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, 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 has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.405 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 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]
2
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, 2010
Common Stock - 8,051,000
3
EXCEL GLOBAL, INC.
FORM 10-Q
For the quarterly period ended June 30, 2010
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 4
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. (Removed and Reserved) 14
Item 5. Other Information 14
Item 6. Exhibits 14
SIGNATURES
4
PART I
Item I - FINANCIAL STATEMENTS
EXCEL GLOBAL, INC.
BALANCE SHEETS (Unaudited)
June 30, December 31,
2010 2009
---------- ----------
ASSETS
Current assets:
Cash $ - $ 111
---------- ----------
Total current assets - 111
---------- ----------
Property and equipment, net of
accumulated depreciation
of $474 at December 31, 2009 - 1,558
Other assets - 1,000
---------- ----------
TOTAL ASSETS $ - $ 2,669
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accrued expenses $ 20,580 $ 17,280
Advances from officer, including
accrued interest
of $2,064 for 2010, and
$1,543 for 2009 19,072 13,227
---------- ----------
Total current liabilities 39,652 30,507
---------- ----------
Stockholders' 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 (401,902) (390,088)
---------- ----------
Total stockholders' deficit (39,652) (27,838)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ - $ 2,669
========== ==========
The accompanying notes are an integral part of these interim
unaudited financial statements
5
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For the three months ended For the six months ended
-------------------------- ------------------------
June 30, June 30,
2010 2009 2010 2009
------------ ----------- ----------- ----------
<s> <c> <c> <c> <c>
Revenue $ (2,500) $ - $ - $ -
----------- ----------- ----------- ----------
Operating expenses:
Selling,
general and
administrative 7,644 5,759 $ 10,494 $ 14,543
----------- ----------- ----------- ----------
Operating loss (10,144) (5,759) (10,494) (14,543)
Interest and other
expenses (288) (24) (520) (289)
----------- ----------- ----------- ----------
Net loss before
income taxes (10,432) (5,783) (11,014) (14,832)
Provision for income
taxes 800 - 800 800
----------- ----------- ----------- ----------
Net loss $ (11,232) $ (5,783) $ (11,814) $ (15,632)
=========== =========== =========== ==========
Net loss per share,
Basic and
Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted Average
Number of
Shares 8,051,000 8,241,000 8,051,000 8,241,000
The accompanying notes are an integral part of these interim
unaudited financial statements
6
EXCEL GLOBAL, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
For the six months ended June 30, 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES: ------------ ------------
Net loss $ (11,814) $ (15,632)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 102 68
Loss on abandonment of assets 2,156 -
Changes in assets and liabilities:
Accounts payable and accrued expenses 3,300 2,539
----------- -----------
Net cash used in operating activities (6,256) (13,025)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash received from sale of property
and equipment 300 -
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from officer advances 6,145 -
Repayments of officer advances (300) (11,700)
Net cash provided by (used in) ----------- -----------
financing activities 5,845 (11,700)
NET CHANGE IN CASH (111) (24,725)
CASH - BEGINNING OF PERIOD 111 24,836
----------- -----------
CASH - END OF PERIOD $ - $ 111
=========== ===========
The accompanying notes are an integral part of these interim
unaudited financial statements
7
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS (Unaudited)
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 June
30, 2010 and for the three and six months ended June 30, 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 and six months ended June 30, 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. Amounts
received prior to providing the service date are classified as deferred
revenue.
8
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 expense 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 June 30, 2010 and 2009
was zero and $34, respectively. Depreciation expense for the six months
ended June 30, 2010 and 2009 was $102 and $68, respectively.
Fair value of financial instruments: Management measures the financial
assets and liabilities in accordance with the requirements of Financial
Accounting Standards Board Accounting Standards Codification ("FASB
ASC") 825 "Financial Instruments". The carrying values of accounts
receivable, accounts payable, accrued expenses, and advances from
officer approximate fair value due to the short-term maturities of
these instruments.
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.
Earnings (loss) per share: Basic earnings (loss) per share is computed
by dividing net loss available to common stockholders by the weighted
average number of common stock outstanding for the period. Diluted
earnings (loss) per share is computed similar to basic earnings (loss)
per share except that the denominator is increased to include
additional common shares available upon exercise of stock options and
warrants using the treasury stock method, except for periods for which
no common share equivalents are included because their effect would be
anti-dilutive. Diluted net loss per share does not differ from basic
net loss per share since potential shares of common stock are anti-
dilutive for all periods presented. For the three and six months ended
June 30, 2010 and 2009, there were no potentially dilutive securities
excluded from the computation because they are anti-dilutive.
