UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 -For the fiscal year ended: December 31, 2009
OR
[ ] 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 - For the transition period
from to
Commission file number: 333-150462
Excel Global, Inc.
(Exact name of registrant 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) 623-7505
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Stock, $0.001
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange act
Yes [ ] No [x]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.406 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [x] No [ ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the part 90 days.
Yes [x] No[ ]
2
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained hereof, and will not be
contained, to will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of "large accelerated filer,"
"accelerated file" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-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]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter. The market
value of the registrant's voting $0.001 common stock held by non-
affiliates of the registrant was approximately $0.00.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number
of shares outstanding of the registrant's only class of common stock, as
of March 27, 2010 was 8,051,000 shares of its $0.001 common stock.
No documents are incorporated into the text by reference.
3
EXCEL GLOBAL, INC.
Form 10-K
For the Fiscal Year Ended December 31, 2009
Table of Contents
Part I
ITEM 1. BUSINESS 4
ITEM 1A. RISK FACTORS 9
ITEM 1B. UNRESOLVED STAFF COMMENTS 9
ITEM 2. PROPERTIES 9
ITEM 3. LEGAL PROCEEDINGS 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
Part II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 10
ITEM 6. SELECTED FINANCIAL DATA 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK 13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 14
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 27
ITEM 9A. CONTROLS AND PROCEDURES 27
ITEM 9B. OTHER INFORMATION 28
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT 29
ITEM 11. EXECUTIVE COMPENSATION 30
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS 31
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE 31
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 32
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 33
4
PART I
ITEM 1. BUSINESS
Overview
- --------
Excel Global is a web-based service provider and consulting company.
Our Business Strategy
- ---------------------
Our objective is to be the leading provider of customer intelligence
software application for the front office supported by project-based
professional services, which includes those areas of business activity
that involve customer interactions, such as sales, marketing, and
service. We have developed the following business strategies to achieve
this objective:
- build the Excel Global brand.
- build consultative relationships with clients; and
- hire and retain highly qualified, experienced associates.
License Agreement
- -----------------
On November 28, 2007, Excel Global entered into a license agreement with
Service Technology, Inc., a non-affiliate. Service Technology granted
Excel Global a license in perpetuity to the use the customer
intelligence application, the Edge, on a non-exclusive basis.
Pursuant to the license agreement, the registrant executed a promissory
note to which it was to pay Service Technology $50,000 on or before
December 31, 2008 and issued Service Technology 100,000 shares of
restricted common stock of the registrant. The promissory note was
extended by mutual consent of the parties to December 31, 2009.
Upon further evaluation of the software, Excel Global determined that it
was unable to implement the use of this particular software with its
clients. As a result, on December 29, 2009, the parties entered into a
termination agreement. Pursuant to the agreement, the 100,000 shares of
restricted common stock were returned to the treasury of Excel Global,
the promissory note was declared null and void and the registrant agreed
to issue Service Technology 10,000 shares of its common stock for the
termination of the agreement.
Revenue
- -------
Our principal revenues will be derived primarily from consulting
revenues.
Our Marketing Strategy
- ----------------------
Management believes that organizations will focus on the front office as
they strive to improve productivity and profitability with high-quality,
differentiated customer experiences. Our customer intelligence
application, the Edge, collects customer data, which provides integrated
5
solutions and enables Excel Global to offer a set of service offerings
to deliver a complete business solution and not just a software solution
to our customers.
Our customer application is a business strategy and not just software.
Specifically, CI is about the combination of technology, methods, and
practices that drive tangible results. We are marketing our application
to organizations of all sizes to optimize their systems, processes,
people and partners around the customer, leading to superior business
outcomes and improved customer experiences.
Excel Global believes organizational change is more than methods and
practices, but a combination of technology, methods, and practices that
drive tangible results. We will work with our customers to develop
methods and practices through:
- Defining, measuring, and understanding the customer
experience helping a company enable its marketing departments to
identify and target their best customers, manage marketing
campaigns with clear goals and objectives, and generate quality
leads for the sales team.;
- Maximizing loyalty and retention assisting the organization
to improve sales, account management, and sales management by
optimizing information shared by multiple employees, and
streamlining existing processes;
- Allowing the formation of individualized relationships with
customers, with the aim of improving customer satisfaction and
maximizing profits; identifying the most profitable customers and
providing them the highest level of service;
- Increasing sales effectiveness providing employees with the
information and processes necessary to know their customers,
understand their needs, and effectively build relationships
between the company, its customer base, and distribution partners;
and
- Gaining market and competitive intelligence.
