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, 2010
- -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) 623-7505
- ------------------------------------------
(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,
April 30, 2010
Common Stock - 8,051,000
2
EXCEL GLOBAL, INC.
FORM 10-Q
For the quarterly period ended March 31, 2010
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 11
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 12
Item 4T. Controls and Procedures 12
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,
2010 2009
-------- -----------
ASSETS (Unaudited) (Audited)
Current Assets
Cash in Bank $ - $ 111
Accounts Receivable 2,500 -
---------- ----------
Total current assets 2,500 111
---------- ----------
Property and equipment, net of
accumulated depreciation
of $576 for 2010, and $474 for 2009 1,456 1,558
Other assets 1,000 1,000
---------- ----------
TOTAL ASSETS $ 4,956 $ 2,669
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Accrued expenses $ 19,780 $ 17,280
Advances from officer, including
accrued interest of $1,775 for 2010,
and $1,543 for 2009 13,596 13,227
---------- ----------
Total current liabilities 33,376 30,507
---------- ----------
Stockholder's Equity (Deficit)
Common stock, $0.001 par value;
25,000,000 shares authorized;
8,051,000 shares issued and outstanding 8,051 8,051
Additional paid-in capital 354,199 354,199
Accumulated deficit (390,670) (390,088)
---------- ----------
Total stockholder's equity (deficit) (28,420) (27,838)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDER'S
EQUITY (DEFICIT) $ 4,956 $ 2,669
========== ==========
The accompanying notes are an integral part
of these interim unaudited financial statements
4
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For three months ended March 31, 2010 2009
Revenues $ 2,500 $ -
---------- ----------
Total Revenues 2,500 -
---------- ----------
Operating Expenses:
Selling, General and Administrative
Expenses 2,850 9,584
---------- ----------
Total Operating Expenses 2,850 9,584
---------- ----------
Operating loss (350) (9,584)
Interest and other expenses (232) (265)
---------- ----------
Net loss before income taxes (582) (9,849)
Provision for income taxes - -
---------- ----------
Net loss $ (582) $ (9,849)
========== ==========
Net loss per share-Basic and Diluted $ (0.00) $ (0.00)
========== ==========
Weighted average number of common shares
outstanding 8,051,000 8,241,000
The accompanying notes are an integral part
of these interim unaudited financial statements
5
EXCEL GLOBAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For three months ended March 31, 2010 2009
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (582) $ (9,849)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 102 34
(Increase) Decrease in operating assets:
Accounts Receivable (2,500) -
Increase (Decrease) in operating
liabilities:
Accounts payable and accrued expenses 2,732 (2,985)
---------- ----------
Net cash used in operating activities (248) (12,800)
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Net cash used in investing activities - -
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from officer advances 137 -
Repayments of advance from officer - (10,000)
---------- ----------
Net cash provided by (used in) financing
activities 137 (10,000)
---------- ----------
NET DECREASE IN CASH (111) (22,800)
CASH BALANCE AT BEGINNING OF PERIOD 111 24,836
---------- ----------
CASH BALANCE AT END OF PERIOD $ - $ 2,036
========== ==========
Supplemental Disclosures of Cash
Flow Information:
Taxes Paid $ 0 $ 0
Interest paid $ 0 $ 0
The accompanying notes are an integral part
of these interim unaudited financial statements
6
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
- --------------------
Excel Global, Inc. (the "Company") was incorporated under the laws of
the state of Nevada on August 2, 2007.
The Company is a web-based service provider and consulting company.
Summary of Significant Accounting Policies
- ------------------------------------------
Presentation of Interim Information. The financial information at March
31, 2010 and for the three months ended March 31, 2010 and 2009 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 included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2009.
The balance sheet as of December 31, 2009 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 months ended March 31, 2010 may not be
indicative of results for the year ending December 31, 2010 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.
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 INTERIM UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
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 7 years.
Depreciation expense for the three months ended March 31, 2010 and 2009
was $102 and $34, respectively.
Fair value of financial instruments All financial instruments are
carried at amounts that approximate estimated fair value.
Research and Development. The Company records research and development
expenses as they incurred.
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.
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 reporting
period.
Non-employees Equity Transactions The Company accounts for equity
instruments issued to non-employees in accordance with the provisions
of ASC 505-50 (formerly SFAS No. 123R) 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. ASC 505-50 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 00-18, the
measurement date occurs as of the earlier of (a) the date at which a
8
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
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.
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 the
operations in the near future are expected to continue to use working
capital.
Management of the Company is actively increasing marketing efforts to
increase 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 - BALANCE SHEET DETAILS
March 31, December 31,
2010 2009
Property and equipment, net
Furniture and equipment $ 2,032 $ 2,032
Less: accumulated depreciation (576) (474)
-------- --------
Property and equipment, net $ 1,456 $ 1,558
======== ========
Accrued Expenses:
Accrued professional fees $ 6,980 $ 4,480
Accrued rent 12,000 12,000
Other accrued expenses 800 800
-------- --------
Total accrued expenses $ 19,780 $ 17,280
======== ========
9
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
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,
2010 2009
---- ----
Numerator:
Net loss $ (582) $ (9,849)
---------- ----------
Denominator:
Weighted average of common shares 8,051,000 8,241,000
========== ==========
Net loss per share-basic and diluted $ (0.00) $ (0.00)
NOTE 5 - RELATED PARTY TRANSACTION
As of March 31, 2010 and December 31, 2009, the Company owed $13,596
and $13,227, 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.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations for the three months ended March 31, 2010 and
2009
We earned revenue of $2,500 for the three months ended March 31, 2010.
The net loss was $(582) for the three months ended March 31, 2010.
This loss was due to selling, general and administrative expenses of
$2,850 which includes the costs of being a reporting company. Selling,
general and administrative expenses will continue to increase as we
implement sales and marketing initiatives.
We did not earn any revenue for the three months ended March 31, 2009.
For the three months ended March 31, 2009, we had a net loss of
$(9,849). This loss was due to selling, general and administrative
expenses of $9,584 which include research and development costs of
$200,000 and costs of being a reporting company. 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, 2010 and 2009, we did not
pursue any financing activities.
During the three months ended March 31, 2010, we received proceeds from
officer advances of $137. As a result, we had net cash used in
financing activities of $137 for the three months ended March 31, 2010.
For the three months ended March 31, 2009, we repaid advances from an
officer of $10,000 resulting in net cash provided by financing
activities of $10,000.
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
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.
11
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, 2010, 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, 2010. 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, 2010 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.
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 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
13
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 12, 2010
EXCEL GLOBAL, INC.
By: /s/Betty Soumekh
- ---------------------------
Betty Soumekh, Chief Executive Officer