Item 1. Business.
History
As used herein and except as otherwise noted, the term “Company”, “it(s)”, “our”, “us”, “we”, and “Monetiva” shall mean Monetiva Inc., a Delaware corporation.
Monetiva Inc. was incorporated in the State of Delaware on July 22, 2016 and was formerly known as Lark Street Acquisition Corporation. In August 2016, Lark Street Acquisition Corporation filed a registration statement with the Securities and Exchange Commission on Form 10 by which it became a public reporting company.
On March 14, 2017, the Company effected a change of control by cancelling an aggregate of 20,000,000 shares of common stock of existing shareholders, accepting the resignations of its then existing officers and directors, electing a new officer and sole director and issuing 8,000,000 shares of common stock to the new shareholder. In connection with the change of control, the sole director of the Company and its board of directors unanimously approved the change of the Company’s name from Lark Street Acquisition Corporation to American Standard Wallet, Inc.
On November 1, 2017, the Company effected a change of control whereby then existing owner Mr. James Koh, the sole shareholder, officer and director of the Company, sold all 8,000,000 of his shares of the Company’s common stock to Mr. Pierre Sawaya. The Company accepted the resignation of Mr. Koh as the existing officer and director, electing a new officer and sole director upon issuance of the shares to Mr. Sawaya. In connection with the change of control, Mr. Sawaya, the sole shareholder and director of the Company unanimously approved the change of the Company’s name from American Standard Wallet, Inc. to Monetiva, Inc.
As of November 15, 2019, the Company has a total of 26,611,264 shares of common stock of the Company issued and outstanding. Of all shares issued and outstanding, a total of 20,000,000 common shares have been issued to the Company’s Board of Director and Founder of the Company, representing approximately 75.16% of the total shares issued and outstanding as of the date of this Report.
Our Current Business
Monetiva’s primary objective is to offer prepaid card and money remittance services to under-banked, underserved markets and foreign workers. We are supported by an experienced team with extensive background and qualifications in our core business, including prepaid card issuance, program management, third party processing technology and banking regulatory and compliance. We are a startup Company in the developmental phase of the business cycle. We are building out a card and technology platform and remittance network and are currently engaged with business partners in the United States and globally.
Our primary services to be offered are centered on the issuance of MasterCard credit and debit cards to qualified consumers in the United States of America. Monetiva’s business rollout is intended to be implemented in phases. Phase I of development includes targeting and establishing relationships with partner companies in U.S., Mexico and India. Business relationships shall be secured to implement domestically issued Prepaid Cards and financial services in each of those markets. The Company aims by this development phase to enable a low cost, efficient solution to both the US accountholders and their respective family and friends in partner countries. Monetiva accounts are designed to enable foreign workers to have their payroll deposited directly onto the Mastercard issued by the Company. Card recipients will then be able to pay bills, send money abroad and utilize the Mastercard to access ATMs and make purchases at retail merchants. Services will also be provided to enable card loading of funds through retail merchant locations. The Company also intends to implement value added programs such as loyalty discounts that shall be provided as part of the card benefits.
After successful rollout of Phase I development programs, the Company intends to expand to additional countries and territories as part of its Phase II development plan. The Company shall provide the same services to these new territories. Phase II territories will include Europe, The Philippines, the United Arab Emirates, Pakistan and China.
Our Strategy
To successfully grow and expand our business, Monetiva intends to deploy the following primary marketing strategies:
● Target those foreign market Immigrants in the US by metro area;
● Establish Ambassadors in high density metro areas - Sales & Marketing Representatives;
● Setup Internet Infrastructure to enable family\friend Issuance in each market, utilizing digital marketing to drive traffic to the Company’s domain;
● Utilize retail distribution partners;
● Utilize accountholder incentives to create a viral referral base to bring in new accountholders; and
● Add new products and services to existing accountholders to generate increased usage per accountholder;
Once the Company has deployed these primary strategies in the US, cross marketing to the other countries will be implemented using the same strategy (e.g. US to the Philippines and Canada to Mexico).
Metro Area Marketing
The Company has identified several primary metropolitan areas and sub-market areas to focus its US-based marketing into the foreign worker concentrated markets. These areas include Los Angeles, San Francisco, San Diego, Houston, Dallas, New York, Chicago, Washington DC, Atlanta, Miami and the surrounding area sub-markets. The Company intends to secure representatives in each of these markets to setup distribution points with foreign market centric services including organizations related to religion, healthcare, community, and employment. The representatives will include direct employees and bank approved independent agents. Deeper expansion into other metropolitan markets will be evaluated and prioritized once the Company has met its initial primary business objectives.
Internet Access and Marketing
The Monetiva website will be developed to easily enable accountholder registration in the US and provide access to registration in each of the home markets through Monetiva’s issuing partners. This will allow effective communications to the consumers in each market while utilizing the Know Your Customer (“KYC”) verification and compliance process that has already been established through the existing systems.
Social Media and Digital Marketing will be used to target consumers. We also intend to affiliate with websites and brands that focus on the same consumer markets.
Retail Distribution Partners
We are in discussions with several retail chains to offer the Monetiva Card through their retail distribution network. The cards will be available for immediate activation and loading from the local stores. Once KYC is provided and verified the cards will be converted from non-reloadable to reloadable and available for personalization if requested. Inventory control will be established with each retail partner.
Accountholder Incentives
The foreign worker communities generally provide a cohesive network that enables incentive programs for one accountholder to refer friends or family. We intend to provide the referring accountholder with valued incentives to bring others into the Monetiva program.
Value-added Services
We have developed a suite of value-added services to increase the value of the service offering to accountholders including retail discounts, healthcare discounts, usage points, long distance telephone, bill-paying, etc. These services are intended to drive more transaction activity and new accountholder traffic.
Global Remittance Market
We are focused on select remittance corridors to enable Monetiva to specialize in the scope, value and quality of services. According to the World Bank the volume of remittances from the US to the target markets in 2018 was:
https://economictimes.indiatimes.com/nri/forex-and-remittance/india-to-retain-top-position-in-remittances-with-80-
billion-world-bank/articleshow/66998062.cms
Competition
The competitive landscape for traditional prepaid cards and remittance products is sizable with leaders such as NetSpend, Green Dot, Western Union and MoneyGram. However, Monetiva does not compete directly with any of these companies, as Monetiva offers hybrid prepaid card services using a unique approach of customer acquisition and product delivery.
Each of these competitors has established itself with a market position that enables it to meet consumer requirements such as low cost and convenience. The Company’s market position is however intended to provide prepaid services at a price below major competitors such as Western Union, focusing on value-added services to both the senders and receivers, and working within the metropolitan markets and communities to establish our value. The Monetiva business model is further differentiated through our implementation of the domestic card issuance in each of the participating countries. This allows us to expedite the transfers and provide additional payment services to the cardholders in the receiving countries.
Technology
Monetiva is implementing its technical strategy through a combination of utilizing the “best of breed” solutions available in the market and adding new functionality and solutions to meet the requirements within each market. We have established relationships in the partner countries and will be utilizing technology through the platforms that exist today. Each market has specific regulatory requirements that require certain controls and reporting. This approach will allow us to maintain the proper risk and compliance controls as defined within each country. We will utilize PCI compliant technology branded under Monetiva to bring the systems together and provide a consistent solution to the accountholders.
Implementing a global solution requires the company to maintain a secure and flexible approach to meet the regulatory standards across each of its intended markets that can vary across each country. In some markets we can operate a single multi-region solution whereas in other markets we are required to implement a technology platform within the country to meet regulatory requirements.
With the global variations in mind we are partnering with companies who have a turnkey solution and experience in certain markets and have established secure operating facilities. As volumes within markets justify, the company will determine the most efficient approach to migrate toward.
Our partners in Mexico have been providing Prepaid Card solutions to the Mexican government and many other large establishments and have both an issuing and money remittance licenses. Our technology will enable us to interconnect the systems while their technology will enable us to monitor the activity.