Our business model combines a client service orientation and commitment
to quality with the entrepreneurial culture.
We believe we have significant opportunity for strong organic growth in
our core business. In our core business, key elements of our growth
strategy include:
- growing our client base;
- expanding geographically;
- providing additional software applications; and
- providing additional professional service offerings.
6
Strategic Partners and Alliances
- --------------------------------
Excel Global will leverage sales and delivery alliances with companies
whose capabilities complement our own by enhancing the Excel Global
brand and extending our sales to new geographies. By combining alliance
partners' products and services with Excel Global's capabilities and
expertise, Excel Global will create innovative, high-value products for
our clients. Some alliances will be specifically aligned with Excel
Global's products, thereby adding skills, technology and insights that
are applicable across the software application industry. Excel Global
also plans to work with strategic partners to promote the Edge brand.
In addition, Excel Global plans to continue to develop solutions that
address specific market needs, are affordable, and can be easily
integrated with the products we currently have in place. Excel Global
intends to continue to explore new market opportunities through product
development, strategic partnering, acquisitions, the creation of new
companies or divisions, and the use of partnership/distributor
relationships that will provide increased market penetration in
international markets.
Patents, Trademarks, Intellectual Property, and Proprietary Protection
- ----------------------------------------------------------------------
Excel Global does not own or license any patents, trademarks, or service
marks that are material to our business.
Environmental Matters
- ---------------------
Excel Global believes it is in material compliance with all relevant
federal, state, and local environmental regulations, and does not expect
to incur any significant costs to maintain compliance with the
regulations in the foreseeable future.
Going Concern
- -------------
Our 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, Excel Global expects operating costs to continue to exceed
funds generated from operations. As a result, we expect to continue to
incur operating losses and may have insufficient funds to grow its
business in the near future. We 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.
We are actively increasing marketing efforts to increase revenues. The
ability of Excel Global to continue as a going concern is dependent on
its ability to meet our financing arrangement and the success of our
future operations.
Seasonal Nature of Business
- ---------------------------
Our business is not seasonal in nature.
7
Employees
- ---------
We presently have no full-time employees, no independent contractors
employees and no part-time employees. The officers are working on a
part-time basis.
ITEM 1A. RISK FACTORS
We may continue to have potential liability even though we made a
rescission offer.
In July 2007, we sold an excess of 31,000 common shares over the
1,000,000 common shares registered in our recent public offering. In
order to address this issue, we offered rescission to the shareholder
who purchased these 31,000 common shares. Even though the shareholder
declined the offer, we may remain liable under the Securities Act of
1933 for a possible further rescission. The Securities Act of 1933 does
not provide that a rescission offer will extinguish a holder's right to
rescind the issuance of shares that were not registered or exempt from
the registration requirements under the Securities Act of 1933.
Consequently, should the recipient of the rescission offer reject the
offer, expressly or impliedly, we may remain liable under the Securities
Act of 1933 for the purchase price of the shares that are subject to the
rescission offer.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable
ITEM 2. PROPERTIES
Our corporate and manufacturing offices are located at 292 South LA
Cienega Blvd., Suite PHD, Beverly Hills, CA 90211. Our telephone number
is (310) 266-3738. These offices consist of 250 square feet which are
leased on a month to month basis for $300 per month.
ITEM 3. LEGAL PROCEEDINGS.
The registrant is not involved in any legal proceedings at this date.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 5(a)
a) Market Information. The registrant intends to work with a market
maker to assist in the public listing of our common stock on the NASD
Over the Counter Bulletin Board.
b) Holders. At March 27, 2010, there were approximately 66
shareholders of the registrant.
c) Dividends. Holders of the registrant's common stock are entitled to
receive such dividends as may be declared by its board of directors. No
dividends on the registrant's common stock have ever been paid, and the
registrant does not anticipate that dividends will be paid on its common
stock in the foreseeable future.
d) Securities authorized for issuance under equity compensation plans.
No securities are authorized for issuance by the registrant under equity
compensation plans.
e) Performance graph. Not applicable.
f) Sale of unregistered securities. On December 29, 2009, the
registrant terminated a contract with a licensor. Pursuant to the
termination agreement, the registrant agreed to issued 10,000 common
shares as a settlement. The common shares were valued at $8,000.
