10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

☐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: 333-173702

Excel Corporation

(Exact name of registrant as specified in its charter)

Delaware	27-3955524
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

6363 North State Highway 161, Suite 310, Irving, Texas	75038
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 972-476-1000

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 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 ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” 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	☒
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No  ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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).  ☒

As of August 14, 2015, there were 99,259,070 shares of Company’s common stock, par value $0.0001 per share, issued and outstanding.

EXCEL CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014	3
Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 (unaudited)	4
Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2015 and 2014 (unaudited)	5
Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (unaudited)	6
Notes to Unaudited Consolidated Financial Statements	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
Overview	14
Results of Operations	15
Liquidity and Capital Resources	16
Significant Accounting Policies	16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 4. CONTROLS AND PROCEDURES	18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	18
ITEM 1A. RISK FACTORS	18
ITEM 2. OTHER INFORMATION	18
ITEM 3. EXHIBITS	19

2

Excel Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
	2015			2014
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	156,656		$	326,788
Accounts receivable		244,015			383,657
Prepaid expenses		20,773			46,229
Shares receivable		90,000			90,000
Inventory		2,808			7,119
Total current assets		514,252			853,793
Other Assets
Fixed assets, net of depreciation		330,284			230,632
Goodwill		4,440,355			4,440,355
Other long-term assets		63,444			68,027
Total other assets		4,834,083			4,739,014
Total assets	$	5,348,335		$	5,592,807
LIABILITIES & STOKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	854,228		$	806,981
Accrued compensation		700,810			602,683
Other accrued liabilities		824,309			426,431
Notes payable - current portion		526,258			581,674
Total current liabilities		2,905,605			2,417,769
Long-term liabilities
Notes payable - long term portion		468,632			681,361
Other long-term liabilities		30,009			29,748
Total long-term liabilities		498,641			711,109
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 10,000,000 shares  authorized, none issued and outstanding		-			-
Series A preferred stock, $.001 par value 2 shares issued and outstanding as of June 30, 2015 and December 31, 2014		-			-
Common stock, $.0001 par value, 200,000,000 shares authorized 99,259,070 and 97,259,070 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively		9,926			9,726
Additional paid-in capital		4,379,717			4,232,342
Accumulated deficit		(2,445,554	)		(1,778,139	)
Total stockholders' equity		1,944,089			2,463,929
Total Liabilities and Stockholders' Equity	$	5,348,335		$	5,592,807

See notes to unaudited consolidated financial statements.

3

Excel Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenues
Equipment lease revenue	$	3,435,205		$	1,775,221		$	5,717,322		$	1,796,709
Transaction and processing fees		1,060,225			404,556			2,213,934			404,556
Total revenues		4,495,430			2,179,777			7,931,256			2,201,265
Costs and expenses
Cost of products sold		712,746			344,696			1,231,586			346,233
Salaries and wages		2,773,364			2,026,203			5,190,096			2,229,462
Outside commissions		503,262			301,705			880,022			303,017
Other selling, general, and administrative expenses		581,838			609,595			1,150,368			746,531
Total costs & expenses		4,571,210			3,282,199			8,452,072			3,625,243
Net loss from operations		(75,780	)		(1,102,422	)		(520,816	)		(1,423,978	)
Other income
Gain on sale of residual portfolio		-			2,800,000			-			2,800,000
Gain on settlement of debt		-			175,101			-			175,101
Total other income		-			2,975,101			-			2,975,101
Interest expense		67,695			203,385			146,599			203,385
Net income (loss) before income taxes		(143,475	)		1,669,294			(667,415	)		1,347,738
Income tax expense (benefit)
Current		(53,086	)		(573,350	)		(246,944	)		(573,350	)
Deferred		53,086			560,071			246,944			560,071
Total income tax expense (benefit)		-			(13,279	)		-			(13,279	)
Net income (loss)	$	(143,475	)	$	1,656,015		$	(667,415	)	$	1,334,459
Income (Loss) Per Share
Basic & Diluted	$	(0.001	)	$	0.019		$	(0.007	)	$	0.017
Weighted Average Shares Outstanding
Basic & Diluted		97,918,411			88,983,013			97,590,562			78,357,270

See notes to unaudited consolidated financial statements.

4

Excel Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(unaudited)

	Preferred Stock		Series A Preferred Stock			Common Stock				Additional Paid-in		Accumulated
	Shares	Amount	Shares		Amount	Shares		Amount		Capital		Deficit
Balances, January 1, 2014		$			$		67,064,892	$	6,706	$	1,010,947	$	(1,341,258	)
Issuance of common stock at .09 per share							1,628,570		163		149,837
Issuance of common stock at .30 per share							200,000		20		59,980
Issuance of stock for acquisition of Securus				2			22,400,000		2240		2,537,024
Stock compensation expense							5,465,608		547		278,427
Net income for the period January 1, 2014 - June 30, 2014													1,334,459
Balances, June 30, 2014		$		2	$		96,759,070	$	9,676	$	4,036,215	$	(6,799	)
Balances, January 1, 2015		$		2	$		97,259,070	$	9,726	$	4,232,342	$	(1,778,139	)
Stock compensation expense							2,000,000		200		147,375
Net  loss for the period January 1, 2015 - June 30, 2015													(667,415	)
Balances, June 30, 2015		$		2	$		99,259,070	$	9,926	$	4,379,717	$	(2,445,554	)

See notes to unaudited consolidated financial statements.