Our partners in India have established a network of over 30 banks utilizing their payment solutions including prepaid cards and Wallets. We will interconnect our systems and again utilize their infrastructure to manage the portfolio.
In the US, Monetiva has already contracted with a partner to provide the Prepaid Card processing infrastructure. In addition, Monetiva has in-house technical resources working to develop easy to use consumer portals, mobile solutions and interfaces to manage consumer information across local markets.
The primary focus is to deliver high quality technical solutions, meeting payment industry data security requirements, regulatory compliance for consumer protection and anti-money laundering and flexible architecture to enable an integrated suite of solutions to think globally while operating locally.
Regulatory and Compliance
As a Program Manager, Monetiva business operations will be subject to various U.S and foreign laws, regulations and policies, including the Bank Secrecy Act (BSA), as amended by the US Patriot Act; Anti-Money Laundering (AML) methods, especially considering BSA; Office of Foreign Assets Control (OFAC) requirements; consumer compliance regulations; and electronic marketing and criminal trends. Failure to comply with such laws, regulations and policies could result in civil and criminal penalties, as well as termination of material business relationships.
Manuals have been developed with regards to complying with required laws, regulations, brand guidelines and bank rules so as to:
● Comply with policies
● Comply with applicable regulatory requirements
● Detect and prevent money laundering and terrorist financing
● Recognize the penalties of noncompliance
● Identify suspicious activity and transactions
● Maintain proper records and reporting
Monetiva is committed to maintaining compliance with all required laws, regulations, brand guidelines and bank rules. Monetiva intends to implement continuing training to ensure such compliance by the Company and its employees.
Subsequent Events
Management has evaluated subsequent events through November 15, 2019, the date the financial statements were available to be issued, noting the following items would impact the accounting for events or transactions in the current period or require additional disclosure.
Equity Transactions
On September 24, 2018, an investor executed a stock subscription agreement to purchase up to 1,000,000 shares of common stock of the Company at $0.50 per share. The subscriber has paid $300,000 to the Company as of November 15, 2019, and agreed to pay the remaining balance prior to December 31, 2019. The Company has issued the 1,000,000 shares of common stock on January 14, 2019 to the investor.
On January 14, 2019, the Company issued 20,000,000 shares of its common stock to its Officer consisting of 12,000,000 shares of common stock as a sign-on bonus, and 8,000,000 shares acquired from the former Chief Executive Officer.
On January 14, 2019, the Company issued 1,666,000 shares of its common stock to investors and business promotors who had subscribed for the Company’s common stock during the year ended December 31, 2018.
On February 27, 2019, an investor executed a stock subscription agreement to purchase 5,264 shares of common stock of the Company at $1.90 per share. The subscriber has paid $10,002 to the Company on February 27, 2019. On October 10, 2019, the Company issued to the investor 5,264 shares of common stock for the stock subscriptions.
On March 14, 2019, a shareholder executed a stock subscription agreement to purchase 3,155,000 shares of common stock for a cash consideration of $788,750. The Company received the cash consideration of $788,750 from the shareholder between March 14, 2019 and June 17, 2019. On October 10, 2019, the Company issued 2,030,000 shares of common stock to the shareholder and 1,125,000 shares of common stock distributed between the seventeen (17) family members for the stock subscriptions.
On March 20, 2019, an investor executed a stock subscription agreement to purchase 50,000 shares of common stock of the Company at $2.00 per share. On March 27, 2019, the investor paid $100,000 to the Company for the stock subscriptions. On October 10, 2019, the Company issued to the investor 50,000 shares of common stock for the stock subscriptions.
On April 3, 2019, an investor executed a stock subscription agreement to purchase 8,000 shares of common stock of the Company at $2.00 per share. On April 3, 2019, the investor paid $16,000 to the Company. On October 10, 2019, the Company issued to the investor 8,000 shares of common stock for the stock subscriptions.
On May 16, 2019, an investor executed a stock subscription agreement to purchase 200,000 shares of common stock of the Company at $0.50 per share. The Company received the cash consideration of $100,000 from the investor on May 16, 2019. On October 10, 2019, the Company issued to the investor 200,000 shares of common stock for stock subscriptions.
On June 14, 2019, an investor executed a stock subscription agreement to purchase 5,000 shares of common stock of the Company at $2.00 per share. The Company received the cash consideration of $10,000 from an investor on July 10, 2019. On October 10, 2019, the Company issued to the investor 5,000 shares of its common stock for stock subscriptions.
On June 17, 2019, an investor executed a stock subscription agreement to purchase 240,000 shares of common stock of the Company at $0.25 per share. The Company received the cash consideration of $60,000 from the investor on June 17, 2019. On October 10, 2019, the Company issued to the investor 240,000 shares of common stock for stock subscriptions.
On June 18, 2019, an investor executed a stock subscription agreement to purchase 200,000 shares of its common stock at $1.00 per share. The Company received a cash consideration of $200,000 from an investor on July 16, 2019. The Company issued 200,000 shares of common stock to the investor on July 24, 2019 for stock subscriptions.
On August 14, 2019, a stockholder executed a stock subscription agreement to purchase 8,000 shares of the Company’s common stock for $2.00 per share. The Company received a cash consideration of $16,000 from the investor on August 16, 2019. On October 10, 2019, the Company issued to the investor 8,000 shares of its common stock for stock subscriptions.
On September 17, 2019, two investors executed three separate subscription agreements to purchase 17,500 shares of the Company’s common stock at $2.00 per share. The Company received cash consideration of $35,000 from the investors on September 27, 2019. On October 23, 2019, the Company issued to the investors 17,500 shares of its common stock for stock subscriptions.
On September 19, 2019, a stockholder executed a stock subscription agreement to purchase 44,000 shares of the Company’s common stock at $0.25 per share. On April 9, 2019, the stockholder had advanced the Company $4,000 towards the purchase of these shares on April 9, 2019, and the remaining $7,000 were received by the Company on August 30, 2019 for these stock subscriptions. On October 10, 2019, the Company issued to the investor 44,000 shares of common stock for these stock subscriptions.
On September 25, 2019, an investor executed a stock subscription agreement to purchase 12,500 shares of the Company’s common stock at $2.00 per share. The Company received cash consideration of $25,000 from the investor on September 27, 2019. The Company issued 12,500 shares of its common stock to the investor on October 23, 2019.
As a result of the offerings, a total of 26,611,264 shares of common stock of the Company have been issued and outstanding as of November 15, 2019.
Lease Transaction
On May 24, 2019, the Company executed a month-to-month rental agreement to lease furnished premises. The lease term commenced June 1, 2019 for a one-year term with a monthly rent of $11,500 per month from June 1, 2019 to November 1, 2019 and increasing to $13,167 from December 1, 2019 to May 31, 2020. The landlord required a security deposit of $15,000 on the commencement date of the lease, and an additional $10,000 security deposit on November 1, 2019. On May 30, 2019, the Company paid to the landlord security deposit of $15,000 and prepaid the rent of $69,000 for the six months ended November 30, 2019.
Securities and Exchange Commission Order
On August 22, 2019, the Company became aware of an Securities and Exchange Commission Order Instituting Administrative Proceedings and Notice of Hearing alleging that the Company is delinquent in certain of its periodic filings with the Commission and indicating that administrative proceedings are intended to be held (i) to determine all delinquent filings and any defenses of the Company for any such delinquent filings, and (ii) to make a decision as whether it may be appropriate to take any action to suspend or revoke the Company’s registration of its securities. The date of the Commission Order is August 14, 2019. The Company is actively working to resolve any delinquent filings as quickly as possible and intends to demonstrate to the Commission its diligence in that regard and filed an answer in response to the assertions made by the Commission.
On September 18, 2019, the Division of Enforcement of the Securities and Exchange Commission filed with the Office of the Secretary a Motion for Ruling on the Pleadings Against the Company seeking an order to revoke each class of securities of the Company registered with the Commission pursuant to Section 12(j) of the Securities Exchange Act of 1934. At this time, the Company is diligently working to eliminate its filing delinquencies, and intends to become current on its filings on or before November 15, 2019.
