

F-4

 
 

Monster Offers

(A Development Stage Company)

Statement of Cash Flows

(Audited)

 

      Inception
  For the years ended (February 23, 2007)
  December 31, December 31,
  2011 2010 2011
       
OPERATING ACTIVITIES      
Net loss             (998,876)           (494,195)                 (1,532,481)
Adjustments to reconcile net loss       
to net cash used by operating activities:      
Impairment loss              425,435                      -                       425,435
License revenue - non-cash               (66,667)                      -                        (66,667)
Non-cash compensation                  8,400                      -                           8,400
Forgiveness of debt                    (846)                      -                             (846)
Financing fees              117,940              11,899                     129,839
Common shares issued for services              171,051            462,436                     633,487
Strategic alliance costs                10,053                      -                         10,053
Amortization                24,565                      -                         24,565
Changes in operating assets and liabilities:      
Increase in prepaid stock compensation                51,667             (51,667)                               -  
Increase in unamortized financing fees                        -                        -                          (5,296)
Decrease in accounts receivable                 (3,071)               (4,117)                        (3,071)
(Increase) decrease in unamortized financing fees                  2,308               (5,296)                        (4,044)
Increase in accounts payable                44,077                9,450                       54,877
Increase in accrued interest                17,705                1,831                       19,536
       
Net cash used by operating activities             (196,259)             (69,659)                    (306,213)
       
FINANCING ACTIVITIES      
Proceeds from convertible notes payable              152,500              88,000                     240,500
Proceeds from issuance of common       
stock                11,045                      -                         68,545
Contributed capital                        -                        -                              985
       
Net cash provided by financing activities              163,545              88,000                     310,030
       
NET CHANGE IN CASH               (32,714)              18,341                         3,817
       
CASH AND CASH EQUIVALENTS -       
BEGINNING OF PERIOD                36,531              18,190                               -  
       
CASH AND CASH EQUIVALENTS -       
END OF PERIOD  $              3,817  $          36,531  $                     3,817

 

SUPPLEMENTAL DISCLOSURES:      
Interest paid  $                    -    $                  -    $                           -  
Income taxes paid  $                    -    $                  -    $                           -  
Non-cash investing and financing activities:      

 

Stock issued for purchase of license  $          450,000  $            8,000  $                 450,000

 

 
Stock issued for conversion of notes  $          202,792  $                  -    $                 202,548

 

Investment in Iconosys  $          100,000  $                  -    $                 100,000

 

The accompanying notes are an integral part of these financial statements.

 

 

F-5

 
 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 1 - 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 is a popular daily deal aggregator, collecting daily deals from multiple sites in local communities across the U.S. and Canada. Focused on providing innovation and utility for Daily Deal consumers and providers, the company collects and publishes thousands of daily deals and allows consumers to organize these deals by geography or product categories, or to personalize the results using keyword search. The has been unable to commence its primary operations to-date due to lack of sufficient working capital, and therefore remains a Development Stage Company.

 

The Company earns fees via marketing services including the online promotion of its affiliate partners daily deals through its website, selling of industry data and analysis reports, and executing internet and social marketing campaigns for customers.

 

 

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. Since inception (February 23, 2007) through December 31, 2011 the Company recognized an accumulated deficit during development stage of approximately ($1,532,481). The Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company’s ability to raise additional capital as required.

 

Management plans to raise equity capital to finance the operating and capital requirements of the Company, and also plans to pursue acquisition opportunities of other revenue-generating companies that provide complementary capabilities to that of the Company. Amounts raised will be used for further development of the Company's products and 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.

 

 

 

F-6

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

 

Year-end

The Company’s fiscal year-end is December 31.

 

Basis of Accounting

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

 

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. As of December 31, 2011 and 2010, there are no cash equivalents.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Advertising

Advertising costs are expensed when incurred. The Company incurred advertising expenses of $10,123 and $4,870 for the years ended December 31, 2011 and 2010, respectively. For the period since inception on February 23, 2007 through the year ended December 31, 2011, the Company has incurred advertising expenses of $35,901.

 

Revenue Recognition

In accordance with ASC 605 and SEC Staff Accounting Bulletin 104, 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 other 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.

 

 

 

F-7

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

 

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.

 

Accounts receivable

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance. As of December 31, 2011 and December 31, 2010, we have $9,423 and $6,352, respectively, in accounts receivable and no amounts charged to allowance for doubtful accounts.

 

Fair Value of Financial Instruments

The carrying amounts of the financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to the short maturities of these financial instruments. The notes payable are also considered financial instruments whose carrying amounts approximate fair values.

 

Intangible assets

The Company follows Financial Accounting Standard Board’s (FASB) Codification Topic 350-10 (“ASC 350-10”), “Intangibles – Goodwill and Other” to determine the method of amortization of its intangible assets. The Company’s intangible assets are capitalized at historical cost and are amortized over their useful lives. The Company amortizes its license of SSL5 intellectual property using the straight-line method over an estimated useful life of 10 years (see Note 8).

 

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

 

 

F-8

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

 

 

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

 

Income Taxes

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

 

Recent Accounting Pronouncements

ASU 2011-04. In May 2011, the FASB issued Accounting Standards Update 2011-14, “Fair Value Measurement (Topic 820)”. This Update will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with US GAAP and International Financial Reporting Standards (“IFRS”). The amendments in this Update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs and they explain how to measure fair value and they do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. The amendments in this Update apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity’s shareholders’ equity in the financial statements. The amendments in this Update are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption of ASU 2011-04 is not expected to have any material impact on our financial position, results of operations or cash flows.