5

Excel Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended
	June 30,
	2015			2014
Operating activities:
Net income (loss)	$	(667,415	)	$	1,334,459
Adjustments to reconcile net income (loss)  to net cash provided by operating activities:
Depreciation		49,004			25,114
Stock based compensation		147,575			278,974
Gain on settlement of debt		-			(175,101	)
Changes in operating assets and liabilities:
Decrease (increase)
Accounts receivable		139,642			(101,513	)
Inventory		4,311			41,809
Prepaid expenses		25,456			19,554
Other receivables		-			(1,524,167	)
Other long-term assets		4,583			(117,500	)
Increase (decrease)
Accounts payable		47,247			212,165
Accrued compensation		98,127			206,595
Other accrued liabilities		397,878			91,556
Other long-term liabilities		261			11,959
Net cash provided by operating activities		246,669			303,904
Cash flows from investing activities:
Purchase  of fixed assets		(148,656	)		(3,282	)
Acquisition of Securus		-			34,563
Net cash provided by (used in) investing activities		(148,656	)		31,281
Cash flows from financing activities:
Proceeds from issuance of notes payable		100,000			1,600,000
Issuance of common stock		-			210,000
Payments on notes payable		(368,145	)		(2,147,497	)
Net cash  used in financing activities		(268,145	)		(337,497	)
Net decrease in cash		(170,132	)		(2,312	)
Cash – Beginning		326,788			8,328
Cash – Ending	$	156,656		$	6,016
Supplemental disclosure of cash flow information
Cash paid for interest	$	67,695		$	206,778

See notes to unaudited consolidated financial statements.

6

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

1.         ORGANIZATION AND OPERATIONS

Excel Corporation (the “Company”) was organized on November 13, 2010 as a Delaware corporation.  The Company has two wholly owned subsidiaries, Excel Business Solutions, Inc., and Payprotec Oregon, LLC (d/b/a Securus Payments), (“Securus”).

The Company had been considered a development stage company as defined by FASB ASC 915-205-45-6. However, on April 21, 2014, the Company acquired 100% of the membership interests of Payprotec Oregon LLC (d/b/a Securus Payments) (see note 8). Following this transaction, the Company ceased to be a development stage company. The Company is currently devoting substantially all of its efforts to providing services in the merchant payment processing industry.

The Company provides payment processing services, which include credit and debit card processing, check approval, and ancillary processing equipment and software services to merchants that accept credit cards, debit cards, checks, and other non-cash forms of payment. In addition, the Company provides leases for point of sale and similar processing equipment to merchants which are in turn sold to a third party.    In June 2015 our subsidiary Excel Business Solutions began selling merchant cash advances under the trade name Mom and Pop Merchant Solutions “Mom and Pop”.  Mom and Pop operates as an ISO and does not directly fund any advances. The impact of Mom and Pop on the Company’s results of operations and financial position for the quarter ended June 30, 2015 was not material.

2.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods.  These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

7

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

3.         FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC Topic No. 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into six broad levels, as described below:

Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.

Level 3: Level 3 inputs are unobservable inputs.

The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows:

Cash and Cash Equivalents, Accounts Receivable, Prepaid Expenses, Inventory, Accounts Payable, Accrued Compensation, Other Accrued Liabilities, and Income Taxes Payable.

The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values.

Notes Payable

The carrying values of notes payable approximate fair values, since these instruments bear market rates of interest.

4.         RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Topic 606 (“ASU 2014-09”) which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Revenue recorded under ASU 2014-09 will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for the Company’s fiscal year beginning January 1, 2017 and early adoption is not permitted. Management does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

5.         INCOME TAXES

The Company accounts for income taxes in accordance with FASB Accounting Standards Codification Topic 740-10 which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. At June 30, 2015, the Company had available unused operating loss carryforwards of $2,376,158 which generated a deferred tax benefit of $879,178. The Company had a 100% valuation allowance on the deferred tax assets at June 30, 2015.

8

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

5.         INCOME TAXES (Continued)

The Company’s provision for income taxes for the six months ended June 30, 2015 consists of the following:

Income Tax Expense	Six months Ended June 30, 2015
Current	$	(246,944	)
Deferred		246,944
Total	$	-

The Company accounts for uncertainties in income taxes in accordance with FASB ASC Topic 740 “Accounting for Uncertainty in Income Taxes”. The Company has determined that there are no significant uncertain tax positions requiring recognition in its financial statements.

In the event the Company is assessed for interest and/or penalties by taxing authorities, such assessed amounts will be classified in the financial statements as income tax expense. Tax years 2011 through 2014 remain subject to examination by Federal and state taxing authorities. 

6.         STOCKHOLDERS’ EQUITY

On April 21, 2014 the Company issued two shares of Series A Preferred Stock to the two previous members of Payprotec. As long as a former member holds at least 9,000,000 shares of the Company’s common stock, the member has the right to exchange his share of preferred stock for a 24.5% share of the membership interests of Payprotec upon a change of control in Payprotec (as defined). 

7.         STOCK OPTIONS AND COMPENSATION

On November 13, 2010, the Company’s Board of Directors (the “Board”) approved a stock plan pursuant to which the Company may grant incentive and non-statutory options to employees, non-employee members of the Board and consultants and other independent advisors who provide services to the Corporation.  The maximum shares of common stock which may be issued over the term of the plan shall not exceed 4,000,000 shares.  Awards under this plan are made by the Board of Directors or a committee of the Board.  Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to holders of 10% or more of the Company’s Common Stock which is required to be issued at a price not less than 110% of the fair market value on the day of the grant.  Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the Plan Administrator.  However, no option shall have a term in excess of 10 years from the date of the grant.

On August 28, 2014, the Company issued options to purchase a total of 1,000,000 shares of the Company’s Common Stock at an exercise price of $.09 per share. The options are exercisable for a ten year period subject to certain restrictions. The shares vest ratably over 36 months. The following table summarizes the Company’s stock options.

Options outstanding	1,000,000
Vested	277,778
Unvested	722,222

On May 13, 2014, The Company issued 2,732,804 shares of the Company’s Common Stock to each of two executives in connection with their employment agreements. One third of the shares vested upon grant and the balance vest ratably over a two-year period.  

On June 1, 2015, the Company issued 2,000,000 shares of stock to an executive.  500,000 of the shares vested upon grant and an additional 500,000 will vest on June 1, 2016, 2017, and 2018.  The Company recorded stock compensation expense in the amount of $147,575 for the six months ended June 30, 2015 related to the stock grants and issuance of stock options.