Item 5(b) Use of Proceeds. Not applicable.
Item 5(c) Purchases of Equity Securities by the issuer and
affiliated purchasers.
None.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The net loss of $(35,997) for the year ended December 31, 2009 was due
to continuing operations and the costs associated with the reporting
requirements under the Securities Exchange Act of 1934.
The net loss of $(283,038) for the year ended December 31, 2008 was due
to research and development of $200,000, continuing operations and the
costs associated with the recent public offering.
Revenues
- --------
Excel Global did not receive any revenues for the year ended December
31, 2009 and 2008.
Selling, general and administrative expense
- -------------------------------------------
For the year ended December 31, 2009, we had general, administrative and
selling expenses of $35,681. These expenses were due to continuing
operations and the costs associated with the reporting requirements
under the Securities Exchange Act of 1934.
For the year ended December 31, 2008, we had general, administrative and
selling expenses of $81,011 continuing operations and the costs
associated with the recent public offering. Selling, general and
administrative expenses will continue to increase as we implement sales
and marketing initiatives.
Liquidity and Capital Resources
- -------------------------------
During the year ended December 31, 2009, we did not pursue any investing
activities.
For the year ended December 31, 2008, we purchased property and
equipment of $2,032 resulting in net cash used by investing activities.
For the year ended December 31, 2009, we received proceeds from officer
advances of $23,250. We repaid advances from officer of $24,200. As a
result, net cash used in financing activities was $950 for the year
ended December 2009.
For the year ended December 31, 2008, we received proceeds from officer
advances of $37,455. We repaid advances from officer of $25,000 and
received proceeds from the sale of common stock of $257,750 pursuant to
our recent public offering.
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
10
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 increase our marketing
efforts to increase sales of 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.
Recent Pronouncements
The registrant does not believe newly issued accounting pronouncements
will have any material impact on its financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
11
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EXCEL GLOBAL, INC.
Index to the Financial Statements
Report of Independent Registered Public Accounting Firm 12
Financial Statements of Excel Global, Inc.:
Balance Sheets as of December 31, 2009 and 2008 13
Statements of Operations For the Years
Ended December 31, 2009 and 2008 14
Statements of Stockholders' Equity (Deficit) For
the Years Ended December 31, 2009 and 2008 15
Statements of Cash Flows For the Years Ended
December 31, 2009 and 2008 16
Notes to Financial Statements 17
12
[Letterhead of SPECTOR & ASSOCIATES, LLP]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Excel Global, Inc.:
We have audited the accompanying balance sheets of Excel Global, Inc. (a
development stage company) as of December 31, 2009 and 2008, and the
related statements of operations, stockholders' equity, and cash flows
for each of the years ended. Excel Global, Inc.'s management is
responsible for these financial statements. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial positions of Excel
Global, Inc. as of December 31, 2009 and 2008, and the results of its
operations and its cash flows for each of the years ended in conformity
with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company's operating losses and working
capital deficiency raise substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters are also
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Spector & Associates, LLP
Spector & Associates, LLP
Pasadena, California
March 10, 2009
13
EXCEL GLOBAL, INC.
