SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended March 31, 2008
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________
Commission File Number 333-150462
EXCEL GLOBAL, INC.
(Exact Name of Registrant As Specified In Its Charter)
<s> <c> <c>
Nevada 26-0657736
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
292 S.La Cienega Blvd.
Suite PHD
Beverly Hills, CA 90211
(Address of principal executive offices, Zip Code)
(310) 266-3738
- ------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):
Large accelerated filer [ ] Non-accelerated filer [ ]
Accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
The number of outstanding shares of the registrant's common stock,
May 15, 2008:
Common Stock - 7,100,000
2
EXCEL GLOBAL, INC.
FORM 10-Q
For the quarterly period ended March 31, 2008
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 13
Item 4T. Controls and Procedures 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 1A. Risk Factors 14
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security
Holders 14
Item 5. Other Information 14
Item 6. Exhibits 14
SIGNATURES
3
PART I
Item I - FINANCIAL STATEMENTS
EXCEL GLOBAL, INC.
BALANCE SHEETS
March 31, December 31,
2008 2007
---------- ----------
(Unaudited)
<s> <c> <c>
ASSETS
- ------
Current assets:
Accounts receivable $ 25,000 $ 25,000
---------- ----------
Total Current Assets 25,000 25,000
---------- ----------
Other Assets
License Rights 51,000 51,000
---------- ----------
Total Other Assets $ 76,000 $ 76,000
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------
Current Liabilities
Accounts payable $ 50,000 $ 50,000
Accrued expenses 26,000 25,200
Officer advances 10,853 853
---------- ----------
Total Current Liabilities 86,853 76,053
---------- ----------
Stockholders' Deficit:
Common stock, no par value, 25,000,000 shares
authorized, 7,100,000 shares issue and outstanding 71,000 71,000
Deficit Accumulated in the development stage (81,853) (71,053)
---------- ----------
Total Stockholders' Deficit (10,853) (53)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 76,000 $ 76,000
========== ==========
The accompanying notes are an integral part
of these interim unaudited financial statements
4
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 2008
2008
----------
Operating Expenses
Selling, general and administrative $ 10,000
----------
10,000
Operating loss (10,000)
Other Income (Expenses):
Interest and Other Income -
Interest and Other Expenses -
----------
Total Other Income (Expenses) -
----------
Net loss before Income Taxes (10,000)
Provision for Taxes 800
----------
Net Loss $ (10,800)
==========
Net loss per share, Basic and Diluted NIL
Weighted Average Number of Shares 7,100,000
The accompanying notes are an integral part
of these interim unaudited financial statements
5
EXCEL GLOBAL, INC.
STATEMENT OF CASH FLOWS
For the three months ended March 31, 2008
Cash Flow from Operating Activities:
Net Loss $ (10,800)
Adjustment to reconcile net loss to net cash
used by operating activities:
Increase in accrued expenses 800
----------
Net Cash used by Operating Activities (10,800)
Cash Flow from Investing Activities:
Net Cash used by Investing Activities -
Cash Flow from Financing Activities:
Proceeds from Officer Loan 10,000
----------
Net Cash provided by Financing Activities 10,000
Net Increase (Decrease) in Cash -
Cash Balance at beginning of period -
----------
Cash Balance at end of Period $ -
==========
Supplemental Disclosure:
Taxes Paid $ -
The accompanying notes are an integral part
of these interim unaudited financial statements
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Excel Global, Inc. (the "Company") was incorporated in the state of
Nevada on August 2, 2007.
The Company is a web-based service provider offering real time
information captured through the use of its prime product known as the
EDGE. This allows the Company together information for its clients
with immediate analysis to its results allowing the client to react to
the information more efficiently.
Presentation of Interim Information. The financial information at
March 31, 2008 and for the three moths ended March 31, 2008 are
unaudited, but includes all adjustments (consisting only of normal
recurring adjustments) that the Company considers necessary for a fair
presentation of the financial information set forth herein, in
accordance with accounting principles generally accepted in the United
States of America (U.S. GAAP"") for interim financial information, and
with the instructions to Form 10-Q. Accordingly, such information does
not include all of the information and footnotes required by U.S. GAAP
for annual financial statements. For further information refer to the
Financial Statements and footnotes thereto for the year ended December
31, 2007 included in the Company's Form S-1.