Service Agreement with E1G
On or about September 30, 2019, the Company entered into an oral agreement with E1G to provide data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers in three additional countries China, Philippines and United Arab Emirates. All other terms and conditions to remain the same as per the January 15, 2018 agreement with E1G.
As of November 15, 2019, the Company has paid to E1G cash consideration of $827,280 as the processing fees to initiate and establish BINs in these selected countries.
Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this document, including, among others, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Form 10-K, 10-Q and 8-K filed with the SEC from time to time. The Company assumes no obligation to update or revise any forward-looking statements.
Item 1A.
Item 1A. Risk Factors.
Not Applicable.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Properties.
Monetiva currently leases its headquarters located at 4695 MacArthur Court, Suite 450, Newport Beach, California. This office space consists of approximately 4,600 square feet of space. The term of the lease is for a period of twenty-one (21) months, commencing on March 18, 2018 and ending November 30, 2019. The Company is currently negotiating to extend or renew its lease, as well as evaluating other potential properties. The current base rent is $12,202 per month.
We believe that our facilities are adequate for our needs for the remainder of the lease term and, in the opinion of the Company’s management; the property s are adequately covered by insurance.
Item 3.
Item 3. Legal Proceedings.
On August 22, 2019, the Company became aware of an Securities and Exchange Commission Order Instituting Administrative Proceedings and Notice of Hearing alleging that the Company is delinquent in certain of its periodic filings with the Commission and indicating that administrative proceedings are intended to be held (i) to determine all delinquent filings and any defenses of the Company for any such delinquent filings, and (ii) to make a decision as whether it may be appropriate to take any action to suspend or revoke the Company’s registration of its securities. The date of the Commission Order was August 14, 2019. The Company filed an answer in response to the assertions made by the Commission.
On September 18, 2019, the Division of Enforcement of the Securities and Exchange Commission filed with the Office of the Secretary a Motion for Ruling on the Pleadings Against the Company seeking an order to revoke each class of securities of the Company registered with the Commission pursuant to Section 12(j) of the Securities Exchange Act of 1934. At this time, the Company is diligently working to eliminate its filing delinquencies, and intends to become current on its filings on or before November 15, 2019 in an effort to possibly avoid such revocation.
Item 4.
Item 4. Mine Safety Disclosures.
Not Applicable.
PART II
Item 5.
Item 5. Market for Registrant’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Unregistered Sales of Common Stock.
There is currently no public market for the Company’s securities.
At such time as it qualifies, the Company presently intends to apply for quotation of its securities on the Nasdaq Capital Market. In general, there is greatest liquidity for traded securities on the Nasdaq Capital Market and less on the OTC Bulletin Board.
The OTC Bulletin Board is a dealer-driven quotation service. Unlike the Nasdaq Stock Market, companies cannot directly apply to be quoted on the OTC Bulletin Board, only market makers can initiate quotes, and quoted companies do not have to meet any quantitative financial requirements. Any equity security of a reporting company not listed on the Nasdaq Stock Market or on a national securities exchange is eligible.
It is not possible to predict or guaranty where, if at all, the securities of the Company will be traded in the future.
Since inception through December 31, 2018, the Company had issued shares of its common stock as follows:
As of December 31, 2018, the Company had one shareholder with 8,000,000 shares of Company common stock, par value of $0.0001 per share, outstanding. The 20,000,000 shares of common stock issued on July 22, 2016 were cancelled as a result of change in control on March 14, 2017.
Subsequent to December 31, 2018, the Company has issued shares of its common stock as follows:
**On November 1, 2017, the Company entered into an employment agreement with the Officer and awarded 12,000,000 shares of the Company’s common stock valued at $1,200 as a sign-on bonus. The common shares were valued at par value and were issued to the Officer on January 14, 2019.
The shares of common stock were issued and sold pursuant to exemptions from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), contained in Section 4(2) and/or Regulation D thereof.
A total of 26,611,264 shares of common stock of the Company have been issued and outstanding as of November 15, 2019.
Interwest Transfer Company, Inc. is the Company’s transfer agent.
Dividends
Monetiva has not paid any cash dividends on its common stock and does not expect to do so in the foreseeable future. We anticipate that any earnings generated from future operations will be used to finance our operations. No restrictions exist upon our ability to pay dividends.
Item 6.
Item 6. Selected Financial Data.
Selected Financial Data is not required to be filed by a smaller reporting company.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and other financial information included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”
Cautionary Note Concerning Factors That May Affect Future Results
This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission, in materials delivered to shareholders and in press releases. In addition, the Company’s representatives may from time to time make oral forward-looking statements.
Forward-looking statements relate to future events and typically address the Company’s expected future business and financial performance. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “forecast” and other words and terms of similar meaning, typically identify such forward-looking statements. In particular, these include, among others, statements relating to:
● the Company’s strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position,
● worldwide economic, political, and capital markets conditions, such as interest rates, foreign currency exchange rates, financial conditions of our suppliers and customers, and natural and other disasters or climate change affecting the operations of the Company or our suppliers and customers,
● new business opportunities, product development, and future performance or results of current or anticipated products,
● the scope, nature or impact of acquisition, strategic alliance and divestiture activities,
● the outcome of contingencies, such as legal and regulatory proceedings,
● future levels of indebtedness, common stock repurchases and capital spending,
● future availability of and access to credit markets,
● pension and postretirement obligation assumptions and future contributions,
● asset impairments,
● tax liabilities,
● information technology security, and
● the effects of changes in tax (including the newly enacted Tax Cuts and Jobs Act), environmental and other laws and regulations in the United States and other countries in which we operate.
We are a development stage enterprise and are incorporated in the State of Delaware in July 2016. As of the periods from inception, through the date of this annual report, we did not generate any revenue and incurred expenses and operating losses, as part of our development stage activities. We have experienced a net loss of $535,274 for the year ended December 31, 2018, working capital of $106,426, and an accumulated deficit of $589,186 at December 31, 2018.
We anticipate that we will need substantial working capital over the next 12 months to continue as a going concern and to expand our operations to distribute, sell and market products and solutions. Our independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. Unless we are able to generate sufficient cash flows from operations and/or obtain additional financing, there is a substantial doubt as to the ability of the Company to continue as a going concern. We intend to make an equity offering of our common stock for the acquisition and operation expenses. If we cannot raise the required cash, we will issue additional shares of our common stock in lieu of cash.
Our Current Business
Monetiva’s primary objective is to offer prepaid card and money remittance services to under-banked, underserved markets and foreign workers. We are supported by an experienced management team with extensive background and qualifications in our core business, including prepaid card issuance, program management, third party processing technology and banking regulatory and compliance. We are a startup Company in the developmental phase of the business cycle. We are building out a card and technology platform and remittance network and are currently engaged with business partners in the United States and globally.
We intend to utilize Endless One Global (“E1G”) prepaid card services to provide prepaid cards to under-banked consumers, primarily targeting foreign workers. The primary services to be offered are centered on the issuance of MasterCard credit and debit cards to qualified consumers in the United States of America. Business rollout is intended to be implemented in phases. Phase I of development includes targeting and establishing relationships with partner companies in both U.S., Mexico and India. Business relationships shall be secured to implement domestically issued Prepaid Cards and financial services in each of those markets. Our aim by this development phase is to enable a low cost, efficient solution to both the US accountholders and their respective family and friends in partner countries. Our accounts are designed to enable foreign workers to have their payroll deposited directly onto the Mastercard issued by us. Card recipients will then be able to pay bills, send money abroad and utilize the Mastercard to access ATMs and make purchases at retail merchants. Services will also be provided to enable card loading of funds through retail merchant locations. We also intend to implement value added programs such as loyalty discounts that shall be provided as part of the card benefits.