BALANCE SHEETS
As of December 31, 2009 2008
- --------------------------------------------------------------------------------
(Restated)
<s> <c> <c>
ASSETS
Current Assets
Cash in Bank $ 111 $ 24,836
---------- ----------
Total Current Assets 111 24,836
---------- ----------
Property and equipment, net of accumulated
depreciation of $474 for 2009, and $68 for 2008 1,558 1,964
License Rights - 51,000
Other assets 1,000 1,000
---------- ----------
TOTAL ASSETS $ 2,669 $ 78,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
- -------------------------------------
Current Liabilities
Accounts payable $ - $ 50,000
Accrued expenses 17,280 12,780
Advances from officer, including accrued interest
Of $1,543 for 2009, and $1,227 for 2008 13,227 13,861
---------- ----------
Total current liabilities 30,507 76,641
---------- ----------
Stockholders' Equity (Deficit):
Common stock, $0.001, 25,000,000 shares
authorized, 8,051,000 and 8,241,000 shares
issue and outstanding as of 2009 and 2008,
respectively 8,051 8,241
Additional paid-in capital 354,199 348,009
Accumulated Deficit (390,088) (354,091)
---------- ----------
Total stockholders' equity (deficit) (27,838) 2,159
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 2,669 $ 78,800
========== ==========
The accompanying notes are an integral part
of these audited financial statements
14
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS
As of December 31, 2009 2008
- --------------------------------------------------------------------------------
(Restated)
<s> <c> <c>
Operating Expenses:
Selling, general and administrative expenses $ 35,681 $ 81,811
Research and Development - 200,000
---------- ----------
Total Operating Expenses 35,681 281,811
---------- ----------
Operating income (loss) (35,681) (281,811)
Interest and other expenses (316) (1,227)
---------- ----------
Net loss before income taxes (35,997) (283,038)
Provision for income taxes - -
---------- ----------
Net Loss $ (35,997) $ (283,038)
========== ==========
Net loss per share-Basic and Diluted $ (0.00) $ (0.04)
========== ==========
Weighted average number of common shares
Outstanding 8,225,167 7,645,500
The accompanying notes are an integral part
of these audited financial statements
15
EXCEL GLOBAL, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)-RESTATED
For the Years ended December 31, 2009 and 2008
Common Stock
------------ Additional Accumulated
Shares Amounts Paid-in Capital Deficit Total
----------------- ---------------- ------- -----
<s> <c> <c> <c> <c> <c>
Balance at December 31, 2007 7,100,000 $7,100 $ 63,900 $(71,053) $ (53)
Issuance of common stock for
cash 1,031,000 1,031 256,719 257,750
Issuance of common stock for
services 110,000 110 27,390 27,500
Net loss for the year ended
December 31, 2008 (283,038)
(283,038)
--------------------------------------------------------
Balance at December 31, 2008 8,241,000 $8,241 $348,009 $(354,091) $ 2,159
Correction of shares issued
in 2007 (100,000) (100) (900) (1,000)
Retirement of common stock
for license rights (100,000) (100) (900) (1,000)
Issuance of common stock for
services 10,000 10 7,990 8,000
Net loss for the year ended
December 31, 2009 (35,997) (35,997)
--------------------------------------------------------
Balance at December 31, 2009 8,051,000 $8,051 $354,199 $(390,088) $(27,838)
--------------------------------------------------------
16
EXCEL GLOBAL, INC.
STATEMENT OF CASH FLOWS
As of December 31, 2009 2008
- --------------------------------------------------------------------------------
(Restated)
<s> <c> <c>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $ (35,997) $(283,038)
Adjustment to reconcile net loss to
net cash used by operating activities:
Depreciation 406 68
Stock issued for services 7,000 27,500
(Increase) Decrease in operating assets:
Accounts receivable - 25,000
Prepaid and other assets - (1,000)
Increase(Decrease) in:
operating liabilities:
Accounts payable and accrued expenses 4,816 (11,867)
---------- ----------
Net cash used by operating activities (23,775) (243,337)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (2,032)
---------- ----------
Net cash used by investing activities - (2,032)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from officer advances 23,250 37,455
Repayments of advance from officer (24,200) (25,000)
Proceeds from sale of stock - 257,750
---------- ----------
Net cash provided by financing activities (950) 270,205
---------- ----------
NET INCREASE (DECREASE) IN CASH (24,725) 24,836
CASH BALANCE AT BEGINNING OF YEAR 24,836 -
---------- ----------
CASH BALANCE AT END OF YEAR $ 111 $ 24,836
========== ==========
Supplemental Disclosure:
Taxes Paid $ - $ -
Noncash Investing and Financing Activities:
Cancellation of acquisition of license rights:
Accounts payable $ 50,000 $ -
Common stock 1,000 -
---------- ----------
$ 51,000 $ -
========== ==========
The accompanying notes are an integral part
of these audited financial statements
17
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 2009 AND 2008
- ----------------------------------------------------------------------
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 and consulting company.
Summary of Significant Accounting Policies
- ------------------------------------------
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.
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. Property and equipment are valued at cost.
Maintenance and repair costs are charged to expenses as incurred.
Depreciation is computed on the straight-line method based on the
estimated useful lives of the assets, generally 5 to 39 years.
Depreciation expense for the years ended December 31, 2009 and 2008 was
$406 and $68, respectively.
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.
18
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- ------------------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Research and Development. The Company records research and development
expenses as they incurred.
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 for the fair value of the equity instruments issued, whichever
is more reliably measurable. Under the guidance in Issue 00-18, 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 (that is, the vesting date).