The balance sheet as of December 31, 2007 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by U.S. GAAP for complete
financial statements.
Use of estimates. The preparation of the accompanying financial
statements in conformity with accounting principles generally accepted
in the United States requires management to make certain estimates and
assumptions that directly affect the results of reported assets,
liabilities, revenue, and expenses. Actual results may differ from
these estimates.
Revenue Recognition. The Company recognizes revenue when service is
rendered, providing that collectibility is reasonably assured. Revenue
consists primarily of gross administrative fees. Amounts received
prior to providing the service date are classified as deferred revenue.
The Company did not generate any revenue during the three months ended
March 31, 2008.
Cash Equivalents. For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents.
Property and Equipment. As of March 31, 2008, the Company did not
maintain or control any fixed assets.
7
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Fair Value of Financial Instruments. All financial instruments are
carried at amounts that approximate estimated fair value.
Income Taxes. Income tax expense is based on pretax financial
accounting income. Deferred tax assets and liabilities are recognized
for the expected tax consequences of temporary differences between the
tax bases of assets and liabilities and their reported amounts.
Licensing Rights. As of March 31, 2008, the Company capitalized
$51,000 for licensing agreement rights.
Impairment of Long-Lived Assets. Long-lived assets and certain
identifiable intangible assets to be held and used are reviewed for
impairment whenever events or changes in circumstance indicate that the
carrying amount of such assets may not be recoverable. Determination
of recoverability is based on an estimate of undiscounted future cash
flows resulting from the use of the asset and its eventual disposition.
Measurement of an impairment loss for long-lived assets and certain
identifiable intangible assets that management expects to hold and use
is based on the fair value of the asset. Long-lived assets and certain
identifiable intangible assets to be disposed of are reported at the
lower of carrying amount or fair value costs to sell.
Net Loss Per Share. Basic net loss per share includes no dilution and
is computed by dividing net loss available to common stockholders by
the weighted average number of common stock outstanding for the period.
Diluted net loss per share does not differ from basic net loss per
share as the Company did not have dilutive items during the audit
period.
Non-employees Equity Transactions. The Company accounts for equity
instruments issued to non-employees in accordance with the provisions
of Statement of Financial Accounting Standards (SFAS) No. 123 and the
Emerging Issues Task Force (EITF) Issue No. 00-18, Accounting for
Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services. SFAS No.
123 states that equity instruments that are issued in exchange for the
receipt of goods or services should be measured at the fair value of
the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable. Under the guidance in
Issue 99-18, the measurement date occurs as of the earlier of (a) the
date at which a performance commitment is reached or (b) absent a
performance commitment, the date at which the performance necessary to
earn the equity instruments is complete (this is, the vesting date).
8
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
New Accounting Pronouncements. In March 2008, Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting
Standards (SFAS) No. 161, "Disclosures about Derivative Instruments and
Hedging Activities" ("SFAS 161"). SFAS 161 is intended to improve
financial reporting about derivative instruments and hedging activities
by requiring companies to enhance disclosure about how these
instruments and activities affect their financial position, performance
and cash flows. SFAS 161 also improves the transparency about the
location and amounts of derivative instruments in a company's financial
statements and how they are accounted for under SFAS 133. SFAS 161 is
effective for financial statements issued for fiscal years beginning
after November 15, 2008 and interim periods beginning after that date.
As such, the Company is required to adopt these provisions beginning
with the quarter ending in February 2009. Adoption of SFAS 161 is not
expected to have a material impact on the Company's financial
statements.