We have examined all other recent accounting pronouncements and believe that none of them will have a material impact on the financial statements of our company.

 

F-9

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

 

 

NOTE 4 - Stock Split Adjustment

 

Certain reclassifications have been made in the prior year’s financial statements.

 

On April 9, 2012, the Company executed a 300 to 1 reverse stock split, which was retrospectively applied to all financial statements, including the comparative balance sheet as of December 31, 2010. This adjustment did not change total stockholders’ deficit. The original filing was for $60,289 in common stock and $469,032 in additional paid in capital. The post-split adjusted balances in this filing are now $201 in common stock and $529,120 in additional paid in capital, resulting in an effective decrease in common stock and increase in additional paid in capital of $60,088, net effect on stockholders’ deficit of $0 as of December 31, 2010.

 

 

NOTE 5 - STOCKHOLDERS' DEFICIT

 

Common Stock

 

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 56,250 (post-split) 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 4,050 (post- split) common shares issued. Of these 4,050 shares, 3,000 were returned and cancelled to the Company.

 

On December 31, 2007, the Company issued 37,500 (post-split) 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 67,500 (post-split) 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 5,000 (post-split) 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 5,000 unregistered common shares will be canceled and returned to the Company.

 

On August 30, 2010, the Company authorized the issuance of 40,000 (post-split) 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. A total of $8,000 was recorded as common stock receivable as of September 30, 2011.

 

On September 1, 2010, the Company authorized the sale of 2,750 (post-split) 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 $351,550 was placed by

 

F-10

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 5 - STOCKHOLDERS' DEFICIT (continued)

 

expensing the normal hourly rate charged by these consultants for the services rendered during the quarter. A total of $150 was received from one consultant and has been reduced from total consulting expense. A total of $400 had been recorded as common stock receivable as of December 31, 2010.

 

On November 3, 2010, the Company issued 287 (post-split) shares of its common stock as part of an S-8 registration with the SEC for legal and administrative services. These shares were issued for services, and expensed at the market stock price of $114 per share, for a total expense of $32,948.

 

On November 18, 2010, Monster Offers issued 625 (post-split) unregistered restricted shares in exchange for Investor and Public Relations services as part of a service agreement dated November 10, 2010. The shares were issued at a market value of $125 per share (post-split) for a total consulting expense of $78,338.

 

On November 18, 2010, the Company's Board of Directors approved a one-half-for-one (0.5:1) common stock dividend (the "dividend"), of the Company's issued and outstanding common stock, par value $0.001, with a record date of December 1, 2010 and a payment date of December 2, 2010. Each shareholder received a dividend of one (1) common share for every two (2) shares owned on the record date. As of the date the dividend was declared, there were 40,192,470 shares issued and outstanding. After the dividend, 60,288,707 shares were issued and outstanding. All shares contained herein are calculated post-split.

 

On November 18, 2010, the Company received 40,000 (post-split) shares of its common stock in exchange for its "Lead Generation Business Segment" in a transaction with the Company's former officer, Scott J. Gerardi. These shares have no value and been returned to treasury stock as of December 31, 2010.

 

On January 21, 2011, the Company issued 1,333 (post-split) unregistered shares in exchange for public relations and communications consulting services in accordance with an agreement dated January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $104,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On January 21, 2011, the Company also issued 667 (post-split) free-trading shares in exchange for consulting services in accordance with an agreement entered into on January 21, 2011. The shares were valued at a market value of $78 per share (post-split), totaling $52,000. The total value was allocated between consulting expense and prepaid consulting expense based on a prorated portion of services performed during the year ended December 31, 2011 and the remaining portion of the term of the agreement.

 

On February 7, 2011, the Company entered into an agreement for business strategy and planning, market analysis, and marketing consulting services. In accordance with the terms of the agreement, 167 (post-split) unregistered restricted shares of common stock will be exchanged for the services provided by the consultant. As of December 31, 2011, the Company determined the shares to be fully earned and

F-11

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 5 - STOCKHOLDERS' DEFICIT (continued)

 

were valued at a market value of $4.50 per share (post-split), totaling $750, and an expense was recognized. As of December 31, 2011 the shares have not yet been issued and thus have been recorded as stock payable.

 

On March 14, 2011, the Company entered into a Strategic Alliance and Licensing agreement with SSL5. As part of the agreement, the Company agreed to issue 10,000 (post-split) unregistered restricted shares as consideration for an exclusive license of SSL5 existing intellectual property. The transaction was valued at the market value of $45 per share (post-split) for a total of $450,000, and recorded as stock payable. See Note 7 for further details of the agreement.

 

During the quarter ended June 30, 2011, the Company issued a total of 6,541 (post-split) shares of common stock to Asher Enterprises for the conversion of two convertible notes payable. See Note 7 for further details of these conversions.

 

On May 6, 2011, the Company entered into a Strategic Alliance and License agreement with Iconosys, Inc. In accordance with the terms of the agreement, the Company agreed to issue 834 (post-split) shares of common stock to Iconosys as part of consideration for services to be performed in conjunction with the alliance and license agreement. These shares were valued at the market value of $43 per share (post-split) for a total of $35,825, and recorded as stock payable. See Note 8 for further details of the agreement.