New Accounting Pronouncements: Excel Global, Inc. does not believe
newly issued accounting pronouncements will have any material impact on
its financial statements.
Reclassification and Restatement: The December 31, 2008 financial
statements have been restated to correct the par value of the common
stock issued. The result is to decrease the common stock and increase
the additional paid-in capital on the restated financial statements
presentation. Accrued interest for year ended December 31, 2008 has
been reclassified from accrued expenses to notes payable. Such
reclassification and restatement had no effect on net loss previously
reported.
19
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 2009 AND 2008
- ----------------------------------------------------------------------
As reported Restated
----------- --------
Accrued expenses $13,333 $12,780
Notes payable $13,308 $13,861
Common stock $356,250 $8,241
Additional paid-in capital $0 $348,009
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 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 developing a plan to commence its
operations by obtaining an infusion of capital through either public or
private investment. The ability of the Company to continue as a going
concern is dependent on management's successful planning for its
operations and successful capital infusion. 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-BALANCE SHEET DETAILS
At December 31, 2009 2008
- -----------------------------------------------------------------------
Property and equipment, net
Furniture and equipment $ 2,032 $ 2,032
Less: accumulated depreciation (474) (68)
- -----------------------------------------------------------------------
Property and equipment, net $ 1,558 $ 1,964
=======================================================================
Accrued Expenses:
Accrued professional fees $ 4,480 $ 11,980
Accrued rent 12,000 -
Other accrued expenses 800 800
- -----------------------------------------------------------------------
Total accrued expenses $ 17,280 $ 12,780
=======================================================================
20
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 2009 AND 2008
- ----------------------------------------------------------------------
NOTE 4 - LICENSE RIGHTS
On November 28, 2007, the Company acquired a license from a software
developer, Service Technology, Inc. ("Licensor"). The Licensor has
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 at a fair value of $1,000.
The stocks were issued in 2007. The cash payment was accrued and has
not been paid.
On December 29, 2009, the Company and the Licensor agreed to terminate
the contract that signed on November 28, 2007 and agreed that all the
previous terms and conditions under the contract are null and void. In
addition, the Company agreed to issue 10,000 shares of its common stock
as a settlement. The stocks were valued at $8,000 and charged to
operations.
NOTE 5 - PROVISION FOR INCOME TAXES
The Company has net operating loss carryforwards, approximately of
$390,000 to reduce future taxable income as of December 31, 2009. To
the extent not utilized, the carryforwards will begin to expire through
2029. The Company's ability to utilize its federal net operating loss
carryforwards is uncertain and thus a valuation reserve has been
provided against the Company's net deferred tax assets.
The deferred tax asset as of December 31, 2009 and 2008 consisted of the
following:
At December 31, 2009 2008
--------------------------
Deferred tax assets:
Tax loss carryforwards $ 132,630 $ 120,391
Valuation Allowance (132,630) (120,391)
--------- ---------
Net deferred tax asset $ (0) $ (0)
========= =========
The valuation allowance increased by $12,239 and $96,233 during the
years ended December 31, 2009 and 2008, respectively
A reconciliation of the difference between the expected income tax
expense (benefit) computed at the U.S. statutory income tax rate and the
Company's income tax expense is shown as follows:
21
EXCEL GLOBAL, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 2009 AND 2008
- ----------------------------------------------------------------------
NOTE 5 - PROVISIONS FOR INCOME TAXES (continued)
For years ended December 31, 2009 2008
--------------------------
Tax provision (benefit) at statutory rate $(12,239) $(96,233)
Increase in valuation allowance 12,239 96,233
-------- --------
Provision for income taxes $ - $ -
======== ========
The Company did not file tax returns since inception.
NOTE 6 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
Year Ended Year Ended
December 31,
2009 2008
- ------------------------------------------------------------------------
Numerator:
Net Loss $ (35,997) $ (283,038)
- ------------------------------------------------------------------------
Denominator:
Weighted average of common shares 8,225,167 7,645,500
- -----------------------------------------------------------------------
Net loss per share-basic and diluted $ (0.00) $ (0.04)
NOTE 7 - RELATED PARTY TRANSACTION
As of December 31, 2009 and 2008, the Company owed $13,227 and $13,861,
respectively, to an officer of the Company. The advances are unsecured,
due on demand and bears interest at 8%. Management expects to repay the
full amount during the year ended December 31, 2010; therefore, it is
classified as current on the balance sheet.