After successful rollout of Phase I development programs, we intend to expand to additional countries and territories as part of its Phase II development plan. We shall provide the same services to these new territories. Phase II territories are likely to include Europe, The Philippines, United Arab Emirates, Pakistan and China.
Our Strategy
To successfully grow and expand our business, we intend to deploy the following primary marketing strategies:
● Target those foreign market Immigrants in the US by metro area;
● Establish Ambassadors in high density metro areas - Sales & Marketing Representatives;
● Setup Internet Infrastructure to enable family\friend Issuance in each market, utilizing digital marketing to drive traffic to the Company’s domain;
● Utilize retail distribution partners;
● Utilize accountholder incentives to create a viral referral base to bring in new accountholders; and
● Add new products and services to existing accountholders to generate increased usage per accountholder;
Once we have deployed these primary strategies in the US, cross marketing to the other countries will be implemented using the same strategy (e.g. US to the Philippines and Canada to Mexico).
Metro Area Marketing
We have identified several primary metropolitan areas and sub-market areas to focus its US-based marketing into the foreign worker concentrated markets. These areas include Los Angeles, San Francisco, San Diego, Houston, Dallas, New York, Chicago, Washington DC, Atlanta, Miami and the surrounding area sub-markets. We intend to secure representatives in each of these markets to setup distribution points with foreign market centric services including organizations related to religion, healthcare, community, and employment. The representatives will include direct employees and bank approved independent agents. Deeper expansion into other metropolitan markets will be evaluated and prioritized once we have met our initial primary business objectives.
Internet Access and Marketing
Our website will be developed to easily enable accountholder registration in the US and provide access to registration in each of the home markets through our issuing partners. This will allow effective communications to the consumers in each market while utilizing the KYC verification and compliance process that has already been established through the existing systems.
Social Media and Digital Marketing will be used to target consumers. We also intend to affiliate with websites and brands that focus on the same consumer markets.
Retail Distribution Partners
We are in discussions with several retail chains to offer the Monetiva Card through their retail distribution network. The cards will be available for immediate activation and loading from the local stores. Once KYC is provided and verified the cards will be converted from non-reloadable to reloadable and available for personalization if requested. Inventory control will be established with each retail partner.
Accountholder Incentives
The foreign worker communities generally provide a cohesive network that enables incentive programs for one account holder to refer friends or family. We intend to provide the referring account holder with valued incentives to bring others into the Monetiva program.
Value-added Services
We have developed a suite of value-added services to increase the value of the service offering to accountholders including: retail discounts, healthcare discounts, usage points, long distance telephone, bill-paying, etc. These services are intended to drive more transaction activity and new accountholder traffic.
Global Remittance Market
We are focused on select remittance corridors to enable Monetiva to specialize in the scope, value and quality of services. According to the World Bank the volume of remittances from the US to the target markets in 2018 was:
https://economictimes.indiatimes.com/nri/forex-and-remittance/india-to-retain-top-position-in-remittances-with-80-
billion-world-bank/articleshow/66998062.cms
Results of Operations
Our results of operations for the years ended December 31, 2018 and 2017 were included the operations of the Company. We reported a net loss of $535,274 and $45,850 for the years ended December 31, 2018 and 2017 applicable to the Company’s common stockholders. The losses resulted primarily due to recording consulting fees, rent, payroll and other general and administrative expenses as operating expenses.
Liquidity and Capital Resources
Cash and cash equivalents were $10,039 and $0 at December 31, 2018 and 2017, respectively. As shown in the accompanying financial statements, we recorded a net loss of $535,274 for the year ended December 31, 2018. Our working capital at December 31, 2018 was $106,426, and net cash used in operating activities for the year ended December 31, 2018 was $735,861. These factors and our ability to raise additional capital to accomplish our objectives, raises doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of our current business operations. We anticipate generating only minimal revenues over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.
From February 2, 2018 through April 30, 2018, we engaged in a private exempt offering in reliance on Regulation D, Rule 506, whereby the Company raised a total amount of $525,500, which was immediately made available to the Company to cover operating expenses, salaries and other development costs. From September 24, 2018 through November 16, 2018, we raised $165,000 from sale of our common stock to investors. In addition, in December 2018, we obtained a short-term unsecured loan of $55,000 from a stockholder for our working capital needs. We presently do not have any significant credit available, bank financing or other external sources of liquidity. Due to our operating losses, our operations have not been a source of liquidity. We will need to acquire other profitable entities or obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing.
No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to:
● Curtail our operations significantly, or
● Seek arrangements with strategic partners or other parties that may require us to relinquish significant rights to technology platform and correlated services, or
● Explore other strategic alternatives including a merger or sale of our Company.
Operating Activities
Net cash used in operating activities for the year ended December 31, 2018 was $735,861 primarily attributable to our net loss of $535,274 and a net increase in operating assets over operating liabilities of $200,587. We recorded an increase in prepaid expenses of $350,480 for payments made to E1G for acquisition of BINs and increase in security deposit of $25,136 for leasing office facility, increase in accrued liabilities of $112,509 and increase in officer payroll expense of $54,560. Net cash used in operating activities for the year ended December 31, 2017 was $0 which resulted primarily from our net loss of $45,850, common stock issued for services of $800, expenses paid by stockholder and contributed as capital of $2,000, increase in accrued liabilities of $19,350, and increase in accrued compensation of officer of $23,700.
Investing Activities
Net cash provided by investing activities for the year ended December 31, 2018 and 2017 was $0, respectively.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2018 was $745,900 primarily due to the cash proceeds of $690,500 received from sale of common stock to investors and business promotors, and cash proceeds of $55,000 received from a stockholder as short-term unsecured loan for our working capital needs. Net cash provided by financing activities for the year ended December 31, 2017 was $0.
As a result of the above activities, we experienced a net increase in cash of $10,039 for the year ended December 31, 2018. Our ability to continue as a going concern is still dependent on our success in obtaining additional financing from investors or from sale of our common shares.
Critical Accounting Policies
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with GAAP. We believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements.
JOBS Act Accounting Election
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Development Stage and Capital Resources
The Company has devoted substantially all of its efforts to business planning since its inception on July 22, 2016. Accordingly, the Company is considered to be in the development stage. The Company has not generated revenues from its operations, and it will not commence generating revenues until sometime during the fourth quarter of 2020.
Off-Balance Sheet Arrangements
We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Recent Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect and that may impact our financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not required for smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data.
MONETIVA INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2018 AND 2017
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Monetiva Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Monetiva Inc. (the “Company”) as of December 31, 2018 and 2017, the related statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2018 and 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the financial statements, the Company has suffered recurring losses from operations and not generated any revenues since inception that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting 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.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
MONETIVA INC.
BALANCE SHEETS
The accompanying notes are an integral part of these financial statements.
MONETIVA INC.
STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of these financial statements.
MONETIVA INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
The accompanying notes are an integral part of these financial statements.
MONETIVA INC.
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements.
MONETIVA INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN
Monetiva Inc. (formerly known as American Standard Wallet, Inc. and Lark Street Acquisition Corporation, or “Monetiva” or the “Company”), a Delaware corporation, was incorporated on July 22, 2016 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage since inception and its operations to date have been limited to issuing shares to its original shareholders.
On March 14, 2017, the Company effected a change of control by cancelling an aggregate of 20,000,000 shares of common stock of existing shareholders, accepting the resignations of its then existing officers and directors, electing a new officer and sole director and issuing 8,000,000 shares of common stock to the new shareholder. In connection with the change of control, the sole director of the Company and its board of directors unanimously approved the change of the Company’s name from Lark Street Acquisition Corporation to American Standard Wallet, Inc.
On November 1, 2017, the Company effected a change of control whereby then existing owner Mr. James Koh, the sole shareholder, officer and director of the Company, sold all 8,000,000 of his shares of the Company’s common stock to Mr. Pierre Sawaya. The Company accepted the resignation of Mr. Koh as the existing officer and director, electing a new officer and sole director upon issuance of the shares to Mr. Sawaya. In connection with the change of control, Mr. Sawaya, the sole shareholder and director of the Company unanimously approved the change of the Company’s name from American Standard Wallet, Inc. to Monetiva, Inc.