9

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

8.         ACQUISITION OF SUBSIDIARY

On April 21, 2014, the Company purchased 90% of the membership interests of Securus and its subsidiary Securus Consultants, LLC through a Securities Exchange Agreement (the “Agreement”) with Mychol Robirds and Steven Lemma.

In exchange for their membership interests in Securus and Securus Consultants LLC, 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. 

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 the remaining 10% of the membership interests of Securus 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 of the two transactions, the Company owns 100% of the membership interests of Securus.

10

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

8.         ACQUISITION OF SUBSIDIARY (Continued)

Pro Forma Financial Information

The information that follows provides supplemental information about pro forma revenues and net income (loss) attributable to the Company as if the acquisition of Securus had been consummated as of January 1, 2014. Such information is unaudited and is based on estimates and assumptions which the Company believes are reasonable.

These results are not necessarily indicative of the consolidated statements of operations in future periods or the results that would have actually been realized had the Company and Securus been a combined entity during 2014.

Selected Pro Forma Financial Information	Six months ended June 30, 2014
Revenues	$	6,256,665
Net income attributable to the Company	$	724,635
Net income attributable to the Company per common share - basic and diluted	$	.009

9.        PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 2015:

	June 30, 2015
Computer software	$	168,266
Equipment		162,524
Furniture & fixtures		83,299
Leasehold improvements		118,882
Total cost		532,971
Less accumulated depreciation and amortization		(202,687	)
Property and equipment – net	$	330,284

11

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

Unaudited

10.       LEASES

Securus leases its Oregon office facilities under an operating lease expiring in June 2017. Monthly lease payments range from $16,153 to $17,808 throughout the term of the lease.

Securus leases its California office facilities under an operating lease expiring in March 2016. Monthly lease payments range from $6,059 to $6,426 throughout the term of the lease.

Securus leases its Florida office facilities under an operating lease expiring in December 2016. Monthly lease payments range from $3,180 to $3,374 throughout the term of the lease.

The Company executed a lease for its corporate offices in Irving Texas. The lease began on November 1, 2014 and has a term of 63 months with monthly payments ranging from $0 to $6,428.

Total rent expense for the six months ended June 30, 2015 was $202,808, compared to $87,186 for the six months ended June 30, 2014.

The future minimum lease payments required under long-term operating leases as of June 30, 2015 are as follows:

2015	$	189,520
2016		343,751
2017		181,118
2018		75,648
2019 and after		83,454
Total	$	873,491

11.       NOTES PAYABLE

The following summarizes the Company’s current outstanding notes payable:

Note payable to Blue Acre Ventures, due in monthly installments of $48,333 through May 2017, including simple interest at 15%, secured by the Company’s primary  residual portfolio	$	868,441
Note payable to E-Cig, due in monthly installments of $26,207 beginning October 2014 through September 2015, including interest at 6%, secured by 1,000,000 shares of the Company's common stock owed to the Company by E-Cig		75,000
Note payable to Payment Processing Technologies LLC, due in monthly installments of $10,653 beginning January 2015 through October 2015, including interest at 14%, secured by the Company’s residual portfolio with Payment Processing Technologies LLC		51,449
Total		994,890
Less current portion		(526,258	)
Long-term portion of notes payable	$	468,632

12

Excel Corporation and Subsidiaries

Notes to Consolidated Financial Statements

June 30, 2015

11.       NOTES PAYABLE (Continued)

Future maturities of notes as of June 30, 2015 are as follows:

2015	$	313,529
2016		454,628
2017		226,733
Total	$	994,890

12.       RELATED PARTY TRANSACTIONS

On January 14, 2014, Ruben Azrak, Chairman of the Board and then Interim Chief Executive Officer, advanced the Company $25,000.  This advance bears no interest and does not provide for a specific repayment date.

13

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition for the six months ended June 30, 2015 and 2014 should be read in conjunction with our interim financial statements and the notes to those financial statements that are included elsewhere in this quarterly report on Form 10-Q.  Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the “Risk Factors,” “Cautionary Notice Regarding Forward-Looking Statements” and “Description of Business” sections and included in our Annual Report on Form 10-K for the year ended December 31, 2014.  We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “predict,” and similar expressions to identify forward-looking statements.    Although we believe the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, our actual results could differ materially from those discussed in these statements.   We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future.

Current Overview

We sell integrated financial and transaction processing services to small and medium sized businesses throughout the United States. We provide these services through our wholly-owned subsidiary, Securus, which we acquired in April 2014. We are a national full service retail credit/debit card processor Independent Sales Organization (“ISO”) and Merchant Services Provider (“MSP”), with primary sales and merchant support offices in Portland, Oregon and West Palm Beach, Florida, which supplement our network of approximately 120 to 150 independent sales representatives located throughout the country. Working with the Company's primary processing partner, First Data Corporation, we provide for the rapid clearing of payments, including Apple Pay, a mobile payment and digital wallet service by Apple Inc. that lets users make payments using the iPhone 6 and iPhone 6 Plus. Our merchant account solutions, married with the latest site and cloud based technologies, are designed to meet the unique needs of each business segment serviced, and offer a variety of credit, debit, gift and loyalty card processing options and equipment to scale with the distinctive business plans of each client. In June 2015, our subsidiary Excel Business Solutions began selling merchant cash advances under the trade name Mom and Pop Merchant Solutions “Mom and Pop”.  Mom and Pop operates as an ISO and does not directly fund any advances. The impact of Mom and Pop on the Company’s results of operations and financial position for the quarter ended June 30, 2015 was not material.

On February 17, 2014 the Company entered into a Securities Exchange Agreement (the “SEA”) with Securus, Mychol Robirds and Steven Lemma, to purchase 90% of the membership interests of Securus and its subsidiary Securus Consultants, LLC.  On April 21, 2014 the Company completed the acquisition of 100% of Securus pursuant to the SEA and through a Securities Exchange Agreement (“E-Cig Agreement) with E-Cig Ventures LLC. The Company issued 22,400,000 shares of common stock for the acquisition of Securus. In addition, the Company issued two shares of Series A Preferred Stock to Messrs Lemma and Robirds as a part of the SEA. As holders of the Series A Preferred Stock. Each of Messrs Lemma and Robirds are entitled to exchange one share of the Series A Preferred Stock for a 24.5% interest in Securus should the Company enter into a transaction that would sell a majority of the membership interest of Securus or its assets. Messrs Lemma and Robirds will be entitled to these exchange rights as long as they own a total of 9,000,000 shares individually.