NOTE 8 - LEASE COMMITMENTS
The Company leases its office facilities under an operating lease which
expires on December 31, 2009. The Company currently leases its office
facilities on a month-to-month basis. Total rent expense for the year
ended December 31, 2009 and 2008 was $12,000 and $9,000, respectively.
22
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-
15(e) and 15d-15(e) under the Exchange Act that are designed to insure
that information required to be disclosed in the reports we file or
submit under the Exchange Act is recorded, processed, summarized and
reported within the periods specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated
and communicated to our management, including our Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), or the persons
performing similar functions, to allow timely decisions regarding
required disclosure.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has evaluated
the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this annual report. Based on that
evaluation, our CEO and CFO, or the persons performing similar
functions, concluded that our disclosure controls and procedures were
effective as of December 31, 2009.
Management's Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the supervision
of our CEO and CFO, or the persons performing similar functions, to
provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of our financial statements for external
reporting in accordance with accounting principles generally accepted in
the United States of America. Management has evaluated the
effectiveness of our internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control over Financial Reporting
- - Guidance for Smaller Public Companies.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has assessed
the effectiveness of our internal control over financial reporting as of
December 31, 2009, and concluded that it is effective.
This annual report does not include an attestation report of the
registrant's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the registrant's registered public accounting firm
23
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or
those persons performing similar functions, our management has evaluated
changes in our internal controls over financial reporting that occurred
during the fourth quarter of 2008. Based on that evaluation, our CEO
and CFO, or those persons performing similar functions, did not identify
any change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various inherent
limitations, including cost limitations, judgments used in decision
making, assumptions about the likelihood of future events, the soundness
of our systems, the possibility of human error, and the risk of fraud.
Moreover, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate
because of changes in conditions and the risk that the degree of
compliance with policies or procedures may deteriorate over time.
Because of these limitations, there can be no assurance that any system
of disclosure controls and procedures or internal control over financial
reporting will be successful in preventing all errors or fraud or in
making all material information known in a timely manner to the
appropriate levels of management.
ITEM 9B. OTHER INFORMATION
None
24
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
NAME AND ADDRESS AGE POSITIONS HELD SINCE
<s> <c> <c> <c>
Betty Soumekh 54 CEO, CFO Inception
470 S. Bedford Drive Director to present
Beverly Hills, CA 90212
Jeremy Vernassal 26 Vice President Inception
1058 S. Wooster St. #3 Director to present
Los Angeles, CA 90035
Delia Vernassal 28 Secretary Inception
1058 S. Wooster St. #3 to present
Los Angeles, CA 90035
Business Experience
- -------------------
Betty Soumekh. Ms. Soumekh has been CEO, Secretary and Director of
Excel Global Inc since its inception. She consulted with Edison
International for two years as part of an executive team overseeing a
$9 billion modernization initiative. Since December 31, 2006 to
present, Ms. Soumekh has been the chief financial officer, secretary
and a director of Tri-Mark MFG, Inc., an entity engaged in the sale and
distribution of jewelry. From 1994 to 2004, Ms Soumekh developed and
implemented organizational effectiveness strategies for AT&T, Blue
Cross, British Telecom, the Canadian Imperial Bank of Commerce,
Kimberly Clark, Vanguard Financial group. From 1991 to 1994, she was
Director of Organizational Development with Dylex, a $3 billion retail
chain headquartered in Toronto. Ms Soumekh worked with the French
Ministry of Finance and Trade from 1982 to 1986 to promote Export
Credit programs for corporations with international operations. Ms.
Soumekh earned a Bachelor of Art with honors from London University in
1976. Ms Soumekh holds an international MBA from the C.E.C.E, France
earned in 1978.
Jeremy Vernassal. From inception to present, Mr. Vernassal has been
vice president and director of Excel Global. From 2004 to present, Mr.
Vernassal has been a manager for Legalzoom.com, an entity engaged in
providing legal documents. Mr. Vernassal obtained a Bachelor of Arts
from York University in Toronto in 2004.
Delia Vernassal. From inception to present, Ms. Vernassal has been
secretary of Excel Global. From 2002 to 2007, Ms. Vernassal was a
project manager of SFK, an entity focused on providing educational
programs to teenagers and young adults in partnership with school
boards, social services, Big Brothers, police departments, etc. From
2007-2008, Ms. Vernassal has been a manager for Revolution Prep, an
entity engaged in providing educational services. Ms. Vernassal
obtained her Bachelor of Arts Degree from UCLA in 2002 and her Master of
Science from USC in 2007.