As of November 15, 2019, the Company has a total of 26,611,264 shares of common stock of the Company issued and outstanding. Of all shares issued and outstanding, a total of 20,000,000 common shares have been issued to the Company’s Board of Director and Founder of the Company, representing approximately 75.16% of the total shares issued and outstanding as of the date of this Report.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. The financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. In the opinion of the Company’s management, the financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts payable, accrued liabilities and payable to related party. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Going Concern
The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically negative working capital, recurring operating losses, accumulated deficit and other adverse key financial ratios.
The Company has not yet generated any revenue and has suffered operating losses since July 22, 2016 (Inception Date) to date and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $535,274 for the year ended December 31, 2018, used net cash flows in operating activities of $735,861, and has an accumulated deficit of $589,186 as of December 31, 2018. These factors, among others raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Company’s financial statements. These accounting policies conform to GAAP in all material respects and have been consistently applied in preparing the accompanying financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company had a cash balance of $10,039 and $0 as of December 31, 2018 and 2017, respectively.
Earnings (Loss) Per Common Share
The Company computes earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2018 and 2017, there were no convertible notes, options or warrants available for conversion that if exercised, may dilute future earnings per share.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, rent deposits, accrued liabilities, and loan payable. The Company believes that the recorded values of all the financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
Recent Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update (“ASU”) ASU 2016-02, “Leases (Topic 842).” The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its financial statements.
In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently in the process of evaluating the impact of this guidance on its financial statements.
There were other updates recently issued accounting pronouncement. The Company’s management does not believe that other than disclosed above, accounting pronouncements that recently issued but not yet adopted will have a material impact on its financial position, results of operations or cash flows.
NOTE 3 - PREPAID EXPENSES
The Company has made prepayments to Endless One Global (“E1G”) with regard to E1G’s service in providing data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers. As of December 31, 2018 and 2017, the prepayment to E1G were $350,480 and $0, respectively (see NOTE 6 Service Agreement).
NOTE 4 - ACCRUED LIABILITIES
The Company recorded accrued liabilities primarily consisting of consulting and professional fees, rent, payroll taxes and franchise taxes of $137,609 and $25,100 as of December 31, 2018 and 2017, respectively.
NOTE 5 - RELATED PARTY TRANSACTIONS
On February 5, 2018 and March 1, 2018, the Chief Executive Officer (“Officer”) paid two instalments of $40,000 and $57,300 from the Company’s funds to a former officer and director to acquire all the issued and outstanding common stock owned by the former officer and director (8,000,000 common shares) of the Company for $97,300. On April 6, 2018, the Officer took a short-term advance from the Company of $8,500. At the time, the Officer was not aware that the advance of funds from the Company was in violation of section 13 of the Securities Act of 1934, as amended. The Officer agreed to repay the advanced amounts by offset of compensation due to him. As a result of the offsetting, the Company had accrued payroll compensation to the Officer of $78,260 and $23,700 at December 31, 2018 and 2017, respectively. In addition, the Company has recorded Officer’s compensation expense of $198,000 and $23,700 for the years ended December 31, 2018 and 2017, respectively.
NOTE 6 - LOAN PAYABLE
On December 11, 2018, the Company received from a stockholder $55,000 in cash, a short-term loan bearing no interest, unsecured, and payable on demand but no later than February 28, 2019. The Company paid back the loan to the stockholder in two payments of $25,000 and $30,000 on February 4, 2019 and February 20, 2019, respectively. The Company recorded the loan payable of $55,000 as a current liability in the accompanying financial statements at December 31, 2018.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Lease Commitments
On February 9, 2018, the Company executed a non-cancellable operating lease for its principal office with the lease commencing March 1, 2018 for a period of 21 months maturing on November 30, 2019. The Company paid a security deposit of $25,136 which is recorded as prepaid expense in the Balance Sheet at December 31, 2018. The base rent of the lease was $12,202 for the first twelve months, increasing to $12,568 from the month thirteen to month twenty-one. The lease had a provision for rent abatement for only one month - April 2018. The Company has recorded rent expense of $117,776 and $0 for the years ended December 31, 2018 and 2017, respectively. In addition, the Company recorded a payable of deferred rent of $7,960 and $0 at December 31, 2018 and 2017, respectively.
Future minimum lease commitments of the Company are as follows:
Employment Agreement with Officer
On November 1, 2017, the Company entered into an employment agreement with its Officer for a one-year term, which shall be automatically renewed for successive one-year periods unless either party gives ninety (90) calendar days written notice of nonrenewal prior to the expiration of the then-current term. The Company granted 12,000,000 shares of its common stock to the Officer as a sign-on bonus valued at $1,200, and agreed to pay an annual base salary of $180,000 provided that the Officer’s base salary may be reduced to the extent that Officer elects to defer any portion thereof under the terms of any deferred compensation or savings plan maintained by the Company. In addition to the eligibility for consideration of merit-based increases in the discretion of the Board of Directors, Officer’s base salary will be increased effective January 1, of each year during the term commencing January 1, 2018 by ten percent (10%) (See NOTE 5).
Service Agreement
On January 15, 2018, the Company entered into an agreement with E1G whereby, E1G agreed to provide data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers for a period of five years. The agreement required a one-time upfront fee of $250,000 for each of the three (3) countries - USA, Mexico and India, for a total fee of $750,000 to initiate the process to establish three (3) Business Identification Numbers (“BINs”). Thereafter, the term will automatically be renewed for one (1) year period unless terminated by either party upon providing a written notice. The Company agreed to pay E1G the processing fees as forth in the Agreement, any special fees, new products and technologies introduced by E1G (See NOTE 3).
Legal Costs and Contingencies
In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received.
If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. The Company was not aware of any loss contingencies as of December 31, 2018 and 2017, respectively.
NOTE 8 - STOCKHOLDERS’ EQUITY (DEFICIT)
The Company’s capitalization at December 31, 2018 was 100,000,000 authorized common shares with a par value of $0.0001 per share, and 20,000,000 authorized preferred shares with a par value of $0.0001 per share.
Common Stock
On July 22, 2016, the Company issued 20,000,000 shares of its common stock, at par value of $0.0001 per share, to two directors and officers for the services performed at $2,000.
On March 14, 2017, the Company effectuated a change in control and redeemed 20,000,000 shares of its then outstanding 20,000,000 shares of common stock upon the resignation of two officers and directors. The Company recorded the cancellation of 20,000,000 shares of common stock at its fair value of $2,000 as additional paid in capital on March 14, 2017. On March 14, 2017, the Company issued 8,000,000 shares of its common stock at par value of $800 to Mr. James Koh for services rendered, accepted resignation of two officers and directors, and pursuant to Section 4(2) of the Securities Act of 1933, appointed Mr. James Koh, to be the Company’s Chief Executive Officer, the sole shareholder, officer and director.
On November 1, 2017, the former sole shareholder, officer and director, Mr. James Koh sold all his 8,000,000 shares of common stock to Mr. Pierre Sawaya, who became the sole shareholder, officer and director of the Company, and was appointed as the President and Chief Executive Officer of Monetiva Inc.
On November 1, 2017, the Company entered into an employment agreement with Mr. Pierre Sawaya and awarded him 12,000,000 shares of the Company’s common stock valued at $1,200 as a sign-on bonus. The common shares were issued to the Officer on January 14, 2019. The Company has recorded the sign-on bonus expense of $1,200 as accrued payroll of officer as of December 31, 2018 and 2017, respectively.
From February 2, 2018 through April 30, 2018, the Company engaged in a private exempt offering in reliance on Regulation D, Rule 506, whereby a total of 1,130,000 common shares were agreed to be sold to the business promoters of E1G at $0.25 per share, resulting in a capital raise of $282,500, and a total of 486,000 common shares were agreed to be sold to private investors at $0.50 per share, resulting in a capital raise of $243,000. As a result, the Company agreed to sell 1,616,000 shares of its common stock to investors and received cash of $525,500 in stock subscriptions. The Company recorded the cash received for stock subscriptions as stock subscriptions received in advance of $525,000 at December 31, 2018. The common shares were issued to the investors on January 14, 2019.
