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 September 30, 2009
-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)
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,
October 31, 2009:
Common Stock - 8,241,000
2
EXCEL GLOBAL, INC.
FORM 10-Q
For the quarterly period ended September 30, 2009
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
As of
September 30, December 31,
2009 2008
---------- ----------
(Unaudited) (Audited)
ASSETS
------
Current assets:
Cash in Bank $ 111 $ 24,836
Accounts receivable - -
---------- ----------
Total Current Assets 111 24,836
---------- ----------
Property and equipment, net of accumulated
depreciation of $136 for 2009, and $68 for 2008 1,892 1,964
Other Assets
License Rights 51,000 51,000
Deposit 1,000 1,000
---------- ----------
Total Other Assets 52,000 52,000
---------- ----------
TOTAL ASSETS $ 53,973 $ 78,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
Current Liabilities
Accounts payable $ 50,000 $ 50,000
Accrued expenses 15,899 13,333
Advances from Officer 4,108 13,308
---------- ----------
Total Current Liabilities 70,007 76,641
---------- ----------
Stockholders' Deficit:
Common stock, no par value, 25,000,000 shares
authorized, 8,241,000 issued and outstanding 356,250 356,250
Accumulated Deficit (372,284) (354,091)
---------- ----------
Total Stockholders' Deficit (16,034) 2,159
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 53,973 $ 78,800
========== ==========
The accompanying notes are an integral part
of these interim unaudited financial statements
4
EXCEL GLOBAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For the three months ended For the nine months ended
September 30, September 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Operating Expenses
Selling, general and
administrative expenses $ 2,561 $ 234,719 $ 17,077 $ 272,998
---------- ---------- ---------- ----------
2,561 234,719 17,077 272,998
---------- ---------- ---------- ----------
Operating loss (2,561) (234,719) (17,077) (272,998)
---------- ---------- ---------- ----------
Other Income (Expenses):
Interest and Other Income - - - -
Interest and Other Expense (27) (553) (316) (553)
---------- ---------- ---------- ----------
Total Other Income (Expenses) (27) (553) (316) (553)
---------- ---------- ---------- ----------
Net loss before income taxes (2,588) (235,272) (17,393) (273,551)
Provision for taxes - - 800 800
---------- ---------- ---------- ----------
Net Loss $ (2,588) $ (235,272) $ (18,193) $ (274,351)
========== ========== ========== ==========
Net loss per share, Basic and
Diluted NIL $ (0.03) NIL $ (0.04)
========== ========== ========== ==========
Weighted Average Number of Shares 8,241,000 7,794,000 8,241,000 7,331,333
========== ========== ========== ==========
The accompanying notes are an integral part
of these interim unaudited financial statements
5
EXCEL GLOBAL, INC.
STATEMENT OF CASH FLOWS (Unaudited)
For the nine months ended
September 30,
2009 2008
--------------------------
Cash Flow from Operating Activities:
Net Loss $ (18,193) $ (274,351)
Adjustment to reconcile net loss to
net cash used by operating activities:
Depreciation 102 34
Stock issued for services - 27,500
Increase(Decrease) in:
Accounts Receivable - 25,000
Deposit - (1,000)
Increase (Decrease) in:
Accrued expenses 2,566 (14,117)
---------- ----------
Net Cash used by Operating Activities (15,525) (236,934)
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 2,500 32,827
Repayments of officer advances (11,700) -
Proceeds from sale of stock - 257,750
---------- ---------
Net Cash provided by Financing Activities (9,200) 290,577
---------- ---------
Net Increase (Decrease) in Cash (24,725) 51,611
Cash Balance at beginning of period 24,836 -
---------- ---------
Cash Balance at end of Period $ 111 $ 51,611
========== =========
Supplemental Disclosure:
Taxes Paid $ - $ -
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 BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Excel Global, Inc. (the "Company") was incorporated in the state of
Nevada on August 2, 2007.
The Company is a web-based service provider offering real time
information captured through the use of its prime product known as the
EDGE. This allows the Company together information for its clients
with immediate analysis to its results allowing the client to react to
the information more efficiently.
Presentation of Interim Information. The financial information at
September 30, 2009 and for the three and nine months ended June 30,
2009 and 2008 are unaudited, but includes all adjustments (consisting
only of normal recurring adjustments) that the Company considers
necessary for a fair presentation of the financial information set
forth herein, in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") for interim
financial information, and with the instructions to Form 10-Q.
Accordingly, such information does not include all of the information
and footnotes required by U.S. GAAP for annual financial statements.
For further information refer to the Financial Statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2008.
The balance sheet as of December 31, 2008 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 nine months ended September 30, 2009 may not be
indicative of results for the year ending December 31, 2009 or any
future periods.
Use of estimates. The preparation of the accompanying financial
statements in conformity with accounting principles generally accepted
in the United States requires management to make certain estimates and
assumptions that directly affect the results of reported assets,
liabilities, revenue, and expenses. Actual results may differ from
these estimates.
Revenue Recognition. The Company recognizes revenue when service is
rendered, providing that collectibility is reasonably assured. Revenue
consists primarily of gross administrative fees. Amounts received
prior to providing the service date are classified as deferred revenue.
The Company did not generate any revenue during the nine months ended
September 30, 2009.
7
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
-----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
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 7 years.
Depreciation expense for the three months ended September 30, 2009 and
2008 was $34. Depreciation expense for the nine months ended September
30, 2009 and 2008 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.
Licensing Rights. As of September 30, 2009, the Company capitalized
$51,000 for licensing agreement rights.