25
The above named directors will serve in their capacity as director until
our next annual shareholder meeting to be held within six months of our
fiscal year's close. Directors are elected for one-year terms.
Code of Ethics Policy
- ---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
- --------------------
There have been no changes in any state law or other procedures by which
security holders may recommend nominees to our board of directors. In
addition to having no nominating committee for this purpose, we
currently have no specific audit committee and no audit committee
financial expert. Based on the fact that our current business affairs
are simple, any such committees are excessive and beyond the scope of
our business and needs.
Family Relationships
- --------------------
Betty Soumekh, an officer and director is the mother of Jeremy
Vernassal, an officer and director and Delia Vernassal, an officer and
director.
ITEM 11. EXECUTIVE COMPENSATION
We may elect to award a cash bonus to key employees, directors, officers
and consultants based on meeting individual and corporate planned
objectives.
Summary Compensation Table
Non-Equity Nonqualified
Name Incentive Plan Deferred All Other
and Stock Options Plan Compen- Compensation Compen-
Principal Salary Bonus Awards Awards sation Earnings sation Total
Position Year ($) ($) ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
<s> <c> <c> <c> <c> <c> <c> <c> <c> <c>
Betty Soumekh
Chief Executive
Officer 2009 - - - - - - - -
2008 - - - - - - - -
Jeremy Vernassal
Chief Financial
Officer 2009 - - - - - - - -
2008 - - - - - - - -
We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to the directors in their capacity as such.
26
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
The following table sets forth, as of March 15, 2010, the number and
percentage of outstanding shares of Excel Global common stock owned by
(i) each person known to us to beneficially own more than 5% of its
outstanding common stock, (ii) each director, (iii) each named executive
officer and significant employee, and (iv) all officers and directors as
a group.
Name Amount Percentage
- ---- ------ ----------
Betty Soumekh 6,900,000 83.73%
Jeremy Vernassal 50,000 .6%
Delia Vernassal 50,000 .6%
Officers and Directors
As a group (3 persons) 7,000,000 84.94%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Excel Global's board of directors consists of Betty Soumekh and Jeremy
Vernassal. They are not independent as such term is defined by a
national securities exchange or an inter-dealer quotation system.
During the nine months ended December 31, 2009, there were no
transactions with related persons other than as described below.
Related Party Loan
- ------------------
As of December 31, 2009 and 2008, the registrant owed $13,227 and
$13,861, respectively, to Betty Soumekh, an officer of the registrant.
The advances were unsecured, due on demand and bears interest at 8%.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees. We incurred aggregate fees and expenses of approximately
$11,750 and $10,250 respectively, from Spector & Associates, LLP for the
2009 and 2008 fiscal years. Such fees included work completed for our
annual audits and for the review of our financial statements included in
our Form 10-Q.
Tax Fees. We did not incur any aggregate tax fees and expenses from
Spector & Associates, LLP for the 2009 and 2008 fiscal years for
professional services rendered for tax compliance, tax advice, and tax
planning.
All Other Fees. We did not incur any other fees from Spector &
Associates, LLP during fiscal 2009 and 2008.
27
The board of directors, acting as the Audit Committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for fiscal years 2009 and 2008 were
approved by the board of directors pursuant to its policies and
procedures. We intend to continue using Spector & Associates, LLP
solely for audit and audit-related services, tax consultation and tax
compliance services, and, as needed, for due diligence in acquisitions.
28
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, December 31, 2009 and 2008
Statements of Operations for the years ended December 31, 2009 and 2008
Statements of Stockholders' Equity for the years ended December 31, 2009
and 2008
Statements of Cash Flows for the years ended December 31, 2008 and 2007
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof:
None
(a)(3) Exhibits
The following of exhibits are filed with this report:
(31) 302 certification
(32) 906 certification
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.
Date: March 30, 2010
Excel Global, Inc.
By: /s/ Betty Soumekh
----------------
Betty Soumekh, CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Betty Soumekh /s/Jeremy Vernassal
----------------- -------------------
Betty Soumekh, CEO Jeremy Vernassal
Principal Financial Officer, Director
Controller, Director March 30, 2010
March 30, 2010