On September 24, 2018, an investor executed a stock subscription agreement pursuant to the private exempt offering and agreed to purchase 1,000,000 shares of the Company’s common stock for $500,000. On September 24, 2018, the Company received cash consideration of $140,000 as stock subscriptions received in advance as of December 31, 2018. The common shares were issued to the investor on January 14, 2019.
On November 7, 2018, an investor executed a stock subscription agreement to purchase 30,000 shares of common stock of the Company at $0.50 per share. On November 8, 2018, the Company received cash consideration of $15,000 and recorded it as stock subscriptions received in advance at December 31, 2018. The common shares were issued to the investor on February 25, 2019.
On November 16, 2018, an investor executed a stock subscription agreement to purchase 20,000 shares of common stock of the Company at $0.50 per share. On November 16, 2018, the Company received cash consideration of $10,000 and recorded it as stock subscriptions received in advance at December 31, 2018. The common shares were issued to the investor on February 25, 2019.
Through the offerings, the Company received a total cash consideration of $690,500 as of December 31, 2018, which was recorded as stock subscriptions received in advance as of December 31, 2018, and was immediately made available to the Company to cover operating expenses, salaries and other development costs. These common shares pursuant to these stock subscriptions were not issued until February 25, 2019.
As a result of all common stock issuances, the total issued and outstanding shares of common stock at December 31, 2018 and December 31, 2017 were 8,000,000 shares, respectively.
Preferred stock
No preferred stock was issued and outstanding as of December 31, 2018 and 2017, respectively.
NOTE 9 - INCOME TAXES
Income tax expense for the year ended December 31, 2018 and 2017 is summarized as follows.
The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Statement of Operations:
The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows:
Deferred income taxes are provided for the tax effects of transactions reported in the financial statements and consist of deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled.
On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted into law and the new legislation contains several key tax provisions that impact the Company, including a reduction of the corporate income tax rate to 21% effective for tax years beginning after December 31, 2017 and the Transition Tax, among others. The staff of the US Securities and Exchange Commission (SEC) has recognized the complexity of reflecting the impacts of the Tax Reform Act, and issued guidance in Staff Accounting Bulletin 118 (“SAB 118”) in December 2017, which clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provides for up to a one year period in which to complete the required analyses and accounting (the measurement period). Adjustments to incomplete and unknown amounts will be recorded and disclosed prospectively during the measurement period. The Company has completed the required analysis and accounting for substantially all the effects. Except for the reduction of the income tax rate from 34% to 21%, there were no material impact on the Company’s financial statements.
At December 31, 2018 and 2017, the Company had accumulated net operating losses of approximately $460,000 and $54,000, respectively, for U.S. federal and Delaware income tax purposes available to offset future taxable incomes. The net operating losses generated in tax years prior to December 31, 2017, can be carryforward for twenty years, whereas the net operating losses generated after December 31, 2017 can be carryforward indefinitely. Management determined that it was unlikely that the Company’s deferred tax assets would be realized and have provided for a full valuation allowance associated with the net deferred tax assets.
As of December 31, 2018 and 2017, the Company’s deferred income tax assets and valuation allowance were $98,333 and $11,322, respectively.
In the ordinary course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2018, tax years 2017 and 2016 remain open for examination by the Internal Revenue Service and the Delaware Division of Revenue. The Company has received no notice of audit from the Internal Revenue Service or the Delaware Division of Revenue for any of the open tax years.
NOTE 10 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through November 15, 2019, the date the financial statements were available to be issued, noting the following items would impact the accounting for events or transactions in the current period or require additional disclosure.
Equity Transactions
On September 24, 2018, an investor executed a stock subscription agreement to purchase up to 1,000,000 shares of common stock of the Company at $0.50 per share. The subscriber has paid $300,000 to the Company as of November 15, 2019, and agreed to pay the remaining balance prior to December 31, 2019. The Company has issued the 1,000,000 shares of common stock on January 14, 2019 to the investor.
On January 14, 2019, the Company issued 20,000,000 shares of its common stock to its Officer consisting of 12,000,000 shares of common stock as a sign-on bonus, and 8,000,000 shares acquired from the former Chief Executive Officer.
On January 14, 2019, the Company issued 1,616,000 shares of its common stock to investors and business promotors who had subscribed for the Company’s common stock during the year ended December 31, 2018.
On February 27, 2019, an investor executed a stock subscription agreement to purchase 5,264 shares of common stock of the Company at $1.90 per share. The subscriber has paid $10,002 to the Company on February 27, 2019. On October 10, 2019, the Company issued to the investor 5,264 shares of common stock for the stock subscriptions.
On March 14, 2019, a shareholder executed a stock subscription agreement to purchase 3,155,000 shares of common stock for a cash consideration of $788,750. The Company received the cash consideration of $788,750 from the shareholder between March 14, 2019 and June 24, 2019. On October 10, 2019, the Company issued 2,030,000 shares of common stock to the shareholder and 1,125,000 shares of common stock distributed between the seventeen (17) family members for the stock subscriptions.
On March 20, 2019, an investor executed a stock subscription agreement to purchase 50,000 shares of common stock of the Company at $2.00 per share. On March 27, 2019, the subscriber paid $100,000 to the Company for the stock subscriptions. On October 10, 2019, the Company issued to the investor 50,000 shares of common stock for the stock subscriptions.
On April 3, 2019, an investor executed a stock subscription agreement to purchase 8,000 shares of common stock of the Company at $2.00 per share. On April 3, 2019, the subscriber paid $16,000 to the Company. On October 10, 2019, the Company issued to the investor 8,000 shares of common stock for the stock subscriptions.
On May 16, 2019, an investor executed a stock subscription agreement to purchase 200,000 shares of common stock of the Company at $0.50 per share. The Company received the cash consideration of $100,000 from the investor on May 16, 2019. On October 10, 2019, the Company issued to the investor 200,000 shares of common stock for stock subscriptions.
On May 24, 2019, the Company executed a month-to-month rental agreement to lease furnished premises. The lease term commenced June 1, 2019 for a one-year term with a monthly rent of $11,500 per month from June 1, 2019 to November 1, 2019 and increasing to $13,167 from December 1, 2019 to May 31, 2020. The landlord required a security deposit of $15,000 on the commencement date of the lease, and an additional $10,000 security deposit on November 1, 2019. On May 30, 2019, the Company paid to the landlord security deposit of $15,000 and prepaid the rent of $69,000 for the six months ended November 30, 2019.
On June 14, 2019, an investor executed a stock subscription agreement to purchase 5,000 shares of common stock of the Company at $2.00 per share. The Company received the cash consideration of $10,000 from an investor on July 10, 2019. On October 10, 2019, the Company issued to the investor 5,000 shares of its common stock for stock subscriptions.
On June 17, 2019, an investor executed a stock subscription agreement to purchase 240,000 shares of common stock of the Company at $0.25 per share. The Company received the cash consideration of $60,000 from the investor on June 17, 2019. On October 10, 2019, the Company issued to the investor 240,000 shares of common stock for stock subscriptions.
On June 18, 2019, an investor executed a stock subscription agreement to purchase 200,000 shares of its common stock at $1.00 per share. The Company received a cash consideration of $200,000 from an investor on July 16, 2019. The Company issued 200,000 shares of common stock to the investor on July 24, 2019 for stock subscriptions.
On August 14, 2019, a stockholder executed a stock subscription agreement to purchase 8,000 shares of the Company’s common stock for $2.00 per share. The Company received a cash consideration of $16,000 from the investor on August 16, 2019. On October 10, 2019, the Company issued to the investor 8,000 shares of its common stock for stock subscriptions.