 

On July 8, 2011, the Company sold 617 (post-split) shares of free-trading common stock for a total of $6,988 (of which $700 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On July 19, 2011, the Company sold 255 (post-split) shares of free-trading common stock for a total of $2,680 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On July 28, 2011, the Company sold 92 (post-split) shares of free-trading common stock for a total of $1,014 (of which $447 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On August 9, 2011, the Company issued 1,594 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable. See Note 7 for further details of these conversions.

 

On August 19, 2011, the Company sold 345 (post-split) shares of free-trading common stock for a total of $2,511 (of which $500 was recorded to reduce APIC for the $5,000 origination fee payable) to Auctus Private Equity Fund, LLC in accordance with the terms of the Drawdown Equity Financing Agreement entered into on December 29, 2010 (see note 6).

 

On September 2, 2011, the Company issued 3,134 (post-split) shares of common stock to Asher Enterprises for the conversion of $11,000 in principal of outstanding convertible notes payable. See Note 6 for further details of these conversions

F-12

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 5 - STOCKHOLDERS' DEFICIT (continued)

 

On December 22, 2011, the Company issued 5,027 (post-split) shares of common stock to Asher Enterprises for the conversion of $8,000 in principal and $1,200 in accrued interest of outstanding convertible notes payable. See Note 6 for further details of these conversions.

 

As of December 30, 2011 and December 31, 2010, the Company has 220,568 (post-split) and 200,962 (post-split) shares of its common stock issued and outstanding, respectively.

 

Stock Options

 

On March 14, 2011, as part of the Strategic Alliance and Licensing agreement mentioned above, the Company entered into a consulting agreement with SSL5, providing stock options and a seat on the Monster Offers board of directors to develop ongoing product strategy and development services. In accordance with the terms of the agreement, the consulting company is entitled to purchase a total of 6,667 (post-split) unregistered restricted shares of the Company over the term of the agreement of two years. Upon the completion of each 6-month period, a total of 1,667 shares (post-split) will become vested and available for purchase by the Consultant. The price of these shares will be at $0.3 (post-split) per share, or par value. In the event that the Company is sold or merged with another company, all remaining unvested shares will become fully vested immediately prior to any such transaction.

 

As of September 13, 2011, 1,667 (post-split) shares have fully vested in accordance with the agreement and were revalued at $12,192 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.5 years, risk free interest rate of 0.21%, a dividend yield of 0% and a volatility rate of 183%.

 

A pro-rated portion of the unvested stock options for the service period from September 14 to December 31, 2011, totaling 972 (post-split) shares, have been valued at $2,109 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.2 years, risk free interest rate of 0.45%, a dividend yield of 0% and a volatility rate of 216%.

 

The following summarizes pricing and term information for options issued to consultants which are outstanding as of December 31, 2011:

 

    Weighted Average
  Number of Shares Exercise Price
Balance, December 31, 2010                        -                            -  
     
Options granted and assumed                  6,667                      0.30
Options expired                        -                            -  
Options cancelled                        -                            -  
Options exercised                        -                            -  
     
Balance, December 31, 2011                  6,667                      0.30
     

 

 

NOTE 6 - DRAWDOWN EQUITY FINANCING AGREEMENT

 

On December 29, 2010, the Company 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.

F-13

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 6 - DRAWDOWN EQUITY FINANCING AGREEMENT (continued)

 

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.

 

At the assumed offering price of $78 per share (post-split), we estimated that we would be able to receive up to $1,950,000 in gross proceeds, assuming the sale of the entire 25,000 shares (post-split) registered hereunder pursuant to the Drawdown Equity Financing Agreement. We would be required to register additional shares to obtain the balance of $10,000,000 available under the Drawdown Equity Financing Agreement at the assumed offering price of $78. There is uncertainty as to whether we will ever receive the full $10 million available under the equity line agreement. It is unlikely that we will be required to register more shares, unless management identifies a major acquisition or opportunity for the Company. As the Company currently has 220,568 (post-split) shares issued and outstanding, with 75,000,000 shares of common stock authorized, the Company would not need to authorize additional shares of its Common Stock should the Company obtain the entire $10,000,000.

 

The Company is obligated to file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-1, 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 was taken out of the proceeds of the first Drawdown.

 

During the year ended December 31, 2011, there were four individual sales of common stock in accordance with this agreement (see note 4). The Company received a total of $11,045 (net of $2,046 financing fees) for a total of 1,309 (post-split) shares of free-trading common stock. In accordance with the agreement, these shares were issued at a discount equal to three percent of the lowest closing bid price during the five trading days following the Company's delivery of notice.

 

NOTE 7 - CONVERTIBLE NOTES PAYABLE

 

On November 9, 2010, the Company entered into an agreement with Asher Enterprises, Inc., a Delaware corporation, an accredited investor, whereby Asher Enterprises loaned the Company the aggregate principal amount of $53,000 together with any interest at the rate of eight percent (8%) per annum, until the maturity date of July 18, 2011. The original issue discount note, as described in ASC 480-55, 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. On May 2, 2011, $15,000 of the principal balance was converted into 539 (post-split) shares.

F-14

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 7 - CONVERTIBLE NOTES PAYABLE (continued)

 

On May 4, 2011, $12,000 of the principal balance was converted into 427 (post-split) shares. On May 6, 2011 $12,000 of the principal balance was converted into 432 (post-split) shares. On May 23, 2011, the remaining principal balance of $14,000 and $2,120 in interest was converted into 1,088 (post-split) shares. As of December 31, 2011 this note was paid in full.

