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 June 30, 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)
816 South Robertson Blvd.
Los Angeles, CA 90035
(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,
August 15, 2008:
Common Stock - 7,100,000
2
EXCEL GLOBAL, INC.
FORM 10-Q
For the quarterly period ended June 30, 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
June 30, December 31,
2008 2007
---------- ----------
(Unaudited)
<s> <c> <c>
ASSETS
- ------
Current assets:
Cash in Bank $ 296 $ -
Accounts receivable - 25,000
---------- ----------
Total Current Assets 296 25,000
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Other Assets
License Rights 51,000 51,000
---------- ----------
Total Other Assets $ 51,296 $ 76,000
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
- -------------------------------------
Current Liabilities
Accounts payable $ 50,000 $ 50,000
Accrued expenses 12,780 25,200
Officer loan 27,648 853
---------- ----------
Total Current Liabilities 90,428 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 (110,132) (71,053)
---------- ----------
Total Stockholders' Deficit (39,132) (53)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 51,296 $ 76,000
========== ==========
The accompanying notes are an integral part
of these interim unaudited financial statements
4
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For the three months For the six months
ended June 30, 2008 ended June 30, 2008
-------------------- -------------------
Operating Expenses
Selling, general and
administrative $ 28,279 $ 38,279
---------- ----------
28,279 38,279
Operating loss (28,279) (38,279)
Other Income (Expenses):
Interest and Other Income - -
Interest and Other Expenses - -
---------- ----------
Total Other Income (Expenses) - -
---------- ----------
Net loss before Income Taxes (28,279) (38,279)
Provision for Taxes - 800
---------- ----------
Net Loss $ (28,279) (39,079
========== ==========
Net loss per share,
Basic and Diluted - -
========== ==========
Weighted Average Number
of Shares 7,100,000 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 June 30, 2008
Cash Flow from Operating Activities:
Net Loss $ (39,079)
Adjustment to reconcile net loss to net cash
used by operating activities:
Decrease in Accounts Receivable 25,000
Decrease in Accrued Expenses (12,420)
----------
Net Cash used by Operating Activities (26,499)
Cash Flow from Investing Activities:
Net Cash used by Investing Activities -
Cash Flow from Financing Activities:
Proceeds from Officer Loan 26,795
----------
Net Cash provided by Financing Activities 26,795
----------
Net Increase (Decrease) in Cash 296
Cash Balance at beginning of period -
----------
Cash Balance at end of Period $ 296
==========
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 June
30, 2008 and for the three and six months ended June 30, 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.
The results for the three and six months ended June 30, 2008 may ot be
indicative of results for the year ending December 31, 2008 or any
future periods.
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
June 30, 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.
7
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Property and Equipment. As of June 30, 2008, the Company did not
maintain or control any fixed assets.
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 June 30, 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. The Company does not believe newly
issued accounting pronouncements will have any material impact on its
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
The 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.
9
NOTE 4 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
For the three months For the six months
ended June 30, 2008 ended June 30, 2008
-------------------- -------------------
Numerator:
Net Loss $ (28,279) $ (39,079)
----------- -----------
Denominator:
Weighted Average of
Common Shares 7, 100,000 7,100,000
Basic and Diluted Net Loss
per Share NIL NIL
=========== ===========
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 $27,648 and $853 on June 30, 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 and six months ended June 30, 2008.
The net loss of $(28,279) and $(39,279) for the three and months ended
June 30, 2008, respectively 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 was due
to commencement of operations.
Revenues
- --------
Excel Global did not receive any revenues for the three and six months
ended June 30, 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 June 30, 2008, we had general,
administrative and selling expenses of $28,279 due to expenses relating
to the recent public offering.
For the three months ended June 30, 2008, we had general,
administrative and selling expenses of $38,279 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 six months ended June 30, 2008, we did not pursue any
investing activities.
During the six months ended June 30, 2008, net cash provided by
financing activities was $26,795 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
11
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
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 June 30, 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 June 30, 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 June 30, 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.
12
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: August 18, 2008
EXCEL GLOBAL, INC.
By: /s/Betty Soumekh
- ---------------------------
Betty Soumekh, Chief Executive Officer