In February 2007, the FASB issued SFAS No. 159 ("SFAS No. 159"), "The
Fair Value Option For Financial Assets And Financial Liabilities -
Including An Amendment of FASB Statement No. 115." SFAS No. 159
provides an option to report selected financial assets and financial
liabilities using fair value, and establishes required presentation and
disclosures to facilitate comparisons with companies that use different
measurements for similar assets and liabilities. SFAS No. 159 is
effective for the Company's fiscal year beginning August 1, 2008, with
early adoption allowed only if SFAS No. 157 is also adopted. The
Company is currently evaluating the potential impact of this standard
on the financial statements.
In June 2007, the FASB ratified Emerging Issues Task Force Issue No.
07-3, "Accounting for Nonrefundable Advance Payments for Goods or
Services to Be Used in Future Research and Development Activities"
("EITF 07-3"). EITF 07-3 requires non-refundable advance payments for
goods and services to be used in future research and development
activities to be recorded as an asset and the payments to be expensed
when the research and development activities are performed. EITF 07-1
will be effective for the Company's fiscal year beginning August 1,
2008. Currently, the Company does not anticipate that this statement
will have a significant impact on its financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007),
"Business Combinations" ("SFAS No.141(R)"). SFAS No. 141(R) will
replace SFAS 141, and establishes principles and requirements for how
the acquirer in a business combination reorganizes and measures in its
financial statements the identifiable assets acquired, the liabilities
assumed and any noncontrolling interest in the acquiree; recognizes and
measures the goodwill acquired in the business combination or gain from
a bargain purchase; and determines what information to disclose to
enable users of the financial statements to evaluate the nature and
9
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
financial effects of the business combination. SFAS No. 141(R) applies
prospectively to business combinations for which the acquisition date
is on or after the beginning of the first annual reporting period
beginning on or after December 15, 2008. Currently, the Company does
not anticipate that this Statement will have a significant impact on
its financial statements.
In December 2007, the FASB issued SFAS No. 160, "Non-Controlling
Interests in Consolidated Financial Statements - an amendment of ARB
No. 51" ("SFAS No. 160"). This statement requires that noncontrolling
or minority interests in subsidiaries be presented in the consolidated
statement of financial position within equity, but separate from the
parents' equity, and that the amount of the consolidated net income
attributable to the parent and to the noncontrolling interest be
clearly identified and presented on the face of the consolidated
statement of income. SFAS No. 160 will be effective for the Company's
fiscal year beginning August 1, 2009. The adoption of this statement
did not have a material effect on the Company's financial statements.
In December 2007, the FASB ratified the consensus reached on Emerging
Issues Task Force Issue No. 07-1, "Accounting for Collaborative
Arrangements Related to the Development and Commercialization of
Intellectual Property" ("EITF 07-1"). EITF 07-1 defines collaborative
arrangements and establishes reporting requirements for transactions
between participants in a collaborative arrangement and between
participants in the arrangement and third parties. EITF 07-1 will be
effective for the Company's fiscal year beginning August 1, 2009. The
Company is currently evaluating the potential impact of this standard
on the financial statements.
In December 2007, the SEC issued Staff Accounting Bulletin No. 110
("SAB 110"). SAB 110 permits companies to continue to use the
simplified method, under certain circumstances, in estimating the
expected term of "plain vanilla" options beyond December 31, 2007. SAB
110 updates guidance provided in SAB 107 that previously stated that
the Staff would not expect a company to use the simplified method for
share option grants after December 31, 2007. Adoption of SAB 110 is not
expected to have a material impact on the Company's financial
statements.
NOTE 2 - GOING CONCERN
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. In the near term, the Company expects operating costs to
continue to exceed funds generated from operations. As a result, the
10
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 2 GOING CONCERN (Continued)
Company expects to continue to incur operating losses and may have
insufficient funds to grow its business in the near future. The
Company can give no assurance that it will achieve profitability or be
capable of sustaining profitable operations. As a result, operations
in the near future are expected to continue to use working capital.
Management of the Company is actively increasing marketing efforts to
increase its revenues. The ability of the Company to continue as a
going concern is dependent on its ability to meet its financing
arrangement and the success of its future operations. The financial
statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
NOTE 3 - LICENSE RIGHTS
On November 28, 2007, the Company acquired a license from a software
developer, Service Technology, Inc. ("Licensor"). The Licensor has a
certain social networking software for use on the website. According
to the license rights, the Company is authorized by this agreement to
utilize the software in any manner within the course and scope of its
business.
