SEC Filing Summary: Excaliber Enterprises, Ltd. (10-K)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2010, for Excaliber Enterprises, Ltd., a Nevada corporation. The company is classified as a development stage entity and a shell company. Its stated business purpose is to market and sell specialty gift baskets to real estate and health care professionals via an internet storefront (www.ExcaliberStore.com). As of the filing date, the company has not generated any revenue, has no saleable inventory, has not identified suppliers, and has not commenced its planned merchandising operations. The company is a smaller reporting company with no established public trading market for its securities.
Key Financial Metrics
| Metric | 2010 | 2009 | Inception to 2010 |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Total Expenses | $8,946 | $21,968 | $57,515 |
| Net Loss | $(8,976) | $(21,998) | $(57,635) |
| Cash and Cash Equivalents | $1,808 | $556 | N/A |
| Total Assets | $2,200 | $1,376 | N/A |
| Total Liabilities | $3,200 | $1,500 | N/A |
| Stockholders' Deficit | $(1,000) | $(124) | N/A |
| Debt (Notes Payable) | $530 | $500 | N/A |
Note: The company recorded a $30 provision for income taxes in 2010 and 2009 due to Idaho minimum tax requirements.
Material Changes vs. Prior Period
- Expense Reduction: Total operating expenses decreased significantly from $21,968 in 2009 to $8,946 in 2010. This reduction was primarily driven by a decrease in professional fees (from $16,345 to $1,389) and accounting fees (from $5,000 to $6,825).
- Liquidity Position: Cash on hand increased from $556 to $1,808, largely due to $8,100 in donated capital from officers and directors during 2010.
- Liabilities: Accounts payable increased from $1,000 to $2,670, and a new $30 note payable to a third party was added.
- Going Concern: The independent auditors have expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses and lack of revenue.
Outlook, Risks, and Management Commentary
Plan of Operation: Management estimates a need for at least $30,000 in additional capital to execute its business plan. Proposed uses of funds include $10,000 for website redesign and e-commerce functionality, up to $20,000 for web advertising (Google, Bing, Yahoo), and $2,000 for direct sales materials. The company currently has no employees other than the part-time officers (Stephanie and Matthew Jones).
Risks and Contingencies:
- Going Concern Risk: The company has no revenue and relies on donated capital or future financing to survive. If financing is unavailable, the company may be forced to liquidate.
- Management Concentration: Operations depend entirely on the part-time efforts of the President and Secretary/Treasurer, who have no prior public company management experience. Stephanie Jones beneficially owns 85.49% of the outstanding stock.
- Internal Controls: Management identified a material weakness in internal controls over financial reporting due to inadequate staffing and lack of segregation of duties.
- Marketability: The stock is classified as a "penny stock," subject to trading restrictions that may limit liquidity for investors.
- Business Execution: The company has not yet identified suppliers, designed gift baskets, or established a sales channel. There is no assurance it can generate sales.
Investor Verification Checklist
- Capital Sufficiency: Verify if the company has secured the estimated $30,000 required to launch operations, given current cash of only $1,808.
- Going Concern Status: Confirm whether the company has obtained additional financing or generated revenue since the filing date to mitigate the auditor's "substantial doubt" opinion.
- Management Diligence: Assess the commitment of the part-time officers, who hold other full-time jobs, to developing the business.
- Internal Controls: Review any updates regarding the remediation of the material weakness in financial reporting controls.
- Related Party Transactions: Monitor the reliance on cash donations from officers/directors ($9,700 total through 2010) as a primary funding source.