Prior to the acquisition of Securus in April 2014, we were considered a developmental stage company. With the acquisition of Securus, we are no longer in a development stage and maintain as our primary business operations the sale of merchant processing and servicing, as well as a limited number of merchant cash advance transactions on behalf of our merchant customers. We are actively seeking acquisition opportunities in related industries including, but not limited to, merchant services and merchant cash advance companies. Although management believes that there are acquisition opportunities, there can be no assurance that the Company will be able to complete any such transactions.

14

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Off-Balance Sheet Financing Arrangements

We did not have any off-balance sheet financing arrangements as of June 30, 2015.

Results of Operations

We acquired Securus in April 2014. As a result of this acquisition, operating results for the three and six months ended June 30, 2015 and 2014 are not directly comparable. The quarter ended June 30, 2014 included 70 days of operations for Securus as opposed to 91 days in 2015. The six months ended June 30, 2014 included 161 days of operations for Securus as opposed to 182 days for the 2015 period.

Revenues

Net revenues for the three month and six month periods ended June 30, 2015 were $4,495,430 and $7,931,256 as compared to net revenues of $2,179,777 and $2,201,265 for the three and six month periods ended June 30, 2014. The increase in net revenues of 206.2% for the three months ended June 30, 2015 as compared to June 2014 was due not only to a full quarters of operations in 2015 but also to significantly higher equipment lease volume in the 2015 period as well as higher transaction and processing fees earned during the 2015 period.

Costs and Expenses

Our operating costs and expenses were $4,571,210 and $8,452,072 for the three and six months ended June 30, 2015 as compared to $3,282,199 and $3,625,243 for the three and six months ended June 30, 2014. Cost of products sold for the three and six months ended June 30, 2015 were 20.7% and 21.5% of equipment lease revenues respectively as compared to 19.4% and 19.3% of equipment lease revenues for the same periods in 2014. The increase in cost of products sold as a percentage of equipment lease revenues was due to increased sales of more sophisticated point of sale units. Outside commissions increased from $301,705 to $503,262 for the three month period ended June 30, 2015 as compared to the same period in 2014 but declined as a percentage of net revenue from 13.8% to 11.2%. For the six months ended June 30, 2015 outside commission expenses were $880,022 and remained fairly consistent at 11.1% of net revenues as compared to $303,017 or 13.8% of net revenues for the same period in 2014. The Company uses independent sales agents for a substantial portion of its business. Salaries and wages were $2,773,364 and $5,190,096 for the three and six months ended June 30, 2015 as compared to $2,026,203 and $2,229,462 for the three and six months ended June 30, 2014. The increase for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 of 36.9% was due to the variable compensation associated with the increased sales volume as well as a full three months operations for Securus. Other selling, general, and administrative expenses were $581,838 and $1,150,368 for the three and six months ended June 30, 2015 as compared to $609,595 and $746,531 for the three months and six months ended June 30, 2014. For the three and six months ended June 30, 2015, other selling, general, and administrative expenses included a one-time charge of $160,000 for a litigation settlement with a former executive of the Company. Corporate overhead accounted for $1,058,359 and $1,331,136 of total costs and expenses for the six months ended June 30, 2015 and 2014 respectively.

15

Other Income

On June 30, 2014, the Company and Payprotec entered into a refinancing pursuant to a Settlement and Release (“Settlement Agreement”) with E-Cig Ventures LLC (“E-Cig”) whereby the Company exercised an option to repurchase $200,000 of monthly residuals sold to E-Cig Ventures LLC (“E-Cig”) on January 28, 2014. The Company paid $2,400,000 cash and issued a note in favor of E-Cig in the amount of $300,000 in return for settling all amounts due under the Residual Purchase Agreement executed by Securus and E-Cig. In addition, upon final payment of the $300,000 note to E-Cig, E-Cig shall surrender 1,000,000 shares of the Company’s Common Stock previously issued to E-Cig in connection with the Company’s purchase of E-Cig’s 10% membership interest in Securus on April 21, 2014. The note to E-Cig bears interest at 6% per annum and is due in 12 equal monthly payments starting on October 1, 2014. The Company recorded a one-time gain of $175,101 in connection with this transaction. Simultaneously with the Settlement Agreement referred to above, the Company and Securus executed new financing arrangements with Blue Acre Ventures (“BAV”) including a Portfolio Purchase Agreement whereby Securus sold monthly residuals in the amount of $100,000 for a cash payment of $2,800,000 and the ability to receive additional payments totaling $400,000 over the next three years. The Company recorded a one-time gain in the amount of $2,800,000 in connection with this transaction.

Interest expense

Interest expense was $67,695 and $146,599 for the three months and six months ended June 30, 2015 as compared to $203,385 for the three months and six months ended June 30, 2014.  The higher interest expense in the 2014 periods was primarily due to the transaction with E-Cig executed by Payprotec in January 2014, which was refinanced on June 30, 2014 as described above.

Net loss from operations

Net loss from operations decreased from $1,102,422 for the three months ended June 30, 2014 to $75,780 for the three month ended June 30, 2015. The significant decrease in the operating loss of $1,026,642 was due primarily to improved sales volume and operating margins at Securus. For the six months ended June 30, 2015, net loss from operations decreased from $1,423,978 to $520,816. Excluding corporate overhead, Securus had operating income of $437,256 and $390,944 for the three months and six months ended June 30, 2015.

Our net losses were $143,475 and $667,415 for the three and six months ended June 30, 2015 respectively. Net income was $1,656,015 and $1,334,459 for the three and six months ended June 30, 2014, respectively. Net income for the 2014 periods was the result of the $2,800,000 gain on the sale of the monthly residuals and the $175,101 gain on the settlement of debt described above which more than offset the operating losses incurred in the 2014 periods.