 

On December 1, 2010, an additional convertible note payable in the amount of $35,000 was entered into with Asher Enterprises with identical terms as the note entered into on November 9, 2010, the maturity date being August 29, 2011, with interest accruing at 8% per annum. If the Note is not paid in full with interest on the maturity date, the note holder has the same right to convert this Note into restricted common shares of the Company with the same discount as the note described above. The original issue discount note is for $35,000. On June 7, 2011, $15,000 of the principal balance was converted into 1,309 (post-split) shares. On June 13, 2011, $10,000 of the principal balance was converted into 1,208 (post-split) shares. On June 17, 2011, the remaining principal balance of $10,000 and $1,400 in interest was converted into 1,538 (post-split) shares. As of December 31, 2011 this note was paid in full.

 

On January 27, 2011, a third convertible note payable in the amount of $30,000 was entered into with Asher Enterprises with identical terms as the note entered into on November 9, 2010, the maturity date being October 31, 2011, with interest accruing at 8% per annum. If the Note is not paid in full with interest on the maturity date, the note holder has the same right to convert this Note into restricted common shares of the Company with the same discount as the note described above. On August 9, 2011, $11,000 of the principal balance was converted into 1,594 (post-split) shares. On September 2, 2011, an additional $11,000 of the principal balance was converted into 3,134 (post-split) shares. On December 22, 2011, the remaining principal balance of $8,000 and $1,200 in interest was converted into 5,027 (post-split) shares. As of December 31, 2011 this note was paid in full.

 

On April 25, 2011, a fourth convertible note payable in the amount of $40,000 was entered into with Asher Enterprises with identical terms as the note entered into on November 9, 2010, the maturity date being January 27, 2012, with interest accruing at 8% per annum. If the Note is not paid in full with interest on the maturity date, the note holder has the same right to convert this Note into restricted common shares of the Company with the same discount as the note described above. The original issue discount note is for $40,000 and a discount of $2,842 remains as of December 31, 2011. For the year ended December 31, 2011, $27,732 had been amortized and expensed.

 

On May 16, 2011, the Company entered into an agreement with Tangiers Investors, LP, a Delaware limited partnership, an accredited investor, whereby Tangiers Investors loaned the Company the aggregate principal amount of $50,000, less $500 for costs of the loan transaction and $4,000 fee to be paid to a third party, together with any interest at the rate of seven percent (7%) per annum, until the maturity date of May 7, 2012. The original issue discount note, as described in ASC 480-55, 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 75% multiplied by the Market Price (representing a discount rate of 25%). "Market Price" means the lowest trading price for the Common Stock during the seven (7) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Borrower via facsimile. The original

F-15

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 7 – CONVERTIBLE NOTES PAYABLE (continued)

 

issue discount note is for $50,000 and a discount of $6,250 remains as of December 31, 2011. For the year ended December 31, 2011, $10,417 had been amortized and expensed.

 

On June 1, 2011, a fifth convertible note payable in the amount of $32,500 was entered into with Asher Enterprises. The original issue discount note, as described in ASC 480-55, 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 55% multiplied by the Market Price (representing a discount rate of 45%). “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. The original issue discount note is for $32,500 and a discount of $5,909 remains as of December 31, 2011. For the year ended December 31, 2011, $20,682 had been amortized and expensed.

 

 

NOTE 8 – STRATEGIC ALLIANCE & LICENSING AGREEMENTS

 

SSL5

 

On March 14, 2011, Monster Offers (the “Company”) entered into Strategic Alliance and Licensing Agreement with SSL5, a Nevada corporation. SSL5 has developed technology services pertaining to a mobile financial services platform, which provides secure person-to-person mobile money transfer services. Monster Offers and SSL5 formed a strategic alliance with respect to the integration, use and commercialization of Monster Offers and SSL5 Existing Intellectual Property to create new and derivative intellectual property to introduce to various markets. Monster Offers obtained a license of the Existing SSL5 Intellectual Property for the exclusive use of the strategic alliance. As consideration for this license, Monster Offers is to issued 10,000 (post-split) of its unregistered restricted shares to SSL5. These shares were valued at the market rate of $45 (post-split) per share, for a total of $450,000. As of December 31, 2011, these shares have been recorded as stock payable.

 

At year end, management performed an impairment analysis on the license asset and determined that impairment was necessary due to the decrease in fair value of the common stock that has yet to be issued for the license. An impairment loss of $425,435 was recognized for the year. The remaining book value of is $0 as of December 31, 2011. Amortization expense for the years ended December 31, 2011 and 2010 were $24,565 and $0, respectively.

 

Monster Offers and SSL5 plan to establish a new company as a 100% owned subsidiary of Monster Offers, in the State of Nevada, and to contribute the license of the Existing SSL5 Intellectual Property into the new subsidiary for its use and future development of new and derivative intellectual property. Any new and derivative intellectual property developed in conjunction with this Strategic Alliance and Licensing Agreement shall be owned exclusively by the new subsidiary. As of December 31, 2011, the subsidiary entity had not yet been established.

 

F-16

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 8 – STRATEGIC ALLIANCE & LICENSING AGREEMENTS (continued)

 

As further consideration, the Company entered into a consulting agreement with SSL5, providing stock options and a seat on the Monster Offers board of directors to develop ongoing product strategy and development services. In accordance with the terms of the agreement, the Consulting Company is entitled to purchase a total of 6,667 (post-split) unregistered restricted shares of the Company over the term of the agreement of two years. Upon the completion of each 6-month period, a total of 1,667 (post-split) shares will become vested and available for purchase by the Consultant. The price of these shares will be at $0.30 (post-split) per share, or par value. In the event that the Company is sold or merged with another company, all remaining unvested shares will become fully vested immediately prior to any such transaction.