On September 17, 2019, two investors executed two separate subscription agreements to purchase 17,500 shares of the Company’s common stock at $2.00 per share. The Company received cash consideration of $35,000 from the investors on September 27, 2019. On October 23, 2019, the Company issued to the investors 17,500 shares of its common stock for stock subscriptions.
On September 19, 2019, a stockholder executed a stock subscription agreement to purchase 44,000 shares of the Company’s common stock at $0.25 per share. On April 9, 2019, the stockholder had advanced the Company $4,000 towards the purchase of these shares and the remaining $7,000 were received by the Company on August 30, 2019 for these stock subscriptions. On October 10, 2019, the Company issued to the investor 44,000 shares of common stock for these stock subscriptions.
On September 25, 2019, an investor executed a stock subscription agreement to purchase 12,500 shares of the Company’s common stock at $2.00 per share. The Company received cash consideration of $25,000 from the investor on September 27, 2019. The Company issued 12,500 shares of its common stock to the investor on October 23, 2019.
As a result of all stock issuances, a total of 26,611,264 shares of the Company’s common stock has been issued and outstanding as of November 15, 2019.
Lease Transaction
On May 24, 2019, the Company executed a month-to-month rental agreement to lease furnished premises. The lease term commenced June 1, 2019 for a one-year term with a monthly rent of $11,500 per month from June 1, 2019 to November 1, 2019 and increasing to $13,167 from December 1, 2019 to May 31, 2020. The landlord required a security deposit of $15,000 on the commencement date of the lease, and an additional $10,000 security deposit on November 1, 2019. On May 30, 2019, the Company paid to the landlord security deposit of $15,000 and prepaid the rent of $69,000 for the six months ended November 30, 2019.
Securities and Exchange Commission Order
On September 25, 2019, an investor executed a stock subscription agreement to purchase 12,500 shares of the Company’s common stock at $2.00 per share. The Company received cash consideration of $25,000 from the investor on September 27, 2019. The Company issued 12,500 shares of its common stock to the investor on October 23, 2019.
On August 22, 2019, the Company became aware of an Securities and Exchange Commission Order Instituting Administrative Proceedings and Notice of Hearing alleging that the Company is delinquent in certain of its periodic filings with the Commission and indicating that administrative proceedings are intended to be held (i) to determine all delinquent filings and any defenses of the Company for any such delinquent filings, and (ii) to make a decision as whether it may be appropriate to take any action to suspend or revoke the Company’s registration of its securities. The date of the Commission Order is August 14, 2019. The Company is actively working to resolve any delinquent filings as quickly as possible and intends to demonstrate to the Commission its diligence in that regard and filed an answer in response to the assertions made by the Commission.
On September 18, 2019, the Division of Enforcement of the Securities and Exchange Commission filed with the Office of the Secretary a Motion for Ruling on the Pleadings Against the Company seeking an order to revoke each class of securities of the Company registered with the Commission pursuant to Section 12(j) of the Securities Exchange Act of 1934. At this time, the Company is diligently working to eliminate its filing delinquencies, and intends to become current on its filings on or before November 15, 2019.
Service Agreement with E1G
On or about September 30, 2019, the Company entered into an oral agreement with E1G to provide data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers in three additional countries China, Philippines and United Arab Emirates. All other terms and conditions to remain the same as per the January 15, 2018 agreement with E1G.
As of November 15, 2019, the Company has paid to E1G cash consideration of $827,280 as the processing fees to initiate and establish BINs in these selected countries.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the fiscal year by and under the supervision of the Company’s principal executive officer (who is also the principal financial officer and sole director). There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. There is only one officer and director of the Company, and as such is solely responsible for evaluating the Company’s disclosure controls and procedures. Based upon that evaluation, the principal executive officer believes that the Company’s disclosure controls and procedures are not effective due to the following material weaknesses. We lacked the ability to have adequate segregation of duties in the financial statement preparation process. Further the Company did not maintain adequate documentation for review and supporting matters impacting financial reporting in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. The principal executive officer is directly involved in the day-to-day operations of the Company.
Plan for Remediation of Material Weaknesses
Since these entity level controls have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.
We believe that, since the date that we were made aware of our material weakness, we have improved our internal control over financial reporting by taking certain corrective steps that we believe minimize the likelihood of a recurrence. We have designed a disclosure controls and procedures regime pursuant to which our management has, among other things:
(a) identified the definition, objectives, application and scope of our internal control over financial reporting;
(b) delineated the duties of each member of the group responsible for maintaining the adequacy of our internal control over financial reporting. This group consists of:
(i) our Chief Executive Officer; and
(ii) an independent consultant who was engaged to prepare and assure compliance with both our internal control over financial reporting as well as our disclosure controls and procedures and review our disclosure controls and procedures on a regular basis, subject to our management’s supervision.
We continue to work with our structure in which we have an independent consultant, in order to continue implementation of required key controls, the necessary steps required for procedures to ensure the appropriate communication and review of inputs necessary for the financial statement closing process, as well as for the appropriate presentation of disclosures within the financial statements. The remediation steps taken are subject to the Chief Executive Officer’s oversight. While management believes there have been significant improvements of internal controls over financial reporting during the year ended December 31, 2018, management anticipates that further continuing efforts will be needed to effectively remediate the material deficiencies relating to segregation of duties and maintaining adequate supporting documentation to substantiate the information reported in the financial statements which existed as of December 31, 2018, and to assure that complex transactions are properly recorded as the business continues to grow. Our management has been actively engaged in planning for, designing and implementing the corrective steps described above to enhance the effectiveness of our disclosure controls and procedures as well as our internal control over financial reporting. Our management is committed to achieving and maintaining a strong control environment, high ethical standards, and financial reporting integrity, and will take further steps to ensure that personnel are adequate in terms of sophistication and quantity to adequately assure that the financial reporting process is efficient and operated with the sufficient level of integrity to meet and surpass all regulatory standards.
While management is implementing corrective steps to remediate its internal control deficiencies, we cannot assure you that they will be sufficient enough to be free of a material weakness. If we should in the future conclude that our internal control over financial reporting suffers from a material weakness, we will be required to expend additional resources to improve it. Any additional instances of material deficiencies could require a restatement of our financial statements. If such restatements are required, there could be a material adverse effect on our investors’ confidence that our financial statements fairly present our financial condition and results of operations, which in turn could materially and adversely affect the market price of our common stock.
Changes in Internal Control over Financial Reporting
Other than the remediation activities undertaken by us as disclosed above, there have been no changes in our internal control over financial reporting during the 2018 fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
The Directors and Officers of the Company for the period covered by this Report were:
*Mr. Sawaya is the sole officer and director of the Company and its majority shareholder.
There are no agreements or understandings for Mr. Sawaya to resign as either an officer or Director at the request of another person and he is not acting on behalf of nor will act at the direction of any other person.
Set forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period during which they have served as such, and the business experience during at least the last five years:
Pierre Sawaya. Mr. Sawaya has served as the President, Secretary, sole Director and Chairman of the Board of the Company since November 1, 2017. From November 2016 until May 2017 Mr. Sawaya served as the CEO of Global CashSpot, which was a start-up company in the prepaid card business. Mr. Sawaya founded EndlessOne Global Inc. in 2011 and served as its CEO until October 2016. EndlessOne Global Inc. provides debit and prepaid cards with comprehensive services and upfront reward packages, and has become a leading international payment card issuer, transaction processor, program manager and financial software technology company. EndlessOne Global is a turnkey provider of financial products and services, focusing on money remittance, prepaid and financial instruments and management tools for those underserved by traditional bank channels.
Code of Ethics.