             It is possible we may continue to incur net losses in the future.  However, we currently anticipate that we will be able to achieve profitability during either the third or fourth quarter of 2015.

Liquidity and Capital Resources

The following summarizes our cash flows:

	Six months  ended June 30,
	2015			2014
Net cash provided operating activities	$	246,669		$	303,904
Net cash provided by (used in) investing activities		(148,656	)		31,281
Net cash used in financing activities		(268,145	)		(337,497	)
Net decrease in cash	$	(170,132	)	$	(2,312	)

Net cash provided by operating activities for the six months ended June 30, 2015 was $246,669 as compared with $303,904 in 2014.

Net cash used  in investing activities was $148,656 for the six months ended June 30, 2015 as compared to $31,281 provided by investing activities for the six months ended June 30, 2014. Capital expenditures were primarily related to improvements in the Company’s information systems. 

Net cash used in financing activities was $268,145 for the six months ended June 30, 2015 as compared to $337,497 for the six months ended June 30, 2014. 

As of June 30, 2015, we had cash and cash equivalents of $156,656, total current assets of $514,252 and total current liabilities of $2,905,605.

The Company may seek to raise capital through  the sale of debt or equity securities or a possible sale of a portion of its residual portfolio in order to improve its liquidity and financial position. There can be no assurances that such financing can be obtained on terms that are acceptable to the Company.

Off-Balance Sheet Financing Arrangements

We do not have any off-balance sheet financing arrangements.

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements. The accompanying unaudited consolidated financial statements reflect the results of operations, financial position and cash flows of the Company, and include the accounts of the Company and subsidiaries, after elimination of all intercompany transactions in the consolidation.

16

Revenue Recognition

The Company’s revenue consists of proceeds from the sale of equipment leases of point of sale terminals and systems used to process credit and debit transactions. The Company records revenue when the sales process with respect to terminals and point of sale equipment is substantially complete.

In addition, the Company receives a percentage of recurring residual fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions.  Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction.

Cash and Cash Equivalents

The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less as cash and cash equivalents.  The carrying amount of financial instruments included in cash and cash equivalents approximates fair value because of the short maturities for the instruments held. 

Income Taxes

Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available.  Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.

Earnings Per Share

Basic earnings per share is computed by dividing net income (loss) available for common stock by the weighted average number of common shares outstanding during the period.  Fully diluted earnings per share is the same as basic earnings per share as the Company had no material common stock equivalents outstanding during the periods presented.

17

Recent Accounting Pronouncements

Management does not currently believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. 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 ensure 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 time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015 and found them to be effective.

Changes in Internal Control over Financial Reporting

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. Risk Factors 

Factors that could cause our actual results to differ materially from those in this report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31 2014 filed with the SEC on March 31, 2015. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem not material may also impair our business or results of operations.

As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 2.   OTHER INFORMATION

None

18

ITEM 3.   EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit Number	Description
31.1*	Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2*	Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1*	Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2*	Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS**	XBRL Instance Document
101.SCH **	XBRL Taxonomy Extension Schema Document
101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **	XBRL Taxonomy Extension Label Linkbase Document
101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.
**	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

19

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EXCEL CORPORATION
Dated: August 14, 2015	By:	/s/ Thomas A. Hyde, Jr.
		Thomas A. Hyde, Jr.
		Chief Executive Officer
		(Principal executive officer)

Dated: August 14, 2015	By:	/s/ Robert L. Winspear
		Robert L. Winspear
		Chief Financial Officer
		(Principal financial and accounting officer)

20

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas A. Hyde Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Excel Corporation (the “report”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2015

By: /s/ Thomas A. Hyde Jr.

Name: Thomas A. Hyde Jr.

Title: Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Winspear, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Excel Corporation (the “report”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2015

By: /s/ Robert L. Winspear

Name: Robert L. Winspear

Title: Chief Financial Officer

(Principal Financial and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Excel Corporation (the “Company”) for the quarter ended June 30,2015, (the “Report”), I, Thomas A. Hyde Jr., the Principal Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2015

By: /s/ Thomas A. Hyde Jr.

Name: Thomas A. Hyde Jr.

Title: Chief Executive Officer

(Principal Executive Officer)

This certification accompanies this report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purpose of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report on Form 10-Q of Excel Corporation (the “Company”) for the quarter ended June 30, 2015, (the “Report”), I, Robert L. Winspear, the Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2015

By: /s/ Robert L. Winspear

Name: Robert L. Winspear

Title: Chief Financial Officer

(Principal Financial and Principal Accounting Officer)

This certification accompanies this report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purpose of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

10. Leases (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Leases [Abstract]
Rent expense	$ 202,808	$ 87,186

XML

11. Notes Payable (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Schedule of notes payable

Note payable to Blue Acre Ventures, due in monthly installments of $48,333 through May 2017, including simple interest at 15%, secured by the Company’s  primary residual portfolio	$	868,441
Note payable to E-Cig, due in monthly installments of $26,207 beginning October 2014 through September 2015, including interest at 6%, secured by 1,000,000 shares of the Company's common stock owed to the Company by E-Cig		75,000
Note payable to Payment Processing Technologies LLC, due in monthly installments of $10,653 beginning January 2015 through October 2015, including interest at 14%, secured by the Company’s residual portfolio		51,449
Total		994,890
Less current portion		(526,258	)
Long-term portion of notes payable	$	468,632

Schedule of future maturities

2015	$	313,529
2016		454,628
2017		226,733
Total	$	994,890

XML

3. Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC Topic No. 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into six broad levels, as described below:

Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.

Level 3: Level 3 inputs are unobservable inputs.

The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows:

Cash and Cash Equivalents, Accounts Receivable, Prepaid Expenses, Inventory, Accounts Payable, Accrued Compensation, Other Accrued Liabilities, and Income Taxes Payable.

The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values.

Notes Payable

The carrying values of notes payable approximate fair values, since these instruments bear market rates of interest.