 

As of September 13, 2011, 1,667 (post-split) shares have fully vested in accordance with the agreement and were revalued at $12,192 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.5 years, risk free interest rate of 0.21%, a dividend yield of 0% and a volatility rate of 183%.

 

A pro-rated portion of the unvested stock options for the service period from September 14 to December 31, 2011, totaling 973 (post-split) shares, have been valued at $2,245 using the Black-Scholes option pricing model based upon the following assumptions: term of 1.2 years, risk free interest rate of 0.45%, a dividend yield of 0% and a volatility rate of 216%.

 

Iconosys

 

On May 16, 2011, the Company entered into a Strategic Alliance and License Agreement with Iconosys, Inc., a California corporation. Iconosys has developed proprietary mobile applications and technology and engaged in the business of mobile communication application design related services. Monster Offers and Iconosys formed a strategic alliance with respect to the integration, use and commercialization of Monster Offers and Iconosys Existing Intellectual Property to create new and derivative intellectual property to introduce to various markets.

 

Iconosys obtained a license of the Existing Monster Offers Tier 1 Zala Merchant license with the ability to promote and sign up Zala account holders and participate in a revenue sharing model with Monster Offers. As consideration for this license, Iconosys issued 3,333 (post-split) of its unregistered restricted shares to Monster Offers. Since Iconosys is not a publicly-traded corporation, these shares were valued at a fair value based upon a fair value of similar shares sold under a private placement memorandum by Iconosys at rate of $30 (post-split) per share, for a total of $100,000. The entire value of the shares was recognized as unearned license revenue and will be recognized over one year, the term of the license. For the year ended December 31, 2011, the Company has recognized $66,667 in license revenue.

 

In accordance with the terms of the agreement, Iconosys will provide services to Monster Offers relating to its Deal Buzzer mobile application and to integrate the Monster Offers existing intellectual property into mobile applications it currently designs and produces. As consideration for the services performed by Iconosys, Monster Offers issued 834 (post-split) shares of unregistered, restricted common stock, an initial cash payment of $500, and future payments as part of a revenue share participation portion of the agreement. The 834 (post-split) shares issued to Iconosys were valued at the market value $43 (post-split)

F-17

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 8 – STRATEGIC ALLIANCE & LICENSING AGREEMENTS (continued)

 

per share for a total of $35,825 in prepaid expenses that will be recognized over the term of the agreement, or approximately 30 months. For the year ended December 31, 2011, the Company recognized $10,053 in strategic alliance expenses.

 

The term of the strategic alliance and this agreement commenced on May 6, 2011 and will end on November 5, 2013, unless terminated earlier in accordance with the agreement.

 

 

NOTE 9 – CONSULTING AGREEMENT

 

On April 21, 2011, the Company entered into a consulting agreement for services related to raising funds for the Company. The terms of the agreement call for a percentage of monies received by contacts provided by the consultant in the following scale:

 

Up to $1 million raised 8.00%
$1,000,001 to $2 million 6.50%
$2,000,001 to $4 million 5.50%
$4,000,001 and above 4.50%

 

As of December 31, 2011, the Company has received $50,000 in convertible notes payable from contacts gained from this agreement and has paid 8 percent of those monies received, in accordance with this agreement, to the consultant for a total of $4,000.

 

NOTE 10 – SIGNIFICANT SOURCE OF REVENUE

 

On June 14, 2011, the Company executed a Services Agreement with Gannett, Inc., a Delaware corporation. In accordance with the Agreement, Monster Offers will track the performance of mutually agreed upon third-party "deal of the day" sites ("DOTD") that serve users in the applicable Gannett Markets, and will create reports describing the performance of deals distributed on such DOTD sites

 

This Agreement commenced on July 1, 2011 with the first deliverable due on July 12, 2011 and, unless earlier terminated as set forth herein, will remain in effect until June 30, 2012. Following the Initial Term, this Agreement may be renewed upon mutual written agreement of the parties.

 

 

 

F-18

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 11 – PROVISION FOR INCOME TAXES

 

For the years ended December 31, 2011 and 2010, the Company had a generated net operating income and had incurred net operating loss, respectively. No benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2011 and 2010, the Company had approximately and $969,328 and $122,987 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 years ended December 31:

 

The components of the Company's deferred tax asset are as follows:

 

  December 31,
Deferred tax assets 2011 2010
Net operating loss carryforwards     $      339,265      $        43,045
Valuation allowance          (339,265)            (43,045)
Total deferred tax assets    $                 -      $                  -  

 

 

The valuation allowance for deferred tax assets as of December 31, 2010 and 2009 was $339,265 and $43,045, 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, 2011 and 2010, and recorded a full valuation allowance.

 

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31:

 

  2011 & 2010
Federal statutory tax rate (35%)
Permanent difference and other 35%
  0%

 

F-19

 
 

 

Monster Offers

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 12 - RELATED PARTY TRANSACTIONS

 

The Company does not lease or rent any property. Office services are provided without charge by a director. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business 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.

 

As discussed in Note 5, on August 5, 2010, the Company entered into an Asset Exchange Agreement whereby an officer/director of the Company received 40,000 (post-split) shares of restricted common stock in exchange for cash of $8,000 and a computer software program with no assigned value, called the Social Network Action Platform (SNAP).