Non-employees Equity Transactions: The Company accounts for equity
instruments issued to non-employees in accordance with the provisions
of FASB ASC 505-50 and the Emerging Issues Task Force ("EITF") Issue
9
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
No. 00-18, Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services. FASB 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 EITF 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.
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
obligations 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
June 30, December 31,
2010 2009
========== ===========
Property and equipment, net
Furniture and equipment $ - $ 2,032
Less: accumulated depreciation - (474)
---------- ----------
Property and equipment, net $ - $ 1,558
========== ==========
Accrued Expenses:
Accrued professional fees $ 6,980 $ 4,480
Accrued rent 12,000 12,000
Other accrued expenses 1,600 800
---------- ----------
Total accrued expenses $ 20,580 $ 17,280
========== ==========
10
NOTE 4 - EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
Three Months Ended Six Months Ended
---------------------- ----------------------
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
------- ------- ------- -------
Numerator:
Net loss $ (11,232) $ (5,783) $ (11,814) $ (15,632)
========= ========= ========= =========
Denominator:
Basic loss per share-
weighted average
shares 8,051,000 8,241,000 8,051,000 8,241,000
Effect of dilutive
securities:
Stock options and warrants - - - -
--------- --------- --------- ---------
Diluted loss per share-
adjusted weighted average
shares 8,051,000 8,241,000 8,051,000 8,241,000
--------- --------- --------- ---------
Basic loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
--------- --------- --------- ---------
Diluted loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
--------- --------- --------- ---------
NOTE 5 - RELATED PARTY TRANSACTION
As of June 30, 2010 and December 31, 2009, the Company owed $19,072 and
$13,227, respectively, to an officer of the Company. The advances are
unsecured, due on demand and bear 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.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations for the three months ended June 30, 2010 and 2009
We did not earn any revenue for the three months ended June 30, 2010.
Invoiced consulting fees of $2,500 were included in revenue for the
three months ended March 31, 2010 but were reversed for the three
months ended June 30, 2010 due to the cancellation of the corresponding
consulting agreement. For the three months ended June 30, 2010, we had
a net loss of $(11,232). This loss was due to selling, general and
administrative expenses of $7,644 that included costs of being a
reporting company.
We did not earn any revenue for the three months ended June 30, 2009.
The net loss of $(5,783) for the three months ended June 30, 2009 was
due to selling, general and administrative expenses of $5,759 that
included costs of being a reporting company.
Results of Operations for the six months ended June 30, 2010 and 2009
We did not earn any revenue for the six months ended June 2010. For
the six months ended June 30, 2010, we had a net loss of $(11,814).
This loss was due to selling, general and administrative expenses of
$10,494 that included costs of being a reporting company.
We did not earn any revenue for the six months ended June 30, 2009.
The net loss was $(15,632) for the six months ended June 30, 2009 due
to selling, general and administrative expenses of $14,543 that include
costs of being a reporting company.
Liquidity and Capital Resources
- -------------------------------
We do not have any cash or cash equivalents to fund our current
operations. Additionally, we have no material commitments for capital
expenditures nor do we have any plans for future capital expenditures
at this time.
Future revenues from consulting fees will determine the amount of
additional financing necessary to continue operations.
The board of directors has no immediate offering plans in place. The
board of directors shall determine the amount and type of financing as
our financial situation dictates.
We are currently not aware of any trends that are reasonably likely to
have a material impact on our liquidity.
During the six months ended June 30, 2010, we received cash of $300
from the sale of property and equipment resulting in cash flows from
investing activities of $300.
12
For the six months ended June 30, 2009, we did not pursue any investing
activities.
During the six months ended June 30, 2010, we received proceeds from
officer advances of $6,145 and repaid officer advances of $300. As a
result, we had net cash provided by financing activities of $5,845 for
the six months ended June 30, 2010.
For the six months ended June 30, 2009, we repaid advances from an
officer of $(11,700) resulting in net cash provided by financing
activities of $(11,700).
Subsequent to the quarter ended June 30, 2010, certain selling
shareholders arranged for the sale of their common shares. Upon
completion of the proposed sale, there will be a change in control of
Excel Global and the new management will determine the plan of
operations. If the proposed change in control does not occur, we will
make continued efforts 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4T. Controls and Procedures.
During the three months ended June 30, 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 June 30, 2010. Due to the fact that Excel Global has limited
personnel resources, there was a lack of segregation of duties, which
management identified as a material weakness. Based on this
evaluation, our chief executive officer and chief principal financial
officer have concluded such controls and procedures are not effective
as of June 30, 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
13
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.
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. (Removed and Reserved)
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
15
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 20, 2010
EXCEL GLOBAL, INC.
By: /s/Betty Soumekh
- ---------------------------
Betty Soumekh,
Chief Executive Officer
and Chief Financial Officer