The Company agreed to compensate the Licensor with a payment of
$50,000, and in 100,000 common shares of the Company.
The Company has indefinite term for the rights; therefore, the license
right is not being amortized but will be reviewed for impairment
annually or more frequently if impairment indicators arise, in
accordance with SFAS 142.
NOTE 4 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
For Three Months Ended
March 31, 2008
--------------
Numerator:
Net Loss $ (10,800)
-----------
Denominator:
Weighted Average of Common Shares 7, 100,000
-----------
Basic and Diluted Net Loss per Share NIL
===========
11
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 4 - NET LOSS PER SHARE (Continued)
Diluted net loss per share is the same as basic net loss per share due
to the lack of dilutive items in the Company.
NOTE 5 - RELATED PARTY TRANSACTION
An officer of the Company make advances to the Company to cover
operating expenses; such advances are recorded as officer advances and
has a balance of $10,853 and $853 on March 31, 2008 and December 31,
2007, respectively. No interest is being accrued.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations for the three months ended March 31, 2008.
The net loss of $(10,000) for the three months ended March 31, 2008 was
due to commencement of operations and expenses relating to the recent
public offering.
Results of Operations for the years ended December 31, 2007.
The net loss of $(71,053) for the year ended December 31, 2007 due to
commencement of operations.
Revenues
- --------
Excel Global did not receive any revenues for the three months ended
March 31, 2008
Revenues of $25,000 for the year ended December 31, 2007 attributed to
commencement of operations.
Selling, general and administrative expense
- -------------------------------------------
For the three months ended March 31, 2008, we had general,
administrative and selling expenses of $10,000 due to expenses relating
to the recent public offering.
For the year ended December 31, 2007, we had general, administrative
and selling expenses of $95,253 due to the commencement of operations.
Selling, general and administrative expenses will continue to increase
as we implement sales and marketing initiatives.
Liquidity and Capital Resources
- -------------------------------
During the three months ended March 31, 2008, we did not pursue any
investing activities.
During the three months ended March 31, 2008, net cash provided by
financing activities was $10,000 from the proceeds of an officer loan.
During the year ended December 31, 2007, we did not pursue any
investing activities.
During the year ended December 31, 2007, net cash provided by financing
activities was $853 from the proceeds of an officer loan. .
We are currently not aware of any trends that are reasonably likely to
have a material impact on our liquidity. Our current cash balance is
estimated to be sufficient to fund our current operations for two
months. We are attempting to increase the sales to raise much needed
cash for the remainder of the year, which will be supplemented by our
efforts to raise cash through the issuance of equity securities. It is
our intent to secure a market share in the software application and
13
service industry which we feel will require additional capital over the
long term to undertake sales and marketing initiatives, and to manage
timing differences in cash flows.
Plan of Operations
- ------------------
Our main focus in the next twelve months is to complete our public
offering and utilize a portion of the funds raised to increase our
marketing efforts to increase sales of the Edge and our services.
Our long term capital strategy is to increase our cash balance through
the receipt of revenues and financing transactions, including the
issuance of debt and/or equity securities. We have not yet determined
any specific offering terms, if any.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not consider the effects of interest rate movements to be a
material risk to our financial condition. We do not hold any
derivative instruments and do not engage in any hedging activities.
Item 4T. Controls and Procedures.
During the three months ended March 31, 2008, there were no changes in
our internal controls over financial reporting (as defined in Rule 13a-
15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of March 31, 2008. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of March 31, 2008 to ensure
that information required to be disclosed by the issuer in the reports
that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 1A. Risk Factors. Not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information. None.
Item 6. Exhibits
Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: May 20, 2008
EXCEL GLOBAL, INC.
By: /s/Betty Soumekh
- ---------------------------
Betty Soumekh, Chief Executive Officer