 

As discussed in Note 5, on November 18, 2010, the Company received 40,000 (post-split) shares of its common stock in exchange for its "Lead Generation Business Segment" in a transaction with the Company's former officer, Scott J. Gerardi.

 

On November 18, 2010, an officer/director of the Company contributed a software program to the Company that was developed for use by DrHealthSHares.com, a Web 3.0 social commerce solution for health and wellness that empowers like-minded collaborators to harness the collective knowledge and experience of the social crowd to improve the depth, breadth, and value of health information. The Company placed a nominal value on the software.

 

NOTE 13 – SUBSEQUENT EVENTS

 

Convertible Note

 

On February 14, 2012, Asher Enterprises converted $10,000 of discounted convertible note principal balance into 10,753 (post-split) shares of common stock.

 

On March 13, 2012, an additional $5,500 of principal balance was converted into 10,186 (post-split) shares of common stock.

 

Reverse stock split

 

The Board approved a resolution to effect a three hundred-for-one (300:1) reverse stock split. Under this Reverse Stock Split each three hundred (300) shares of our Common Stock were converted automatically into one (1) share of Common Stock. To avoid the issuance of fractional shares of Common Stock, all fractional shares will be rounded up to the next whole share. Any shareholder who owns three hundred or fewer shares will be rounded-up to one whole share. No fractional shares will be issued. The effective date of the Reverse Stock Split was April 9, 2012 and the financial statements herein have been adjusted to retrospectively reflect the split.

 

 

F-20

Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure.

 

None.

 

Item 9A(T). Controls and Procedures.

 

(a) Evaluation of disclosure controls and procedures

 

Management is committed to maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

As required by Rule 13a-15(b) of the Exchange Act, we must carry out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of each fiscal quarter, under the supervision and with the participation of its management, including its Chief Executive Officer and the Chief Financial Officer, who is also the sole member of our Board of Directors, to provide reasonable assurance regarding the reliability of financial reporting and the reparation of the financial statements in accordance with U. S. generally accepted accounting principles.

 

Management, including the chief executive officer and chief financial officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

 

With the participation of the chief executive officer and chief financial officer, our management evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2011 based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment performed using the criteria established by COSO, management has concluded that the Company maintained ineffective internal control over financial reporting in the following areas:

 

1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and

 

2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements;

 

 

The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2011.

 

Management believes that the material weaknesses set forth in item (2) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

This annual report does not include an attestation report of the Corporation's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Corporation's registered public accounting firm pursuant to temporary rules of the SEC that permit the Corporation to provide only the management's report in this quarterly report.

 

(b) Management's Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

(c) Changes in internal controls over financial reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

 

 

Item 9B. Other Information.

 

None.

 

 
 

 

 

PART III

 

Item 10. Director, Executive Officer and Corporate Governance.

 

The following table sets forth certain information regarding our current director and executive officer. Our executive officers serve one-year terms. Set forth below are the names, ages and present principal occupations or employment, and material occupations, positions, offices or employments for the past five years of our current director and executive officer.

 

 

Name

 

Age

Position & Offices Held  
       
  Paul Gain 50 Chairman/Chief Executive Officer
       
             

 

All directors hold office until the next annual meeting of stockholders of the Company and until their successors have been elected and qualified. Directors currently receive no fees for services provided in that capacity. The officers of the Company are elected annually and serve at the discretion of the Board of Directors.

 

Set forth below is a brief description of the background and business experience of our sole officer/director.

 

 

Biography of Paul Gain, CEO & Director

 

Mr. Gain is a software industry veteran with over 24 years of experience working for startup and early-stage companies that pioneered new business concepts and technologies. His efforts helped shape strategies into business results. His accomplishments include the launch, management, and sale of several software technology and services companies, along with key management positions in emerging technology companies. The following provides a summary of his recent past experience:

 

Prime Mover Global, LLC (July 2007 - August 2010) Mr. Gain was Manager and CEO of Prime Mover Global, LLC. He and his team developed innovative technology assets including product configuration and simulation tools, and a web 2.0 social commerce platform. The Company also generated revenues by providing outsourced consulting services to organizations in web 2.0 social networking, online commerce, strategic business planning & development, IT strategy, design, and management.

 

Lydian Technology (February, 2006 - June, 2007) After the successful sale of WellFound Decade Corporation to Lydian Trust, Mr. Gain was retained as CEO of Lydian Technology Group. His roles included the integration of existing business operations, product strategy, and people, providing technology solutions to the financial services and mortgage industry.

 

Wellfound / Decade Corporation (September, 2002 - February, 2006) 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 (2000 - 2002) 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.

 

CMstat Corporation (1986 - 1997) 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).

 

Education:

 

Mr. Gain is a graduate of Ferris State University in Michigan, with degrees in Business Management, Automotive Technology, and Mechanical Engineering.

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officer and director, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based upon a review of the copies of such forms furnished to us and written representations from our executive officer and director, we believe that as of the date of this report they were not current in their 16(a) reports.

 

Board of Directors

 

Our board of directors currently consists of one member, Mr. Paul Gain. Our directors serve one-year terms.

 

 

Audit Committee

 

The company does not presently have an Audit Committee. The sole member of the Board sits as the Audit Committee. No qualified financial expert has been hired because the company is too small to afford such expense.