XML

7. Stock Options and Compensation (Details Narrative) - Jun. 30, 2015 - USD ($)	Total	Total
Stock Options and Compensation (Textual)
Stock compensation expense	$ 79,787	$ 147,575

XML

7. Stock Options and Compensation (Details)	6 Months Ended
	Jun. 30, 2015 shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options outstanding	1,000,000
Vested	277,778
Unvested	722,222

XML

8. Acquisition of Subsidiary (Details) - 6 months ended Jun. 30, 2014 - USD ($)	Total
Selected Pro Forma Financial Information
Revenues	$ 6,256,665
Net loss attributable to the Company	$ 724,635
Net loss attributable to the Company per common share - basic and diluted	$ 0.009

XML

9. Property and Equipment (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Total cost	$ 532,971
Less accumulated depreciation and amortization	(202,687)
Property and equipment - net	330,284	$ 230,632
Computer Software
Property, Plant and Equipment [Line Items]
Total cost	168,266
Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	162,524
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total cost	83,299
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 118,882

XML

2. Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods.  These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

XML

10. Leases (Details)	Jun. 30, 2015 USD ($)
Future Minimum Lease Payments
2015	$ 189,520
2016	343,751
2017	181,118
2018	75,648
2019 and after	83,454
Total	$ 873,491

XML

Consolidated Balance Sheet (Unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$ 156,656	$ 326,788
Accounts receivable	244,015	383,657
Prepaid expenses	20,773	46,229
Shares receivable	90,000	90,000
Inventory	2,808	7,119
Total current assets	514,252	853,793
Other Assets
Fixed assets, net of depreciation	330,284	230,632
Goodwill	4,440,355	4,440,355
Other long-term assets	63,444	68,027
Total other assets	4,834,083	4,739,014
Total assets	5,348,335	5,592,807
Current Liabilities
Accounts payable	854,228	806,981
Accrued compensation	700,810	602,683
Other accrued liabilities	824,309	426,431
Notes payable - current portion	526,258	581,674
Total current liabilities	2,905,605	2,417,769
Long-term liabilities
Notes payable - long-term portion	468,632	681,361
Other long-term liabilities	30,009	29,748
Total long-term liabilities	$ 498,641	$ 711,109
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 10,000,000 shares authorized, none issued and outstanding; Series A preferred stock, $.001 par value 2 shares issued and outstanding as of June 30, 2015 and December 31, 2014.	$ 0	$ 0
Common stock, $.0001 par value, 200,000,000 shares authorized 99,259,070 and 97,259,070 shares issued and outstanding as of June 30,2015 and December 31, 2014, respectively.	9,926	9,726
Additional paid-in capital	4,379,717	4,232,342
Accumulated deficit	(2,445,554)	(1,778,139)
Total stockholders' equity	1,944,089	2,463,929
Total Liabilities and Stockholders' Equity	5,348,335	5,592,807
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 10,000,000 shares authorized, none issued and outstanding; Series A preferred stock, $.001 par value 2 shares issued and outstanding as of June 30, 2015 and December 31, 2014.	$ 0	$ 0

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities:
Net income (loss)	$ (667,415)	$ 1,334,459
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	49,004	25,114
Stock based compensation	147,575	278,974
Gain on settlement of debt	0	(175,101)
Decrease (increase)
Accounts receivable	139,642	(101,513)
Prepaid expenses	25,456	19,554
Inventory	4,311	41,809
Other receivables	0	(1,524,167)
Other long-term assets	4,583	(117,500)
Increase (decrease)
Accounts payable	47,247	212,165
Accrued compensation	98,127	206,595
Other accrued liabilities	397,878	91,556
Other long-term liabilities	261	11,959
Net cash provided by operating activities	246,669	303,904
Cash flows from investing activities:
Purchase of fixed assets	(148,656)	(3,282)
Acquisition of Securus	0	34,563
Net cash provided by (used in) investing activities	(148,656)	31,281
Cash flows from financing activities:
Proceeds from notes payable	100,000	1,600,000
Issuance of common stock	0	210,000
Payments on notes payable	(368,145)	(2,147,497)
Net cash used in financing activities	(268,145)	(337,497)
Net decrease in cash	(170,132)	(2,312)
Cash - Beginning	326,788	8,328
Cash - Ending	156,656	6,016
Supplemental disclosure of cash flow information
Cash paid for interest	$ 67,695	$ 206,778

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11. Notes Payable (Details 1)	Jun. 30, 2015 USD ($)
Future maturities of notes
2015	$ 313,529
2016	454,628
2017	226,733
Total	$ 994,890

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8. Acquisition of Subsidiary (Tables)

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Schedule of selected proforma financial information

Selected Pro Forma Financial Information	Six months ended June 30, 2014
Revenues	$	6,256,665
Net income attributable to the Company	$	724,635
Net income attributable to the Company per common share - basic and diluted	$	.009

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10. Leases (Tables)

6 Months Ended

Jun. 30, 2015

Leases [Abstract]

Schedule of future minimum lease payments

2015	$	189,520
2016		343,751
2017		181,118
2018		75,648
2019 and after		83,454
Total	$	873,491

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1. Organization and Operations

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

Excel Corporation (the “Company”) was organized on November 13, 2010 as a Delaware corporation.  The Company has two wholly owned subsidiaries, Excel Business Solutions, Inc., and Payprotec Oregon, LLC (d/b/a Securus Payments), (“Securus”).

The Company had been considered a development stage company as defined by FASB ASC 915-205-45-6.  However, on April 21, 2014, the Company acquired 100% of the membership interests of Payprotec Oregon LLC (d/b/a Securus Payments) (“Securus”) (see note 8).  Following this transaction, the Company ceased to be a development stage company. The Company is currently devoting substantially all of its efforts to providing services in the merchant payment processing industry.  

The Company provides payment processing services, which include credit and debit card processing, check approval, and ancillary processing equipment and software services to merchants that accept credit cards, debit cards, checks, and other non-cash forms of payment. In addition, the Company provides leases for point of sale and similar processing equipment to merchants which are in turn sold to a third party. In June 2015 our subsidiary Excel Business Solutions began selling merchant cash advances under the trade name Mom and Pop Merchant Solutions “Mom and Pop”. Mom and Pop operates as an ISO and does not directly fund any advances. The impact of Mom and Pop on the Company’s results of operations and financial position for the quarter ended June 30, 2015 was not material.