During the period of this Report, the Company did not have in place an adopted Code of Ethics pursuant to rules described in Regulation S-K. During the period of this Report, the Company has had only one person who was the sole shareholder and who served as the only director and officer. During the period of this report, the Company had no operations or business and did not receive any revenues or investment capital. During the period of this Report, the adoption of an Ethical Code would not serve the primary purpose of such a code to provide a manner of conduct as the development, execution and enforcement of such a code would be by the same persons and only persons to whom such code applied. Furthermore, because the Company did not have any activities, there are no activities or transactions which would be subject to this code. At such time as the Company commences more significant business operations, the current officers and directors will recommend that such a code be adopted. The Company does not maintain an Internet website on which to post a code of ethics.
Corporate Governance
For reasons similar to those described above, the Company does not have a nominating, compensation committee, or audit committee of the board of directors. During the period of this Report, the Company has had only one person who was the sole shareholder and who served as the only director and officer. During the period of this report, the Company had no operations or business and did not receive any revenues or investment capital. At such time as the Company commences more significant business operations and/or has additional shareholders and a larger board of directors, the Company will propose creating committees of its board of directors, including a nominating, compensation, and an audit committee. Because there has been only one shareholder of the Company, there was no established process by which shareholders to the Company could nominate members to the Company’s board of directors. Similarly, however, at such time as the Company has more shareholders and an expanded board of directors, the Company may review and implement, as necessary, procedures for shareholder nomination of members to the Company’s board of directors.
Beneficial Ownership Reporting Compliance - Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers and directors, and persons who beneficially own more than 10% of the Company’s stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Executive officers, directors and greater than 10% beneficial owners are required by applicable regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of the forms furnished to the Company and information involving securities transactions of which the Company is aware, certain of the Company’s officers, directors and holders of more than 10% of the outstanding common stock of the Company failed to timely file reports required by Section 16(a) of the Exchange Act. To the Company’s knowledge, Mr. Sawaya failed to file a form 4 within the required time frame following the issuance to him of 12,000,000 shares of Company’s common stock in January 2019 as bonus.
Item 11.
Item 11. Executive Compensation.
Pierre Sawaya Employment Agreement
The Company entered into an employment agreement with its Chief Executive Officer Mr. Pierre Sawaya on November 1, 2017 as an inducement for Mr. Sawaya’s time and services to be contributed to the Company. The agreement provides for an initial term of one year, which automatically renews for successive one-year periods unless either party provides 90 days prior written notice of non-renewal. The agreement entitled Mr. Sawaya to a sign-on bonus of 12,000,000 shares of the Company’s common stock; which were awarded concurrently with execution of the Contract on November 1, 2017, but which were not issued until January 14, 2019. The agreement provides for (i) an annual salary equal of $180,000, subject to applicable tax withholding and payable in accordance with the Company’s normal payroll practices and provided that payment of amounts of the salary may be deferred at the election of Mr. Sawaya, (ii) four (4) weeks paid vacation, (iii) incentive payments, benefits and long term incentives to the extent the Company maintains such plans.
The Company may terminate the agreement without cause at any time upon ninety (90) days prior written notice or for cause, subject to a thirty (30) day cure period. If the agreement is terminated without cause, then any unvested incentive awards, stock options restricted stock, phantom shares or similar awards held by Mr. Sawaya shall fully vest. If Mr. Sawaya terminates the agreement for good reason or the agreement terminates as a result of death or complete disability, then Mr. Sawaya or his heirs will be entitled to the same treatment as if he was terminated without cause. Mr. Sawaya may terminate the agreement at any time upon ninety (90) days prior written notice.
If following a change of control, the agreement is terminated within twenty-four months thereafter, then Mr. Sawaya will be entitled to (a) a cash lump sum payment equal to four times (4x) his then base salary, (b) accelerated vesting of all outstanding options to purchase common stock of the Company, and continuation of comparable medical benefits for a period of eighteen months.
Except for Mr. Sawaya, during the period covered by this Report, no other officer received any compensation for services rendered to the Company, nor did they receive any such compensation in the past. During the period covered by this Report, no director received any compensation for services rendered to the Company, nor did they receive any such compensation in the past. Additionally, except for Mr. Sawaya, no other officer and/or director has or is accruing any compensation pursuant to any agreement with the Company.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.
Except for Mr. Sawaya, the Company has had no other employment contracts with its executives or employees but may enter into such contracts in the future.
During the period covered by this Report, the Company did not have a compensation committee due to the limited number of directors and that the shareholders were the same persons as the executive officers and directors.
The Company paid cash compensation and granted stock awards to its executives during the years ended December 31, 2018 and 2017 as follows:
(1)All compensation in form of salary owed pursuant to the employment agreement has been unpaid and is being deferred by Mr. Sawaya. The Company intends to defer payment of executive’s salary compensation until the Company has sufficient amounts to fund both the Company’s operations and executive’s salary.
(2)Mr. Sawaya’s employment agreement entered into on November 1, 2017, awarded him 12,000,000 shares of the Company’s common stock, which was valued at $1,200. The shares were not issued until January 14, 2019.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information with respect to beneficial ownership has been furnished for each director, executive officer or beneficial owner of more than 5% of Monetiva’s common stock. In computing the number of shares beneficially owned by a person listed below and the percentage ownership of such person, shares of common stock underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of November 15, 2019 are deemed outstanding for purposes of computing such person’s percentage ownership, but are not deemed outstanding for computing the percentage ownership of any other person. Beneficial ownership including the number and percentage of shares owned is determined in accordance with Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934 (the “Exchange Act”) and is generally determined by voting power and/or investment power with respect to securities. The percentage of beneficial ownership is based on 26,611,264 shares of common stock of the Company issued and outstanding as of November 15, 2019.
Except as otherwise noted below, and subject to applicable community property laws, the persons named have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the address of the following stockholders is c/o Monetiva Inc., 4695 MacArthur Court, Suite 450, Newport Beach, CA 92660.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The Company entered into an employment agreement with its Chief Executive Officer Mr. Pierre Sawaya on November 1, 2017 as an inducement for Mr. Sawaya’s time and services to be contributed to the Company. The agreement provides for an initial term of one year, which automatically renews for successive one-year periods unless either party provides 90 days prior written notice of non-renewal. The agreement entitled Mr. Sawaya to a sign-on bonus of 12,000,000 shares of the Company’s common stock; which were awarded concurrently with execution of the Contract on November 1, 2017, but which were not issued until January 14, 2019. The agreement provides for (i) an annual salary equal of $180,000, subject to applicable tax withholding and payable in accordance with the Company’s normal payroll practices and provided that payment of amounts of the salary may be deferred at the election of Mr. Sawaya, (ii) four (4) weeks paid vacation, (iii) incentive payments, benefits and long term incentives to the extent the Company maintains such plans.
Item 14.
Item 14. Principal Accounting Fees and Services
Audit Fees
The aggregate fees incurred in 2018 and 2017 for professional services rendered by the independent registered public accounting firm for the audits of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-K and Form 10-Q reports and services normally provided in connection with statutory and regulatory filings or engagements were as follows:
The Company does not currently have an audit committee serving and as a result its board of directors performs the duties of an audit committee. The board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. The Company does not rely on pre- approval policies and procedures.
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a) (1) Financial Statements. The financial statements filed as part of this report are listed in the index to financial statements at the beginning of this document.
(a) (2) Financial Statement Schedules. Financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Financial Statements or the notes thereto.
(a) (3) Exhibits. The exhibits are either filed with this report or incorporated by reference into this report. Exhibit numbers. See (b) Exhibits, which follow.
(b) Exhibits.
(3) Articles of Incorporation and bylaws
*Incorporated by reference to our Form 10-12G, filed on August 9, 2016.
(10) Material contracts and management compensation plans and arrangements:
Filed herewith, in addition to items, if any, specifically identified above:
Item 16. Form 10-K Summary.
No Form 10-K summary is being provided as a part of this document.
Pursuant to the requirements of Section 13 or 15(d) 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.
MONETIVA INC.
By: /s/ Pierre Sawaya,
Chief Executive Officer
Principal Executive Officer
Principal Financial Officer
Dated: November 15, 2019
Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
MONETIVA INC.
NAME
OFFICE
DATE
/s/ Pierre Sawaya
Director
November 15, 2019