 

Committees and Procedures

 

1. The registrant has no standing audit, nominating and compensation committees of the Board of Directors, or committees performing similar functions. The Board acts itself in lieu of committees due to its small size.

 

2. The view of the board of directors is that it is appropriate for the registrant not to have such a committee because its directors participate in the consideration of director nominees and the board and the company are so small.

 

3. The members of the Board who acts as nominating committee is not independent, pursuant to the definition of independence of a national securities exchange registered pursuant to section 6(a) of the Act (15 U.S.C. 78f(a).

 

4. The nominating committee has no policy with regard to the consideration of any director candidates recommended by security holders, but the committee will consider director candidates recommended by security holders.

 

5. The basis for the view of the board of directors that it is appropriate for the registrant not to have such a policy is that there is no need to adopt a policy for a small company.

 

6. The nominating committee will consider candidates recommended by security holders, and by security holders in submitting such recommendations.

 

7. There are no specific, minimum qualifications that the nominating committee believes must be met by a nominee recommended by security holders except to find anyone willing to serve with a clean background.

 

8. The nominating committee's process for identifying and evaluation of nominees for director, including nominees recommended by security holders, is to find qualified persons willing to serve with a clean backgrounds. There are no differences in the manner in which the nominating committee evaluates nominees for director based on whether the nominee is recommended by a security holder, or found by the board.

 

Code of Ethics

 

We have not adopted a Code of Ethics for the Board and any salaried employees.

 

 

Limitation of Liability of Directors

 

Pursuant to the Nevada General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director's liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.

 

 

Nevada Anti-Takeover Law and Charter and By-law Provisions

 

The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada Corporation Law apply to Monster Offers Section 78.438 of the Nevada law prohibits the Company from merging with or selling more than 5% of our assets or stock to any shareholder who owns or owned more than 10% of any stock or any entity related to a 10% shareholder for three years after the date on which the shareholder acquired the Monster Offers shares, unless the transaction is approved by Monster Offers' Board of Directors. The provisions also prohibit the Company from completing any of the transactions described in the preceding sentence with a 10% shareholder who has held the shares more than three years and its related entities unless the transaction is approved by our Board of Directors or a majority of our shares, other than shares owned by that 10% shareholder or any related entity. These provisions could delay, defer or prevent a change in control of Monster Offers.

 

 

Item 11. Executive Compensation

 

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 2009. The foregoing persons are collectively referred to herein as the "Named Executive Officers." Compensation information is shown for fiscal years 2011, 2010, 2009.

 

Monster Offers Summary Compensation Table

 

 

 

 

        Year       Compen-    
      Principal Ending Salary Bonus Awards sation Total  
Name Position Dec. 31, ($) ($) ($) ($) ($)  
                     
Paul Gain CEO/Director 2011 0 0 0 8,000 8,000  
      2010 27,000 0 0 0 27,000
                     
                     
Jonathan Marshall      Former CEO/Director 2009 0 0 0 0 0  
                                       

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.

 

Stock Option Grants

 

We did not grant any stock options to the executive officer or director from inception through fiscal year end December 31, 2011.

 

 

Outstanding Equity Awards at 2011 Fiscal Year-End

 

We did not have any outstanding equity awards as of December 31, 2011.

 

Option Exercises for Fiscal 2010

 

There were no options exercised by our named executive officer in fiscal 2011.

 

Potential Payments Upon Termination or Change in Control

 

We have not entered into any compensatory plans or arrangements with respect to our named executive officer, which would in any way result in payments to such officer because of his resignation, retirement, or other termination of employment with us or our subsidiaries, or any change in control of, or a change in his responsibilities following a change in control.

 

Director Compensation

 

Our director was not paid any compensation during the fiscal year ending December 31, 2010.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this annual report on Form 10-K, which account for our recent 300:1 reverse split 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.

 

 

 

 

 

 

 

 

 

 

 

         
Name and Address of Beneficial Owner  

Number of Shares

Beneficially Owned

 

Percentage

of Outstanding

Shares of Common

Stock (1)

         
Paul Gain (2)   49,000   22.7%
Powerhouse Development (3)   56,260   26.1%
Scott Gerardi(4)   10,000   4.6%
         
All Directors and Officers as a Group   49,000   22.7%

 

1) Percent of Class based on 215,540 shares.

2) Paul Gain, President & Chairman of Monster Offers, 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.

4) Scott Gerardi, non-affiliated shareholder, 8275 S. Eastern Avenue, Suite 200-306, Las Vegas, NV 89123.

 

 

We are not aware of any arrangements that may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.

 

We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.

 

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

The Company's Director has contributed office space for the Company's use for all periods presented. There is no charge to Monster Offers for the space. Management believes that its current facilities are adequate for its needs through the next twelve months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard. Our officer will not seek reimbursement for past office expenses. No written agreement exists that this officer/director will continue to donate office space to the operations. Therefore, there is no guarantee that he will not seek reimbursement for the donated office space in the future.

 

 

 

For the year ended December 31, 2010 the Company received $76,553 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. Additionally, in the year ended December 31, 2010, the Company paid a related party $9,352 in commission revenue. The bulk of the commissions paid to related parties include: Azure Software SRG, a company based in Romania, who received commissions based on the amount of revenues it generated through the Company's affiliated and now discontinued lead generation platform. Additionally, SJG Ventures, who is beneficially owned by Scott J. Gerardi, received commissions for generating revenues by bringing increased (web) traffic to the Company's Internet advertising programs. Mr. Gerardi, subsequent to these transactions, became the President/Director and a shareholder of the Company. He has since resigned as officer/director of the Company. Also, Jonathan W. Marshall received an agency fee from the Company, prior to serving as past officer and director of the Company. Each of these transactions resulted in a synergistic correlation between the amount of revenues these entities/individuals brought to the company versus the commissions they received for these revenues. The Company classified these transactions in their financial statements as related party transactions. Thus, commissions from related parties represent most of the Company's revenue.