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Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	99,259,070	97,259,070
Common stock, shares outstanding	99,259,070	97,259,070
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	2	2
Preferred stock, shares outstanding	2	2

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11. Notes Payable

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

NOTES PAYABLE

The following summarizes the Company’s current outstanding notes payable:

Note payable to Blue Acre Ventures, due in monthly installments of $48,333 through May 2017, including simple interest at 15%, secured by the Company’s primary residual portfolio	$	868,441
Note payable to E-Cig, due in monthly installments of $26,207 beginning October 2014 through September 2015, including interest at 6%, secured by 1,000,000 shares of the Company's common stock owed to the Company by E-Cig		75,000
Note payable to Payment Processing Technologies LLC, due in monthly installments of $10,653 beginning January 2015 through October 2015, including interest at 14%, secured by the Company’s residual portfolio with Payment Processing Technologies LLC		51,449
Total		994,890
Less current portion		(526,258	)
Long-term portion of notes payable	$	468,632

Future maturities of notes as of June 30, 2015 are as follows:

2015	$	313,529
2016		454,628
2017		226,733
Total	$	994,890

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 14, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Excel Corp
Entity Central Index Key	0001512890
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		99,259,070

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12. Related Party Transactions

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

On January 14, 2014, Ruben Azrak, Chairman of the Board and then Interim Chief Executive Officer, advanced the Company $25,000.  This advance bears no interest and does not provide for a specific repayment date.

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues
Equipment lease revenue	$ 3,435,205	$ 1,775,221	$ 5,717,322	$ 1,796,709
Transaction and processing fees	1,060,225	404,556	2,213,934	404,556
Total revenues	4,495,430	2,179,777	7,931,256	2,201,265
Costs and expenses
Cost of products sold	712,746	344,696	1,231,586	346,233
Salaries and wages	2,773,364	2,026,203	5,190,096	2,229,462
Outside commissions	503,262	301,705	880,022	303,017
Other selling general and administrative expenses	581,838	609,595	1,150,368	746,531
Total costs and expenses	4,571,210	3,282,199	8,452,072	3,625,243
Net loss from operations	(75,780)	(1,102,422)	(520,816)	(1,423,978)
Other income
Gain on sale of residual portfolio	0	2,800,000	0	2,800,000
Gain on settlement of debt	0	175,101	0	175,101
Total other income	0	2,975,101	0	2,975,101
Interest expense	67,695	203,385	146,599	203,385
Net income (loss) before income taxes	(143,475)	1,669,294	(667,415)	1,347,738
Income tax expense (benefit)
Current	(53,086)	(573,350)	(246,944)	(573,350)
Deferred	53,086	560,071	246,944	560,071
Total income tax expense	0	(13,279)	0	(13,279)
Net income (loss)	$ (143,475)	$ 1,656,015	$ (667,415)	$ 1,334,459
Loss Per Share
Basic & Diluted	$ (0.001)	$ 0.019	$ (0.007)	$ 0.017
Weighted Average Shares Outstanding
Basic & Diluted	97,918,411	88,983,013	97,590,562	78,357,270

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6. Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

STOCKHOLDERS' EQUITY

On April 21, 2014 the Company issued two shares of Series A Preferred Stock to the two previous members of Payprotec. As long as a former member holds at least 9,000,000 shares of the Company’s common stock, then the member has the right to exchange his share of preferred stock for a 24.5% share of the membership interests of Payprotec upon a change of control in Payprotec (as defined). 

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5. Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company accounts for income taxes in accordance with FASB Accounting Standards Codification Topic 740-10 which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. At June 30, 2015, the Company had available unused operating loss carryforwards of $2,376,158 which generated a deferred tax benefit of $879,178. The Company had a 100% valuation allowance on the deferred tax assets at June 30, 2015.

The Company’s provision for income taxes for the six months ended June 30, 2015 consists of the following:

Income Tax Expense	Six months Ended June 30, 2015
Current	$	(246,944	)
Deferred		246,944
Total	$	-

The Company accounts for uncertainties in income taxes in accordance with FASB ASC Topic 740 “Accounting for Uncertainty in Income Taxes”. The Company has determined that there are no significant uncertain tax positions requiring recognition in its financial statements.

In the event the Company is assessed for interest and/or penalties by taxing authorities, such assessed amounts will be classified in the financial statements as income tax expense. Tax years 2011 through 2014 remain subject to examination by Federal and state taxing authorities. 

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9. Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	June 30, 2015
Computer software	$	168,266
Equipment		162,524
Furniture & fixtures		83,299
Leasehold improvements		118,882
Total cost		532,971
Less accumulated depreciation and amortization		(202,687	)
Property and equipment – net	$	330,284

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2. Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods.  These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Reclassification

Reclassification

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

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9. Property and Equipment

6 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 2015:

	June 30, 2015
Computer software	$	168,266
Equipment		162,524
Furniture & fixtures		83,299
Leasehold improvements		118,882
Total cost		532,971
Less accumulated depreciation and amortization		(202,687	)
Property and equipment – net	$	330,284

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7. Stock Options and Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK OPTIONS AND COMPENSATION

On November 13, 2010, the Company’s Board of Directors (the “Board”) approved a stock plan pursuant to which the Company may grant incentive and non-statutory options to employees, non-employee members of the Board and consultants and other independent advisors who provide services to the Corporation.  The maximum shares of common stock which may be issued over the term of the plan shall not exceed 4,000,000 shares.  Awards under this plan are made by the Board of Directors or a committee of the Board.  Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to holders of 10% or more of the Company’s Common Stock which is required to be issued at a price not less than 110% of the fair market value on the day of the grant.  Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the Plan Administrator.  However, no option shall have a term in excess of 10 years from the date of the grant.

