Before all my music was digital and playing out of bluetooth speakers, I was a big fan of Monster Cables for connecting my audio and video equipment. Now those cables just sit in a plastic bin in the basement. I hadn’t thought about Monster Cables until the SEC has published the first “bedbug” letter on EDGAR and it was aimed at Monster. The letter from the Division of Corporation Finance is in response to a proposed monster money offering by Monster Products, Inc. Rather than providing a detailed examination and issuing comments, the staff letter to Monster suggests trying again.
Public company filings are not in my area of expertise so I’m not sure what the SEC was concerned about.
What caught my attention was the crazy scheme that Monster is trying to put together. Monster wants to offer up to three hundred million of its to-be-created Monster Money Tokens (“MMNY”) for gross proceeds of $300,000,000.
Monster plans to use the Ethereum blockchain technology on its E-commerce website to create the new Monster Money Network where consumers may use either MMNY Tokens or fiat currencies to purchase Monster products and services. The company intends to utilize the blockchain technology to its marketing, accounting and audit, internal control and shipping management functions.
In the event of an “ICO Failure” investors in the tokens may convert them into Monster common stock at the rate of four tokens per share of stock. The “ICO Failure” means that i) MMNY Tokens not have been traded on a cryptocurrency exchange or a U.S. stock exchange by June 30, 2020 because either this registration statement is not declared effective by the SEC or MMNY Tokens are not approved for trading on any such exchange market; or ii) MMNY Tokens have ceased trading on or before June 30, 2020 due to legal or administrative enforcement actions by the SEC, the CFTC, or any other government authorities.
The ICO seems a Hail Mary to turn the company around. It was acquired by a blank check company earlier this year. It as unable to timely file its latest 10Q. It fired its auditor. It replaced its CFO.
Monster trying something new by basically pre-selling Monster products and services through the MMNY offering. It’s issuing gift certificates, tarted up with blockchain.
I saw this at the same time I saw the UBI Blockchain fraud. That company was originally JA Energy, but reincorporated as UBI Blockchain Internet. Its business was to encompasses the research and application of blockchain technology with a focus on the internet of things covering areas of food, drugs and healthcare. UBI had no revenues and has yet to develop any products for sale. The stock price shot up from $3.70 per share to over $87 at one point on a surge of buying just because the company had blockchain in its name. The SEC temporarily suspended trading in UBI Blockchain stock earlier this year due to concerns about the accuracy of assertions in its SEC filings and unusual and unexplained market activity.
Unlike UBI Blockchain, Monster has an operating business. It’s just not doing well. As a turnaround, it proposes to sell tarted up gift certificates for products that are mostly in bins in the basement.
What type of monster is it?
Sources:
- Monster ICO has bedbugs, CorpFin says in first public letter by Anne Sherry, J.D.
- SEC Obtains Final Judgments Against Attorney and Law Firm Business Manager Charged with IIIegal Sales of Ubi Blockchain Internet Stock
- SEC temporarily suspended trading in UBI Blockchain stock
- Monster Bed Bug letter
- Monster’s Form S-1