Impairment of Long-Lived Assets. Long-lived assets and certain
identifiable intangible assets to be held and used are reviewed for
impairment whenever events or changes in circumstance indicate that the
carrying amount of such assets may not be recoverable. Determination
of recoverability is based on an estimate of undiscounted future cash
flows resulting from the use of the asset and its eventual disposition.
Measurement of an impairment loss for long-lived assets and certain
identifiable intangible assets that management expects to hold and use
is based on the fair value of the asset. Long-lived assets and certain
identifiable intangible assets to be disposed of are reported at the
lower of carrying amount or fair value costs to sell.
Net Loss Per Share. Basic net loss per share includes no dilution and
is computed by dividing net loss available to common stockholders by
the weighted average number of common stock outstanding for the period.
Diluted net loss per share does not differ from basic net loss per
share as the Company did not have dilutive items during the audit
period.
New Accounting Pronouncements. Excel Global, Inc. does not believe
newly issued accounting pronouncements will have any material impact on
its financial statements.
8
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED 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 - LICENSE RIGHTS
On November 28, 2007, the Company acquired a license from a software
developer, Service Technology, Inc. ("Licensor"). The Licensor has a
certain social networking software for use on the website. According
to the license rights, the Company is authorized by this agreement to
utilize the software in any manner within the course and scope of its
business.
The Company agreed to compensate the Licensor with a payment of
$50,000, and in 100,000 common shares of the Company. As of September
30, 2009 and December 31, 2008, the Company recorded $51,000 for its
license rights.
The Company has indefinite term for the rights; therefore, the license
right is not being amortized but will be reviewed for impairment
annually or more frequently if impairment indicators arise, in
accordance with SFAS 142.
NOTE 4 - ACCRUED EXPENSES
Accrued expenses consisted of the following:
September 30, December 31
2009 2008
(Unaudited) (Audited)
------------- ----------
Accrued Professional Fees $ 7,556 $ 9,306
Accrued Interest 1,543 1,227
Accrued Rent 6,000 2,000
9
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
-----------------------------------------------------------
Note 4 - ACCRUED EXPENSES continued
State Income Tax 800 800
--------- ---------
Total Accrued Expenses $ 15,899 $ 13,333
========= =========
NOTE 5 - STOCKHOLDERS' EQUITY
During the year ended December 31, 2008, the Company issued 100,000
shares of its common stock, valued at $0.25 per share or $25,000, to
its Secretary and a director of the Company in consideration of their
services rendered to the Company, and also issued 10,000 shares of
common stock, valued at $0.25 per share or $2,500, to a broker for
brokerage fees.
During the year ended December 31, 2008, the Company received $257,750
and sold 1,031,000 shares of the Company's common stock to various
investors at a price of $0.25 per share.
On November 28, 2007, the Company issued 100,000 shares of common stock
to Service Technology, Inc. for licensing rights (See Note 3).
On August 2, 2007, the Board of Directors approved the issuance of
7,000,000 shares of common stock to the CEO and two other officers of
the Company for services provided.
NOTE 6 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
For Three Months Ended For Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---------------------- -------------------
Numerator:
Net loss $(2,588) $(235,272) $(18,193) $(274,351
Denominator:
Weighted Average of
Common Shares 8,241,000 7,794,000 8,241,000 7,331,333
--------- --------- --------- ---------
Basic and Diluted Net Loss
per Share NIL $ (0.03) NIL $ (0.04)
Diluted net loss per share is the same as basic net loss per share due
to the lack of dilutive items in the Company.
10
EXCEL GLOBAL, INC.
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
-----------------------------------------------------------
NOTE 7 - RELATED PARTY TRANSACTION
The Company repaid $11,700 of officer advances during the quarter ended
September 30, 2009. These advances bear interest at 8% and have no
maturity date. The balance of advances was $4,108 and $13,308 at
September 30, 2009 and December 31, 2008, respectively.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations for the three months ended September 30, 2009 and
2008
We did not earn any revenue for the three months ended September 30,
2009. The net loss was $(2,588) for the three months ended September
30, 2009. This loss was due to selling, general and administrative
expenses of $2,588 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 September 30,
2008. For the three months ended September 30, 2008, we had a net loss
of $235,272. This loss was due to selling, general and administrative
expenses of $234,719 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.
We did not earn any revenue for the nine months ended September 30,
2009. The net loss of $(18,193) for the nine months ended September
30, 2009. This loss was due to selling, general and administrative
expenses of $17,077 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 nine months ended September 30,
2008. For the nine months ended September 30, 2008, we had a net loss
of $274,351. This loss was due to selling, general and administrative
expenses of $272,998 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 nine months ended September 30, 2009, we did not pursue any
investing activities. For the nine months ended September 30, 2008, we
purchased property and equipment of $2,032 resulting in net cash used
by investing activities of $2,032.
During the nine months ended September 30, 2009, we received proceeds
from officer advances of $2,500. During the nine months ended
September 30, 2009, we repaid $11,700 of an officer advance. As a
result, we had net cash used in financing activities of $9,200 for the
nine months ended September 30, 2009.
For the nine months ended September 30, 2008, we received proceeds from
an officer advance of $32,827 and received proceeds from the sale of
stock of $257,750 resulting in net cash provided by financing
activities of $290,577.
12
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.
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 September 30, 2009, 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 September 30, 2009. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of September 30, 2009 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,
13
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. 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
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: November 12, 2009
EXCEL GLOBAL, INC.
By: /s/Betty Soumekh
---------------------------
Betty Soumekh, Chief Executive Officer