 

 

Item 14. Principal Accountant Fees and Services.

 

De Joya Griffith & Company, LLC served as our principal independent public accountants for the fiscal years ending December 31, 2011 and 2010. Aggregate fees billed to us for the years ended December 31, 2011 and 2010 were as follows:

 

 

 

  For Year Ended December 31,               For the Year Ended December 31      
  2011   2010      
(1)   Audit Fees (1)  $22,150   $14,500      
(2)   Audit-Related Fees  $2,000          
(3)   Tax Fees             
(4)   All Other Fees            

 

 

Total fees paid or accrued to our principal auditor

 

(1) Audit Fees include fees billed and expected to be billed for services performed to comply with Generally Accepted Auditing Standards (GAAS), including the recurring audit of the Company's financial statements for such period included in this Annual Report on Form 10-K and for the reviews of the quarterly financial statements included in the Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

 

 

 

Audit Committee Policies and Procedures

 

We do not have an audit committee; therefore our sole director pre-approves all services to be provided to us by our independent auditor. This process involves obtaining (i) a written description of the proposed services, (ii) the confirmation of our Principal Accounting Officer that the services are compatible with maintaining specific principles relating to independence, and (iii) confirmation from our securities counsel that the services are not among those that our independent auditors have been prohibited from performing under SEC rules. Our sole director then makes a determination to approve or disapprove the engagement of De Joya Griffith & Company, LLC for the proposed services. In the fiscal year ending December 31, 2010, all fees paid to De Joya Griffith & Company, LLC were unanimously pre-approved in accordance with this policy.

 

Less than 50 percent of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

 

The following information required under this item is filed as part of this report:

 

(a) 1. Financial Statements

 

 

  Page
   
   
Management's Report on Internal Control Over Financial Reporting 30

 

Report of Independent Registered Public Accounting Firm

 

F-1

Balance Sheets

 

F-2

 

Statements of Operations

 

F-3

 

Statements of Stockholders' Deficit

 

F-4

 

Statements of Cash Flows

 

F-5

 

 

 

(b) 2. Financial Statement Schedules

 

None.

 

 

 

 

(c) 3. Exhibit Index

 

 

      Incorporated by reference  
Exhibit Exhibit Description Filed herewith Form Period Ending Exhibit Filing Date  
3.1 Articles of Incorporation   SB-2   3.1 01/15/08  
  3.2 By-laws as currently in effect   SB-2   3.2 01/15/08
  3.2 Amended Articles of Incorporation   SB-2   3.3 01/12/12
  10.1 Asset Exchange Agreement by and between Monster Offers and Prime Mover Global, LLC, dated August 5, 2010  

 

8-K

  10.1 09/02/10
  10.2 Share Lock-Up Agreement with Scott J. Gerardi, dated August 6, 2010   8-K   10.2 09/02/10
  10.3 Share Lock-Up Agreement with Powerhouse Development, dated August 6, 2010   8-K   10.3 09/02/10
  10.4 Share Lock-Up Agreement with Paul Gain, dated August 6, 2010   8-K   10.4 09/02/10
  10.5 Share Lock-Up Agreement with Jonathan W. Marshall, dated August 6, 2010   8-K   10.5 09/02/10
  10.6 Investor and Public Relations Agreement between Monster Offers and Emerging Growth Research, LLC, date November 10, 2010   8-K   10.9 11/19/10
  10.7 Exchange and Hold Harmless Agreement with Scott J. Gerardi dated November 19, 2010 X 8-K   10.7 11/24/10
  10.8 Drawdown Equity Financing Agreement between Monster Offers and Auctus Private Equity Fund, LLC, dated December 23, 2010.   8-K   10.6 01/03/11
  10.9 Registration Rights Agreement between Monster Offers and Auctus Private Equity Fund, LLC, dated December 23, 2010.   8-K   10.7 01/03/11
  10.10 Consulting Agreement with Christina R. Hansen, dated January 21, 2011   S-8   10.1 01/27/11
  10.11 Investor and Public Relations Agreement between Monster OFFERS and Equititrend Advisors, LLC, dated January 21, 2011   8-K   10.11 02/03/11
  10.12 Strategic Alliance and Licensing Agreement between Monster OFFERS and SSL5, dated March 14, 2011   8-K   10.12 03/16/11
  23.1 Consent letter from DeJoya Griffith & Company, LLC X        
  31.1 Certification of President and Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act X 8-K   99.1 09/30/11
  32.1 Certification of President and Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act X 8-K   99.2 09/30/11
                             

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Monster Offers

Registrant

 
     
     
Date:  April 16, 2012        /s/ Paul Gain  
  Name: Paul Gain  
   

Title: Chief Executive Officer, President,

Director, Principal Executive, Financial,

and Accounting Officer

 

 

         

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and on the dates indicated have signed this report below.

 

     
     
     
Date:  April 16, 2012        /s/ Paul Gain  
  Name: Paul Gain  
   

Title: (Principal Executive,

Principal Financial and

Principal Accounting Officer)