Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2009, for Xcellink International Inc. (formerly Blue Bird Exploration Company). The company is a Delaware corporation classified as a shell company and a smaller reporting company. Originally an exploration-stage entity, the company pivoted in April 2009 to acquire a global license for patented electronic payment technologies, intending to replace traditional credit and debit card systems. As of the reporting date, the company had no employees other than its President and Director, Mark Fingarson.
Key Financial Metrics
| Metric | Value (Sep 30, 2009) | Value (Dec 31, 2008) |
|---|---|---|
| Cash and Cash Equivalents | $592 | $687 |
| Total Assets | $592 | $687 |
| Total Liabilities | $60,164 | $48,697 |
| Stockholders' Equity (Deficit) | ($59,572) | ($48,010) |
| Net Loss (3 months ended Sep 30, 2009) | ($4,531) | N/A |
| Net Loss (9 months ended Sep 30, 2009) | ($11,562) | N/A |
| Cumulative Net Loss (Inception to Sep 30, 2009) | ($77,672) | N/A |
| Shares Outstanding | 104,160,000 | 104,160,000 |
Liquidity and Debt: The company holds minimal cash ($592) against current liabilities of $60,164. Liabilities consist primarily of accounts payable ($16,285), a loan payable ($19,333), and amounts due to a related party ($24,546). There is no revenue reported for the period.
Material Changes vs. Prior Period
- Financial Position: Total liabilities increased by approximately $11,467 from December 31, 2008, driven largely by an increase in amounts due to a related party (from $12,914 to $24,546).
- Accumulated Deficit: The accumulated deficit grew by $11,562 during the nine months ended September 30, 2009, reflecting continued operating losses without offsetting revenue.
- Restatement: The company restated its June 30, 2009 financial statements to correct over-recorded liabilities of $7,500, which increased retained earnings for that prior period.
- Operational Shift: The company formally transitioned from mineral exploration to a technology licensing model, acquiring rights to patented payment systems in April 2009.
Outlook, Risks, and Management Commentary
Going Concern: Management explicitly states that the company has not established an ongoing source of revenues sufficient to cover operating costs. The ability to continue as a going concern is dependent on obtaining adequate capital from management, significant shareholders, or external financing. There is significant doubt regarding the company's ability to maintain its status as an SEC reporting company without additional funding.
Plan of Operations: The company intends to generate revenue through licensing its intellectual property, dedicated business units in e-commerce, and software support. However, management notes these plans are highly speculative and contingent on raising capital, which has historically been unsuccessful.
Risks and Contingencies:
- Liquidity Risk: Failure to secure funding within 30-60 days could result in a complete loss of shareholder value and business failure.
- Management Changes: The company dismissed its independent auditor (Moore & Associates) in August 2009 and engaged Seale and Beers, CPAs. A new director was appointed in October 2009.
- Corporate Structure: The company entered into a share exchange agreement to purchase the equity of Xcellink International Limited (BVI) and moved its headquarters to Las Vegas, Nevada.
Investor Verification Checklist
- Verify the company's ability to secure immediate financing to cover the $60,164 in current liabilities.
- Confirm the status of the share exchange agreement with Xcellink International Limited and the integration of the patented technology.
- Review the impact of the auditor change (Moore & Associates to Seale and Beers) on future financial reporting reliability.
- Assess the validity of the "shell company" status and the likelihood of delisting or ceasing SEC reporting status.
- Investigate the nature of the $24,546 owed to the related party and any repayment terms.