EX-99.2 3 f8k042514aex99ii_excelcorp.htm UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2013. f8k042514aex99ii_excelcorp.htm
Exhibit 99.2
Excel Corporation and Subsidiaries
and Payprotec Oregon LLC dba Securus Payments
Proforma Condensed Combined Balance Sheet
December 31, 2013
(Unaudited)
               
Assets
 
   
Excel Corporation and Subsidiaries (Parent)
    
Payprotec Oregon LLC dba Securus Payments (Subsidiary)
    
Proforma Increase (Decrease)
      
Proforma (Combined)
  
                           
Current Assets
                          
Cash and cash equivalents
   $ 8,328     $ 394,750             $ 403,078  
Accounts receivable
     2,250       288,261               290,511  
Prepaid expenses and other current assets
     32,979       153,949               186,928  
Total current assets
     43,557       836,960       -         880,517  
                                   
Other Assets
                                  
Property and equipment - net
             420,841                 420,841  
Security deposits
     7,939       21,101                 29,040  
Investment in subsidiary
                     708,082  
(A)
        
                      (708,082 )
(B)
        
Advances to related party
             106,366                 106,366  
Total other assets
     7,939       548,308       -         556,247  
Total assets
     51,496       1,385,268       -         1,436,764  
                                   
Liabilities and Stockholders' Equity
                                   
Current Liabilities
                                  
Accounts payable
     146,949       184,743                 331,692  
Accrued payroll and payroll liabilities
     66,113                         66,113  
Accrued expenses
             232,224                 232,224  
Other accrued liabilities
     12,039                         12,039  
Advance
     150,000                         150,000  
Accrued members' distributions
     -       71,999                 71,999  
Current portion of notes payable to related parties
     -       29,406                 29,406  
Total current liabilities
     375,101       518,372       -         893,473  
                                   
Other Liabilities
                                  
Deferred rent
             19,472                 19,472  
Notes payable to related parties
             139,342                 139,342  
Total other liabilities
     -       158,814       -         158,814  
Total liabilities
     375,101       677,186       -         1,052,287  
                                   
STOCKHOLDERS' EQUITY
                                  
Preferred stock
                                  
Common stock
     6,706               2,240  
(A)
     8,946  
Additional paid-in capital
     1,010,947               705,842  
(A)
     1,716,789  
Accumulated equity (deficit)
     (1,341,258 )     708,082       (708,082 )
(B)
     (1,341,258 )
Total stockholders' equity (deficit)
     (323,605 )     708,082       -         384,477  
Total Liabilities and Stockholders' Equity
   $ 51,496     $ 1,385,268     $ -       $ 1,436,764  

 
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Excel Corporation and Subsidiaries
and Payprotec Oregon LLC dba Securus Payments
Proforma Condensed Combined Balance Sheet
January 1, 2013 - December 31, 2013
(Unaudited)
 
   
Excel Corporation and Subsidiaries (Parent)
    
Payprotec Oregon LLC dba Securus Payments (Subsidiary)
    
Proforma Increase (Decrease)
    
Proforma (Combined)
  
                         
Revenues
                        
Advance commission income
   $ 33,015                   33,015  
Management fee income
     209,750                   209,750  
Residual income
     92,092                   92,092  
Lease income
     11,104                   11,104  
Service fee income
     86,500                   86,500  
Payprotec income
             12,397,247             12,397,247  
Total revenues
     432,461       12,397,247       -       12,829,708  
                                 
Cost of Sales
                                
Commissions and other merchant costs
     45,070                       45,070  
Payprotec cost of sales
             7,917,067               7,917,067  
Total Cost of Sales
     45,070       7,917,067       -       7,962,137  
Gross Profit
     387,391       4,480,180       -       4,867,571  
                                 
Sales, General and Administrative Expense
                                
Payroll
     687,037                       687,037  
Legal & professional fees
     164,321                       164,321  
Outside services
     127,322                       127,322  
Rent
     36,000                       36,000  
Bad debt
     33,281                       33,281  
Travel
     31,181                       31,181  
Marketing & advertising
     29,782                       29,782  
Insurance
     28,441                       28,441  
Miscellaneous SG&A expense
     53,667                       53,667  
Payprotec SG&A expense
             2,889,361               2,889,361  
Total SG&A Expense
     1,191,032       2,889,361       -       4,080,393  
                                 
Net loss before other income and income taxes
     (803,641 )     1,590,819       -       787,178  
                                 
Other Income
                                
Interest income (writeoff for uncollectible interest)
     (1,515 )                     (1,515 )
Miscellaneous other income
     450       24,183               24,633  
Total other income
     (1,065 )     24,183       -       23,118  
                                 
Other Expense
                                
Acquisition of subsidiary
     20,868                       20,868  
Interest expense
             4,433               4,433  
Miscellaneous other expense
     115,005                       115,005  
Total other expense
     135,873       4,433       -       140,306  
                                 
Net income (loss) before income taxes
     (940,579 )     1,610,569       -       669,990  
                                 
Income Taxes
                                
Current
                             -  
Deferred
                             -  
Total income taxes
                                