On August 28, 2014, the Company issued options to purchase a total of 1,000,000 shares of the Company’s Common Stock at an exercise price of $.09 per share. The options are exercisable for a ten year period subject to certain restrictions. The shares vest ratably over 36 months. The following table summarizes the Company’s stock options.

Options outstanding	1,000,000
Vested	277,778
Unvested	722,222

On May 13, 2014, The Company issued 2,732,804 shares of the Company’s Common Stock to each of two executives in connection with their employment agreements. One third of the shares vested upon grant and the balance vest ratably over a two-year period.  

On June 1, 2015, the Company issued 2,000,000 shares of stock to an executive.  500,000 of the shares vested upon grant and an additional 500,000 will vest on June 1, 2016, 2017, and 2018.  The Company recorded stock compensation expense in the amount of $147,575 for the six months ended June 30, 2015 related to the stock grants and issuance of stock options.

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8. Acquisition of Subsidiary

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

ACQUISITION OF SUBSIDIARY

On April 21, 2014, the Company purchased 90% of the membership interests of Securus and its subsidiary Securus Consultants, LLC through a Securities Exchange Agreement (the “Agreement”) with Mychol Robirds and Steven Lemma.

In exchange for their membership interests in Securus and Securus Consultants LLC, 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. 

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 the remaining 10% of the membership interests of Securus 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 of the two transactions, the Company owns 100% of the membership interests of Securus.

Pro Forma Financial Information

The information that follows provides supplemental information about pro forma revenues and net income (loss) attributable to the Company as if the acquisition of Securus had been consummated as of January 1, 2014. Such information is unaudited and is based on estimates and assumptions which the Company believes are reasonable.

These results are not necessarily indicative of the consolidated statements of operations in future periods or the results that would have actually been realized had the Company and Securus been a combined entity during 2014.

Selected Pro Forma Financial Information	Six months ended June 30, 2014
Revenues	$	6,256,665
Net income attributable to the Company	$	724,635
Net income attributable to the Company per common share - basic and diluted	$	.009

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10. Leases

6 Months Ended

Jun. 30, 2015

Leases [Abstract]

LEASES

Securus leases its Oregon office facilities under an operating lease expiring in June 2017. Monthly lease payments range from $16,153 to $17,808 throughout the term of the lease.

Securus leases its California office facilities under an operating lease expiring in March 2016. Monthly lease payments range from $6,059 to $6,426 throughout the term of the lease.

Securus leases its Florida office facilities under an operating lease expiring in December 2016. Monthly lease payments range from $3,180 to $3,374 throughout the term of the lease.

The Company executed a lease for its corporate offices in Irving Texas. The lease began on November 1, 2014 and has a term of 63 months with monthly payments ranging from $0 to $6,428.

Total rent expense for the six months ended June 30, 2015 was $202,808, compared to $87,186 for the six months ended June 30, 2014.

The future minimum lease payments required under long-term operating leases as of June 30, 2015 are as follows:

2015	$	189,520
2016		343,751
2017		181,118
2018		75,648
2019 and after		83,454
Total	$	873,491

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11. Notes Payable (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Total	$ 994,890
Less current portion	(526,258)	$ (581,674)
Long-term portion of notes payable	468,632	$ 681,361
Secured Debt [Member]
Debt Instrument [Line Items]
Total	868,441
Secured Debt One [Member]
Debt Instrument [Line Items]
Total	75,000
Secured Debt Two [Member]
Debt Instrument [Line Items]
Total	$ 51,449

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7. Stock Options and Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock options

Options outstanding	1,000,000
Vested	277,778
Unvested	722,222

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5. Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Tax Expense
Current	$ (53,086)	$ (573,350)	$ (246,944)	$ (573,350)
Deferred	53,086	560,071	246,944	560,071
Total	$ 0	$ (13,279)	$ 0	$ (13,279)

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Consolidated Statements of Stockholders' Equity - USD ($)	Series A Preferred Stock	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit
Beginning balance (amount) at Dec. 31, 2013		$ 6,706	$ 1,010,947	$ (1,341,258)
Beginning balance (in shares) at Dec. 31, 2013		67,064,892
Issuance of common stock at .09 per share		$ 163	149,837
Issuance of common stock at .09 per share, Shares		1,628,570
Issuance of common stock at .30 per share		$ 20	59,980
Issuance of common stock at .30 per share, Shares		200,000
Issuance of stock for acquisition of Securus (amount)		$ 2,240	2,537,024
Issuance of stock for acquisition of Securus (in shares)	2	22,400,000
Stock Compensation Expense (amount)		$ 547	278,427
Stock Compensation Expense (in shares)		5,465,608
Net income (loss) for the period				1,334,459
Ending balance (amount) at Jun. 30, 2014		$ 9,676	4,036,215	(6,799)
Ending balances (in shares) at Jun. 30, 2014	2	96,759,070
Beginning balance (amount) at Dec. 31, 2014		$ 9,726	4,232,342	(1,778,139)
Beginning balance (in shares) at Dec. 31, 2014	2	97,259,070
Stock Compensation Expense (amount)		$ 200		147,375
Stock Compensation Expense (in shares)		2,000,000
Net income (loss) for the period				(667,415)
Ending balance (amount) at Jun. 30, 2015		$ 9,926	$ 4,379,717	$ (2,445,554)
Ending balances (in shares) at Jun. 30, 2015	2	99,259,070

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4. Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Topic 606 (“ASU 2014-09”) which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Revenue recorded under ASU 2014-09 will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for the Company’s fiscal year beginning January 1, 2017 and early adoption is not permitted. Management does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

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5. Income Taxes (Details Narrative) - Jun. 30, 2015 - USD ($)	Total
Income Taxes (Textual)
Operating loss carryforwards	$ 2,376,158
Rate of valuation allowance on the deferred tax benefit	100.00%
Deferred tax benefit	$ 879,178

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5. Income Taxes (Tables)

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of net effect on net income to full tax valuation allowance

Income Tax Expense	Six months Ended June 30, 2015
Current	$	(246,944	)
Deferred		246,944
Total	$	-