                                 
Net income (loss)
   $ (940,579 )   $ 1,610,569     $ -     $ 669,990  
                                 
Earnings Per Share
                                
Basic & Diluted
                           $ 0.00762  
                                 
Weighted Average Shares Outstanding
                                
Basic & Diluted
                             87,948,471  

 
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NOTE 1: EXCEL CORPORATION AND SUBSIDIARIES

We were incorporated in the state of Delaware in November 2010 as Ruby Worldwide, Ltd. for the purpose of commencing a licensing business.  In November 2010 we amended our Articles of Incorporation to amend our authorized capital from a non-stock corporation to its present authorized capital of 200,000,000 shares of common stock, $.0001 par value and 10,000,000 shares of preferred stock, $.0001 par value. In January 2011 we again amended our Articles of Incorporation to change our corporate name from Ruby Worldwide, Ltd. to Excel Corporation (the “Parent”).

On January 14, 2013, we entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Excel Business Solutions, Inc., a Delaware corporation (“EBSI”), and ECB Acquisition Corp., our newly formed, wholly-owned Delaware subsidiary (“Acquisition Sub”). Upon closing of the transaction contemplated under the Merger Agreement (the “Merger”), Acquisition Sub merged with and into EBSI, and EBSI, as the surviving corporation, became a wholly-owned subsidiary of the Company.
 
Pursuant to the terms and conditions of the Merger Agreement, at the closing of the Merger, each share of EBSI’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive an aggregate of 33,532,446 shares of common stock, par value $0.0001 per share, of the Company, with fractional shares of the Company’s common stock rounded up or down to the nearest whole share.
 
On August 19, 2013, Excel Cash Solutions, Inc. (“ECSI”) was formed as a wholly owned subsidiary of Excel Business Solutions, Inc.  
 
On September 25, 2013, Excel Capital Solutions, LLC (“ECap”) was formed as a wholly owned subsidiary of Excel Cash Solutions, Inc.
 
On March 20, 2014, 420 Solutions Corporation (“420”) was formed as a wholly owned subsidiary of the Company.

Our business and main focus is now concentrated on the merchant servicing business, which began when we acquired with EBSI, and continued with the formations of ECSI, Ecap and 420.
 
NOTE 2: PAYPROTEC OREGON LLC dba SECURUS PAYMENTS
 
Payprotec Oregon, LLC dba Securus Payments (Payments) was formed in 2009 in the state of Oregon. The consolidated financial statements include the accounts of Payments and its 98 percent-owned subsidiary, Securus Consulting, LLC (Consulting) (collectively referred to as "the Subsidiary"). All significant intercompany balances and transactions have been eliminated upon consolidation. The noncontrolling interest in Consulting is not significant and therefore is not presented in the accompanying consolidated financial statements.

The Company initiates lease transactions for credit and debit card processing equipment and other merchant services to merchants throughout the United States through its offices in Oregon, California, and beginning in 2014, Florida. The Company primarily initiates such transactions on behalf of First Data Merchant Services Corporation (First Data).

 
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NOTE 3: PROFORMA ADJUSTMENTS
 
On February 17, 2014, Excel Corporation (the “Company”), entered into a Securities Exchange Agreement (the “Agreement”) with Payprotec Oregon, LLC (d/b/a Securus Payments) (“Payprotec”), Mychol Robirds and Steven Lemma, to effectuate the purchase of 90% of the membership interests of Payprotec and its subsidiary Securus Consultants, LLC (“Securus”).  On April 10, 2014, the Parties entered into an amendment (the “Amendment”) to the Agreement that extended the termination date to April 21, 2014.  On April 21, 2014, the parties to the Agreement closed the transaction (the “Transaction”).

In exchange for the membership interests in Payprotec and Securus, the Company issued to Messrs. Robirds and Lemma a total of 20,400,000 shares of the Company’s Common Stock and two shares of the Company’s Series A Preferred Stock.  Payprotec also entered into three year employment agreements (the “Employment Agreements”) with each of Messrs. Robirds and Lemma.

Also on April 21, 2014, pursuant to a Securities and Exchange Agreement ("E-Cig Agreement") dated April 21, 2014 between the Company and E-Cig Ventures, LLC ("E-Cig"), the Company acquired an additional 10% of the membership interests of Payprotec in exchange for the issuance of 2,000,000 shares of the Company's common stock and the agreement to guaranty a $1.5 million loan (the “Guaranty”) from Shadow Tree Income Fund A LP (“Shadow Tree”) to E-Cig (the "E-Cig Transaction"). As a result, the Company now owns 100% of the membership interests of Payprotec.

Proforma adjustments on the attached financial statements include the following:
 
(A)      To record the acquisition of 100% interest in Subsidiary by Parent through the issuance of 22,400,000 shares of common stock
 
(B)      To record elimination of investment in Subsidiary and equity of Subsidiary

NOTE 4: PROFORMA EARNINGS PER SHARE

The proforma earnings per share is computed based on the number of shares outstanding, after adjustment for shares issued in the acquisition as though all shares issued in the acquisition had been outstanding from the beginning of the period presented.
 
 
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